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The adoptive family of the head of the Mustafa Center, Mustaq Ahmad, brought serious accusations against him yesterday, accusing him of deceiving his father, stepmother and stepbrothers so that he, his wife and their children could “line their pockets”.
The accusations came at the beginning of a 34-day hearing on a lawsuit brought against Mr. Mustaq and his family by his five half-brothers and his mother, with each side accusing the other of “insatiable” greed.
The adoptive family, headed by Mr. Ayaz Ahmed, is petitioning the High Court for an order to liquidate Mohamed Mustafa and Samsuddin Co (MMSC), the company behind the popular department store.
A liquidator should be appointed to investigate the affairs and records of the business and recover any property that was improperly dissipated prior to dissolution, the adoptive family said.
The plaintiffs argued that Mr. Mustaq’s various irregularities have caused an “irreparable break” in the relationship between the shareholders.
Lead attorney Davinder Singh, representing the adoptive family, said in his opening statement that Mr. Mustaq “treated the company as if it were his own domain, abusing his position with the help of other shareholders and directors and assisting himself himself with stocks and money that were not his. ” “.
He accused Mr. Mustaq of “covertly” diluting his father, Haji Mohamed Mustafa’s stake in the company in 1995.
After Mustafa’s death in 2001, the share of his estate diluted again, to 14.89 percent, while the share of Mustaq and his wife increased to 69.99 percent, Singh said.
Singh argued that from 2000 to 2013, the company’s average net profit for each year was around $ 9.6 million, but no dividends were declared during that period.
However, in that period, Mr. Mustaq received between $ 3 million and $ 5 million annually in directors’ fees, while his wife received between $ 200,000 and $ 400,000.
Singh said his clients began to discover the wrongdoing between 2013 and 2016, and after they started asking questions, Mustaq managed to get the company to pay dividends after not doing so for 14 years.
Dividends were stopped in January 2018 after the adoptive family filed their lawsuit in December 2017 alleging minority oppression, he said.
Singh also accused Mustaq of conducting bogus transactions to divert money from MMSC and collect “refunds” from employees after causing them to exaggerate their salaries in job pass applications.
The two sons of Mr. Samsuddin Mokhtar Ahmad, Mr. Mustafa’s business partner, have also filed a lawsuit with similar claims.
They are represented by Mr. Sarbjit Singh Chopra. Both lawsuits are heard together.
In his defense, Mr. Mustaq said that he was the sole owner of the company and had the right to conduct his affairs as he saw fit.
His attorney, Senior Advisor Alvin Yeo, said Mustaq grew the business through 50 years of hard work, and that Mustafa and Samsuddin had nothing to say about how the business was run.
Yeo said Mustaq was 12 years old in 1963 when he started selling scarves and socks at a makeshift stall.
His business grew and, in 1971, he leased a commercial home on Campbell Lane and registered a sole proprietorship.
He said that in July 1973, when Mr. Mustaq made a trip to India to visit his wife and son, Mr. Mustafa and Mr. Samsuddin registered the business under the name of Mohamed Mustafa and Samsuddin Company.
When Mr. Mustaq returned later that year, he confronted them about this, but after being sure that the business was his alone, he decided to keep the name and added himself as a partner.
Yeo said it is disappointing that the plaintiffs “have turned around to bite the hand that feeds them” after benefiting from Mustaq’s kindness and generosity over the years.
He said that only years after the deaths of Mustafa and Samsuddin did his family members, “armed with a misguided sense of self-right,” went to court to ask for more money.
He said the plaintiffs have tried to rewrite the company’s history, downplayed Mustaq’s contributions and “evoked serious and serious allegations for which they have offered little or no credible evidence.”
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