Turnstar Holdings’ board members may have breached their fiduciary duty by signing off the shady Dubai deal before carrying out a thorough due diligence – Investigations by Sunday Standard have revealed.
Turnstar board members were flown business class for a long weekend of fun and treats stretching from Friday October 28th April to Tuesday May 2nd 2017.
The board members, former cabinet minister Patrick Balopi who is also board Chairperson, Mokgadi Nteta, Ishmael Nshakazhogwe and Peo Pillar checked in at the upmarket Sheraton Dubai Mall on 28th April for a six-day fun filled junket, more than three weeks after the sale agreement between Turnstar Holdings and Global Capital Partners had already been signed. The sale agreement was signed on 5th April 2017.
With the heavy-lifting of conducting a due diligence no longer necessary as the deal had already been inked, perhaps the highlight of the trip was a celebratory lunch at the 7-star Burj al Arab, the world’s most luxurious hotel which plays host to Hollywood A listers and Arab oil Sheikhs.
Although Turnstar Holdings Managing Director Gulaam Abdoola told the board last week that, “as may be expected, Turnstar and Turnstar Investments effected a due diligence on the property via reputable entities in Dubai, a report by an expert appointed by the Dubai Dispute Committee suggests otherwise.
Information turned up by the Sunday Standard has revealed that Turnstar Investments relied on a valuation by a questionable valuer who is not accredited to the Dubai Land Department.
In his report, dismissing the claim by Turnstar Holdings, the expert stated that, ‘the evaluation given by the seller should have been rejected by Turnstar Investments and they should not have completed the sale until after submitting an appraisal from the Dubai Land department.
It also emerges from Gulaam Abdoola’s report to the board that “the leases which underpinned the due diligence were false and all tenants were non-existent.”
Abdoola however shifted all blame to the Turnstar agent in Dubai: “As Turnstar Investments’ agent in Dubai Mr Razi should have known of the falsity of the leases and the fraudulent sale structure. That he was complicit in the fraud appears to be evidenced by a letter dated 22 April 2021 from Davidson & Co (Mr Lakhani/GCP’s attorneys in Dubai). The letter indicates that Mr Lakhani/GCP paid and made over to Mr Razi the sum of AED 1,422,3000 as commission fees and AED 1,153,840 for the transfer fees. It is unclear why Mr Razi received any commission and why, if indeed he was given the amount indicated for transfer fees, he did not pay it over to Dubai Land department. It seems from the above that Mr Lakhani/GCP and Mr Razi have themselves had some sort of falling out. Turnstar Investments have retained the services of Ahmed law firm in Dubai. There are currently in the relevant Dubai courts civil and criminal claims by Turnstar Investments against both Mr Lakhani/GCP and Mr Razi.”