Dubai: Properties transferred to company in the city
A solicitor who acted for both sides in the transfer of five properties for nil value without the knowledge of the transferors has been hit with a £12,000 fine by the Solicitors Regulation Authority (SRA).
The regulator said the actions of Mohammed Israr, who at the time was an associate solicitor at Birmingham firm Morgan Wiseman, were “reckless, but not grossly reckless”.
A notice published this week said Mr Israr acted for the transferors and transferee in facilitating the transfer of five properties for nil consideration to a Dubai-based company.
Following the transfer, one property was sold at auction and the proceeds of the sale were paid into a third-party bank account based in Dubai.
However, the transferors said the transfers of the properties and money were without their knowledge or agreement. They reached a settlement agreement which saw the return of the four properties but not the proceeds of the sold property.
The SRA found multiple failings on Mr Isar’s part. He did not advise his clients of the conflict of interest that existed, nor satisfied himself that it was appropriate to act in these circumstances.
He also did not advise he the transferors of the risks involved in transferring properties for nil value, nor enquire about the reasons for the transfers.
Further, Mr Israr “did not follow the firm’s policies and procedures for conveyancing regarding commercial clients, establishing control of the client, establishing beneficial ownership and non-domiciled companies, and completing all due checks, potential conflict of interests and risk assessments”.
Admitting the breaches of the code of conduct, Mr Isar said in mitigation that he did not at that time understand his responsibilities “and had not read the policies in place to deal with such circumstances as the one which arose”.
He said he has sought to rectify the gaps in his knowledge by attending appropriate courses.
The SRA concluded that a fine was the appropriate sanction. “A negligent and reckless approach was taken to his work. He failed to ensure his knowledge and understanding of the regulatory requirements to provide professional service and act in the best interest of each client was followed.”
The penalty of £12,000 was towards the middle of the penalty bracket in which the misconduct fell.
It is one of the larger fines the SRA has handed out since the government increased its fining limit last year from £2,000 to £25,000, although it continues to lobby for unlimited fining powers.
The highest sum to date has been £20,000 for an Oxfordshire firm’s “reckless” failure to comply with anti-money laundering rules, with a £18,750 fine for a senior partner for accounts rules breaches the biggest for an individual.
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