By Arshad Sharif
Islamabad, January 18: An offshore shell company established with Pound £200 investment changed ownership for UK Pound £100 and earned an impressive US$32 million over 20 years, reveal the documents in Broadsheet versus Pakistan case.
Banking officials said the return of US$32 million profits on a mere investment of just British Pound £300 comes to about Ten Thousand Per Cent (10000%) interest per year for a period of twenty years, something unheard of in the banking industry.
The interest payment per annum amounts to approximately seventy-six per cent (76%) atleast.
Broadsheet LLC was established as an offshore shell company in Isle of Man in May 2000, just a month before signing the contract with NAB on June 20, 2000.
The Articles of Organization of the LLC reveal that Oxford International Holdings SA and Berkshire International Holdings SA contributed hundred pounds (£100/-) each with fifty percent shareholding of Broadsheet LLC
Company documents reveal that Mr Kaveh Moussavi contributed cash amount of one hundred pounds (£100/-) only to take over hundred per cent ownership of the company in November 2009.
The company’s statement of accounts over multiple years from 2000 till year 2020 reveal zero balance, NIL realisations and disbursements.
The only estimated value of outstanding assets of the company mention “Unknown” estimated value of possible arbitration against the government of Pakistan of damages.
The Government of Pakistan and National Accountability Bureau did not raise a question throughout arbitration proceedings or appeal processes about change of ownership of the company from Dr William F Pepper to Kaveh Moussavi in 2009 throughout the proceedings.
Lt General Amjad had signed the agreement on behalf of NAB with Dr William F Pepper of Broadsheet LLC and Mr Kaveh Moussavi did not feature in any official documents of the company till 2009.
Pakistan’s lawyers did not raise the question of law in the arbitration proceedings or appeal process that if the agreement would be valid with a company if it changed ownership after liquidation proceedings.
Students of law could better answer the question that after a company is dissolved and a new owner takes it over, is the agreement signed with an old company and previous owners still valid? Was it a question worth raising in defence of the case by Pakistan? If it was not raised, what could be the justification for it?
Responding to the general question of law, a former Attorney General of Pakistan said, “If the company is liquidated all agreements stand terminated. If payment is to be made, it becomes a debt, and can be claimed from the liquidator. If the company changes hands then the agreement remains valid as the company remains live with only change of shareholders. A dissolved company cannot be revived but a new company has to be formed. If the name is the same, this new company will not be liable for any agreement with the old dissolved company. Thus change of ownership will not have any effect on existing agreements unless the two companies are independently incorporated. The only exception is that if one can show that dissolution and reincorporation was for the purpose to avoid an agreement and debts. Thus fraud has to be pleaded in this case. The Companies Act is clear on this. And this is an acceptable principle the world over.”
“Once a company is dissolved, I don’t think there can be any change of ownership of the said company,” Barrister Ahmed Pansota told this scribe, adding, “If there is an agreement with a dissolved company, such an agreement has no legal value. Secondly, the liabilities of a dissolved company cannot be carried forward to a new entity.”
When asked the same question, a retired judge said, “In liquidation proceedings, the company can exchange hands but it is a new company, new entity. Since new owner takes over, the agreements signed by previous owners comes to an end, you cannot enter into an agreement with a dead horse. No liability or agreements of the previous company hold the field.“
The way Mr Moussavi took over Broadsheet is in itself an interesting story.
The Royal Court of Jersey had entered default judgement against Broadsheet for a sum of 29,090 Pounds on account of fees claimed by a Jersey lawyer Philip Cowan Sinel. The judgement was registered in Isle of Man on 1st April 2004 but it remained unpaid. Mr Sinel petitioned the High Court (Chancery Division) on 3rd February 2005 and a wining up order was made against Broadsheet on 7th March 2005, appointing Andrew Paul Shimmin as the provisional liquidator. By a further order dated 2nd April, 2007, Broadsheet was dissolved.
Question arises if Broadsheet was dissolved as a company in April 2007, why the Government or NAB accepted the new company with a new owner as the claimant and first paid $1.5 million and later $28.7 million.
The multi-million dollar question remains unanswered as to why the legal eagles who earned millions of dollars as legal fees and the law officers of the government did not file a case in Isle of Man to challenge the takeover and resurrection of Broadsheet LLC by Kaveh Moussavi.
Timeline of events about takeover of Broadsheet by Mr Moussavi in 2009 is mentioned in the arbitration proceedings by Sir Anthony Evans raising the big question if it was incompetence or complicity of Pakistani officials in the entire affair.