Thursday 19 October 2017

Irish Nationwide secures £7m-plus judgment against property mogul

Michael Fingleton was in charge of Irish Nationwide when the loan was granted
Michael Fingleton was in charge of Irish Nationwide when the loan was granted
John Mulligan

John Mulligan

A legal action launched by Irish Nationwide against a Syrian property mogul who was once one of Britain's richest people has succeeded in securing a £7m-plus (€8m) judgment against firms connected to him.

The ruling has also highlighted the slapdash nature of lending practices at the defunct building society, which was run by Michael Fingleton.

A court in Jersey said bookkeeping by Irish Nationwide in relation to borrowings it advanced to one of the defendant firms in the case "fell short of what would be expected of any well-conducted bank or building society".

Irish Nationwide, which was subsumed into the now in-liquidation Irish Bank Resolution Corporation, had sued Simon Halabi and two firms – Stormex Holdings and Immofra – after a large loan made to Stormex in 1997 had not been repaid. No interest owed had ever been paid on the loan.

Once a pillar of Britain's rich elite, Mr Halabi was reckoned in 2007 to have a £3bn fortune. At one point, he was involved in the new Shard skyscraper in London after acquiring a 25pc stake in the development from Irish Nationwide. He later sold his holding to Qatari investors.

As part of the 1997 agreement by Irish Nationwide to advance money to Jersey-based Stormex, Mr Halabi and Immofra provided guarantees.

Cynical

Immofra owns the Chateau des Bois Mures holiday development north of Cannes. Irish Nationwide holds a charge over the property, which at the end of 2009 was listed as being worth about €7.4m.

By 2000, Irish Nationwide claimed there was £2.3m outstanding on the loan it advanced to Stormex. With interest, the amount owed jumped to more than £7m.

A judgment in default had previously been secured by Irish Nationwide against Mr Halabi, but the institution never received anything from the businessman, who was declared bankrupt in England and subsequently discharged.

Mr Halabi, Stormex and Immofra had already argued in court that the building society had incorrectly calculated the interest owed.

The Jersey court said that during a recent trial of the case, Mr Halabi had engaged in a "cynical attempt to postpone the day of reckoning". Mr Halabi had sent an email the morning before the trial started to the lawyer for Stormex and Immofra, accusing his firm of negligence. Nevertheless, the trial proceeded.

Stormex, which the court said is effectively controlled by Mr Halabi, and Immofra have been given until July 26 to pay £3.5m in loan principal and interest. The two firms have until September 27 to pay a further £3m.

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