On 21 May 2026, Sarit Suresh Raja Shah stood at the Nairobi Securities Exchange between the Capital Markets Authority’s director of market operations and the NSE’s own chief executive, ringing the bell to mark the listing of I&M Group’s first Medium Term Note tranche.

The bank’s stock was weeks from an all time high.

The family that controls it was about to be reported as sitting on a combined fortune north of Sh17 billion in personal holdings alone, and more than Sh66 billion once its three controlling investment vehicles were counted in.

Six weeks later, the same executive is a named defendant in a High Court suit that borrows its legal theory from an English tort case and puts a figure of Sh5.77 billion on the damage his bank is accused of having caused a judgment creditor still waiting to be paid.

The creditor, Synergy Industrial Credit Limited, says the true bill including the underlying decree has now passed Sh11.3 billion. A separate High Court judge has already found, in an earlier and unrelated ruling in the same saga, that the bank’s own conduct pricked what he called the conscience of the court.

Those two images, the bell and the bench, belong to the same institution in the same season.

This is the story of how a Sh703 million property dispute at 14 Riverside Drive in Westlands turned into a decade long war over enforcement, how I&M Bank became the last line of defence for a debtor who had lost at every level of the judiciary, and why the family that owns and runs the bank may find that the bill for that defence now travels well beyond Cape Holdings and lands on their own balance sheet.

THE SH703 MILLION SEED

The dispute began in what the Court of Appeal later called friendly familiarity and trust. Around 2010 and 2011, Cape Holdings Limited, the property arm of the Sanghrajka family that also owns Tile and Carpet Centre, agreed to sell Synergy Industrial Credit, a company associated with businessman Vipul Shah, office blocks and parking bays in the still rising 14 Riverside development for roughly Sh703 million.

Synergy paid, the transfer never happened, and by 2015 an arbitrator had ordered Cape to pay Synergy Sh1.666 billion, carrying 18 percent compound interest from January 2015 until settlement.

Cape fought the award through the High Court, the Court of Appeal, and twice to the Supreme Court. It lost every serious round. By November 2020 the Court of Appeal had reinstated the award. By October 2021 the Supreme Court had shut Cape’s last door. What should have followed was payment. What followed instead was I&M Bank.

THE DEBENTURE THAT DOES NOT ADD UP

This is where the paper trail gets strange, and where nobody else appears to have looked closely enough at the dates and the names.

According to Synergy’s fresh suit, I&M’s position rests on a letter of offer dated 23 September 2020 and a debenture registered on 8 January 2021, both advanced on the claim that the bank was taking over existing credit facilities that Cape Holdings had previously held at Co-operative Bank of Kenya.

But the facility named in that paperwork was not held in the name of Cape Holdings.

It was held in the name of Nandlal and Company Limited, the original corporate identity of the Sanghrajka family’s retail business before it was rebranded Tile and Carpet Centre in 2016, four years before I&M’s letter of offer was even written.

Synergy’s suit goes further. It alleges that Cape Holdings itself had redeemed all of its own facilities with I&M back in 2011 and had banked with Co-operative Bank ever since, meaning the 2020 transaction dressed up as a refinancing was in fact a brand new loan created out of nothing, timed precisely to the month after the Court of Appeal handed Synergy back its award.

A charge that purports to migrate a sister company’s old facility onto Cape Holdings, arranged weeks after Cape lost its most important appeal and months before it was placed under administration, is not a detail. It is the entire architecture the bank later relied on to freeze Synergy out of enforcement.

A charge said to migrate a sister company’s old facility onto the judgment debtor, arranged weeks after that debtor lost its most important appeal, is not a footnote. It is the architecture.

PRICKS THE VERY CONSCIENCE OF THE COURT

Four days after the Supreme Court closed Cape’s last avenue on 8 October 2021, I&M placed Cape Holdings under administration, appointing Vruti Shantilal Shah to run the company.

Administration triggers an automatic moratorium under Section 560 of the Insolvency Act, freezing a creditor’s enforcement rights unless a court grants leave to proceed.

Justice Alfred Mabeya was not persuaded that this was a genuine rescue. In his December 2021 ruling, he found no evidence Cape was in real financial distress, noting the company was earning substantial rental income from the very complex under dispute. He concluded that the administration was timed to buy Cape a shield against a lawful decree rather than to protect any legitimate creditor interest, and that neither the bank nor the company had acted in good faith.

