The High Court has been asked to throw open the books of Credit Bank after three minority shareholders filed a petition accusing the controlling investors, several of whom carry the Nyachae name or are linked to the powerful family’s corporate web, of running the institution as a personal piggy bank while ordinary shareholders starve for dividends and struggle to obtain even a seat at the annual general meeting.
Ketan Devram Morjaria, who holds a 6.7 percent stake in the lender, and Jay Rajnikant Karia, with a 3.3 percent slice, are among the petitioners who have placed explosive allegations before the court: that the bank’s leadership allowed insider and related-party lending that exposed the institution to financial risk while exclusively enriching entities linked to its dominant shareholders, that non-performing loans have been left to fester without serious recovery effort, and that the bank’s affairs have been conducted in a manner that is unfairly prejudicial to those who own it but are not named Nyachae.
The High Court has, for now, declined to entertain those grievances directly, ordering instead that the dispute be resolved through international arbitration under the rules of the London Court of International Arbitration as provided for in a shareholder agreement signed in May 2022. The majority shareholders, speaking through Leon Nyandusi Nyachae, a director in the companies representing the controlling block, argued that the claims fell squarely within that agreement and the court agreed.
The court said it was satisfied that the reliefs being sought, including declaratory reliefs, inquiries, accounts and orders for the compulsory purchase of shares, were capable of being determined within an arbitral process. But the referral to arbitration does nothing to extinguish the fires burning inside one of Kenya’s most politically freighted banking houses.
A Family Bank Under Siege
Credit Bank was licensed in 1986 as a non-banking financial institution under the name Credit Kenya Limited and converted to a full commercial bank in 1995. For much of the four decades since, it has been inseparable from the Nyachae name. The late Simeon Nyachae, at various points one of the most powerful politicians in the country, served as its chairman. His wife, Grace Wamuyu Nyachae, sits on the board as a director. His son Eric Nyachae serves as executive officer in charge of business and strategy. The family’s principal corporate vehicle, Sansora Group of Companies, a stable of four family-owned entities, holds 27.1 percent of the bank, making it the anchor shareholder.
The respondents in the court petition include Sansora Group Limited, Sanama Investments Limited, Chanzu Enterprises Limited, Nomura Nominees Limited and P.B. Lema Holdings Limited, court documents show, with several of these linked to the Nyachae family. A fourth shareholder, a firm known as Shangriles Villas Company Limited, holds 56 percent of the bank’s shares though the connection between Shangriles and the Nyachae family has not been publicly established.
The petition claims the bank’s leadership allowed insider and related-party lending that exposed the institution to financial risk while benefiting connected entities. From the bank’s own financial statements, loans to shareholders and their associates stood at Sh651 million in September, down from Sh695 million in December 2021, a modest reduction that critics argue understates the scale of preferential access to the bank’s credit.
A Bank Bleeding Red Ink
Whatever is happening inside the boardroom, the financial results make grim reading. Credit Bank posted a net loss of Sh207 million in the nine months to September 2025, a sharp deterioration from the Sh144 million loss recorded over the same period in 2024. The bank has carried a retained loss of Sh1.21 billion on its books. Its total assets stood at Sh27.71 billion as at June 2024, a modest base for a lender now facing a capital cliff.
That cliff is vertical and approaching fast. The bank held just Sh1.23 billion in core capital as of September 2025 against a Central Bank of Kenya minimum of Sh3 billion that must be met by December 31, 2025 under the Business Laws (Amendment) Act of 2024, which raised the floor for commercial banks from the Sh1 billion threshold that had been in force since 2012. Credit Bank’s capital shortfall of Sh1.72 billion at the end of 2024 placed it among the worst-capitalised lenders in the country, in a cohort of eleven institutions required to collectively raise Sh15 billion or face the loss of their licences.
The capital crisis has not gone unnoticed by the regulators. The CBK has demanded that all undercapitalised banks submit board-approved capital build-up plans covering not just the 2025 milestone but the full staircase of requirements through 2029, when the minimum climbs to Sh10 billion.
