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Fawad Rana wins messy arbitration against brothers Atif and Sameen over Lahore Qalandars ownership
Arbitration court instructs Atif and Sameen Rana to give majority shareholding of franchise to QALCO or pay Rs 2.3 billion. Current management will appeal the decision
An arbitration court has ruled that Atif and Sameen Rana, the current owners of the Lahore Qalandars, must either return management control of the franchise to Qatar Lubricants Company (QALCO), which is owned by their elder brother Fawad Rana, or pay up Rs 2.3 billion in lieu of his shares.
The arbitrator in the case, Justice (r) Maqbool Baqer, who was appointed by the Supreme Court of Pakistan to resolve the dispute between the brothers, has given 45 days for the order to be enforced.
The arbitration is unlikely to be the last stage of the unfortunate family drama that has been raging in the back of the Lahore Qalandars franchise since at least 2023. The matter will almost certainly go to appeal, with Atif Rana confirming to Profit that his legal team is exploring all options to respond, but it underscores what has been a vicious and costly battle unknown to most. The facts of what took place between the brothers have become clearer through the arbitration proceedings and Justice (r) Baqer’s decision, which is available with Profit.
A family affair
In December 2015 when the Pakistan Cricket Board (PCB) announced the auction of franchises for the HBL PSL, Fawad Rana was one of the first individuals to step up to the plate. He made a bid for the Lahore franchise and acquired the rights to it for $26 million for a ten year period. He did not buy it directly, but instead bought it through QALCO, the Qatar based company of which he is managing director.
A life long cricket fanatic, he wanted to run the franchise as a family affair. He brought on his brothers Atif and Sameen Rana to help him run the franchise. The brothers agreed that the franchise should be owned by a Pakistani entity and not one registered in Qatar. For this reason, in January 2016, the brothers set up a special purpose vehicle in Pakistan by the name of Kausar Rana Resource (KRR).
It was named Kausar after their mother.
KRR was registered as the owner of Lahore Qalandars in Pakistan. The ownership structure was simple. QALCO owned 51% of KRR giving Fawad Rana management control over the franchise. He also kept another 1% of the shareholding of KRR under his own name. The remaining 48% of the share was in the name of his brothers, Atif Rana and Sameen Rana. One source close to Fawad Rana claims his brothers did not invest directly in the Qalandars. However, he gave them a significant shareholding because he wanted them to run the day-to-day affairs of the franchise since he spent most of his time in Qatar.
Fawad Rana immediately became one of the most popular fixtures of the tournament. His animated boundary side antics made him beloved even as his team struggled both on the field and off it. The HBL PSL was a profitable league but a business model in which the PCB kept 20% of the revenue and the rest of the 80% was split between the five franchises meant it was constantly bleeding money.
The cracks appear
The first signs of trouble between the brothers emerged in 2018, when 4% of QALCO’s shares in KRR were transferred to Atif Rana. This means that Fawad Rana now no longer had a majority share in the franchise. While he continued to be involved in the franchise and the single largest shareholder through QALCO he was no longer the majority owner. In the arbitration document which is available with Profit, Atif Rana’s lawyers claimed that the transfer happened because the Qalandars franchise was under serious financial pressure. It had the second highest franchise fee of the tournament and the PCB at the time was taking the lion’s share of the tournament’s revenue.
They also claimed that the company that owns the franchise, KRR, wanted to participate in the Abu Dhabi T10 tournament. This would not have been possible because it was owned by QALCO, a Qatari company. The UAE has disputes with Qatar which limits the ability of Qatari companies to do business in the UAE. The transfer of the 4% shares meant QALCO became an associated company of Lahore Qalandars instead of a holding company that owned the franchise.
Fawad Rana was still the public face of the franchise, and he had 47% of the shares, but he was no longer a majority owner.
The next major shift came in 2020. As per the court documents, Fawad Rana’s brothers asked him to transfer the remaining 47% of the shares in KRR over to him. Why would Fawad Rana do this? His counsel claimed that Atif and Sameen Rana told Fawad they had received an offer from someone to purchase Lahore Qalandars at a very good price. However, they told their brother that the buyer would only deal with them if they could show they had the sole ownership. With this reason, they were able to convince Fawad Rana to relinquish his shares in KKR in favour of Atif Rana. After this, Fawad Rana was left with only 1% of the company. The shares were transferred to Atif Rana as per the document, and no payment was made for this. During the cross examination, the brothers agreed that they had not taken any payment from Fawad for the relinquished shares.
According to one source close to Fawad Rana, he had been hit badly during the Covid-19 pandemic by health issues and agreed to sell the franchise since it was struggling financially. However, after the transfer he was slowly iced out of the franchise.
