Transfer of Lahore Qalandars majority shares from Qalco to KKR void and lacked valid authorisation, rules Arbitration Tribunal

LAHORE: In a significant judgement, an arbitration tribunal, retired Justice Maqbool Baqer, has ruled against the current management of Kausar Rana Resources (Pvt) Limited (KRR), the parent company of the Lahore Qalandars, a franchise of the Pakistan Super League (PSL). The tribunal found that the transfer of majority shares from Qatar Lubricants Company (Qalco) to brothers Atif Naeem Rana and Sameen Naeem Rana was legally void and lacked valid authorisation. The tribunal has ordered the respondents to either pay Qalco Rs2.96 billion plus markup or immediately restore Qalco’s 51 per cent majority shareholding in the company. The dispute pitted Fawad Ahmed Rana, the Managing Director of Qalco and elder brother, against his younger brothers, Atif Rana and Sameen Rana. Qalco originally secured the Lahore franchise rights from the Pakistan Cricket Board (PCB) in 2015, later transferring those rights to KRR, where Qalco held 51pc shares at incorporation. Declares share transfer of Lahore Qalandars’ parent firm void; younger Rana brothers ordered to return 51pc stake in KRR or pay Rs2.96bn. The core of the legal battle involved two disputed share transfers in 2018 and 2020, which the respondents/younger brothers claimed were necessary to circumvent UAE-Qatar geopolitical tensions during the Abu Dhabi T10 league. They contend that, because the UAE had snapped ties with Qatar, it was not possible for an entity majorly held by Qalco to participate in activities in the UAE, therefore, Fawad Rana decided that Qalco would transfer 4pc of its shares to Atif Rana to make him the majority holder. However, the Qalco and Fawad Rana alleged that these transfers were false, fabricated, and fraudulent. The respondents also claimed that some amounts paid to KRR were for a hunt arranged by the younger brothers for His Highness Shaikh Sultan, Chairman and CEO, Qalco. However, the claimants dispute this, asserting that no such purpose appears in statements of account, no evidence was produced and the respondents neither specified nor proved the amounts allegedly so received and spent.

In its judgement, the tribunal highlighted several critical failures in the respondents’ case. It noted that Fawad Rana provided travel history and passport copies proving he was not in Pakistan when the disputed transfer deeds were purportedly signed. Under cross-examination, Sameen Rana admitted that the signatures of the attesting witness, KRR Company Secretary Farooq Anwar, did not match his known signatures, the tribunal observed. It noted that the respondents failed to produce original transfer deeds and did not call key witnesses (Farooq Anwar and Imran Ahmed) to testify, despite them being available in Lahore. It said the respondents admitted that no payment (via pay order or crossed cheque) was ever made for the shares, despite requirements in the purported offer letters. A turning point in the proceedings was the revelation that the younger brothers had secretly sold 30pc of KRR shares to an individual named Mr. Niazi for $5million. The claimants alleged this sale was concealed from both Qalco and the tribunal until it was exposed during cross-examination. Justice Baqer dismissed the respondents’ counterclaim of Rs50 billion, citing a lack of cogent material and credible evidence.  “The tribunal is constrained to hold that the transfer documents cannot be regarded as having been legally and validly executed, and in any event are void for want of consideration,” said the judgement. The tribunal ordered that within 45 days, the younger Rana brothers must pay Qalco Rs2.296bn with markup dating back to June 2020, or return the 51pc shareholding. The judgement said the respondents must provide a full and true account of all profits earned by KRR and the proceeds from the $5 million “Niazi deal” to the company judge of the Lahore High Court. It is pertinent to note that the present dispute was referred to the arbitration tribunal by the Supreme Court through a judgement on Dec 2, 2024. The petition was filed by the respondents against the dismissal of their application under Section 34 of the Arbitration Act in a petition for rectification of KRR’s members’ register.