Bosses of bridging loans business leave country despite having passports confiscated and wearing electronic tags
Two multimillionaire brothers from Manchester, who are said to have defrauded £100m from the property loans business they ran, have fled the UK despite having had their passports confiscated, wearing electronic tags and having their worldwide assets subject to a freezing order.
Shaid and Waheed Luqman built their bridging loans business Lexi Holdings into a purported £300m empire after borrowing from Barclays Bank. They are believed to have absconded to Pakistan.
They have been pursued by the Serious Fraud Office for four years, but Shaid Luqman fled before he could be charged and his brother escaped later.
Waheed Luqman was on Thursday sentenced to seven and a half years in jail after being found guilty in absentia by a jury at Manchester crown court earlier in the week.
Shaid Luqman, a former Ernst & Young “young entrepreneur of the year”, had been ordered by the courts to wear an electronic tag two years ago after he made inquiries about obtaining a new passport to replace one confiscated by investigators.
This was not enough to stop the entrepreneur, who had a fortune estimated in the Sunday Times Rich List at £250m, escaping two months later.
Meanwhile, bail conditions relating to Waheed Luqman, who was sentenced to 18 months in jail in 2010 for attempting to conceal bank accounts, included the surrender of British and Pakistani passports, an electronic tag, a nighttime curfew and a requirement to report three times a week to a police station.
Two months after his brother’s departure, the SFO had been pressing the courts to remand Waheed in custody when he, too, slipped away.
Administrators from KPMG were appointed to Lexi in 2006 after Barclays received no response to demands for loan repayments. A month later, the administrators told Barclays and other creditors: “Immediately upon appointment, [we] attended the company’s premises in Manchester to secure the site and take control of the business. Upon arrival it was clear that the premises had been vacated and that none of the books or records remained.”
Later, creditors were told that freezing orders totalling more than £260m had been obtained by administrators against the worldwide assets of Luqman brothers and relations.
Lexi had drawn down loans from Barclays purportedly linked to bridging loan deals. According to the SFO, however, the funds were diverted and hidden from auditors. “Money was drained out of the company to family members in Pakistan and included large sums to the brothers’ father, Mohammed Luqman,” the SFO said.
“Though [Barclays] carried out checks on the running of the agreement [with Lexi], there was a great deal of trust involved. Unfortunately, that trust was misplaced.”
Lexi’s last published accounts show it had short-term bank loans and overdrafts of £118m at the end of 2004. Barclays had sold on much of its exposure to other lenders through a syndication deal.It is not the first time major fraud suspects have fled to Pakistan. The late founder of the Bank of Credit and Commerce International Aga Hassan Abedi fled there as the bank collapsed 1991 and successfully resisted extradiction requests until he died four years later. Abbas Gokal, one of BCCI’s biggest customers and a close friend of Abedi also fled to Pakistan, but was arrested by the SFO six years later when on a plane which stopped in Frankfurt. Tried and convicted on his return to the UK, he was sentenced to 14 years in jail.
Britain’s best known absconder was Asil Nadir, the former boss of failed FTSE 100 conglomerate Polly Peck, who fled to Northern Cyprus for 17 years before returning voluntarily. He is alleged to have embezzled £380m and was convicted and sentenced last year to 10 years in jail.