The customer, it seems, is not always right. At least that is what Audi Pakistan would have you believe. In fact, not only is the customer not always right, sometimes the customer is so wrong they deserve to be slapped with a criminal defamation suit.
Just over a year ago in July 2024, Naeem Afzal received notice that he was the defendant in a criminal defamation case under Pakistan’s draconian defamation laws. These laws govern the expression of thoughts and opinions in print, as well as on social and electronic media in Pakistan. In most countries, defamation is a civil matter not a criminal one. In fact, even in Pakistan most defamation cases are tried in civil courts. But because these criminal defamation laws exist, a person can be accused in a much more serious criminal trial that requires them to appear in court regularly under threat of arrest.
Naeem Afzal’s accuser was a company called Premier Systems Pvt Limited. Premier is the official importer of Audi AG, the German luxury car manufacturer, in Pakistan. They also exclusively operate the several Audi showrooms all over the country. Premier runs on a very basic business model. Audi AG has them listed as their official import partner in Pakistan on their website. They market Audi AG products in Pakistan and when a customer walks in looking to get hold of an Audi car, they take an advance payment and place an order with the manufacturer in Germany. Premier gives the customer a timeframe for how long it will take to import the car and the remaining payment is made upon delivery.
That is the relationship that was first established between Naeem Afzal and Premier in May of 2022. But how in the world did this seemingly simple transaction snowball into a messy legal battle stuck in three different civil and criminal courtrooms, with arrest warrants issued for both parties? More importantly, exactly what makes a company sue their client in a criminal capacity, and can it possibly be considered a good business strategy?
Importing hazards
The story starts simply enough. Naeem Afzal wanted to buy an Audi. A resident of DHA Lahore, he went to Askari Towers off Liberty Chowk and walked into the Audi showroom. He met with a representative of the dealership, he told them what car he wanted, and they told him they could get it for him. On the 16th of May 2022 he put down a deposit of just over Rs 1 crore (Rs 1 crore 3 lakhs and 29 thousand to be exact) for an Audi E-Tron 50 Quattro.
The colour was supposed to be Manhattan Grey.
He paid with a banker’s cheque issued by Habib Metropolitan Bank DHA Phase VI Branch. The pay order was made out to Premier Systems (Private) Limited. The offer letter he received had the letterhead and branding of “Audi Pakistan”. All pretty run of the mill.
It turned out this was the worst possible time to try and buy an imported car. Three days after Naeem Afzal put down the deposit, the government of Pakistan formally announced it was running out of dollars. The State Bank’s foreign exchange reserves were running on fumes and with loan repayments just around the corner, the word default was being thrown around quite casually.
The government’s answer to this was to shut everything down until they had time to think. A ban was imposed on all but the most essential imports such as fuel. Luxury cars were the second item named on the list. In the offer letter sent by Audi Pakistan to Naeem Afzal, the expected delivery time was mentioned as 30-32 weeks. With the temporary import ban now in place, it was likely to take longer.
In the meantime the Rs 1 crore deposit remained with Premier. At the time this accounted for about 60% of the car’s value. Premier’s estimate had placed the final price at around Rs 1.72 crore including all duties and taxes. This price was subject to change depending on the exchange rate or any change in the taxation schedule. Premier as an importer makes payments to Audi AG in Euros. Because of the volatility of the rupee, the sales contract for Audi and other luxury cars always include a devaluation clause protecting the importer from forex shocks.
Naeem Afzal was well aware of this. When the import ban hit, the value of the rupee was also dropping fast. He knew the devaluation cost would hit him eventually. He kept in touch with Premier and they continued to give him updates. In July 2023, 76 weeks after Naeem Afzal made the Rs 1 crore deposit, Premier told Naeem Afzal he could have his car in December if he agreed to get it in black instead of the grey he had ordered it in. He agreed. Premier said the car would arrive at Karachi port by the end of December.
On the 4th of December, they sent a revised estimate for the final price of the car. The devaluation charges were high. Much higher than Naeem Afzal expected. In fact, according to Naeem Afzal, the devaluation charges were applied not just on the 40% remaining payment, but also on the initial Rs 1 crore he had paid. This quickly became a major sticking point between both parties.
