Insolvency Service
Printable version E-mail this to a friend

Four year disqualification for property fund manager

Four year disqualification for property fund manager

INSOLVENCY SERVICE News Release (Ins/Coms 68) issued by The Government News Network on 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.

Notes to Editors

1. Baljinder Chohan, whose date of birth is 9 April 1975, and current residential address is Al Majara 1, Dubai Marina, PO Box 502901, Dubai, United Arab Emirates, was disqualified from being a company director for a period of 4 years on 14 December 2007.

2. Companies Investigation Branch, part of the Insolvency Service, carries out confidential enquiries under Section 447 of the Companies Act 1985 and, where necessary, takes further action in the name of the Secretary of State. This can include winding up proceedings in the public interest or disqualification proceedings against directors under Section 8 of the Company Directors Disqualification Act 1986.

3. Section 8 of the Company Directors Disqualification Act 1986 allows the Court to make a disqualification order of up to 15 years for unfit conduct. On 2 April 2001, amendments were introduced by the Insolvency Act 2000 allowing directors, with the agreement of the Secretary of State, to avoid the need for a Court hearing by offering an acceptable disqualification undertaking. This has the same legal effect as a disqualification order made by the Court and usually includes a schedule identifying the director's unfit conduct. The consequences of breaching a disqualification undertaking are the same as those for breaching a disqualification order; a fine or imprisonment for up to two years.

4. The Insolvency Service administers the insolvency regime investigating all compulsory liquidations and individual insolvencies (bankruptcies) through the Official Receiver, to establish why they became insolvent. The Service also authorises and regulates the insolvency profession; deals with disqualification of directors in corporate failures; assesses and pays statutory entitlement to redundancy payments when an employer cannot or will not pay employees; provides banking and investment services for bankruptcy and liquidation estate funds; and advises ministers and other government departments on insolvency law and practice.

5. Companies House maintains a public register of disqualified directors that can be viewed at http://www.companieshouse.gov.uk.

6. Members of the public who think that they know of any person who is acting in breach of a Disqualification Order or Undertaking should report that person's details to The Insolvency Service Enforcement Hotline on 0845 601 3546 (24 hour message service).

7. For further information about Companies Investigation Branch, the Insolvency Service and disqualifications see: http://www.insolvency.gov.uk