UAE: Man to pay Dh500,000 compensation for seizing company profits

He also illegally sold shares to his partner's son



by

Ismail Sebugwaawo

Published: Thu 28 Jul 2022, 4:05 PM

Last updated: Thu 28 Jul 2022, 5:14 PM

A businessman has been ordered to pay Dh500,000 in compensation to his partner for seizing profits of the company and illegally selling shares.

The accused and his business partner had equal shares in the company. However, the accused took advantage of having the power of attorney and began embezzling profits.

The partner, an Arab man, filed a lawsuit against his business partner demanding Dh2.5 million in compensation in lost profits and material damages.

In an earlier lawsuit, he also demanded 12 per cent on the Dh5.2 million. The cash was supposed to be paid to the plaintiff for the shares he had in the company.

The plaintiff explained that he had been a partner with the defendant since 2011 and each of them had 50 per cent share in the company.

The man said he worked for a different firm and left the defendant to manage their company alone after giving him the powers of attorney. They also signed a Memorandum of Understanding (MoU) which detailed their business relationship, the shares owned by each partner in the company and the sharing of the profits.

He said that things moved on well until 2015 when the defendant seized the company, and its profits.

This prompted the plaintiff to file a lawsuit against the defendant to the Abu Dhabi Commercial Court, claiming his shares in the company and the profits.

The plaintiff said he was surprised when he learned that the defendant took advantage of the power of attorney granted to him and sold off his entire shares in the company to his son. The defendant also amended the commercial license and changed it to his name and that of his son.

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The man said he had not received the profits from their company for the years 2015, 2016, and 2017, pointing out that he had also filed an appendix invalidity suit.

The man had earlier filed a commercial lawsuit against the defendant demanding for all his shares in the company, in accordance with the MoU signed between them. The commercial court had earlier issued a ruling in which it instructed the defendant to pay the plaintiff Dh5.2 million (estimated cash for shares he invested in the company).

After hearing from all parties, the judge issued a ruling obliging the defendant to pay the plaintiff Dh500,000, in compensation for the material and moral damages he sustained, and the delayed interest on this amount at 5 percent annually.

Court also ordered the defendant to pay the plaintiff the delayed interest at the rate of 5 percent annually of the Dh5.2 million that was awarded in the previous case, regarding the plaintiff’s shares in the company, from the date of filing that lawsuit until the full payment and that it should not exceed the original amount decided by court.

The businessman will also pay for the plaintiff’s legal expenses.


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