London: A former Pakistani minister has dragged Deutsche Bank to a commercial court, alleging that it cheated and defrauded him and his family members by first promising them an attractive investment and loan package and later changing the deal.
Lawyers for Waqar Ahmed Khan, former Minister for Investment and Privatisations, told the litigation trial at the Royal Court of Justice`s Commercial Court here that the bank defrauded their client and members of his family.
Waqar Ahmed Khan, 49, is a PPP senator and son of Gulzar Ahmed Khan, another senator and eminent politician.
The case involves a package deal the family agreed with the bank using the family properties in London as security, a report in the News said.
The lawyers alleged that Deutsche Bank convinced the family to move their business to it from UBS by promising them an attractive investment and loan package using the family properties in London as security.
According to the family`s allegation, despite signing the loan agreement, Deutsche unlawfully changed their mind to lend the full amount and then tried to cover up by sending one of their relationship managers to the family home in Lahore to obtain signature on a document allowing the bank to reduce the amount to be drawn down by 11 million pounds.
If proven, this amounts not only to a breach of contract by the bank but much more seriously, a potential fraud against their private clients.
At the centre of the dispute is the future ownership of a planned 80 million pounds "super mansion" at the Bishops Avenue, famously know as billionaires` row where Arab royal families and business tycoons live, and six luxury apartments worth around 40 million pounds, the report said.
The Khan family won permission in 2009 to demolish it and replace it with a 46,000 sq ft residence, which would have been London`s largest mansion house after Buckingham Palace. But the Khan family claims that Deutsche Bank unlawfully withheld 11 million pounds required for its development.
The family was unable to carry out its development plans and lost substantial profits, said to run into tens of millions of pounds, the News cited the court papers as saying.
In addition, the family claim that Deutsche tried to cover up the fraud by engineering a default on the loan agreement using dubious valuations and charging a default interest rate.
The Deutsche will argue that the property portfolio fell almost by half in value in 2008 and 2010 giving them right to terminate the loan. However, the Khans contradict the claim.
In a surprise move shortly before the trial, the Deutsche Bank dropped its claim that five family members are jointly and severally liable to repay a sum in the region of 60 million pounds, the family`s solicitor, Richard Slade, was quoted as saying by the paper.