Libya’s sovereign wealth fund has been granted the right to try to recoup a £10.5 million ($14m) investment in a failed British hotel venture.
The Libyan Investment Authority in February ploughed the sum into what it believed was a 50 per cent share in a multimillion-pound venture for a 207-bedroom Crowne Plaza hotel in Maple Cross, Hertfordshire, near London.
The project was in partnership with Roger King, a millionaire businessman who owns Stoke Park, a five-star hotel and golf club set in 140 hectares in Stoke Poges, Buckinghamshire.
It featured in films including Goldfinger, starring Sean Connery as James Bond, and Bridget Jones's Diary.
In 2010, London’s High Court heard the LIA was told the complex, which was never built, would be worth £21m and to expect returns of up to £58m.
But the wealth fund’s survey of the land found it to be worth only £5.7m, the court heard.
Despite this valuation, its then UK chief Rajab Layas, a close ally of Libyan dictator Muammar Qaddafi, relied on the word of the other investors.
The LIA took the case back to the Court of Appeal to try to recoup the money and seek damages.
Property surveyors King Sturge had been appointed by Mr King’s firm to assess the value of the development and send a letter of that valuation to LIA.
But on Monday, judges rejected the respondents’ argument that the case should be dismissed because of the time elapsed, and allowed LIA’s appeal to resubmit its claim.
“On May 12, 2010 Mr Layas, the then executive director of LIA UK, wrote to Roger King confirming, subject to contract, that the LIA were proceeding with the purchase of a 50 per cent shareholding for £10.5m, with completion expected in June,” Lord Justice Nugee told the court.
“It appears that it was only then that thought turned to the LIA obtaining its own advice on value.
"Mr Layas initially instructed Savills to provide valuations of the hotel and retail sites, but on June 17, 2010 Mr Furze of Savills telephoned him to alert him to a major discrepancy between Savills' initial view [that the hotel site was worth £5.7m] and the price being paid.
“Mr Layas's reaction was apparently to dis-instruct Savills, and on June 18 to ask Mr King to assist.”
The court heard this resulted in the developers sending a letter, known as the King Sturge letter, from their surveyors repeating their claim that the venture was worth £21m.
“This was a lengthy letter which concluded that, based on the information King Sturge had been given, including Strutt and Parker's valuation, they supported the assumptions made and considered an enterprise value of £21m appropriate,” Mr Nugee said.
“Mr Layas forwarded the King Sturge letter to the LIA, and on June 27, 2010, the board of directors of the LIA approved the investment in the joint venture.
"The joint venture agreement was signed and the £10.5m paid on July 19, 2010.
"Over the next six months certain other sums, totalling £1.76m, were also invested by the LIA pursuant to requests for further funding.
“The development, however, did not proceed, nothing was built, and the joint venture companies went into liquidation.
"Relations between the LIA and Mr King broke down in or about 2013. The claimants claim to have lost all or most of their investment.”
Mr Layas was a co-director of a company called CP Maplecross with Mr King’s son, Hertford.
Before entering into the contract, the King family’s holding company, the International Group, had been awarded a five-year contract to manage Al Marg hospital, 95 kilometres north-east of Benghazi.
Mr Layas had earlier set up a business with Saif Al Islam Qaddafi, a son of the Libyan dictator, in Kensington, west London.
At the time of the LIA investment, the UK Treasury had frozen the assets of Mr Qaddafi and five of his children.
TRAP
Starring: Josh Hartnett, Saleka Shyamalan, Ariel Donaghue
Director: M Night Shyamalan
Rating: 3/5
HWJN
%3Cp%3EDirector%3A%20Yasir%20Alyasiri%3C%2Fp%3E%0A%3Cp%3EStarring%3A%20Baraa%20Alem%2C%20Nour%20Alkhadra%2C%20Alanoud%20Saud%3C%2Fp%3E%0A%3Cp%3ERating%3A%203%2F5%3C%2Fp%3E%0A%3Cp%3E%3C%2Fp%3E%0A
UAE currency: the story behind the money in your pockets
Zayed Sustainability Prize
COMPANY PROFILE
Initial investment: Undisclosed
Investment stage: Series A
Investors: Core42
Current number of staff: 47
Read more about the coronavirus
Dhadak 2
Director: Shazia Iqbal
Starring: Siddhant Chaturvedi, Triptii Dimri
Rating: 1/5
Citizenship-by-investment programmes
United Kingdom
The UK offers three programmes for residency. The UK Overseas Business Representative Visa lets you open an overseas branch office of your existing company in the country at no extra investment. For the UK Tier 1 Innovator Visa, you are required to invest £50,000 (Dh238,000) into a business. You can also get a UK Tier 1 Investor Visa if you invest £2 million, £5m or £10m (the higher the investment, the sooner you obtain your permanent residency).
All UK residency visas get approved in 90 to 120 days and are valid for 3 years. After 3 years, the applicant can apply for extension of another 2 years. Once they have lived in the UK for a minimum of 6 months every year, they are eligible to apply for permanent residency (called Indefinite Leave to Remain). After one year of ILR, the applicant can apply for UK passport.
The Caribbean
Depending on the country, the investment amount starts from $100,000 (Dh367,250) and can go up to $400,000 in real estate. From the date of purchase, it will take between four to five months to receive a passport.
Portugal
The investment amount ranges from €350,000 to €500,000 (Dh1.5m to Dh2.16m) in real estate. From the date of purchase, it will take a maximum of six months to receive a Golden Visa. Applicants can apply for permanent residency after five years and Portuguese citizenship after six years.
“Among European countries with residency programmes, Portugal has been the most popular because it offers the most cost-effective programme to eventually acquire citizenship of the European Union without ever residing in Portugal,” states Veronica Cotdemiey of Citizenship Invest.
Greece
The real estate investment threshold to acquire residency for Greece is €250,000, making it the cheapest real estate residency visa scheme in Europe. You can apply for residency in four months and citizenship after seven years.
Spain
The real estate investment threshold to acquire residency for Spain is €500,000. You can apply for permanent residency after five years and citizenship after 10 years. It is not necessary to live in Spain to retain and renew the residency visa permit.
Cyprus
Cyprus offers the quickest route to citizenship of a European country in only six months. An investment of €2m in real estate is required, making it the highest priced programme in Europe.
Malta
The Malta citizenship by investment programme is lengthy and investors are required to contribute sums as donations to the Maltese government. The applicant must either contribute at least €650,000 to the National Development & Social Fund. Spouses and children are required to contribute €25,000; unmarried children between 18 and 25 and dependent parents must contribute €50,000 each.
The second step is to make an investment in property of at least €350,000 or enter a property rental contract for at least €16,000 per annum for five years. The third step is to invest at least €150,000 in bonds or shares approved by the Maltese government to be kept for at least five years.
Candidates must commit to a minimum physical presence in Malta before citizenship is granted. While you get residency in two months, you can apply for citizenship after a year.
Egypt
A one-year residency permit can be bought if you purchase property in Egypt worth $100,000. A three-year residency is available for those who invest $200,000 in property, and five years for those who purchase property worth $400,000.
Source: Citizenship Invest and Aqua Properties
No Shame
Lily Allen
(Parlophone)