Sovereign Stealth Funds? EXCLUSIVE

Sovereign Stealth Funds? EXCLUSIVE

They are Abu Dhabi’s best known royal figures. Crown Prince Mohammed bin Zayed Al Nahyan (MBZ) is the de facto man in charge of oil rich Abu Dhabi and his younger brother Sheikh Mansour is the boss of IPIC and famed owner of Manchester City Football Club.

Together they also control the Mubadala sovereign wealth fund with assets worth around a hundred billion US dollars and both sit on the board of the even more massive Abu Dhabi Investment Authority (ADIA). They are the most powerful half brothers of the present President of the Emirates and ruler of Abu Dhabi, Sheikh Khalifa bin Zayed Al Nahyan. 

Chairman and his 'Deputy'. The Ruler's half brothers rank number two and three  on the board of ADIA under the Chairmanship of their half brother the President of the Emirates and Ruler of Abu Dhabi

Chairman and his ‘Deputy’. The Ruler’s half brothers rank number two and three on the board of ADIA under the Chairmanship of their half brother the President of the Emirates and Ruler of Abu Dhabi

Both brothers have, of course, also been closely caught up in the 1MDB scandal. US$6.5 billion was raised by the Malaysian fund largely thanks to a bogus guarantee organised through a subsidiary of IPIC, Aabar, which became a vehicle for stealing at least half the money.

In the past fortnight the bank Goldman Sachs has agreed to pay a multi-billion dollar fine in recognition of its crooked role and ex-Prime Minister Najib Razak has been found guilty of the first 7 of 42 charges he personally faces in the Malaysian Courts.

Meanwhile, Sheikh Mansour’s right hand man at Aabar/IPIC, Khadem Al Qubaisi, has been doing jail time in Abu Dhabi ever since Sarawak Report first exposed his role as the vehicle for kickbacks amounting to over half a billion dollars, as a reward for facilitating the thefts through a web of bogus off-shore Aabar subsidiaries and the Aabar/IPIC owned Falcon Bank.

Better days? Sheikh Khalifa prior to his stroke

Better days? Sheikh Khalifa prior to his stroke

Seemingly, Mansour himself had failed to notice that tens of millions from that stash went into the servicing of his super-yacht and was also invested into projects such as Las Vegas’s largest nightclub venture Hakkasan (subsequently absorbed back into Aabar and now largely divested of its assets).

Likewise, Mansour’s older, even more powerful brother, Crown Prince Mohammed, was exposed in a published telephone recording agreeing to help Najib cover-up the scandal. Subsequent to that call, Aabar/IPIC entered into a ‘fraudulent’ Consent Order whereby Malaysia coughed up huge repayments and interest to the tune of US$6 billion to the Abu Dhabi fund in return for facilitating Najib’s secret bailout.

Malaysia still has a case against IPIC drifting in the courts in London, although signs are that the new backdoor coup government will now return to covering up the misdemeanours and reach a settlement.

Centre stage as 1MDB bond scam was hatched - Crown Prince Mohammed signed a 'Strategic Investment Partnership' with 1MDB that underpinned Najib's $6.5 billion bond issues

Centre stage as 1MDB bond scam is hatched in 2013 – Crown Prince Mohammed (centre) launches the ‘Strategic Partnership’ with 1MDB that underpinned Najib’s $6.5 billion fraudulent bond issues

Revealing Court Case

However, whilst Abu Dhabi has fought for months to prevent the 1MDB case moving into open court (given the blushes it might provoke in such high places) the Emirate has shown itself far less wary of embarking on a separate dispute in London’s High Court, which now threatens to become an even more embarrassing affair.

Indeed, if the evidence emerging from the case is confirmed as true, it sheds a far from flattering light on these same two top players in the ruling Al Nahyan family, one of the world’s wealthiest clans.

The defendants, Lancer Property Asset Management, are a small British agency that might have appeared an easy target for Abu Dhabi royal litigants with their unlimited cash.

However, for 17 years Lancer was on the inside of many property investment deals in London and they have possibly surprisingly stood their ground.  As a result, some deeply embarrassing allegations have started tumbling into open court, which appear to be backed by compelling evidence that the Emirati litigants seem to have found hard to readily rebut.

Lancer, according to the evidence, was hired by Abu Dhabi’s present ruler, President Khalifa bin Zayed of the Emirates, to help build up his private property portfolio in London. Soon, purchases curated by the agency since 1990 developed into a staggering collection of some of the poshest pads in town.

