Strand, London, WC2A 2LL
B e f o r e :
| Meera Ashish Thakkar
|Ashish Jagdish Thakkar
Mr Patrick Chamberlayne QC and Ms Lucy Owens for the First Respondent
Mr Timothy Scott QC for the Second and Third Respondents
Hearing dates: 6th to 10th February 2017
Crown Copyright ©
MR JUSTICE MOOR:-
(a) The terms on which the First Respondent's mother, Sarla Thakkar (the Second Respondent) and his sister, Ahuti Chug (the Third Respondent) hold the shares in Inspire Holdings Group Ltd; and
(b) The extent of his interest in Inspire Holdings Group Ltd, Mara Group Holdings Ltd (hereafter "the Group") and/or any of the underlying companies or assets.
(a) The Applicant, Meera Thakkar as Meera;
(b) The First Respondent, Ashish Thakkar as Ashish;
(c) The Second Respondent, Sarla Thakkar as Sarla;
(d) The Third Respondent, Ahuti Chug as Ahuti;
(e) The First Respondent's father, Jagdish Thakkar as Jagdish;
(f) The First Respondent's eldest sister, Rona Kotecha as Rona;
(g) The Applicant's brother, Prashant Manek as Prashant.
"[a sham] means acts done or documents executed by the parties to the "sham" which are intended by them to give to third parties or to the courts the appearance of creating between the parties, legal rights and obligations different from the actual legal rights and obligations (if any) which the parties intend to create".
"…If property held by a husband has been put into the name of someone who, on the evidence, is obviously a bare trustee for him, there will be no problem in holding that the beneficial ownership has not changed….the court will also not be bamboozled by the use by husbands to a like end of "shams, artificial devices and similar contrivances".
"Ashish J Thakkar, Non-Executive Director
Mr Thakkar is the founder of Mara Group and Mara Foundation. Mr Thakkar started his first IT company in 1996 at the age of 15 in Uganda. Since then, Mr Thakkar has successfully driven the growth of Mara Group to become a globally recognised multi-sector conglomerate with investments in IT services, manufacturing, agriculture and real estate operations in 21 countries (of which 19 are African) that employ over 8,000 people…."
"Mara's first company was founded by Ashish J Thakkar in 1996. Ashish began his career in business at the age of 15 by borrowing $5,000 to set up an IT company in Uganda. Within a year, he transitioned from a high school student to a full time entrepreneur.
Since then, Mara has evolved into an international multi-sector business with operations and interests across 22 African countries. Ashish has successfully driven the growth of Mara by identifying opportunities to build businesses in under-served markets and by selectively partnering with international firms focussed on expanding in Africa.
Among Mara's credits include building the leading corrugated cardboard packaging company in Uganda (Riley Packaging), founding a Pan-African IT services company (Mara Ison) and establishing an African business process outsourcing company, operating in ten African countries (Ison BPO)."
(a) Jagdish, Sarla and Ashish as the initial beneficiaries, entitled to the assets and income during his (sic) lifetime [Article 1];
(b) Following the death of all the three first beneficiaries, second beneficiaries would be entitled to enjoyment of the Foundation's assets and its income. Meera would be entitled to 50% of the income as well as maintenance of living standards, housing and living expenses; Ashish's children would be entitled to 50% of the Foundation's assets and interest [Article 3];
(c) If the above failed, Rona and Ahuti would benefit.
"At the time the whole structure was set up, the idea was to keep the assets in the foundation for the family. Due to the fact that Home Management has the General Power of Attorney on the company Inspire Corporation Ltd, we are liable to our compliance department and therefore need to know what is going on and for what reason the new company is needed. Therefore, prior to incorporate (sic) a new company to the structure, I need to check with our compliance department and we need to give our approval to this transaction".
"Unfortunately, do [sic] KYC issues with my family trust, I'm having to put the holding of Mara Africa Holdings and Mara Investment Partners in a temporary structure called Midas which is owned by my sister, Ahuti for 2–3 months and then re-position in my structure once we've sorted out the issues".
"As to avoid in detail KYC for all existing account and upcoming account, we need to open MG main account with SCB. Asif will manage the KYC for the same and will manage to open account without submitting any paper for Inspire. We will just submit the declaration that Ashish J Thakkar is the ultimate beneficiary owner".
"RBH Foundation was set up by Sarla Thakkar, the Respondent's mother and Ahuti Chug, the Respondent's sister in 2008. Inspire Corporation SA was set up through the vehicle of the RBH Foundation as a holding company with bearer shares. However, the Respondent understands that Ahuti Chug's husband required her to stop being a shareholder because his own business was in financial difficulty. The Respondent's father, Jagdish Thakkar agreed to stand as a shareholder in place of Ahuti Chug. However, the Respondent's father also wanted there to be an additional younger shareholder because of his and Sarla Thakkar's ages. The Respondent's father wanted the Respondent to hold the bearer shares on the basis that Ahuti was beneficially entitled to them. There is no documentation in relation to this as it was a family arrangement. On 25 July 2012, Ahuti Chug's husband died suddenly and unexpectedly. Thereafter, along with the Respondent's mother, Ahuti transferred the assets of Inspire Corporation SA to the newly formed Inspire Holdings Group Limited. The Respondent does not have and never has had any legal or beneficial interest in Inspire Holdings Group Limited and is not a director and never has been."
