The top heads of popular Middle Eastern restaurant chain, Paramount Fine Foods, have been embroiled in legal drama for the past year amid contentious ownership disputes.
The legal battle involves Paramount’s founder, Mohamad Fakih, and the company’s largest shareholders based in Kuwait, Ali Noureddine and Naeem Javed.
The two investors own a combined 75 per cent of the Toronto-based company, while Fakih and his family trust own 25 per cent of the business. However, the founder controls 50 per cent of the voting rights, which has resulted in a deadlock over how to navigate the ownership issues, according to a recent report in The Globe and Mail.
The shareholders stated in their court filing that the deadlock has prevented “rational decision-making,” and they want a third director to resolve the issues if Fakih is not removed.
The investors claim Fakih treated the company as a “personal fiefdom” and that he took money from the business when he was struggling to “pay for his lavish lifestyle.”
According to The Globe and Mail, Fakih has called the motion an “act of oppression” targeted towards wiping out personal loans he contributed to the company.
He also called the motion “tactical” in a court filing last week, and said that he, along with his family trust, were supposed to receive $16 million for the 75 per cent stake he sold to the investors.
However, the shareholders allege that they invested in Paramount under the false pretense that the company was profitable. According to Noureddine and Javeed, Paramount has been in financial crisis since 2015.
A hearing was scheduled on Friday in the Ontario Superior Court, which was focused on control of the company.
None of the allegations so far have been proven in court.