Lexi Holdings
Encyclopedia
Lexi Holdings
plc was a United Kingdom
based finance, property management
and property development company, that collapsed in to administration in October 2006 with debts of over £100M.
i student at the University of Manchester
, who studied finance. He bought his first house during his studies, striking a deal with the university's accommodation agency. This enabled him to approach banks re financing, and by the time of his graduation in 1991 owned a portfolio of 24 flats and houses, which he rented out to fellow students.
Renamed Lexi Holdings plc in 2003, clients included MP's and footballers. The firm grew so well and quickly - in 2003 it was reported to be making profits of £21.4m on a turnover of £36m - that in 2004 Luqman was named Young Entrepreneur of the Year by Ernst and Young.
At its peak, the company was worth £300M and owned a Gulfstream IV
business jet, while Luqman had a personal estimated wealth of £250m personal wealth, placing him 238th on the Sunday Times Rich List
. In iterview in 2005, Luqman commented: "Overall, we are a billion-pound company. In 10 or 20 years, I want us to be as big as a high street bank."
If clients defaulted on loans, Luqman would buy the development at a pre-agreed rate, via another property development company he owned. This company at the time of collapse owned the derelict Mansfield Brewery
, a retail park in Leeds, a development site near Halifax
, two hotels in the Lake District
; and the former Pound store and head office on Piccadilly Gardens
, with approved plans to develop it into an eight storey residential development called "Lexi Towers." Many of these projects were designed by architects Hodder Associates, with whom Lexi had partnered into projects in Pakistan, Saudi Arabia
and a £3.5Bn consortia leading a retail development in Cricklewood
.
to defend his companies, who claimed in mid-2006 that Lexi Holdings had raised £245m from the sale of the European division to "a Middle Eastern Bank", which it declined to name.
But in late 2006 in relation to furnishings business Modern Living Ltd which collapsed with debts of £1.56M, Manchester-based High Court judge Mr Justice Patten called Luqman "completely dishonest." Luqman and his brother Waheed were both banned from running a company for 15 years, and business associate Kasia Saleh disqualified for 10 years.
Creditors immediately appointed administrators to all of his companies, and his business assets were seized, including Lexi Holdings. At this time Lexi employed 18 people in Manchester and 6 in its Mayfair office. Max Clifford was among over 100 unsecured creditors, owed £15,000.
Lexi's major creditor Barclays Bank, which headed a consortia of banks providing various forms of finance, appointed administrators KPMG
. In their initial report, they commented:
On investigation, KPMG stated that its attempts to realise value from Lexi were held back because "in many cases the borrower is subject to insolvency proceedings, while numerous properties are in a poor state of repair or are vacant and have been subject to fly tipping or squatters." In a two year investigation, they could only find £12.5M of assests, including £910,000 raised from the sale of No Man's Land Fort in the Solent
in March 2009, valued originally at £14M. The difficulty in recovering assets resulted in a further court case being brought by KPMG/Lexi against Luqman, who was resultantly sentenced to serve a 21-month jail term for failing to tell the judge where Lexi's assets had gone.
Subsequent investigation showed that the company took part in organised fraud
, valuing property above its market value, in an arrangement with valuers, mainly including Ian McGarry, the former head of valuations for surveyors Dunlop Haywards. After his assets were restrained under the Proceeds of Crime Act 2002
, the Serious Fraud Office brought a case against McGarry on behalf of Lexi. Court cases were also issued against DTZ
, with one revolving around the valuation of No Man's Land Fort.
In October 2010, Luqman's brother Waheed was jailed for 18 months for contempt after he attempted to conceal bank accounts, retained company documents and breached passport orders in relation to the failure of Lexi.
A claim by KPMG/Lexi against Manchester-based law firm Pannone for £50M with regards alleged breach of contract and professional negligence, was settled out of court in February 2011.
Lexi Holdings
Lexi Holdings plc was a United Kingdom based finance, property management and property development company, that collapsed in to administration in October 2006 with debts of over £100M.-Background:...
plc was a United Kingdom
United Kingdom
The United Kingdom of Great Britain and Northern IrelandIn the United Kingdom and Dependencies, other languages have been officially recognised as legitimate autochthonous languages under the European Charter for Regional or Minority Languages...
based finance, property management
Property management
Property management is the operation, control of ususally on behalf of an owner, and oversight of commercial, industrial or residential real estate as used in its most broad terms. Management indicates a need to be cared for, monitored and accountability given for its usable life and condition...
and property development company, that collapsed in to administration in October 2006 with debts of over £100M.