Scores of London properties owned by Sheikh Khalifa have boomed in value

Scores of London properties owned by Sheikh Khalifa have boomed in value

From the evidence, which has started to be breathlessly reported in the UK and global tabloid press (using words like ‘profligacy‘ and ‘reckless extravagance‘) it would seem that an investment of some £2 billion over the years has delivered scores of properties now worth a massive £5 billion (RM25 billion) in London alone.

Ascot Park near Windsor

Ascot Park near Windsor

The court filings refer also to numerous other residences acquired by the wealthy ruler, including a stately home near the Queen in Windsor, where Sheikh Khalifa ordered for imported Evian water to spout from every fountain.

He has yet to spend even one night at Ascot or at another of his many residences, a vast restored estate near Madrid, where an entire staff of 15 have remained employed but with not a single guest for them to serve for 17 years.

Phantom Off-shore Owner

It is this same ‘profligate’ Sheikh Khalifa who has purportedly fallen into a dispute over some £30 million with his longterm London managers whom he accuses of taking too much in the way of fees and allegedly paying backhanders to the now former manager of his own private office in Abu Dhabi.

Where is the litigant? Who is the litigant?

Where is the litigant? Who is the litigant?           (photo 2013)

Lancer stoutly deny the claims, saying their charges were agreed and that the Sheikh knew about the commissions to his own official, having signed a document that specifically sanctioned the arrangement.

The company furthermore has expressed bafflement at the sudden change of heart of their client, which they claim can be dated to 2014 after which they had found it increasingly difficult to communicate with Khalifa’s Abu Dhabi office and then found themselves first sacked then sued.

Sheikh Khalifa suffered a stroke in 2014 and has been rarely seen in public since. Therefore, Lancer has questioned who is actually suing them, Sheikh Khalifa or entities whom they believe have taken over his affairs?

The plaintiffs lawyers have argued this is irrelevant, yet the matter goes to the heart of off-shore secrecy and what it might conceal. It also raises sensational concerns about what might going on in the private office of the now reclusive ruler of Abu Dhabi and who is actually in charge of the oil rich Kingdom?

The formal litigants in this case are some 24 British Virgin Island companies set up to ‘own’ the various chunks of London property within the Sheikh’s portfolio. The reason for this device was to preserve his desire for anonymity and also, one would assume, to save the fabulously wealthy foreigner some £700 million in capital gains that he would otherwise have owed to the British revenue (money British residents/companies would be forced to pay).

However, after much apparent wrangling, Sarawak Report has established that the judge has opined that Khalifa’s status as the Ultimate Beneficial Owner (UBO) of all these off-shore companies does indeed lie at the heart of the case and therefore it must be proven that the decision to sue Lancer was made by him.

Incapacitated!

Post stroke - a rare image from August 2019

Post stroke – a rare image from August 2019

This has given rise to information put before the court that should send shock waves through Abu Dhabi and indeed the world, including Malaysia which has had its own dose of the ‘governing style’ of the movers and shakers in Abu Dhabi.

The defendants, Lancer, have dramatically informed the court that during the course of being sued by the Royal claimant they had started to be made aware that since suffering his stroke in 2014, Sheikh Khalifa, whom they previously found to be an engaged client who signed off on the deals authorising the off-shore companies, their lawyers and agents, is no longer capable of his own decisions.

This is despite the fact that Khalifa, who has rarely been seen in public since the stroke, was nonetheless voted in for another five years as the President of the Emirates in November of last year. According to Lancer:

“Sheikh Khalifa is reported to have suffered a stroke in January 2014, which the Defendants believe to be gravely debilitating of his mental faculties and the Defendants believe that this litigation results from ensuing competition amongst family members for control of his assets …. Sheikh Khalifa and/or the General Secretariat of the Executive Council (amongst others) have since January 2014 issued documents which purport to (but, given his incapacity, cannot in fact) be approved and/or signed by Sheikh Khalifa …” [Defence document Berkley Square Holdings & 23 Others – vs – Lancer Property Asset Management Limited – underline added]

Whilst it has been recognised in Abu Dhabi that Sheikh Khalifa has been much retired since his illness and almost never appears in public, the suggestion that he might be mentally incapacitated and unable to make key decisions as the ruler of Abu Dhabi and President of the Emirates will come as shocking information.

How the newly re-elected ruler is presented in public

How the newly re-elected ruler was presented following his re-election as President late last year

Enquiries by Sarawak Report indicate that the full extent of the much loved ruler’s decline has been kept a closely guarded secret amongst the leading inner circle of the Al Nahyan family, who have chosen to pretend instead that the oldest brother remains a functioning leader of his country – and Chairman of the world’s third largest sovereign wealth fund.

