The market has reacted negatively to an apparently cooked up report aimed at absolving Turnstar Holdings Managing, Director Gulaam Abdoola from Dubai shady deals that cost the Botswana Stock Exchange listed company tens of millions of Pula.
Two days after Turnstar Holdings convened a special meeting to discuss the report and present the group’s financials, the listed company’s shares dropped from P189 per share to P185.
This is hardly surprising. In an apparent smoke and mirrors ruse to cover up the Turnstar Holdings Dubai multi-million Pula scandal, the BSE listed property company last year appointed Desai Law Group to conduct “an independent legal forensic investigation” into the controversial Dubai deal.
Desai Law Group however is anything but “independent”.
Sunday Standard can reveal that Desai Law Group counts among its clients both Turnstar Holdings and its Managing Director Gulaam Abdoola.”
Turnstar Holdings issued a press statement, mid- January, that, “Turnstar Board has appointed a Gaborone law firm to conduct an independent legal forensic investigation into all aspects of the Relevant Investment and Turnstar’s investment in the Palazzo Venezia property in Dubai.”
This followed a series of stories by the Sunday Standard, suggesting that both the Turnstar Holdings board of directors and Managing Director Gulaam Abdoola were not guiltless in the fraudulent Dubai property deal in which pensioners and stockholders lost close to P 50 million.”
Curiously, Desai Law Group was tasked with investigating its clients – the Turnstar board of directors and Turnstar Managing Director Gulaam Abdoola on their role in the fraudulent deal in which pensioners and stockholders lost P70 million.
Gulaam Abdoola and Rizwan Desai are joined at the hip. Abdoola is Chairman of the Botswana Muslim Association while Desai is its legal advisor. While a partner at Collins Newman & Co, Desai was personally involved in the sales deal in which Abdoola and motor Magnate Satar Dada sold Mulimani complex in Tanzania to Turnstar Holdings. Satar Dada and Gulaam Abdoola are the biggest individual share holders in Turnstar Holdings and are also partners in the controversial Bucephalus Holdings in Dubai. Desai also lists Satar Dada’s Motor Centre as his client.
While only three people, Gulaam Abdoola, Sameer Lakhani of GCP Holdings in Dubai and Uzair Razi were privy to the confidential goings on in the controversial Dubai deal, Desai Law Group only interviewed its client, Abdoola and concluded that there was no evidence that Abdoola demanded a kickback from the controversial deal. This is despite numerous letters from Lakhani’s lawyers stating that Abdoola demanded a kickback from the deal and a letter to the editor by Uzair Razi confirming that there was an agreement to pay a kickback.
The Sunday Standard also has in its possession an account statement for Gulaam issued by Sameer Lakhani’s company GCP, crediting Gulaam with a commission on the Palazzo deal of AED1.8m (approx. BWP 5.8m).
Sunday Standard has also turned up reports that on or about March 2021 Gulaam Abdoola accompanied by one Abdoola Mangoosh presented themselves at GCP offices demanding the AED 1.8m commission due to Gulaam from the Dubai shady deal. Abdoola Mangoosh a close ally of Gulaam and is the same notorious Abdoola Mangoosh from the UAE who tried to dupe the Botswana Government into selling him the BCL mine for 1US$.
Gulaam Abdoola had dealings with Sameer Lakhani and his companies long before the controversial Turnstar transaction as can be seen by investment agreement signed in 2015.
The Desai Law Group report further claimed that Razi was Turnstar’s agent in the deal. According to the report quoted in the Business weekly, “Razi was to ensure the running and collection of the rentals from the Palazzo Venezia.” Sunday Standard investigations on the other hand have turned up documents stating that the sole agent for Turnstar in Dubai was GCP holdings which is owned by Sameer Lakhani. The Sunday Standard has in its possession the MOU for the purchase of Palazzo Venezia in Dubai by Turnstar Holdings, and the addendum signed on 26th of May 2017, stipulating that the property agent managing the building was GCP properties. Both agreements were signed by Shiran Puvimanasinghe of the Finance Director of Turnstar Holdings.
The Sunday Standard has also in its possession a letter dated 27th April 2021 addressed to Mr Shiran Puvimanasinghe of Turnstar Holdings, through which GCP terminated their management contract for Palazzo.