In 2021 a new chapter opened in the case. KKR seemingly sold around 30% of their shareholding to a “Mr Niazi.” The arbitration documents do not provide any first name or details regarding who this individual is. However, Atif and Sameen Rana’s lawyer claimed that this sale took place and Fawad Rana was aware of it. Fawad Rana’s lawyers argue that he was not aware of this sale and it was deliberately hidden from him.
There has been no mention of this sale anywhere up until this point. was only uncovered during cross-examination and was concealed from the Tribunal until then. The emergence of this new nameless character, whose details even QALCO’s legal representation was not able to share with Profit, has made this matter significantly complicated.
The legal merits
During the case, QALCO’s legal team argued that the first transfer of 4% shares was irregular and there was no way of proving the documents were not forged. In the 2020 relinquishment of the remaining 47% shares of QALCO, they argued that the relinquishment had been achieved through fraudulent means since no buyer existed. KRR responded to these allegations by pointing out that QALCO did not challenge any of this until 2023 when it went to the Lahore High Court. It was after it went to the LHC that KRR said there was an arbitration clause in the agreement, and the Supreme Court appointed Justice (r) Baqer as the arbitrator.
In his decision, Justice (r) Baqer has ordered KRR to pay QALCO the outstanding amount of Rs 2.3 billion with markup, which amounts to just over Rs 3 billion, which had been reported in KRR’s audited financial statements. If KRR fails to pay this, they have been instructed to restore QALCO’s 51% shareholding in KRR immediately. Furthermore, Justice (r) Baqer made another interesting addition: KRR has to account for all profits derived from the disputed sale of 30% shares to the mysterious “Mr Niazi” who has been mentioned in the court documents.
The matter is unlikely to stop anywhere soon. In conversation with Profit, Atif Rana confirmed that his legal team would continue to pursue the case and go for appeal. He declined to comment beyond this. “He is my elder brother. What can I say about my Bhai?”
For the time being, Atif and Sameen Rana are expected to continue controlling KRR and the Lahore Qalandars. What direction this family dispute goes in next, however, remains to be seen.
Link: https://profit.pakistantoday.com.pk...f-and-sameen-over-lahore-qalandars-ownership/
Comments: The current LQ management (Atif and Sameen Rana) are very close to the Pakistani govt, GHQ and US Embassy. They will use their contacts to bury this ruling or ensure it is not enforced.
Arbitration court instructs Atif and Sameen Rana to give majority shareholding of franchise to QALCO or pay Rs 2.3 billion. Current management will appeal the decision
An arbitration court has ruled that Atif and Sameen Rana, the current owners of the Lahore Qalandars, must either return management control of the franchise to Qatar Lubricants Company (QALCO), which is owned by their elder brother Fawad Rana, or pay up Rs 2.3 billion in lieu of his shares.
The arbitrator in the case, Justice (r) Maqbool Baqer, who was appointed by the Supreme Court of Pakistan to resolve the dispute between the brothers, has given 45 days for the order to be enforced.
The arbitration is unlikely to be the last stage of the unfortunate family drama that has been raging in the back of the Lahore Qalandars franchise since at least 2023. The matter will almost certainly go to appeal, with Atif Rana confirming to Profit that his legal team is exploring all options to respond, but it underscores what has been a vicious and costly battle unknown to most. The facts of what took place between the brothers have become clearer through the arbitration proceedings and Justice (r) Baqer’s decision, which is available with Profit.
A family affair
In December 2015 when the Pakistan Cricket Board (PCB) announced the auction of franchises for the HBL PSL, Fawad Rana was one of the first individuals to step up to the plate. He made a bid for the Lahore franchise and acquired the rights to it for $26 million for a ten year period. He did not buy it directly, but instead bought it through QALCO, the Qatar based company of which he is managing director.
A life long cricket fanatic, he wanted to run the franchise as a family affair. He brought on his brothers Atif and Sameen Rana to help him run the franchise. The brothers agreed that the franchise should be owned by a Pakistani entity and not one registered in Qatar. For this reason, in January 2016, the brothers set up a special purpose vehicle in Pakistan by the name of Kausar Rana Resource (KRR).
It was named Kausar after their mother.
KRR was registered as the owner of Lahore Qalandars in Pakistan. The ownership structure was simple. QALCO owned 51% of KRR giving Fawad Rana management control over the franchise. He also kept another 1% of the shareholding of KRR under his own name. The remaining 48% of the share was in the name of his brothers, Atif Rana and Sameen Rana. One source close to Fawad Rana claims his brothers did not invest directly in the Qalandars. However, he gave them a significant shareholding because he wanted them to run the day-to-day affairs of the franchise since he spent most of his time in Qatar.
