Two months after financial advice firm IFS Qatar (IFSQ) was banned from accepting new business; the company lost a court case brought by a ‘former consultant’/shareholder.
According to court documents seen by International Adviser, the Qatar International Court and Dispute Resolution Centre ruled in favour of Aycan Richards on 14 December 2020 and ordered the firm to pay the capital sum of QAR392,500 (£78,917, $107,603, €87.731) plus interest and costs.
The defendants are named as IFSQ and Nigel Perera, the firm’s former chief executive.
According to the Qatar Financial Centre Regulatory Authority (QFCRA), the executive function at IFSQ is presently held by Rudolfs Veiss, whose authorised status is currently suspended.
Merits of the case
The legal action centred on the failure of IFSQ and Perera to pay Richards an agreed retainer of QAR78,500 per month for six months, as part of a consultancy agreement.
According to the court document, Perera signed six post-dated cheques; the first of which was paid on 15 January 2020.
However, a month later he requested Richards return the unpaid cheques so they could be countersigned by a new company signatory.
The cheques were subsequently shredded.
In early March 2020, Richards sent the company a letter demanding payment. Following no resolution, she initiated court proceedings.
In July 2020, IFSQ disputed that the international court held jurisdiction and claimed that the consultancy agreement was unenforceable because it was a ‘simulated transaction’.
The jurisdiction question was settled in October and the hearing set for 30 November.
Off to a bad start
The parties were given until 25 November to file skeleton briefs.
Richards met the deadline; but the defendants submitted their briefs on the eve of the hearing, to the obvious displeasure of the court.
“These skeletons did not mention the delay or offer any satisfactory explanation for this default,” the court documents state.
Their legal representative also failed to provide an explanation for missing the deadline.
The court stated: “Although as a matter of principle, this court cannot and will not condone the wanton non-compliance with its directions, we decided that, in all the circumstances of this case and particularly the absence of any prejudice to the other side, the defendants should be allowed to rely on their skeleton submission.”
Case for the defence
IFSQ and Perera argued that the consultancy agreement was never intended to be enforceable but constituted a fictitious or simulated transaction.
They claimed that the agreement was signed by Perera, on behalf of IFSQ, under duress resulting from threats by Richards to report one or both of them to the police.
According to the defendants, the monthly payments equalled the equivalent of £100,000 which was the sum loaned by Richards to the former owner of IFSQ, Thomas Paul Fewtrell.
They said the money was to be repaid by Fewtrell and not IFSQ.
Richards had discussed acquiring shares in IFSQ in January 2019. It came to light that the company was struggling to maintain the minimum capital requirements, resulting in her loaning £100,000 to Fewtrell, who would then transfer the loan amount to IFSQ.
A sale and purchase agreement was entered into in March 2019 but Richards withdrew from it in July of that year.
Her capital contributions were refunded, and she returned the shares.
But the £100,000 was outstanding.
Consultancy agreement
Following repeated demands for payment, Perera informed Richards that IFSQ was unable to repay the sum immediately.
He also did not want the money to be recorded as a loan, as it would reduce the liquidity of the company below the regulatory requirements.
He suggested the consultancy agreement, to which Richards reluctantly agreed.
In exchange for making herself available for a maximum of six hours of consultancy work per month, Richards would receive the monthly retainer of QAR78,500.
Ultimately, the court ruled in favour of Richards and ordered the defendants to pay her the outstanding sum plus interest and court costs.
No place in this industry
Speaking to International Adviser, Richards said: “I am pleased that justice has been served and it has been a long-drawn legal battle.
“It is heartening to note that the court was able to see the harassment that Mr Veiss has continued against me and the judgement very clearly spells out the scant regard shown by Mr Veiss for legal procedures.
“The earlier rebukes by the regulator against IFSQ also show that Mr Veiss has misused the firm’s client base and failed to satisfy the regulator with regards to ‘fitness and propriety’.
“I strongly believe that our sector should have no place for the individuals who are currently running IFSQ,” Richards added.
Not to be confused with…
IFSQ had a sister company in Singapore, under separate management, which had its licence cancelled by the local regulator.
Another business based in Hong Kong, also called IFS, is not connected to either the Singapore or Qatar-based companies.