The oral evidence
My findings of fact
(a) The whole purpose of a Foundation such as RBH in a jurisdiction such as Panama is to hide the true ownership of assets from prying eyes. It is very difficult to get any information. Indeed, the Regulations were not produced into this litigation until the middle of 2016 by Swiss lawyers. Mr Chamberlayne on behalf of Ashish accepted in his closing submissions that the whole purpose of a Foundation is to keep family arrangements private. There was absolutely no reason to hide Ahuti's interest if it was genuine. Her husband's creditors would never have found out. I do not know whether or not there was any merit in the argument that the family solicitor, Mr Saujani should not know. I did not have the benefit of hearing from him and solicitors are required to keep their clients' affairs confidential. But, even if there was some genuine fear in that regard, Mr Saujani did not have to be the Protector and the information required to draft the Regulations could have been given direct to those administering the Foundation in Switzerland.
(b) In any event, Ahuti's other financial actions show that there was no truth in her claim that it would be "financial suicide" to name her as a beneficiary. She says that she continued to run her very successful real estate business via Trio, yet Trio was, she says, in her husband's name. The profits would therefore be directly vulnerable to his creditors. If she was so concerned, why did she not put her real estate business, into a different structure?
(c) Moreover, there is no dispute that Computerworld and Midas were both in her name. I am quite unclear as to what assets these companies held but she told the court that she undertook two property deals in London via Midas. As she was so vague about it, I have a strong suspicion that they at least commenced whilst her husband was alive. But even if that is not correct, there is no doubt that Mara Investment Partners Ltd and Mara Africa Holdings were both put into Midas whilst her husband was still alive. This shows that it was untrue to say that it would be "financial suicide" for her to have an interest in Mara Panama via the Foundation. It is no wonder she distanced herself from that statement at the commencement of her oral evidence but it was, of course, too late. Ashish and she had no concern about putting assets into companies she owned so they certainly would not have had reservations about her having an interest in Mara Panama via the Foundation. To say that the assets were placed in Midas only for a short period really does not answer the point at all.
(d) The fundamental question, however, to which there is absolutely no answer is why she should have an interest in the Mara Group to the exclusion of Ashish. I have already noted that he was the entrepreneur. He made the money for the Mara Group. Her businesses, Computerworld, Midas and Trio never went into the Mara Group. She was clearly concentrating on Trio rather than Mara for much of this time. She only returned to Mara in November 2014. I reject in its entirety Ashish's explanation that he was not interested in having a share. Moreover, if it was right that Ahuti should have a share, why did Rona not have a share?
(e) There is equally no explanation that can be offered for why Meera and any children of Ashish were named as secondary beneficiaries in the 2012 amendments if this share was exclusively for Ahuti. It is impossible for Ahuti to say that she could not be named at that point because she was named to the extent of 12.5%.
(f) I regret to say that I find that the story has changed as documentation has emerged. Initially, there was no reference at all to this arrangement either in the Form E or the first answers to questionnaire. There was just a bland assertion that Ashish had never had a legal or beneficial interest in Mara Group Holdings Ltd. Ashish's third replies were thoroughly misleading in numerous respects. The Foundation was not set up by Sarla and Ahuti as claimed. Ahuti's husband cannot have required her to "stop being a shareholder" because she never had been. Although the reply then said that "the Respondent's father, Jagdish agreed to stand as a shareholder in place of Ahuti Chug," it is the family's case that Jagdish was a beneficiary in his own right so it is impossible to see how he could ever have stood as a shareholder for her. It is right that the explanation then goes on to say that Jagdish "wanted there to be an additional younger shareholder because of his and Sarla Thakkar's ages. The Respondent's father wanted the Respondent to hold the bearer shares on the basis Ahuti was beneficially entitled to them" but I reject that statement as being palpably untrue. Finally, the reply said that Ahuti and Sarla transferred the assets of Inspire Panama to the BVI. That is also completely wrong.
(g) The whole story simply does not ring true. Ahuti said in her evidence that the law in Dubai does not say that a wife can be liable for the debts of her husband. Her evidence is that she would have been susceptible to indirect pressure. I can see how she might have been subject to pressure from creditors but I cannot see how her having a share in a business via a Foundation can have worsened the situation. I consider she would have been just as susceptible to pressure if she had a very significant interest in the Mara Group held for her by her brother as she would have been if it was held for her direct in the Panamanian structure. Moreover, if it is indirect pressure from creditors of which she was concerned, I do not see why it would automatically end on her husband's death.
(h) The final point, of course, is that there is absolutely no mention of this anywhere, not even in private emails between the family. I regret to say that I consider the whole thing to be palpable nonsense and simply manufactured for this case to attempt to explain why Ashish was listed as a first beneficiary in the Regulations. It follows that I find I have been repeatedly lied to by all three Respondent Thakkar witnesses, which has extremely serious consequences for the rest of their evidence. I had been even told in the written documentation that Sarla and Jagdish are the ultimate decision makers and controllers of Mara when this was demonstrably false even before Jagdish's evidence. I find that these falsehoods explain Jagdish's dreadful presentation as a witness. He was simply uncomfortable lying. Turning to Sarla, I recognise that she is not in the best of health but I accept Mr Pointer's submission that she could have filed a statement and then applied for it to be admitted pursuant to the Civil Evidence Act. Alternatively, she could have given evidence from Dubai. On the balance of probabilities, I find that she did not attend as she was not prepared to lie to this court. That is to her credit although it is not to her credit that she has still instructed her lawyers to fight this case on the basis that the interest was held for Ahuti.
(a) The First Respondent's mother, Sarla Thakkar (the Second Respondent) and his sister, Ahuti Chug (the Third Respondent) hold the shares in Inspire Holdings Group Ltd as nominee/bare trustee for the First Respondent, Ashish Thakkar; and
(b) The extent of Ashish's interest in Inspire Holdings Group Ltd, Mara Group Holdings Ltd (hereafter "the Group") and/or any of the underlying companies or assets is 100%.
Mr Justice Moor
10th February 2017