Background
The company was formed by Shaid Luqman, a British-born ethnic-PakistanPakistan
Pakistan , officially the Islamic Republic of Pakistan is a sovereign state in South Asia. It has a coastline along the Arabian Sea and the Gulf of Oman in the south and is bordered by Afghanistan and Iran in the west, India in the east and China in the far northeast. In the north, Tajikistan...
i student at the University of Manchester
University of Manchester
The University of Manchester is a public research university located in Manchester, United Kingdom. It is a "red brick" university and a member of the Russell Group of research-intensive British universities and the N8 Group...
, who studied finance. He bought his first house during his studies, striking a deal with the university's accommodation agency. This enabled him to approach banks re financing, and by the time of his graduation in 1991 owned a portfolio of 24 flats and houses, which he rented out to fellow students.
History
In 2000 Luqman secured a loan of £2.5m from Barclays Bank to form Pearl Holdings. The company provided bridging loan-finance to high net worth individuals to build property portfolios, focusing mainly on projects which converted offices and hotels into flats. Providing agreed finance against a surveyor-agreed valuation of the final project, the company would lend within 24 hours. The loan would remain in place until project financing could be provided by a long-term lender.Renamed Lexi Holdings plc in 2003, clients included MP's and footballers. The firm grew so well and quickly - in 2003 it was reported to be making profits of £21.4m on a turnover of £36m - that in 2004 Luqman was named Young Entrepreneur of the Year by Ernst and Young.
At its peak, the company was worth £300M and owned a Gulfstream IV
Gulfstream IV
The Gulfstream IV and derivatives are a family of twin-jet aircraft, mainly for private or business use. The aircraft was designed and built by Gulfstream Aerospace, a General Dynamics company based in Savannah, Georgia, United States from 1985 until 2003.-Design and development:Gulfstream, in...
business jet, while Luqman had a personal estimated wealth of £250m personal wealth, placing him 238th on the Sunday Times Rich List
Sunday Times Rich List
The Sunday Times Rich List is a list of the 1,000 wealthiest people or families in the United Kingdom, updated annually in April and published as a magazine supplement by British national Sunday newspaper The Sunday Times since 1989...
. In iterview in 2005, Luqman commented: "Overall, we are a billion-pound company. In 10 or 20 years, I want us to be as big as a high street bank."
If clients defaulted on loans, Luqman would buy the development at a pre-agreed rate, via another property development company he owned. This company at the time of collapse owned the derelict Mansfield Brewery
Mansfield Brewery
Mansfield Brewery was constructed in 1855 on land that was once a part of the North Notts Coalfield in the market town of Mansfield, England. The main beer brewed here was Mansfield Bitter, along with other popular brands including Riding Bitter, Old Bailey, and Marksman Lager. The brewery also...
, a retail park in Leeds, a development site near Halifax
Halifax, West Yorkshire
Halifax is a minster town, within the Metropolitan Borough of Calderdale in West Yorkshire, England. It has an urban area population of 82,056 in the 2001 Census. It is well-known as a centre of England's woollen manufacture from the 15th century onward, originally dealing through the Halifax Piece...
, two hotels in the Lake District
Lake District
The Lake District, also commonly known as The Lakes or Lakeland, is a mountainous region in North West England. A popular holiday destination, it is famous not only for its lakes and its mountains but also for its associations with the early 19th century poetry and writings of William Wordsworth...
; and the former Pound store and head office on Piccadilly Gardens
Piccadilly Gardens
Piccadilly Gardens is a green space in Manchester city centre, England, situated at one end of Market Street and on the edge of the Northern Quarter...
