The bank claims that almost the full amount, plus substantial interest, is owed to it by the family of Pakistan’s former privatisation minister Senator Waqar Ahmed Khan and his father Senator Gulzar Ahmed Khan, and the family’s companies under a 2007 loan secured on properties including Dryades, a substantial dwelling in North London’s so-called billionaire’s row, Bishops Avenue.
However, the Khan family has brought a number of counter claims. Among them it alleges that misrepresentations made by the bank, before the loan facility agreement was entered into in August 2007, cost it the opportunity to borrow more money to fund a redevelopment of Dryades and another Bishops Avenue property that would have made them “tens of millions” of profit.
Mr Justice Hamblen is to rule on issues of liability in the case, following a three-week trial. Damages will then be dealt with at a later second trial.
Presenting the case for Deutsche Bank, Raymond Cox QC said that what was once a “straightforward debt and possession claim” had been complicated by a large number of defences and counter-claims put forward by the Khan family.
He said that almost all of the loan amount remains unpaid, and that the bank also seeks to recover “substantial interest”.
Describing the case, he said that the family “entered the London property market in a big way” in 2004 and 2005, and initially enjoyed a substantial rise in the value of the properties used to secure the loan – Dryades, bought for £12m, and six Knightsbridge flats bought for a total of £12,295,000.
However, he claimed that, when property prices collapsed during the global financial crisis, it became clear during 2008 and 2009 that the family “did not have the means, or the inclination, to provide repayment” or to service the loan.
Among its counter-claims and defences, the family alleges that had they not been misled by the bank and they should have been able to borrow additional funds to finance the redevelopment of the two Bishops Avenue properties.
The trial continues.