Look at it this way. Naeem Afzal had paid Rs 1 crore in May 2022 which was supposed to be 60% of the cost of the car. The price of the Euro was Rs 200.8 on the day the deposit was made. In his mind, that Rs 1 crore was worth €51,371. At the time, the estimate for the car including duties was Rs 1.72 crores. If we convert even that entire amount (including the duties meant to be paid in rupees) into Euros the price of the car comes out to €85,693. That means his maximum remaining payment was another €34,322 or Rs 72 lakhs. By the time the car was ready to arrive in December, the exchange rate had gone up to Rs 311.19. This meant the remaining Rs 72 lakh was now Rs 1.06 crores. On top of this, as the revised estimate sent by Premier details, another Rs 22 lakhs had been added in new duties. The price of the car had gone from the estimated Rs 1.72 crores in May 2022 to Rs 2.31 crores in December 2023. Since a little over Rs 1.03 crore had already been paid, Naeem Afzal assumed he would have to pay another Rs 1.29 crores to get his car.
He was wrong. Premier’s revised estimate asked him to pay Rs 1.77 crores – nearly Rs 50 lakhs more than what Naeem Afzal expected, bringing the overall price of the car to Rs 2.8 crores. What was Premier’s logic? While the company did not speak with Profit on the record, we were able to get some information from senior Premier executives on the condition of anonymity. This executive explained to Profit that the Rs 1 crore was simply a deposit meant to function as a holding price on the order. It did not indicate partial payment on the vehicle. In other words, if you wanted to park an Audi in your garage, you first had to park Rs 1 crore in Premier’s bank account.
While no official comment came from Premier, this dispute was discussed in an email exchange between Naeem Afzal and Syed Farhan Hassan, the company’s Country Lead, and the executive that had been in touch with Naeem Afzal throughout this time. In this email thread, one statement from Farhan Hassan is quite clarifying.
“The advance payment made at the time of the vehicle order is a minimum requirement for booking the vehicle. The percentage of the advance payment is irrelevant because, upon arrival, we will assess customs duties, taxes, and the exchange rates in effect for the vehicle,” it reads. “Any corresponding charges due to changes in duty, taxes, and/or exchange rate fluctuations will be passed on to you. If there are no changes in customs duty, taxes, or exchange rates, we will not impose any additional charges on our customers. Conversely, if there are decreases in duty, taxes, or exchange rates, we will gladly reimburse you accordingly.”
The message here is clear. That Rs 1 crore was exactly that – one crore rupees. It did not indicate value in euros at the time nor was it inflation protected. The estimate document from Premier sent to Naeem Afzal is actually a very fascinating document. It provides an interesting calculation that seems to lump together the new duties and convert them into Euros before arbitrarily deciding to calculate 80% of the car’s cost at the original rate and then subtracting that from the 80% cost of the car at the new exchange rate. The document does not clarify why the devaluation charges were applied on only 80% of this total value instead of on the entire 100% (as was being claimed by Naeem Afzal). According to one source within the Premier management, this had been their way of extending a favour to a customer that had to wait longer than expected even though the circumstances of that wait had been out of their hands. The calculation can be seen below.
It’s a favour: In an official revised estimate sent to Naeem Afzal, Premier charged devaluation on 80% of the value of the car. They claim this was a favour to a customer that had to wait longer than expected even though the wait time was not in the importer’s control.
In any case, Premier insisted its remaining payment was Rs 1.77 crores and Naeem Afzal insisted it was no higher than Rs 1.29 crores. The two parties were now locked in a battle of wills.
Where’s my money
Naeem Afzal was livid. He did not understand why his money had just been sitting with Premier losing value when it could have either converted it to foreign currency or at the very least put it in a bank account and gotten interest off it. Instead, Premier either had that money parked in a bank account and was collecting interest on it, or was using it in their regular cash flows, or had possibly even invested it somewhere. In any case, the money was with Premier and they were now claiming Naeem Afzal would have to pay for the devaluation of that money.
Premier immediately pointed towards the contract Naeem Afzal had signed. Standard Audi sales contracts include clauses that protect them from situations exactly like this. Indeed, there is a price fluctuation clause which shields Premier the importer from any kind of financial hit due to rupee devaluation or duty changes. Premier also claims ownership of the car remains 100% theirs until 100% of the payment is made. Add to that a standard force majeure clause, which protects them from unexpected (but in Pakistan, very expected) delays or expenditures. Then there’s the kicker: the right to cancel the contract rests with Premier.
