Dubai shipping magnates face asset freezing order pending court hearings
Muhammad Tahir Lakhani, 58, and his sons Ali and Hasan facing allegations in the UK, the US and Malaysia
A Dubai-based shipping family accused of an international fraud have had £62 million in assets frozen by a London court pending a full trial of the allegations.
The fraud claims involve $89.1m [Dh327.4m] in claims stretching across multiple jurisdictions.
Maritime shipping executive Muhammad Tahir Lakhani, 58, and his sons, Ali and Hasan, are facing allegations in the UK’s Commercial Court involving five private equity funds.
“The allegations being made, will be contested and legally defended in the United Kingdom’s Commercial Courts through our appointed legal representatives," said Mr Lakhani, the senior member of the family. "We will and intend to fully cooperate with the courts and we firmly believe that we will be exonerated at the end of the proceedings."
The fraud accusation centres on the sale of 13 mortgaged tankers for scrap. Mr Lakhani is the founder of the Dubai Trading Agency, an entity that has no involvement in the dispute.
US court papers containing the allegations said there was a $80.2m multinational maritime fraud.
“Applicants were deceived, assets were concealed and false papers were lodged with multiple foreign governments,” the court papers say.
The papers allege the men concealed the existence of the applicants' mortgages by forging documents and making fraudulent filings to different government authorities.
They sold mortgaged vessels to ship breakers in Bangladesh and Pakistan for demolition and conversion into scrap metal, the papers said.
They said that allowed the borrowers to destroy the collateral and keep the sale proceeds that they were contractually required to pay to applicants.
A joint case has been brought by finance houses in the UK, the US and Malaysia.
A seizure application in a Malaysian court in March said the vessel Wu Xian was due to be scrapped.
Another 12 vessels were scrapped in Bangladesh “without notice to, authorisation from or payment to” the finance houses behind the mortgages.
“The applicants hold equitable proprietary tracing claims rights with respect to all of the proceeds of the vessels, which were beached and scrapped without regards to the applicants’ mortgage rights under the applicable facility agreements,” the papers said.
“In an apparent attempt to conceal the fraud as a mere cashflow insolvency, the holding company of the borrowers put itself into voluntary liquidation in Nevis.
"The authorities in multiple jurisdictions have been alerted.”
The group is seeking assistance from the US District Court in New York to obtain documents from 13 financial institutions in relation to the receipt, transfer and proceeds of the mortgaged vessels in an effort to recover the funds.
A worldwide freezing order was issued this month on Mr Lakhani's assets in the Commercial Court in London and on Wednesday the order was extended. The case is continuing
Lawyers for the applicants said that the case was based on “documents that evidence what we say was clear fraud”.
The court heard the defendants needed more time to prepare a defence for the proceedings and to ensure a fair legal defence.
Updated: May 1, 2020 03:43 PM