“The evidence as to these frauds was, and remains, strong and undisputed,” ruled the Court
“A huge win for our investors,” Yieldstreet said
NEW YORK–(BUSINESS WIRE)–A British high court has ordered the owners of a Dubai-based ship recycling company, Muhammad Tahir Lakhani and his sons, Muhammad Ali Lakhani and Muhammad Hasan Lakhani, to pay Yieldstreet nearly $77 million to repay loans.
The decision by the United Kingdom’s High Court of Justice also extended a global order Yieldstreet had obtained in April freezing the assets of all three Lakhanis.
“This is a huge win for our investors and Yieldstreet,” said CEO and co-Founder Milind Mehere. “It demonstrates our relentless pursuit of recovery for our investors across the globe.”
“Since our founding, we have been focused on asset quality, asset performance and, when necessary, on asset recovery,” said President and co-Founder Michael Weisz. “When we have to pursue recovery, we will be ferocious about it.”
The ruling now clears the way for Yieldstreet to seize the Lakhanis’ personal and corporate assets.
While the Lakhanis promised the press a “robust defense” based on the “full facts” — the English High Court was clear: “none of the Defendants (Tahir, Ali, and Hassan) had served any evidence or advanced any argument disputing the facts relating to the underlying fraud on which the Claimants (Yieldstreet) relied. . . the evidence as to these frauds was, and remains, strong and undisputed.”
The High Court ruling can be found here.
In court, Ali and his brother, Hasan, claimed their father induced them to sign guarantees without their appreciating what they were doing, but the court rejected that argument, writing: “This is not a case involving young children, but well-educated individuals . . . and in whom their father had sufficient confidence to vest the entire ownership of the ship recycling business in order to accomplish family succession.”
Elsewhere in the decision, the judge wrote that the sons’ claim of ignorance “carries no degree of conviction at all. Both sons were well-educated and had taken business degree courses. Ali’s degree was in Maritime Business and Maritime Law. He had then worked for Stephenson Harwood, a leading international law firm. Hasan’s degree was in Global Finance Management, and he had worked as an intern at the Emirates National Bank of Dubai.”
The High Court’s ruling would not have been possible had Yieldstreet not insisted that the Lakhanis provide more than the usual corporate guarantees for its loans, but because Yieldstreet looks to design maximum safeguards for its investments, Yieldstreet also demanded that the Lakhanis provide personal guarantees to further protect Yieldstreet.
Amended Four Wood Complaint
In New York, Yieldstreet filed an Amended Complaint on September 22 against Four Wood Capital Partners (Four Wood), the company that had introduced the Lakhanis and vouched for them, and then managed the loans made to the Lakhanis.
The Amended Complaint asserts that Four Wood and its principals not only set in motion the Lakhanis’ wrongdoing, but then helped the Lakhanis to cover up their frauds. After Yieldstreet uncovered the Lakhanis’ and Four Woods’ activities, Yieldstreet sued the Lakhanis and terminated its relationship with Four Wood.
Global Pursuit of the Lakhanis
When Yieldstreet unmasked the Lakhanis’ fraud, Yieldstreet formed a global task force that pursued recovery in six countries in a deliberate and thorough way against the Lakhanis’ and their web of companies. Yieldstreet’s London case is part of that multi-front recovery strategy against the Lakhanis, their companies and confederates. The Lakhani companies include North Star Maritime Holdings Ltd, Dubai Trading Agency, and Dubai Navigation Corp.
In Malaysia, the Malaysian High Court, in the middle of a pandemic in March, allowed Yieldstreet to seize an oil tanker the Lakhanis had pledged as collateral for a loan from Yieldstreet. That case remains pending.
Yieldstreet is also conducting forensic investigations in New York from more than 20 financial institutions to uncover additional Lakhani assets.
Yieldstreet is striving to change the way wealth is created for individual investors by opening up access to investments across a range of asset classes, including Real Estate, Marine Finance, Art Finance, Legal Finance, Commercial Loans, and Private Business Credit. More than $1.1 billion has been invested on Yieldstreet’s platform since the company was founded in 2015. To date, Yieldstreet has returned $650 million in capital back to the investor community.
Headquartered in New York City with offices in Brazil, Argentina and Greece, Yieldstreet is backed by venture firms, including Edison Partners, Greycroft, and Raine Ventures. Join the movement at www.yieldstreet.com.