Father of jailed Lexi Holdings boss ordered to pay £16.2m

The father of jailed Lexi Holdings boss Shaid Luqman has been ordered to pay a £16.2m claim brought by Lexi’s administrator, KPMG. Briggs J made the order in view of Mohammed Luqman’s continued failure to comply with an asset disclosure order obtained by KPMG in November 2006. The £16.2m claim, which is part of KPMG’s £119m claim resulting from the collapse of Lexi in October 2006, is based upon allegations that large unauthorised payments were made by Lexi to Mohammed Luqman’s bank account in Pakistan. Luqman claimed that he was an innocent middleman who, at the direction of his son, passed all the money to third parties to repay Pakistani investors and creditors of Lexi and that he does not own any property in the UK or Pakistan. However, in August, Mummery LJ held that Luqman’s claim that he owned no assets worth more than £5,000 was “incredible” and that unless he complied in full with court orders for the disclosure of assets within 14 days, his “defence would be struck out and he would be debarred from defending these proceedings further”. Despite that warning, Briggs J today held that Luqman has “maintained, and continues to maintain, an incredible assertion as to his lack of assets”. He said: “[Luqman] admits to having obtained, and has so far wholly failed to identify, with any credibility, what he has done with a very substantial amount of [Lexi’s] money.” The judge also awarded indemnity costs in favour of Lexi on the grounds of “the lamentable manner in which [Luqman] contrived to frustrate the pursuit by the claimant of its tracing remedies”. In a separate judgment given immediately afterwards, the judge ordered judgment in favour of Lexi against four companies allegedly owned and controlled by Shaid Luqman: Tona 2003, Viewfresh (2004), KNJ and Beauchamp Ventures. Shaid Luqman, the former Ernst & Young “Young Entrepreneur of the Year”, who once claimed to have a £200m property empire, is serving a two-year prison sentence and is prevented from contesting the multi-million-pound claim because of breaching court orders. Lexi Holdings plc v Luqman and others Chancery Division (Briggs J) 30 October 2007. Philip Marshall QC and Ruth Holtham (instructed by DLA Piper LLP) appeared for the claimant; James Gibbons (instructed by Birchall Blackburn, of Manchester) appeared on behalf of the fifth defendant.