These contracts are designed exactly for situations like this. It might seem like a harsh deal, but Premier’s iron-clad contract would indicate they are protected from liability in such situations.
When Premier sent him the revised estimate in December 2023, Naeem Afzal said he was not paying a devaluation price on the Rs 1 crore he had paid back in May 2022. The dealership decided they would cancel the contract and send him his Rs 1 crore back. Naeem Afzal did not want this as well. The Rs 1 crore was now worth at least Rs 1.25 crores even if he had done nothing but put it in a savings account. He went to court against the cancellation and got a stay order.
The matter is still subjudice. The legal merits of the case will be determined by the court. One might sympathise with Nadeem Afzal. After all, it was not his fault imports got banned and his money stayed tied up with Premier when he could simply have been collecting interest on it. However, one must keep in mind that the clauses in the sales contract go to great lengths to protect the importer and Audi AG. It is designed to protect against shocks like this. There is no knowing what way the court might lean in this civil case. At this point, one might accuse Premier of pushing some harsh terms on their customers, but is that also illegal?
What happened next, however, is actually quite shocking.
Facebook criminal
What do you do with a disgruntled customer? This single question, more than anything else, is what matters in this story. Up until now we have detailed a dispute between a customer and a company. No big deal disputes like this are common enough. Anyone in business knows that customers can sometimes be annoying, entitled, unfair, and downright dense.
Perhaps that is how Premier saw Naeem Afzal. Perhaps they were trying in earnest to explain something that he simply was not understanding. And when the matter could not be solved by talking, it ended up in court. This finally made Premier sweat. And no, it was not necessarily because the legal case against them was particularly potent. When Naeem Afzal filed his case, he filed a petition against Audi Pakistan, which was the name of the company he thought he was dealing with. He also made Audi AG, the company in Germany, a party to the case. When he filed this case he discovered no entity by the name of “Audi Pakistan” existed. His complaint should have been addressed against Premier Systems (PRIVATE) Limited. Audi Pakistan was simply a branding term Premier was using on their letterheads and in their communications.
To Naeem Afzal this seemed to be a smoking gun. Up until this entire point, all of the dealings Naeem Afzal had with the dealership was under the letterhead of “Audi Pakistan”. The only time Premier Systems Limited was mentioned was when he made the Rs 1 crore payment. According to Afzal, when he had asked the dealership what Premier was, he claims they had told him that was the name of their importer without clarifying the dealership itself was run by Premier.
Lady Justice was not the only avenue this customer turned to. Sans money and sans car, Naeem Afzal did the only other thing he could: posting on social media. He became active in groups like Voice of Customers on Facebook which have become the boogeyman for many businesses afraid of getting bad reviews. He started writing emails to Audi AG but received no reply. He took to twitter and began tagging Audi AG with details of the case he had filed against Audi Pakistan and against them as well. Eventually he received confirmation from Audi AG in Germany through a twitter reply and through an email. They said their local partners are completely separate legal and economic entities with no ties to the Audi AG group. They were simply allowed to use the Audi branding because they were displaying their products.
Audi AG uses this technique elsewhere in the world as well. They want to sell their cars in markets that they do not want to enter directly, so they strike a deal with an investor that becomes their importer in that country. In this case, it was Premier. Audi AG wants to have a “presence” in these countries through these importers and allow them to use their branding without actually having any legal skin in the game. For the local importer, it is a matter of prestige to be running the presence of an international brand with its branding at home. This was turning out to be a problem for Premier. Naeem Afzal’s crusade threatened to sour their relationship with Audi AG, which naturally does not want to have its name dragged in the courts and in the media. On top of this, these import agreements can prove to be fickle. This would not be the first time a luxury car importer would have their position threatened. A few years ago, when Porsche’s importer in Pakistan got in trouble over a similar issue, the Mansha Group wanted to take over the contract from Porsche Germany. This campaign was beginning to hit Premier where it hurt.
But there was no stopping Naeem Afzal.
With a background in textiles, Naeem Afzal claims there is a difference between being an importer of a foreign company and claiming you are that company’s Pakistan arm. According to him, the term “Audi Pakistan” was misleading and gave him the impression he was directly doing business with the German car manufacturer and not with an importer. He points towards how other car sellers in Pakistan deal with this.
