Most investors in Indian scheme can claim against solicitor

A HIGH Court judge has ruled most of the 289 people who claim they lost millions of euro after investing in a scheme to buy apartments in India are entitled to recover monies against a Northern Ireland solicitor who had acted for a firm involved in the scheme.

The amount of monies due to the investors will be decided later this month by Mr Justice Kevin Feeney. Anthony M Joyce, solicitor for the investors, said yesterday the vast bulk of them would be entitled to monies under the judge’s ruling.

The investors had alleged representations in two letters written by solicitor Seymour Major in 2007, while solicitor for Kuvera (Ireland) Ltd, effectively induced them to invest in the scheme which later ran into significant difficulties.

While Mr Major allegedly told them the purchase of the proposed properties was “completely safe” under Indian law, their contracts with an Indian based builder, VG Buildtech, turned out to be “invalid” and “worthless”, they also claimed.

They made various claims, including breach of duty of care against Mr Major, trading as Seymour Major solicitors, Belmore Street, Enniskillen. He agreed he had written the letters of 2007, but denied having a duty of care towards the investors.

The investors had also brought proceedings against Kuvera (Ireland) Ltd, Marlborough House, Donnybrook, and its CEO Kieran Murphy, Cabinteely Way, Cabinteely, Co Dublin, over the scheme. The claims against those parties were settled earlier.

The legal actions were aimed at recovering some of an apparent €8.9m allegedly raised by Kuvera Ireland from up to 400 people here for the property scheme.

The investors have claimed there was no evidence of any meaningful construction work on the two proposed developments of 580 apartments and the scheme was designed to facilitate, in whole or in part, the “siphoning off” of funds to the benefit of Kuvera Ireland and Mr Murphy.

In a press release of April 2009, Kuvera Ireland said €8.9m was raised from investors and claimed, after deducting €3.5m for its “running costs” it had paid €5.4m to Kuvera Properties (India) Pvt Ltd, allegedly incorporated to oversee the two apartment developments to be built by VG Buildtech.

On April 17, 2009, Kuvera Irl asserted no misappropriation of funds was carried out by it or its directors, but said it had “genuine concerns” investors monies may have been mismanaged by Kuvera India and/or VG Buildtech.

VG Buildtech later said it received €4.9m as an “advance” towards the proposed developments but needed more funds to take construction forward. Kuvera India managing director Dr Ajit Jha said, of €4.7m received by it, it transferred €4.3m to VG Buildtech for the projects, allegedly at the insistence of Mr Murphy and Kuvera Irl.

Dr Jha asserted Mr Murphy had been “fully involved” with the daily management of Kuvera India and Vg Buildtech and he was “shocked to learn” Mr Murphy and Kuvera Ireland “withheld approximately €3.5m meant for the projects”.

On April 24 Kuvera Ireland said it had sent €5.4m to Kuvera India, not the €4.7m referred to by Dr Jha. It alleged neither Indian company had properly accounted for its spending and said it had hired Indian lawyers to investigate matters.

When the proceedings against Mr Major came before Mr Justice Kevin Feeney yesterday, Patrick MacCann SC, with Conor Devally SC, for the investors, said they were alleging Mr Major owed a duty of care to all of them in relation to the preparation of the contract documents concerning the investment and his central role in the matter.

Counsel said 289 plaintiffs were involved and two letters written by Mr Major in September and November 2007 were central to their claims. Most of the plaintiffs got either or both of the letters.

After Mr Justice Feeney asked what funds were available to meet the claims, Mr Major, representing himself, said he had been represented by his professional indemnity insurers but they ceased to represent him after deciding they would not indemnify him. Mr Major said he has no assets of his own but, if he was rendered bankrupt, the investors could move against his insurers.

Mr Justice Feeney ruled those investors who received one or both of the letters of 2007 written by Mr Major are entitled to recover against him. The claims by the remaining investors will be addressed later.