Information passed to the Sunday Standard indicate that Uzair Razi was never hired by Turnstar Holdings. He neither signed an agreement with them nor received any compensation . He only had Power of Attorney to act on their behalf.
The Business Weekly report further stated that Uzair Razi was no stranger to scandals and he had resigned from a local bank under a cloud. The Sunday Standard contacted the FNBB Managing Director Steven Bogatsu on circumstances surrounding Razi’s resignation from FNBB, the only bank he has ever worked for in Botswana. Bogatsu responded thus: “ I can confirm that there was no controversy whatsoever surrounding Uzair Razi exit from the bank”.
The Desai Law Group’s report also seem to have missed tell-tale signs of poor corporate governance around the purchase of the controversial Dubai Palazzo Venezia property by Turnstar Holdings. Sunday Standard investigations have raised documents indicating that the sale agreement was signed on 5th April 2017 by Shiran Puvimanasinghe (Turnstar CFO and board member) representing Turnstar and Sameer Lakhani representing himself and GCP.
Curiously the agreement states at clause 5.1 that a deposit of AED1,500,000 (approx. BWP4,8m) had already been paid as early as 2nd March 2017. This is over a month before any sale agreement was officially signed nor valuation carried out.
The agreement also contained two very key conditions precedent;
2.1-The seller will obtain valuation of the property from the royal institute of chartered surveyors (RICS)
2.2 The company will secure a lessor for a period of five (5) years in respect of the Property by 15th April 2017.
Curiously, the seller GCP produced a valuation report closely matching the sale price, as required by the agreement dated 9th March 2017 a date well before the signature date of the agreement.
Further the lease agreement provided to Gulaam and Shiran by Sameer of GCP was for only 3 years with a conditional additional 2 years, the tenancy agreement in possession of Sunday Standard sets out clearly the period of tenancy as 3 years.
The lease had already been signed on 8th March 2017, prior to the sale agreement being signed, and was effective from 31st May 2017. Thus, the sale agreement being signed only on 5th April 2017, and the board confirming that a thorough due diligence was conducted. It however seems from the report that the Desai Law Group failed to picked these discrepancies.
Even more worrisome, the tenancy agreement gave the tenant an option to exit the lease with a simple 60 day’s notice and one month penalty rent. It seems this high level risk was missed by the entire Turnstar Holdings board which “comprised of experienced business and industry members.”
Enter clause 5.2 of the purchase agreement, “An amount of AED 2,884,600/-, equivalent to 10% of the Purchase Price, shall be paid to the Seller within fifteen (15) calendar days of Purchaser Board Approval, alternatively by 15th April 2017, whichever occurs first.”
From this clause in the agreement signed by Shiran on behalf of Turnstar on 5th April 2017, it is clear that at the time of paying the AED 1,500,00 (approx. BWP4,8m) deposit in March 2017, and signing of the agreement on 5th April 2017, there was still no board approval for this purchase, and agreements were entered into purely on the whims of Gulaam assisted by Turnstar CFO Shiran. The payment mentioned here was actually made on 27-Feb-2017.
Documents in Sunday Standards possession confirm that indeed the AED 1,500,000 (approx. BWP4,8m ) payment was made to GCP on 27th February 2017 equalling USD$ 410,000 . The funds were neither held in trust nor with attorneys, they were paid directly from Turnstar coffers to GCP properties, leaving Turnstar fully exposed.
The second payment of US$ 790,310 (approx. BWP9.3m) as per clause 5.2 was made on 12thApril 2017 which according to the agreement translated to the board having approved the transaction before 12th April 2017.
This would mean the board, Gulaam and Shiran would want the public to believe that the events took place as follows: On 5th April 2017, the sale and purchase agreement was signed. Then in a record 7 days the Turnstar Board was able to complete its due diligence, convene a board meeting, sanction the purchase and make the second payment to GCP of USD 790,301 (approx. BWP9.3m) which was done on 12th April 2017? Such large amounts paid directly without attorneys whilst completely unsecured with no tangible delivery.
The time frames are not practically possible and in a transaction of this value could be seen as reckless and negligent.
…… STORY CONTINUES NEXT WEEK
