A Deutsche Bank AG unit said a family of politicians from Pakistan defaulted on loans of about 55 million pounds ($88 million), which they used to invest in multimillion pound London properties.
The Khan family, including former privatization minister Waqar Ahmed Khan, his father Gulzar Khan and companies they set up, borrowed money to invest in luxury homes and apartments, then defaulted on loans, a lawyer for the bank said on the opening day of a London trial.
When property values collapsed in 2008, the Khans had to provide more collateral under the terms of the agreement, Deutsche Bank lawyer Raymond Cox told the court. “They ought to have made up the shortfall.”
The family’s companies bought apartments at The Knightsbridge development overlooking London’s Hyde Park and on Bishop’s Avenue, which the Sunday Times has called “Billionaires’ Row” because of its wealthy residents and mansions.
The family countersued the lender, claiming its private-wealth team misled them over the loans, and didn’t provide the further funding it promised to develop the properties for profit.
“The propriety of the bank’s dealings with the Khan family will be put under the microscope in court this week,” their lawyer, Richard Slade, said in a statement.
Deutsche Bank mis-valued the properties to wrongly claim the Khans breached loan agreements, the family said in court filings. Slade said their counterclaim was for about 60 million pounds.
“This is a straightforward case of borrowers taking out a loan and failing to meet their obligations,” Nick Probert, a spokesman for the bank, said in an e-mail.