Businessmen Rai’s Bank Account Frozen amid succession battles

In a dramatic turn of events, a Nairobi High Court has issued an order to freeze a bank account held by the Rai Family.

This legal action follows a bitter dispute between the family’s two brothers, Iqbal and Jaswant Rai, over Iqbal’s abrupt removal as a signatory to Rai Investments Ltd, an account held at Absa Bank.

This development has reignited a longstanding and intense succession battle within the Rai family.

In a court application filed by Iqbal Rai through his lawyer Ekuru Aukot, he asserts that his removal as a signatory was done without due process and without the adoption of a formal resolution.

He argues that this action leaves the account vulnerable to manipulation and unauthorized withdrawals, jeopardizing the interests of the applicant, who remains a director and shareholder in the company.

Among his prayers, Iqbal has requested the court to reinstate him as a signatory to the multi-billion-dollar empire, which has significant business interests spanning real estate, luxury shops, and manufacturing across multiple countries, including Kenya, Uganda, Tanzania, and Malawi.

The core of the dispute revolves around the estate of their late father, Tarlochan Singh Rai, who passed away in 2010. Iqbal Rai has alleged that his efforts to be reinstated as a signatory have been met with contempt, despite the grave risk this situation poses.

In his application, Iqbal states that he was removed as a signatory in February 2023. He has urged the court to order the release of the company’s bank statements since March of that year.

“The said removal renders the account susceptible to manipulation and withdrawals without the consent of the applicant who is still a director/shareholder,” Iqbal says in court papers.

He adds: “The Companies Act … require decisions of the company to be made vide resolutions and in this case, the removal of the plaintiff from the company mandate has never been discussed in a meeting of the shareholders/directors of the company and it must be concluded by any independent umpire, therefore, that the conduct of the defendant is unlawful.”

Shockingly, Iqbal claims that when he requested access to these bank statements in his capacity as a director and shareholder, he was informed that he could not access them because he was no longer on the bank’s mandate.

However, records at the company registry still list Iqbal as a director of the investment firm. He emphasized this fact to the court, underscoring the irregularity of his removal from the account.

The Rai family’s tumultuous legal battles have not been confined to their internal disputes. They have also spilled over into business rivalries, most notably in the case of the collapsed Mumias Sugar Company.

Sarbit Rai, another member of the family, who owns a sugar mill and other businesses in neighboring Uganda, successfully secured the bid to revive the ailing miller. However, Jaswant Rai opposed this move, leading to a protracted legal battle that has further fueled tensions within the family and their business empire.