Mercedes’ official importer, for example, brands themselves as Mercedes Shahnawaz Motors. Similarly, BMW is known as BMW Dewan Motors. Even in the case of assemblers, the names are branded as Toyota Indus Motors, and Honda Atlas Motors. Suzuki is the only company that refers to itself as just Suzuki or Suzuki Pakistan, and that is also because Suzuki Japan owns the majority of the Pakistani company. In all these cases the names these importers or assemblers use are the names of actual legal entities (read companies), but that was not the case for Audi Pakistan. There is no entity called Audi Pakistan registered anywhere.
Naeem Afzal took this discrepancy and ran with it. It is entirely possible that he knew this was the case and had picked up on Premier using the “Audi Pakistan” branding earlier as well. After all, he has been involved in the import-export heavy business of textiles himself for many years. But once his dispute with Premier picked up, he decided to go after them for it. Since the case has become public, Premier has started using letterheads that use the Audi Logo and say “Premier Private Limited” instead of the Audi Pakistan branding.
In Naeem Afzal, Premier had found one of the most annoying things a business can face: a vigilante customer. Most companies have the good sense to ignore such people. Sometimes they will send a quiet message and try to resolve the issue. Other times they will simply not give it the time of day. If the matter persists and attracts attention they might put out a professionally written statement. Premier’s response was to send a legal notice. It accused Naeem Afzal of defamation and told him to cease and desist and pay them damages. Naeem Afzal’s attorney responded to the letter. Normally, a legal notice is an out of court method employed by companies and people when they feel they are being criticised in public. It is actually quite simple.
A person says something about you on the internet. You send them a legal notice. You don’t actually have to spend money and take them to court but next time someone asks you about the accusation you can simply say “I have initiated legal proceedings and will wipe the floor with them in court”. A legal notice is, after all, the first step to initiating legal proceedings. Once you have that handy line in the bag there is no reason to actually take a contentious matter to court. So if a customer asks you about that man on Facebook that keeps telling him not to do business with you, you can always respond by telling them it is being handled by the lawyers. For that matter, you could even go ahead and pursue a civil case which can then be argued for years in the courts.
But Premier did not stop there. The company went ahead and pursued a case. Not only that, they significantly escalated the situation by filing a case against Naeem Afzal on criminal defamation charges under Sections 499 and 500 of the Pakistan Penal Code. The case was filed in Karachi.
As journalists around the country know all too well, this is a technique used by many to make a defamation case hurt as much as possible. You see, in Pakistan when a criminal case is filed, the defendant has to appear in person in court. The person filing the case, conveniently enough, does not have to do anything of the sort. It is a law designed to hurt the accused and cripple them even before a case is decided upon. Even though the showroom was in Lahore and so was Naeem Afzal, the case was filed in Karachi so he would be forced to undertake the expensive business of travelling to Karachi regularly. By March 2025, the court had issued warrants for his arrest, which by the way is standard procedure in any criminal case to summon the accused by a court.
Naeem Afzal was now implicated in a serious legal battle. The civil case he had filed was not so important. He now had to fight for his name which he felt had been sullied. That was far more important to him than the Rs 50 lakh he had been fighting over up until now. He responded by filing criminal cases of forgery and deception against the leadership team of Premier as well. His argument was the same one he had been making on social media: How could Premier use the name “Audi Pakistan” when they were just an importer? According to him this was criminal misdirection. The entire saga was now spread over one civil court and two different criminal courts.
For Premier, their decision to pursue a criminal case was about to seriously backfire.
Can businesses afford bruised egos?
Let us take a break here for a second. A simple transaction between a buyer and an official importer has become a nasty legal battle. Court cases are nothing new in the world of business but most of them occur at times when there is some sort of financial dispute or fraud involved. Most businesses don’t exactly enjoy having their business dragged around in the courts.
But what did Premier achieve by pursuing this case? On the surface some of it makes sense. Naeem Afzal’s complaints and constant posts against Premier are not great for PR. People actually take reviews and customer feedback on Facebook very seriously. In a fast evolving market for automobiles, they do not want to have their credentials as “Audi Pakistan” questioned and would want to put an end to it. An even bigger problem would be if this affected their relationship with Audi AG in Germany. Premier sent notices to express displeasure and possibly scare Naeem Afzal but it did not seem to have the desired effect.
