Saturday 3 December 2016

Offshore firm boss to file multi-million euro lawsuit over boardroom ban

Simon Rowe

Published 02/10/2016 | 02:30

An Irish businessman, who was handed a boardroom ban amid allegations that his companies form part of an elaborate $16bn Ponzi scheme, is preparing to launch multi-million euro lawsuits against financial regulators in Mauritius and Guernsey. Stock photo: Getty
An Irish businessman, who was handed a boardroom ban amid allegations that his companies form part of an elaborate $16bn Ponzi scheme, is preparing to launch multi-million euro lawsuits against financial regulators in Mauritius and Guernsey. Stock photo: Getty

An Irish businessman, who was handed a boardroom ban amid allegations that his companies form part of an elaborate $16bn Ponzi scheme, is preparing to launch multi-million euro lawsuits against financial regulators in Mauritius and Guernsey.

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David Cosgrove's company, Belvedere Management Limited, had its management licence revoked by the financial regulator in Mauritius in August. Entities linked to Belvedere that have been investigated by financial regulators in Guernsey were found to have "systemic failings in corporate governance and the application of the law, regulation, code and principle".

In recent days, Cosgrove has lodged an appeal against the ban imposed by Mauritius' Financial Services Commission (FSC), in which he accuses the watchdog of a "witch hunt", of making "contrived findings" and of "incompetence".

In a 44-page rebuttal document submitted to the FSC by Cosgrove's lawyers as part of an appeal process, he claims his investment company has been "destroyed" as a result of the ban and the resulting negative publicity.

Belvedere was set up in 2008 as an umbrella group for more than 100 investment funds. It is now under investigation by regulators in several jurisdictions, with the trail stretching from the Indian Ocean to South Africa, and from Guernsey to Ireland.

Belvedere Management is reported to have had $16bn of assets under administration at one time.

Cosgrove intends to launch proceedings against the FSC "to recover the damages suffered by him and his related entities - essentially the loss of his share in a multi-million dollar financial services business", according to documents seen by the Sunday Independent.

Cosgrove is seeking to recover US$130m (€116m) in damages. When contacted this week, he confirmed that "nine groups - a mixture of investors and investment advisors - are also preparing to take action in either Guernsey or Mauritius". The embattled businessman said the FSC's "lack of good faith in these investigations has forfeited its immunity from prosecution".

Cosgrove is currently appealing the decision by the FSC's enforcement committee to disqualify him from holding any position as an officer of any licensee of the FSC for five years.

The FSC in Mauritius found that a number of companies of which Cosgrove was a director had breached regulations, mostly regarding keeping proper records of customers and checks on the sources of the funds they were investing. It also found that there was manipulation of the net asset value of one of the investment funds.

A number of high-value managed offshore funds linked to the Irishman have been seized by financial regulators and put into administration to protect investor funds. Cosgrove robustly denies all allegations and insists he has not been charged.

Sunday Indo Business

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