Certainly, recent online videos and photographs of the ruler have been kept to a bare minimum and appear to potentially reveal the devastating effects of a major brain haemorrhage and stroke that the 71 year old is believed to have suffered back in 2014.

A favoured photograph of the ruler being kissed by the Crown Prince might seem to have caught a joyful moment, but the hand is also limp. And the ruler’s jaw appears to remain unclosed in most situations.

Ruler and Crown Prince

Ruler and Crown Prince

It is the Crown Prince who is the ‘Deputy’ for Khalifa at the half trillion dollar ADIA fund managed on behalf of the people of Abu Dhabi. He is also already regarded as the de facto but not official ruler and as the most powerful player in the state.

Flat Denial

But there should be no misunderstanding. The litigants in this case have fiercely rebutted and totally denied that there is a shred of truth in the allegations by the defence that the ultimate beneficial owner of these properties, Sheikh Khalifa, is in any way incapacitated or might not have made the decision himself to sue his longtime agents over in London. After all, that could render the whole case a sham, as the defence has pointed out.

According to the complainants’ law firm, Eversheds in May:

“Sheikh Khalifa is not suffering from any “mental incapacity”; nor has he suffered from such incapacity at any time since January 2014 as alleged.”

Despite this claim, the law firm also continues to say it isn’t actually relevant either:

“In any event, his capacity is irrelevant to the authority of the Claimants’ solicitors to conduct these proceedings, which are brought in the name of the Claimants, not Sheikh Khalifa.”

Sheikh Khalifa’s Worldly Wealth Signed Away …. By Himself?

However, the defendants believe they have obtained stunning evidence to back their astonishing claim. They have placed before the court a sensational document dated 1st June 2015, which purports to have been signed by Sheikh Khalifa himself in front of an official notary in Abu Dhabi.

This document allegedly declares in the name of Sheikh Khalifa that he has decided to hand over the control and management of his entire worldly wealth and all his possessions (believed to be worth at least US$18 billion) to a Committee chaired by Sheikh Mansour.

Sheikh Mansour (centre) and his lawyer Faraj (right)

Sheikh Mansour (centre) and his lawyer Faraj Abdullah Ahneish (right)

The committee consists of two of Khalifa’s sons, a lawyer known to be closely associated with Sheikh Mansour (Faraj Abdullah Ahneish) and a minister from the Ministry of Presidential Affairs.

Enquiries by Sarawak Report indicate that directions from the Committee are handled by Faraj.

This transfer of power over the ruler’s personal properties and wealth is clearly framed so that the power over all decisions by that Committee in fact resides only with the Chairman according to quotes made available to Sarawak Report:

“The Committee…. shall be represented before third parties by its Chairman who shall be responsible on behalf of the Committee to sign on all contracts, agreements, purchase orders and other documents that fall under the competence of the Committee. All resolutions and directives made by the Chairman shall be also considered as a resolution adopted by the Committee itself…”  [Resolution to form a Committee for the management of his personal property & assets purportedly signed by Sheikh Khalifa 1st June 2015]

The Defence has therefore argued that the document is proof that the case was not brought against them by Sheikh Khalifa but by the ‘Committee’ managing his affairs, headed by Sheikh Mansour, the owner of Man City whom they say now has total secret control of his half-brother’s private affairs, whilst “concealing his [Khalifa’s] incapacity” and “falsely representing his authorisation” of this and other matters!

“… the 1 June 2015 Resolution by which Sheikh Khalifa purportedly created and authorised a committee headed by Sheikh Mansour bin Zayed Al Nahyan .. is purporting to administer the Department of the President’s Affairs and/or the assets of Sheikh Khalifa. It is to be inferred that Sheikh Khalifa’s extended family members and/or their agents are concealing his incapacity and falsely representing his authorisation and approval of various matters, including …  instructions to commence the present proceedings – accordingly, it is denied that the Claimants’ solicitors are authorised to commence and conduct these proceedings.” [Lancer Property Asset Management, Defence]

And the defendants have produced another bombshell to support their shocking claim.

No Ordinary Substitute Signature!

The document in question claims to be signed in the presence of a notary by Sheikh Khalifa himself. Yet, the defendants say that the signature on the document is NOT that of Sheikh Khalifa, which they recognise from other documents (available also online thanks to the Panama Papers).

