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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