News Article

Legislation & Litigation

Four year disqualification for property fund manager

By CreditMan 18 March 2008

A director of a property fund management company based in London has been disqualifed for four years following an investigation by Companies Investigation Branch of the Insolvency Service.

Mr Baljinder Chohan was the founding director and controlling shareholder of UK Property Fund Managers Limited ("UKPFM"), a company set up by Mr Chohan to co-ordinate the launch of a property fund and to raise up to £1billion equity for that fund. The company was based at the office of an associated company under Mr Chohan's control, UKLI Limited.

UKPFM prepared a proposal document in order to obtain funding, specifically for a Shariah law compliant property investment fund.

The proposal document was sent to a commercial bank based in Saudi Arabia for this purpose. Mr Chohan supervised and was in overall control of the proposal drafting process. Information appearing in the proposal document also found its way on to a UKPFM website.

The Companies Investigation Branch investigation into UKPFM resulted in a petition to wind up the company on public interest grounds. That petition was successful, resulting in the company being wound up on 28th September 2005. Disqualification proceedings then commenced, which were defended by Mr Chohan. This resulted in the disqualification proceedings being held before a trial hearing at the High Court in London in July and September 2007 before Registrar Baister.

The Court found that the proposal document contained a number of lies and misleading statements, including the following:

* Falsely inflated figures concerning the value of projects that the company's executive management team members had been previously involved in. In many instances the value of projects had been inflated by a factor of 10. Mr Chohan admitted that the figures in question had been "beefed up" and that he was fully aware that those beefed up figures had been included in the draft and final proposal document. In fact Mr Chohan had instructed the inclusion of those beefed up figures;

* The proposal's claim that there was an "impending partnership"
between UKPFM and an NHS Trust was found to be "manifestly untrue and misleading";

* A list of executive team members included false names;

* One named individual appearing in the proposal as an executive team member had not given his consent to act as an executive team member, and was in fact unaware that his name - the spelling of which had been deliberately altered - had been included in the proposal. In the case of another named executive team member, that individual's CV had been altered for the purposes of the proposal without his consent;

* Mr Chohan's CV, which appeared in the proposal, contained a number of "misrepresentations and some outright lies". Mr Chohan was disclosed as holding an MBA from Henley Management College. He held no such qualification, yet repeated this lie to the Companies Investigation Branch investigator. Mr Chohan's CV disclosed that he had been a Communications Director at British Airways. This was untrue;

The Court also found that during the trial Mr Chohan had put forward written and oral evidence which was found to be "unsatisfactory in a number of ways", that Mr Chohan had sought to deflect blame for the lies and misrepresentations appearing in the proposal by blaming other people and the company's professional advisors. It was also found that Mr Chohan had a "generally cavalier attitude to the truth"
in respect of his evidence.

Mr Chohan was given leave to carry on as a director of, UKLI Limited, following the disqualification order that was made against him. This leave to act was granted under the provisions of Section 17 of the Company Directors Disqualification Act 1986.

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