One might argue that Premier had no other choice. But the results of this single decision are not going in their favour. The first thing to happen was that the added attention from the legal battle resulted in misinformation spreading. On the 19th of September, PakWheels reported that Pakistan’s Customs Authority had suspended Premier’s rights to issue price evaluations on imported Audi cars. This is important because when a used Audi car is imported to Pakistan from, say Japan, customs charges duties based on the value of the car. This value is judged by Audi’s official importer. Similarly if it were a Mercedes or a BMW their official importers, Shahnawwaz and Dewan Motors, would make the assessment. These importers have it in their interest to set higher values since they want people importing cars through them and not directly from sellers in other countries.
The news spread quickly. Speculations began that Premier was in trouble with Audi AG and they might be stripped of their official importer status. Audi customers began to panic. They were worried about what would happen to their warranties and car service if the importer they had bought the car from was suddenly out of business. With Premier not saying anything, shows began to air on television and posts began to circulate on social media with all sorts of unfounded rumors.
PakWheels said in a story three days later that “Earlier reports suggested that Customs Pakistan had suspended the Premier’s right to set import trade prices (ITPs). This has now been clarified: Premier retains its authority, and ITPs are still being issued by the dealership.”
Similarly, the news of warranties being suspended had no basis. The legal battle had aired what was up until that point a private matter into a public one and the facts of the case were lost in all of the noise.
Then there is another matter besides misinformation. How was this going to affect customer perception? Think of it this way. On the one hand, there is a person out there, a customer, that is saying negative things about your company. Perhaps he is taking personal pot shots against the company’s leadership. A company can be worried this will affect their market and spook away customers. But just how spooky can one guy (not an influencer by any measure, just a regular internet user) be for an entire company that has the backing of an international luxury car brand?
What this does do is create an atmosphere of mistrust. A customer might see a man ranting on the internet against a car brand which could raise some alarms for them. They might want the brand to clarify or ask for an explanation before conducting business with them. But then this same customer finds out that the brand has sued a former customer in a criminal capacity for posting about them on the internet. All of this after the brand was unable to provide the customer with their product at the original agreed upon price. That might actually end up spooking the customer more.
Even when it comes to their relationship with Audi AG, and overly aggressive response that complicates and delays a solvable dispute will not inspire confidence among the German executives.
On top of this, the clientele for Premier is high end. People buying Audis in Pakistan have wealth. No one is spending multiple crores on a car when they don’t have many more lying around. So even though a car manufacturer like Suzuki might theoretically be able to bully their customers, Premier might have a harder time taking on some of their clients. Then there is the fact that any high profile client that might be a public figure would not want to touch a car company with a messy legal battle on their books with a ten foot pole.
The noise around the criminal case and Naeem Afzal’s crusade on social media seems to have done more damage for Premier. Details of the case were warped. Existing Audi customers began to worry about what would happen if Premier’s import agreement would get revoked. Would their warranties still hold? Rumors began circulating that had no basis. Media coverage remained confusing and Premier was not speaking with anyone or issuing a statement.
From a PR perspective, Premier was in a very good position to make a simple statement clarifying the matter in a simple and professional tone. Instead, they took serious legal action that put an already disgruntled customer in a tough corner. Naeem Afzal has responded in turn. He has filed criminal cases against Premier’s executives under Sections 420 and 468, entailing forgery and cheating. He also lodged complaints with the SECP and the CCP. And that is where it stands currently. After all of this came to the fore, Premier did finally issue a statement. It has been shared in full below.
The statement, which interestingly enough has the letterhead of “Premier” along with the Audi logo and no mention of the term Audi Pakistan, is belligerent in tone. While the press release clarifies issues surrounding Premier’s status and relationship with Audi AG, it also alludes to “false and misleading claims” being circulated on social media. It does not specify or get into the dispute with Naeem Afzal but does mention that PECA is a tool at their disposal. Essentially, Premier is trying to beat out the flames that their case had fanned. It was also a clear indication that they were not ready to put this matter aside and reach an out of court settlement. The cases would continue to be pursued.
This is where we stand. Premier and Naeem Afzal got in a tit-for-tat legal escalation match over a financial dispute worth Rs 50 lakh. For Naeem Afzal, the dispute has cost him time and money. He also feels the need to defend his honour. For Premier, their decision to pursue the case has magnified the issue far beyond any social media posts that their disgruntled customer might have been making. Even as the legal battles rage on, it is unlikely that the entire ordeal will end up being worth it to either party.
