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Equity and trusts (purpose and resulting£

Hi
(edited 3 years ago)
Original post by Laurenokeeffe


Question 3
Sir Mohammed Abubakir Ali made his wealth from a successful electronic business, Salam Industries Ltd, but the company has suffered from a series of set backs and was recently put into administration. Sir Mohammed was also declared bankrupt. The insolvency practitioners seek your advice on the ownership of the following property:

As Salam Industries started to get into trouble Sir Mohammed transferred £100,000 from his personal bank account to a bank account in his cousin Ibrahim’s name and described it as a ‘gift’ in an email to Ibrahim. Mohammed told Ibrahim to use it to bet against Salam Industries on the stock market (this is a crime called insider trading). As a result Ibrahim made a huge profit and the account now has £800,000 in it. Ibrahim has been paying Sir Mohammed £10,000 a month out of the account.

c) In the week before Salam Industries Ltd went into administration the directors approached Akhir Bank for a loan to save the company. Akhir bank lent the company £300,000 on the basis it would be used only to fund a final advertising campaign for Salam Industries flagship mobile phone. The directors had not had a chance to launch the campaign when the company went into administration for other reasons and the money remains in its corporate bank account.
Advise:
(a) Sir Mohammed’s trustee in bankruptcy as to who owns the the money in the bank account in Ibrahim’s name.
(b) Salam Industries Ltd’s administrators as to who owns the money lent by Akhir Bank.

What's your query?
What topics do I focus on regarding the advise for the bank account question a. Do I talk about purpose trusts anywhere?

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