UK businessman jailed for obstructing fraud probe

UK businessman jailed for obstructing fraud probe

	Published : Mon, 02 Jul 2007 16:13 By : Agencies Print this Story

LONDON (Thomson Financial) - Multi millionaire businessman Shaid Luqman, a former Young Entrepreneur of the Year, was jailed for 18 months by a High Court judge today for contempt of court in connection with an investigation into fraud at his former company.

The 38-year-old, who is 238th in the Sunday Times Rich List, with a personal fortune of 250 mln stg, has failed to comply with court orders won by administrators of his company Lexi Holdings which went into liquidation in October last year with debts of more than 100 mln stg.

Jailing him for numerous contempts of orders won by the administrators over his assets and company records Mr Justice Henderson said the case involved 'a massive alleged fraud which the administrators of the company are still in the process of uncovering.'

The judge said Luqman was the managing director and guiding force behind Lexi Holdings.

But added: 'His background does not inspire confidence. In 1993 he was convicted on four counts of attempting to obtain property by deception and one count of obtaining property by deception, and sentenced to 21 months imprisonment.'

A few weeks before Lexi went into administration he was disqualified from acting as a company director for 15 years, the maximum permitted, in proceedings involving another of his companies, Modern Living UK Ltd.

The judge who disqualified him, Mr Justice Patten, described him as 'completely dishonest.'

Mr Justice Henderson said Lexi was incorporated in 2000 with the purpose of providing bridging loans for property transactions.

He was named Young Entrepreneur of the Year in 2004 and in July 2005 a number of banks with Barclays as the agent provided Lexi with a loan facility of 120 mln stg.

But the judge said that in breach of the loan agreement Luqman and his co-directors - almost all members of his family in Britain and Pakistan - 'paid large sums of company money into other accounts.'

Accountancy firm KPMG who are acting as administrators are claiming 119 mln stg from Luqman accounts.

The judge said Luqman himself is accused of being the recipient of much of the money alleged to have been misappropriated from the company accounts. But he denies all the allegations.

In his judgment he found that when two KPMG partners arrived at the Manchester offices of Lexi Holdings in October 2006 they found the premises had been virtually emptied of all of the company's books, papers and computers.

'They formed the view in the course of their investigations that the removal of the records had occurred as a result of a deliberate strategy of concealment,' said the judge.

He said that during an insolvency hearing Luqman admitted that most of the companys books and records were shredded or disposed of in August and September 2006.

KPMG then won a freezing order against Luqman and members of his family involved in the case.

He was ordered to deliver up tracing information about his company and deliver up his passport.

The judge imposed various sentences of between two weeks and 18 months for various contempts, but said they were to run concurrently.

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