Businessman ordered to repay more than £5m to former partner
A businessman who misappropriated large sums of money from his company has been ordered to refund more than £5 million to his former partner.
The case involved Ashank Patel and Mohammad Babar Iqbal, who had been partners in a property development business.
After some of the projects suffered delays due to cashflow problems, Patel discovered that Iqbal had been misappropriating funds from the business, resulting in losses of around £5 million.
The two men then entered into a deed containing clauses directing Iqbal on how to reimburse Patel.
Iqbal agreed to:
- pay the proceeds of the business, and any other funds he was able to raise, to Patel, another partner and himself under a defined schedule, and to hold such proceeds and funds on trust until payment was made
- transfer a 25% shareholding in one of his companies to Patel
- procure another of his companies to pay £400,000 to Patel
- execute a declaration of trust in favour of Patel over his 66% beneficial interest in a second company.
Iqbal failed to comply with any of the clauses, so Patel applied for an order for damages.
The court found in his favour and made a declaration that Patel should receive £5 million to cover his losses. Iqbal was also ordered to pay a further £400,000 in damages and to transfer his 25% share in the first company and his 66% share in the second company to Patel.
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