The conduct of the bank and Company pricks the very conscience of the Court.
 — Justice Alfred Mabeya, In re Cape Holdings Limited, 10 December 2021

The judge added that the whole world, including the bank, had been warned about the dispute over the property as far back as 2011, when Synergy registered a caveat and published a public caveat emptor notice in the Daily Nation. Whatever I&M’s credit committee saw in 2020, ignorance of the underlying dispute was never a plausible defence.

A FAMILY, NOT JUST A BANK

I&M Group is a listed company, but its governance sits inside a narrow family structure that makes the 14 Riverside exposure a personal matter as much as a corporate one.

Recent disclosures around the bank’s Medium Term Note listing show that three investment vehicles tied to the Raja Shah family, Minard Holdings, Tecoma Limited and Ziyungi Limited, together control a 54.93 percent stake in I&M worth roughly Sh66.4 billion as of the end of May 2026.

The family’s Bhagwanji Raja Charitable Foundation holds a further 2.43 percent. Add the personal holdings named for Suresh Raja Shah and his two sons, and the family’s practical economic interest in the bank clears 70 percent.

Sarit Suresh Raja Shah, the executive named personally in Synergy’s suit, has been an executive director of I&M since 1993 and Group Executive Director since 2018. His father, Suresh Raja Shah, is the bank’s founder and Chairman Emeritus. His brother Sachit sits on the same board as a non-executive director.

Credit decisions of the kind a court has already criticised in blunt language were not made by an anonymous institution answering to thousands of dispersed shareholders. They were made inside a tightly held family enterprise where the people who approved the exposure and the people who profit from the bank’s share price are, in practical terms, the same people.

THE MARKET HAS NOT PRICED THIS IN

I&M’s shares closed at an all time high of Sh54 on 8 June 2026, giving the bank a market capitalisation of roughly Sh88 billion.

The stock has climbed more than 40 percent over the past year, trades on a modest trailing earnings multiple near 4.7 times, and carries a healthy dividend yield above 6 percent. Analyst commentary reviewed for this story continues to rate the stock a buy, built on strong loan book growth and a comfortable payout ratio.

None of the public market commentary reviewed mentions the Synergy claim as a contingent liability, despite its size relative to the bank’s own recent full year net income of roughly Sh18.8 billion.

A claim worth close to a third of annual profit, tied to judicial findings of bad faith against the bank’s own senior executive, is the sort of exposure that shareholders and the Capital Markets Authority would ordinarily expect to see flagged. Whether it has been disclosed with the specificity the claim now demands is itself a live governance question, separate from whether Synergy ultimately wins.

THE MAREX GAMBLE

Synergy’s new claim borrows its theory from Marex Financial Ltd v Sevilleja, a UK Supreme Court case exploring when a third party can be sued in tort for deliberately putting a judgment debtor’s assets beyond a creditor’s reach.

Synergy says I&M and Sarit Shah did exactly that, first by asserting the disputed charge to block a forced sale, and second by triggering the administration moratorium, at a combined cost it puts at Sh5.77 billion, the growth in the debt between October 2021 and April 2026 while enforcement sat frozen.

No Kenyan court has yet confirmed that a Marex style tort applies here. If one does, the exposure for banks that step into distressed borrower situations changes immediately.

Security and insolvency tools that once looked like ordinary creditor protection could become a direct liability if a court later decides they were deployed to shield a debtor rather than rescue one.

WHAT HAPPENS NEXT

Cape Holdings continues to fight on procedural ground, most recently before Justice Mong’are in March 2026, in what the court itself described as yet another delaying tactic in a decade long effort to frustrate a lawful decree.

The 14 Riverside complex, valued at roughly Sh5.4 billion in October 2025, remains the primary target for auction. So do smaller Cape properties in Kajiado County.

But the centre of gravity in this saga has shifted. It is no longer only about whether Cape Holdings can be made to pay.

It is about whether I&M Bank, and by direct extension the family that built and still controls it, will be made to answer for the machinery it allegedly built to protect a client, four days after that client ran out of road in the country’s highest court. The stock market has not blinked yet. The judiciary already has.