Tariq fell out with his own family members
Popular Indian restaurant Royal Nawaab is set to be put up for sale after a fall-out between the founders.
Since opening in 2003, the buffet restaurant in Levenshulme, Manchester, has been a hotspot for South Asian cuisine.
While the restaurant has been successful, founders Tariq Mahmood Malik and Mahboob Hussain Junior fell out a few years after opening.
After years of bad blood between the founders, the High Court judge has ruled that the property and 50% of the company must go on sale.
It will go on sale in a process bound by terms set by the court, in order to prevent Tariq from engineering a ‘bidding war’ and then dropping out.
At a High Court hearing in May 2021, Judge Stephen Davies said that Tariq and Mahboob started out as joint owners and shareholders.
However, by 2007, their relationship deteriorated.
Tariq later stepped back and his son Asad, who is married to Mahboob’s daughter Atikah, took over.
Over time, Tariq and Mahboob’s wives also became shareholders.
In 2016, Tariq fell out with his own family members, including his wife Nusrat, and sons Asad and Usman.
Both sons were shareholders of Royal Nawaab and were supportive of their mother.
Meanwhile, Tariq’s family remained on good terms with Mahboob.
Due to the fall-out, which Judge Davies said “appeared to be irreversible”, Tariq was removed as a director.
The outcome has resulted in a court dispute over the restaurant’s future.
Judge Davies said that the “most sensible way forward” was to have an expert valuation on the property and the partnership half share of the business so that Tariq’s interest could be sold to some or all of the others.
But in January 2021, Tariq said he did not want to sell his share to Mahboob.
Instead, he wanted the restaurant to be sold on the open market.
In March 2021, Tariq offered to buy out Mahboob for £2.2 million.
However, it was rejected by Mahboob’s lawyers, saying it was “unacceptable” for Tariq or any third party to acquire Mahboob’s share.
They also thought it was not a genuine offer “since Tariq had no obvious means of funding the purchase”.
Judge Davies then decided that there should be a sale according to the court’s terms. If no sale happens, Mahmood should buy out Tariq.
Judge Davies said: “The court has a discretion not only as to whether or not to order a sale, but also the manner in which any sale should be conducted.
“That is particularly important in this case, since in my judgement there is a very real likelihood that Tariq’s true motive in pressing for an order for sale is to attempt to increase the price by engineering a bidding war, and I am satisfied that it is necessary to ensure that the provisions in relation to any sale should be tailored so far as reasonable to prevent him from doing so with impunity.”
He ordered a “full and fair” valuation of the Royal Nawaab property so that Tariq, Mahboob and any of the others can make bids “as should any third party who wishes to do so”.
However, Judge Davies said that any “independent” selling agent or solicitor charged with “conduct of the sale” should be under “no obligation to publicise” it.
In order to “prevent injustice”, Judge Davies set terms that mean Mahboob can acquire the property and the shares at the court’s valuation if others drop out after making bids above that price.