, with approved plans to develop it into an eight storey residential development called "Lexi Towers." Many of these projects were designed by architects Hodder Associates, with whom Lexi had partnered into projects in Pakistan, Saudi Arabia
Saudi Arabia
The Kingdom of Saudi Arabia , commonly known in British English as Saudi Arabia and in Arabic as as-Sa‘ūdiyyah , is the largest state in Western Asia by land area, constituting the bulk of the Arabian Peninsula, and the second-largest in the Arab World...
and a £3.5Bn consortia leading a retail development in Cricklewood
Cricklewood
Cricklewood is a district of North London, England whose northeastern part is in the London Borough of Barnet, western part is the London Borough of Brent and southeastern part is in London Borough of Camden.-History:...
.
Collapse
In 2005, Luqman appointed publicist Max CliffordMax Clifford
Maxwell Frank Clifford is an English publicist, considered the highest-profile and best-known publicist in the United Kingdom...
to defend his companies, who claimed in mid-2006 that Lexi Holdings had raised £245m from the sale of the European division to "a Middle Eastern Bank", which it declined to name.
But in late 2006 in relation to furnishings business Modern Living Ltd which collapsed with debts of £1.56M, Manchester-based High Court judge Mr Justice Patten called Luqman "completely dishonest." Luqman and his brother Waheed were both banned from running a company for 15 years, and business associate Kasia Saleh disqualified for 10 years.
Creditors immediately appointed administrators to all of his companies, and his business assets were seized, including Lexi Holdings. At this time Lexi employed 18 people in Manchester and 6 in its Mayfair office. Max Clifford was among over 100 unsecured creditors, owed £15,000.
Lexi's major creditor Barclays Bank, which headed a consortia of banks providing various forms of finance, appointed administrators KPMG
KPMG
KPMG is one of the largest professional services networks in the world and one of the Big Four auditors, along with Deloitte, Ernst & Young and PwC. Its global headquarters is located in Amstelveen, Netherlands....
. In their initial report, they commented:
On investigation, KPMG stated that its attempts to realise value from Lexi were held back because "in many cases the borrower is subject to insolvency proceedings, while numerous properties are in a poor state of repair or are vacant and have been subject to fly tipping or squatters." In a two year investigation, they could only find £12.5M of assests, including £910,000 raised from the sale of No Man's Land Fort in the Solent
Solent
The Solent is a strait separating the Isle of Wight from the mainland of England.The Solent is a major shipping route for passengers, freight and military vessels. It is an important recreational area for water sports, particularly yachting, hosting the Cowes Week sailing event annually...
in March 2009, valued originally at £14M. The difficulty in recovering assets resulted in a further court case being brought by KPMG/Lexi against Luqman, who was resultantly sentenced to serve a 21-month jail term for failing to tell the judge where Lexi's assets had gone.
Subsequent investigation showed that the company took part in organised fraud
Fraud
In criminal law, a fraud is an intentional deception made for personal gain or to damage another individual; the related adjective is fraudulent. The specific legal definition varies by legal jurisdiction. Fraud is a crime, and also a civil law violation...
, valuing property above its market value, in an arrangement with valuers, mainly including Ian McGarry, the former head of valuations for surveyors Dunlop Haywards. After his assets were restrained under the Proceeds of Crime Act 2002
Proceeds of Crime Act 2002
The Proceeds of Crime Act 2002 is an Act of the Parliament of the United Kingdom which provides for the confiscation or civil recovery of the proceeds from crime and contains the principal money laundering legislation in the UK.-Background:...
, the Serious Fraud Office brought a case against McGarry on behalf of Lexi. Court cases were also issued against DTZ
DTZ
DTZ is a global real estate adviser headquartered in London, employing over 10,000 people in 148 cities in 43 countries, operating in Europe, Middle East and Africa, Asia and the Americas....
, with one revolving around the valuation of No Man's Land Fort.
Present
As a result of the case against Luqman, Lexi was liquidated. Further cases against Luqman resulted in a second period in jail, since which he has suffered medically diagnosed psychological issues. Banned from travelling abroad and with a court order both holding his existing passport and banning him from applying for a replacement, in April 2011 he was sentenced to 10 months suspended for 18 months and ordered to wear an electronic tag for three months, after applying for a replacement passport.In October 2010, Luqman's brother Waheed was jailed for 18 months for contempt after he attempted to conceal bank accounts, retained company documents and breached passport orders in relation to the failure of Lexi.
A claim by KPMG/Lexi against Manchester-based law firm Pannone for £50M with regards alleged breach of contract and professional negligence, was settled out of court in February 2011.