Questions & Answers
Liability for a loan misused by an absconding partner
Hi,
I would like to ask about the company, where I am working for the last 5 years. We are W.L.L. company and the local partner was a sleeping partner.
The other partner was Indian and he took a loan from the bank on the company's name and used it for his personal use and drained it in other business.
He increased the creditors and now he left the country. At this situation, the local partner comes to know about his intention of not coming back. Now, all the responsibility falls upon the local partner's shoulders.
The company has creditors of around BD 140,000 / and a bank loan of BD 160,000/, which is impossible to pay by the local partner.
For running business outstanding, mostly companies has cheques issued by the Indian partner (Local partner is not authorized to sign any cheque according to MOA), and the bank has guarantee papers signed by the local partner.
Can you please advise how we can save the local partner and file a case against the Indian partner?
Dear Sir,
Thank you for getting in touch with me on this.
With reference to your query, please note that you should immediately institute civil and criminal proceedings against the Indian partner to fix the liability on him (the Indian partner).
Failing to fix this liability could affect the local partner as the secured and unsecured creditors will come after the local partner and other partners' assets.
We could use the defence of the MOA that the local partner was not authorised to sign any cheques on behalf of the company.
You need to act promptly as these cases can escalate quickly.
You may get in touch with me on 052-9495731 or email on hari@alnassaradvocates.com for further discussion.
Regards,
Hari Wadhwana
