Shaking off scandal to dig in for long haul

The Dubai entrepreneur who unwittingly played a key role in setting off the chain reaction that culminated in the resignation of the UK defence minister breaks his silence on the affair.

Harvey Boulter, the Dubai businessman who was at the centre of the Liam Fox controversy last year. Antonie Robertson / The National

There cannot be many men who can claim to have been instrumental in bringing down a British cabinet minister, but Harvey Boulter is one who can.

Last year, the entrepreneur, based in Dubai, set off a chain of events that led to the resignation of Dr Liam Fox, the UK's minister of defence. Mr Boulter had acquired a technology from the ministry of defence (MoD) that had the potential to detect MRSA, a life-threatening bacterium that has plagued hospitals and nursing homes in the UK.

But, says Mr Boulter, the technology was never properly developed and marketed by 3M, the US corporation that bought it, and he sued the company for the full purchase price, some US$40 million (Dh146.9m).

That litigation set off a chain of events that led to disclosure of unauthorised meeting between MoD officials and business people, allegations of blackmail and extortion, and the presence of shadowy "advisers"' to government ministers. It ended in the humiliating resignation of Dr Fox.

Speaking for the first time at length since those events, Mr Boulter says: "I'm not sure I was instrumental, but I was certainly at the wrong place at the wrong time. We work with the MoD to commercialise their technology, and I was also paying the legal fees of Ploughshare, the MoD's commercial subsidiary, so it was relevant to meet the minister."

But the meeting culminated in allegations by Sir George Buckley, 3M's chief executive, that Mr Boulter had threatened to try to get his knighthood rescinded, and Mr Boulter hit back by revealing the full extent of meetings between Dr Fox and other businessmen.

"Naturally I produced the facts, and Dr Fox unfortunately paid the price," he says, with just a tiny hint of regret at the minister's fate.

However, he will not allow any regrets to get in the way of his ongoing legal campaign against 3M and Sir George personally. Recently, he won a couple of important legal victories in the US and UK. A Washington judge threw out 3M's allegations of blackmail, extortion and conspiracy ("ridiculous allegations", he called them.)

Last November, a London court found 3M in breach of contract over the deal but awarded Mr Boulter only some $1.3m of a total claim of about $30m. He has leave to appeal against that sum. "We might move it up a little," he says.

He was also given permission in the UK to serve a libel action against Sir George for the blackmail allegations. "It will take a year or two to hold Sir George to account, but I am patient," he adds ominously.

After the furore over Dr Fox, Mr Boulter's own business track record has come under scrutiny in the international media. Operating first from Hong Kong and then Dubai for the past six years, he has had a business relationship with the MoD for about 13 years, mainly at the civil service level.

Some critics have alleged that his investors and clients do not seem to have made big money out of Mr Boulter, and point to his own lifestyle with the suggestion that the rewards seem to flow first to the entrepreneur himself.

"Our business takes many forms - one side of our business is venture capital, where it is true everything does not always go well. It is very risky, and if it goes well the rewards can be equally very impressive", he says.

"Our primary fund that has been running since June 2000 has delivered good returns. In the last 10 years it is up 149 per cent compared to the Nasdaq, for example, that is up just 52 per cent over the same period. That fund captures successes and failures," he says.

Whatever the facts about the track record, Mr Boulter has certainly plugged himself well into the Middle East investment scene. Some of his partners and investors are in the region's top political and business echelons, so his view on the global investment scene from a Gulf perspective is worth hearing.

"We see nervousness - investors have funds available but they are super-cautious about where to deploy their investment funds," he says. "This is really no surprise, the traditional real estate markets that are liked by local investors are still struggling in most places; and there is only so much property you can buy in Mayfair; the equity/debt markets have exhibited high volatility over recent years.

"Then you have the euro-zone situation that will without doubt look very different at the end of 2012 compared to the beginning. This spells risk and is yet another reason to just remain in cash," he says.

"This said, private equity and technology investment continues to look attractive; it is one way of investing at a business level for the medium term and riding through the shorter term volatility in the markets," he concludes.

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