An Emergency Capital Scramble
Cornered by the regulator and embarrassed by the shareholder revolt, the bank’s leadership convened an extraordinary general meeting on December 19, 2025 to push through an aggressive capital-raising package. Shareholders, with near-unanimous support of 99.9 percent of votes cast, approved the issuance of up to 45 million new ordinary shares at Sh100 each through a private placement to existing shareholders and qualified investors, a move designed to raise up to Sh4.5 billion.
The plan also included the creation of Sh3 billion in preference shares, a USD 1.5 million convertible note for Shorecap III LP carrying a six percent interest rate payable semi-annually with a minimum maturity of five years, and an asset-for-shares swap under which the bank will acquire a property on Kiambere Road in Upper Hill valued at Sh1.2 billion in exchange for 12 million ordinary shares. The convertible note allows Shorecap to transform its debt holding into equity at a future date of its choosing.
Ahead of the EGM, Sansora Group CEO Leon Nyachae wrote to the CBK’s director of banking supervision committing to inject Sh1 billion into the bank by the December 31 deadline. Equator Capital Partners, the investment manager for Shorecap III, made a parallel commitment in writing for another Sh1 billion. The Sh2 billion from the two institutional investors was projected to lift Credit Bank’s core capital to at least Sh3.23 billion, giving the bank the barest passage over the regulatory threshold.
Sansora has separately asked the CBK to allow it and its associate companies to temporarily exceed the 25 percent shareholding limit for a period of 36 months as the bank pursues new investors, a regulatory carve-out that would concentrate even more ownership in the hands of the family the minority shareholders are accusing of misusing the bank for their benefit.
Shorecap’s Entry and the Shareholder Agreement
The shareholder agreement at the centre of the arbitration referral was signed in May 2022, the same year Shorecap III LP began its acquisition of a 20 percent stake in the bank. The CBK formally cleared the deal in June 2023 after approvals from the Competition Authority of Kenya. The Shorecap investment was heralded at the time as a vote of confidence in the lender and a sign that Credit Bank was ready to grow its way into the top tier of Kenyan commercial banking, with plans floated to list its shares on the Nairobi Securities Exchange.
Those ambitions now sit awkwardly alongside a bank losing money every quarter, a capital hole that required emergency surgery, and a shareholder dispute heading to London arbitration. Morjaria and Karia argued in court that their claims were anchored on breaches of the Banking Act and therefore outside the scope of arbitration, and that statutory reliefs could not be granted by an arbitrator. The court was unmoved, finding that the reliefs sought were capable of being handled by arbitrators.
A Dynasty Under Wider Scrutiny
The bank’s troubles arrive at a moment when Nyachae family companies face litigation on multiple fronts. The High Court has separately allowed shareholders of other Nyachae-linked firms to proceed with a derivative suit against their directors over a disputed Kisii property sale, with a section of the family accusing those directors of treating their companies as personal property to the detriment of all shareholders. Justice Mugambi found a prima facie case warranting further judicial inquiry, describing the situation as one where the reliefs sought were directed towards the protection of the company as a whole.
The pattern of litigation is consistent: minority shareholders, excluded from governance and watching their investments erode, turning to the courts to force accountability from a controlling interest that has, across multiple entities, been accused of operating as judge, jury and executor in matters that touch directly on the interests of those who also own shares.
At Credit Bank, the numbers that will eventually go before arbitrators are stark. The bank’s gross non-performing loans were identified as a key driver of its capital erosion. Loans to connected parties remained elevated even as the institution bled losses. Dividends have not materialised. Annual general meetings, the minimum democratic ritual of corporate life, were inaccessible to the petitioners.
For Morjaria, Karia and the third unnamed petitioner, the fight has now moved to an international arbitral forum. Whether London arbitrators will prove more willing than the Nairobi High Court to compel a full accounting of how Credit Bank’s money has moved between the institution and the family that has controlled it for four decades remains to be seen. The bank itself, for its part, is busy trying to survive the year.
