ARY Digital bankrupted in UK, Creditors Cheated

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Mekaal Hassan

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Jul 26, 2011, 1:14:52 PM7/26/11

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The private Pakistani satellite television channel, ARY Digital is in deep financial trouble. The company behind the brand recently slid into administration, leaving employees (journalists and technical staff) helpless and aghast.

ARY Digital TV, broadcasts 3 Asian satellite television channels using Sky television platform in England, ARY News, QTV, and ARY Digital. The company (ARY Digital UK Limited) commenced trading on 9th April 1999 (company registered number 03749889). By July 2011, it owed over �3,500,000.00 (GBP) to various creditors including some well known industry names.

What appears really odd is that the company, now in administration, terminated arrangements with its employees, but later (unbeknown to them) those same employees were hired by a similarly sounding company: ARY Network Limited.

This new company was incorporated on 1st December 2010 (company registered no. 07456134). Administrators were appointed to deal with the affairs of ARY Digital UK Limited due to the disastrous financial situation the company found itself in. Matters were dealt with at the High Court of Justice, Chancery Division, London and the company was placed into administration on the 19th May 2011, (case number No 4172 of 2011).

It is surprising that the assets of ARY Digital UK Limited were sold by private treaty to ARY Network Limited on the 31st May 2011. It is noteworthy that two of the directors of the two companies are brothers.

One of the directors of ARY Network Limited, Mr Muhammed Yaqoob Iqbal is the father of Salman Iqbal, a director of ARY Digital UK Limited. It appears that company assets have simply been passed between family members whilst countless creditors and employees are unaware of this private arrangement.

The employees at ARY�s media station are completely outraged as they feel they have been cheated and denied basic employment rights as they did not even know of the changes being made by management. Some salaries have not been paid for almost a year.

The dire financial mismanagement came to light a few months ago when the ARY engaged in a costly advertising campaign to launch a weekly newspaper called �The Bridge�. Despite the allegedly huge costs incurred, no publication was ever released and it appears that the newspaper�s editorial team have now been forced from office. No explanation has ever been given.

The company had promised to launch the newspaper in Pakistan and the UK but failed on both attempts. It is unclear what strategy was at work and why one company was forced to incur exorbitant marketing/advertising costs given there has not been a single publication to date.

Reliable sources within the channel have cited unrest and anger among the employees who find themselves now being employed by the new company. According to a senior insider, professional trade unions are now set to step in and a legal battle will ensue by those wanting to protect themselves from the adventures of the owners.

It seems however if the old ARY has been put in to administration and the employees have suddenly found that the label has been changed and a new ARY has taken over (albeit under the control of the brother) the staff may have to ask the authorities to investigate matters further.

When the company was set up, the first directors were Jawaid Pasha, Yasir Pasha and Zain Pasha who (for reasons unknown) all resigned abruptly on 13th October 2000. It was on that date, Mr Muhammed Yaqoob Iqbal and Salman Iqbal were appointed as directors. Even Mr Asif Iqbal (the former cricketer) was a director at one point as was Barbara Kahan although their positions have since been terminated.

Records at Companies House (the government agency for all companies in England and Wales) makes it clear that the principal activity of the company to June 2006 was to produce and broadcast television programmes for the Asian community in the UK and Europe. It cites, the company having �suffered material losses whilst carrying out this activity�.

Those losses were financed and underwritten by its shareholders as well as loans from sponsors. It goes on to state: �Due to heavy trading losses 5 years ago, the company entered into an agreement with one of its (family) associated company�s�. Therefore, its current activity is that of sales and marketing for 3 satellite television stations for the Asian market in the UK and Europe.� "�The Company suffered bad debts on a regular basis which created cash flow problems��

The papers submitted by the ARY owners, state the company directors felt the company may not be able to trade through the difficult financial period. Rather than risk whatever little assets the company owned and further expose itself to trade creditors they felt the company should be placed in to administration to protect its position and therein its assets.