The UAE based Naval Recycling Tycoon Muhammad Tahir Lakhani is reeling from a British High Court Judgment made in October 2020 upholding a ruling against Mr. Lakhani and his two sons Ali Muhammad Lakhani and Hasan Muhammad Lakhani, that they defrauded the well-known American investment Platform ‘Yieldstreet’ for nearly $80 Million USD in a series of unpaid loans. Yieldstreet made the loans to the Lakhani owned DTA (Dubai Trading Agency LLC) to purchase naval vessels for recycling which were then never bought. The loans subsequently went into default.
As reported in ‘Business Wire’ at the time of the ruling, the presiding UK judge (Justice Jacobs) determined that Ali and Hasan (who with along with their father signed personal guarantees for the loans) were disingenuous in their statements to the court claiming that they had no idea they were both signing personal guarantees for the loans. Justice Jacobs rejected Ali Muhammad Lakhani statement that he “did not recall having entered into a personal guarantee” in relation to” the loan and that his “father regularly required” him “to sign documents without explaining their effect”.
According to a senior executive at DTA, the UK High Court ruling of 18 months ago infuriated Mr. Lakhani, and he is now blaming his sons Ali and Muhammad Hasan Lakhani for the harsh judgment laid down by the UK court. The senior executive, who spoke on background about the case said last week that “MTL (as Mr. Lakhani is commonly referred to as) is an honest and caring man and is livid at his sons who he considers spoiled and inattentive to the family business”. While this DTA executive’s support of his boss (Mr. Lakhani) is understandable, this schism within the Lakhani family’s business empire is rattling investors who no longer have faith in Ali and Hasan’s ability to replace their father (who is now 60 years old) as company Chairman after he retires.
The elder Lakhani, a Pakistani-British national, who’s companies include Dubai Navigation Corp, and a breathtaking array of other global corporations also has multi-million-dollar property development portfolios with luxury residences in London and other swank locations in Europe. In the past couple of weeks, he has had some of his senior management and other colleagues make ‘off the record’ statements to local journalists in the UAE and the UK to distance himself from his sons.
An Abu Dhabi based American attorney who is familiar with the case and close to the Lakhani was recently quoted as stating “Tahir has been greatly disappointed by his sons who let him down in court and have screwed up many deals that he was working on”. The attorney also pointed out that Mr. Lakhani is a “very religious and humble man with high moral standards and he is very embarrassed by the extravagant lifestyle of drinking and partying that his sons have”. In a move most likely done to appease his investors “Mr. Lakhani is now reconsidering the succession plan of Ali and Hasan taking full control of the Lakhani’s vast wealth and business conglomerate”.
The UK high court ruling also put a WFO (World Freeze Order) on all of Muhammad Tahir Lakhani and his son’s assets and bank accounts. Recent media reports claim the family has been hiding their wealth in “Monaco, Curacao, Palau, the United Arab Emirates, the United Kingdom, Pakistan, Hong Kong, the European Union, and even the United States”.
While Mr. Lakhani grapples with the financial fallout of the British court judgment he is also in the uncomfortable position of having to disown his own sons who according to one UAE based British bank executive “… are an absolute disgrace to Lakhani’s group of companies”. The bank executive went further by saying “Hasan and Ali have caused the family untold damage and have had their financial spending habits severely curtailed by their father”.
These latest remarks attributed to Muhammad Tahir Lakhani through his supporters in the UAE business community should not find sympathy with anyone. While we can all relate to sons and daughters causing personal embarrassment through unsavory lifestyles of partying, Mr. Lakhani himself was found guilty (along with sons Ali and Hasan) of committing a multi-million USD fraud against Yieldstreet and other investors.
It would be prudent for him to consider paying back these investors to whom he owes close to $80 million USD instead of investing all the time and energy to try and blame his “spoiled” sons. Only then will he be able to clear his name.