Conservative peer accused of helping Russian group obtain bank statements

Updates from Burford Capital Ltd

Conservative peer helped Russian shipping group secure confidential banking documents from Venezuelan billionaire in ‘dubious’ deal, new allegations made in $ 91 million High Court trial from London.

Nicholas Fairfax reportedly arranged a payment of $ 300,000 to Andrew Longhurst, a former executive at Maroil Trading – a company owned by Venezuelan shipping magnate Wilmer Ruperti – in exchange for a cache of private documents relating to Mr. Ruperti.

The new allegations came to light during pre-trial hearings for a trial in which Daniel Hall, a leading corporate debt collector at Burford Capital, was also accused of illegally exchanging Mr. Ruperti’s private documents against a sex tape featuring the US oil billionaire. Harry Sergeant III.

The case highlighted the contentious and high-stakes nature of Asset Search, a small but large division of Burford, which is best known for raising funds for lawsuits in exchange for reduced proceeds.

Burford was the biggest headline in the UK’s junior Aim market until an attack by activist hedge fund Muddy Waters on its governance and accounting last year cut its share price in half.

The lawsuit will also add to the scrutiny of Lord Fairfax’s work for the UK branch of Sovcomflot Group, a Russian state-owned shipping company.

In 2018, he was one of two conservative peers accused of “asking for government help for Russian associates” following a letter from the Minister of Security to the Parliament’s Foreign Affairs Committee. An investigation by the House of Lords Commissioner for Standards cleared Lord Fairfax of all these lobbying allegations.

Lord Fairfax, who inherited his title and has served in the House of Lords since 2015, is involved in the case due to his roles as director of Sovcomflot UK and as a former consultant to Burford Capital. Both roles were disclosed on the House of Lords Register of Interests. Lord Fairfax declined to comment on the court case.

According to allegations made at pre-trial hearings this month, Lord Fairfax arranged the payment of $ 300,000 to Mr Longhurst in his role as director of Sovcomflot UK.

The court documents submitted in connection with the proceedings contained an email Lord Fairfax sent to Mr Longhurst in 2014, in which he said Sovcomflot would pay him “in exchange for relevant information in your possession regarding historical activities. and the financial condition of Wilmer Ruperti and his companies. ”. The payment was conceived as an arrangement whereby Sovcomflot could pay Mr. Longhurst the wages that would have been owed to him by Mr. Ruperti.

According to allegations in court documents, Sovcomflot wanted Mr. Ruperti’s bank statements as part of his efforts to take legal action to force him to pay an apparent debt of around $ 100 million.

Sovcomflot had hired Mr Hall, co-head of Burford’s asset search and execution division, to help him recover the money. A day after Lord Fairfax sent the email, Mr Longhurst sent Mr Hall 700 pages of documents and 5 GB of data on a hard drive regarding Mr Ruperti’s bank accounts, said the court. The documents were used to take legal action against Mr. Ruperti in Switzerland, after which he agreed to settle the unpaid debts to the Sovcomflot companies, according to people familiar with the matter. Mr. Ruperti declined to comment.

Mr Hall appeared to brag about obtaining the documents from Mr Longhurst during a presentation he gave at the OffshoreAlert Fraud and Asset Search conference in Miami two years later, in 2016. A YouTube video of Mr Hall’s intervention was submitted as evidence in the High Court case. . In it, Mr Hall said: “I established a relationship, we hit it off really well. I went to his house, I ate his wife’s cookies. I assured them that everything would be fine if he helped. And in the end, he gave me a stack of Swiss documents.

Thomas Grant QC, lawyer for Mr Ruperti, said at the court hearing this month that the Sovcomflot companies had “bought” Mr Longhurst in order to obtain his private banking records, and said the transaction was “doubtful and strange”.

In a witness statement in court, Mark Hastings of Grosvenor Law, counsel for Mr Ruperti, alleged that Sovcomflot was “concerned about the optics of Lord Fairfax’s proposal” and alleged that the company had set up a complex payment arrangement “in order to avoid the suggestion that they had bribed Mr. Longhurst” to provide them with Mr. Ruperti’s confidential documents.

The transaction is at the heart of a complex legal battle in which Maroil Trading is suing Novoship, which is part of the Sovcomflot group, up to $ 91 million for allegedly violating a 2016 settlement agreement.

Novoship in turn is suing Burford Capital, which it claims is liable for damages related to the alleged violation.

In 2016, two years after the exchange with Mr Longhurst, Mr Hall exchanged Mr Ruperti’s documents for ‘sexually-oriented video material’ relating to Harry Sargeant III, whose holdings he was investigating for another client . This exchange sparked a legal battle on both sides of the Atlantic.

Burford declined to comment on the litigation. Novoship’s lawsuit accuses her of fraudulent misrepresentation, which she denies. Burford said Mr Hall would not comment either.

Novoship said: “Novoship does not wish to comment on the latest legal proceedings. . . except to say that he does not agree with Mr. Ruperti’s description of the events.

In its court documents, Novoship said Mr Longhurst “voluntarily provided” the documents. “It is denied that this payment was illegitimate, not to mention that the defendants ‘bribed’ Mr Longhurst who had a genuine dispute with Mr Ruperti over unpaid wages or fees,” the court documents said.

Mr. Longhurst did not respond to a request for comment.

This article has been edited to correct the name of the Fraud and Asset Search Conference.

Comments are closed.