Sheikh Khalifa's signature was allegedly not the one on the document

Sheikh Khalifa’s signature was allegedly not the one on the document

The signature in the name of Sheikh Khalifa shown on this document is a very different one, they say, which can likewise be identified, thanks to its fame and widespread use. It appears to be that of Sheikh Mansour’s older brother, none other than the Crown Prince of Abu Dhabi, Sheikh Mohammed.

Lancer allege THIS was the signature above Sheikh Khalifa's name on the notarised document

Lancer allege THIS was the signature above Sheikh Khalifa’s name on the notarised document

The defence have alleged therefore that the entire document smacks of deception, which not only raises questions over the genuine nature of the case against them but also about just what is going on behind the scenes in the scented palaces of Abu Dhabi?

In their latest pleas to the court Lancer’s legal team claimed they had demanded an explanation time and again for this extraordinary state of affairs and not received it:

“.. 29 November 2019 the Defendants observed that the purported signature of Sheikh Khalifa on the 1 June 2015 Resolution referred to above did not match known examples of his signature but rather appeared to match the signature of Sheikh Mohammed bin Zayed Al Nahyan, and asked for an explanation of who in fact signed the Resolution and, if it was not Sheikh Khalifa, why it had been notarised (by a notary public of the Abu Dhabi Judicial Department) as signed by him; having received no response, the Claimants were pressed for an answer by letter dated 13 December 2019; by letter dated 16 December 2019, the Claimants refused to provide any explanation; and in the circumstances the Defendants will invite the Court to infer that the Claimants had no good explanation and that the matters averred in this paragraph 8 are well-founded.” [Defence document: May 26th 2020]

Eventually Eversheds did respond on behalf of their clients saying the complaint was “unsustainable”, because although they now concede Sheikh Khalifa may not have actually signed the document, they claim (without providing the slightest proof) that it would have been “approved” by him and it would have been signed by “an authorised representative” while “in his presence”!

“All decrees, declarations and other decisions issued by Sheikh Khalifa or in his name since January 2014 have been formally notarised by the Notary Public of Abu Dhabi and generally signed by Sheikh Khalifa himself; where such decisions have not been signed by Sheikh Khalifa himself, they have been expressly approved by Sheikh Khalifa and signed by an authorised representative of Sheikh Khalifa in his presence.” [Reply to the Defence May 27th 2020]

The question as to why the Sheikh himself did not sign the document if he was in the room and authorised it has not been addressed in the above statement by the legal team who claim the ruler is in no way incapacitated.

Nor why the notary did not record that the person who signed was in fact the senior brother of Sheikh Mansour, who has now taken full control of the private property and affairs of one of the richest men in the world.

The people of Abu Dhabi, Malaysia and elsewhere may very well be interested to follow the progress of this low-key case to find the answers, in particular to whether the Crown Prince has secretly acquired a Power of Attorney to run the kingdom on his brother’s behalf?

Financial Opportunities To Raise Billions?

Meanwhile, further evidence shows that powers of attorney now being granted by the ‘Committee’ to those authorised to manage the properties in London have been strikingly extended far beyond the powers permitted by Sheikh Khalifa in the past.

Whereas before the Sheikh’s representatives had powers that merely enabled them to manage the properties, they now have the ability to raise a mortgage on the properties and effectively leverage the value of the £5 billion portfolio many times with banks and lenders for whatever purpose the ‘Committee’ might require.

Following the June 1st resolution ‘signed’ by Sheikh Khalifa/and or his brother Sheikh Mohammed, Sheikh Mansour has granted such powers in the name of the ‘Committee’ to two lawyers, one of whom is his close legal advisor Faraj Abdullah Ahneish and the other, Dr Ahmed Almazrouie a senior government figure, who now has the power of attorney over all of the London properties cited in this case.

Sarawak Report has established that the judge has agreed that the mental capacity of Sheikh Khalifa is indeed a matter that lies at the heart of this case and the claimants have been instructed to disclose evidence that reveals the extent of the mental capacity of the ultimate beneficial owner of the properties involved in whose interests the case purports to have been brought.

The defence will surely be calling for several witnesses in the case alongside this evidence, including the two royal brothers, whom they appear to evidently suspect of being involved in “competition amongst family members for control of [Sheikh Khalifa’s] assets“.

The once secret off-shore companies that hid Sheikh Khalifa's £5 billion London property portfolio

The once secret off-shore companies that hid Sheikh Khalifa’s £5 billion London property portfolio

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