LONDON: The high-profile litigation involving Pakistan’s former Minister for Investment and Privatisation Senator Waqar Ahmed Khan and the Deutsche Bank has ended in London after nearly three weeks of intense hearings at the Royal Court of Justice’s Commercial Court here.
The complex litigation case involving at least £140 million has engaged two dozen lawyers on each side, tens of thousands of pages of documentary evidence and witness accounts from both sides and their teams, both sides accusing each other of failing to keep contractual obligations.
The case involves properties owned by Senator Waqar and his family members at two most sought after venues in London’s upper class districts: the Bishops Avenue mansion which, when developed, could stand an estimated £100 million price tag and six Knightsbridge flats, now worth around £40 million.
The Deutsche bank wants to repossess the Khan family’s properties in a bid to recoup a £50m loan but the Khan family has launched a damages claim of around £60m from Deutsche. The bank initially agreed to pay £65m to the Khan family but withheld £10 million – the amount which is at the centre of the Khan family’s claim against the bank. Of the £55 million total loaned amount, the Khan family paid back £7m to the bank but the bank has added interest rate and wants £55 million from the Khans.
Senator Waqar has accused the Deutsche Bank, especially its private banker and Khan family’s trusted banker Nasim Ahmad, cheated and defrauded him and four of his family members.
His lawyers told the trial judge that Deutsche Bank promised them an attractive investment and loan package for the Hampstead mansion using the family properties in Knightsbirdge as security. Senator Waqar bought these flats on loan from a western bank and it must be stressed that he didn’t bring over any money from Pakistan for this investment at any stage. Nasim Ahmad, who is now Regional Head for Global South Asia, for the ME and Pakistan in Deutsche’s Private Wealth Management Division, and Khan family were so close that they went on Haj together. The Khan family has claimed that the refusal of the bank to pay the full amount prevented the family from carrying out development work on the Bishops Avenue mansion. The Khan family won planning permission in 2009 to demolish it and replace it with a 46,000sq ft residence, which would have been London’s largest mansion after Buckingham Palace. The family claims that due to this they lost substantial profits, said to run into tens of millions of pounds. The family claims Deutsche tried to cover this up by engineering a default on loan agreement using dubious valuations and charging a default rate of interest three times the agreed rate. The Bank has argued the property portfolio fell almost by half in value in 2008 and 2010 giving them right to terminate the loan. The judge will take about two months to decide. He will assess whether there has been a breach of contract on part of the bank in not lending extra £10 million to the Khan family. Secondly, he will also assess if there has been a breach of contract then it will be assessed whether the bank legally obtained the first supplement. For the Khan family to win the case on liability, the judge has to find on both counts in favour of Khan family.
Rashad Yaqoob, an independent legal consultant, commented while speaking to The News: “Western private banks will be looking very keenly at the outcome of this case as to how private bankers conduct themselves in balancing their duty of care to their bank and the client.” When asked for comment, the Deutsche Bank said in a statement: “This is a straightforward case of borrowers taking out a loan and failing to meet their obligations.”