Fawad Rana immediately became one of the most popular fixtures of the tournament. His animated boundary side antics made him beloved even as his team struggled both on the field and off it. The HBL PSL was a profitable league but a business model in which the PCB kept 20% of the revenue and the rest of the 80% was split between the five franchises meant it was constantly bleeding money.
The cracks appear
The first signs of trouble between the brothers emerged in 2018, when 4% of QALCO’s shares in KRR were transferred to Atif Rana. This means that Fawad Rana now no longer had a majority share in the franchise. While he continued to be involved in the franchise and the single largest shareholder through QALCO he was no longer the majority owner. In the arbitration document which is available with Profit, Atif Rana’s lawyers claimed that the transfer happened because the Qalandars franchise was under serious financial pressure. It had the second highest franchise fee of the tournament and the PCB at the time was taking the lion’s share of the tournament’s revenue.
They also claimed that the company that owns the franchise, KRR, wanted to participate in the Abu Dhabi T10 tournament. This would not have been possible because it was owned by QALCO, a Qatari company. The UAE has disputes with Qatar which limits the ability of Qatari companies to do business in the UAE. The transfer of the 4% shares meant QALCO became an associated company of Lahore Qalandars instead of a holding company that owned the franchise.
Fawad Rana was still the public face of the franchise, and he had 47% of the shares, but he was no longer a majority owner.
The next major shift came in 2020. As per the court documents, Fawad Rana’s brothers asked him to transfer the remaining 47% of the shares in KRR over to him. Why would Fawad Rana do this? His counsel claimed that Atif and Sameen Rana told Fawad they had received an offer from someone to purchase Lahore Qalandars at a very good price. However, they told their brother that the buyer would only deal with them if they could show they had the sole ownership. With this reason, they were able to convince Fawad Rana to relinquish his shares in KKR in favour of Atif Rana. After this, Fawad Rana was left with only 1% of the company. The shares were transferred to Atif Rana as per the document, and no payment was made for this. During the cross examination, the brothers agreed that they had not taken any payment from Fawad for the relinquished shares.
According to one source close to Fawad Rana, he had been hit badly during the Covid-19 pandemic by health issues and agreed to sell the franchise since it was struggling financially. However, after the transfer he was slowly iced out of the franchise.
In 2021 a new chapter opened in the case. KKR seemingly sold around 30% of their shareholding to a “Mr Niazi.” The arbitration documents do not provide any first name or details regarding who this individual is. However, Atif and Sameen Rana’s lawyer claimed that this sale took place and Fawad Rana was aware of it. Fawad Rana’s lawyers argue that he was not aware of this sale and it was deliberately hidden from him.
There has been no mention of this sale anywhere up until this point. was only uncovered during cross-examination and was concealed from the Tribunal until then. The emergence of this new nameless character, whose details even QALCO’s legal representation was not able to share with Profit, has made this matter significantly complicated.
The legal merits
During the case, QALCO’s legal team argued that the first transfer of 4% shares was irregular and there was no way of proving the documents were not forged. In the 2020 relinquishment of the remaining 47% shares of QALCO, they argued that the relinquishment had been achieved through fraudulent means since no buyer existed. KRR responded to these allegations by pointing out that QALCO did not challenge any of this until 2023 when it went to the Lahore High Court. It was after it went to the LHC that KRR said there was an arbitration clause in the agreement, and the Supreme Court appointed Justice (r) Baqer as the arbitrator.
In his decision, Justice (r) Baqer has ordered KRR to pay QALCO the outstanding amount of Rs 2.3 billion with markup, which amounts to just over Rs 3 billion, which had been reported in KRR’s audited financial statements. If KRR fails to pay this, they have been instructed to restore QALCO’s 51% shareholding in KRR immediately. Furthermore, Justice (r) Baqer made another interesting addition: KRR has to account for all profits derived from the disputed sale of 30% shares to the mysterious “Mr Niazi” who has been mentioned in the court documents.
The matter is unlikely to stop anywhere soon. In conversation with Profit, Atif Rana confirmed that his legal team would continue to pursue the case and go for appeal. He declined to comment beyond this. “He is my elder brother. What can I say about my Bhai?”
For the time being, Atif and Sameen Rana are expected to continue controlling KRR and the Lahore Qalandars. What direction this family dispute goes in next, however, remains to be seen.
Link: https://profit.pakistantoday.com.pk...f-and-sameen-over-lahore-qalandars-ownership/
Comments: The current LQ management (Atif and Sameen Rana) are very close to the Pakistani govt, GHQ and US Embassy. They will use their contacts to bury this ruling or ensure it is not enforced.
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