Private equity firm suing tycoon over €983k bond
But Irish property magnate Marley claims move was 'clever business'
Published 09/12/2012 | 05:00
Philip Marley, the student accommodation developer who hopes to become a reality TV star, is being sued by a former business partner over a "worthless" £800,000 Costa Rican bond.
Maven Capital Partners, his former co-investor in Space Student Living Limited, a student accommodation business in England, is alleging that Marley "misrepresented" his investment in the business as being £800,000 (€983,647) in cash when it was in reality a Caribbean bond.
The British private equity group says it only discovered the bond was issued by a Capital Provident Indemnity of Costa Rica after Marley resigned earlier this year. It believes the bond has no value and claims it would never have invested with Marley if it had known this.
Maven is suing Dublin-born Marley for £2m (€2.45m) in Manchester's High Court in relation to Space.
Bill Nixon, the managing partner of Maven, said: "We had a legally binding contractual commitment from Mr Marley that he would invest in cash."
"We were," Nixon alleged, "deceived by the nature of his investment, which turned out to be a worthless Costa Rican bond".
Marley however, told the Sunday Independent he had done nothing wrong. "Bonds are used in the real estate sector and it was a valid consideration," he claimed.
Marley said he had taken legal advice on using a bond rather than cash to fund his investment. "It was my ingenuity to use a bond ... it is just clever business," he added. Marley accused Maven of "clutching at straws," in taking legal action against him. He admitted he had "toured" London in order to find the Costa Rican bond and using it to take a stake in Space. "This is all a smokescreen," Marley insisted.
Meanwhile, the remaining directors of Space have completed a forensic examination of the student accommodation business's books.
They now claim €250,000 was removed by Marley from Space in the four days prior to his resignation and paid into another company he controls. The finance director of Space claims there was no valid reason for this.
However, Marley told the Sunday Independent that he was legally entitled to move the money.
"I have told them [Space] the funds (€250,000) were used to refurbish apartment blocks," Marley said.
Marley, who says he is now based in Gibraltar, left Space in August of this year and he has since begun working on a career in reality TV with his new girlfriend Dana Wilkey, the Real Housewives of Beverly Hills star.
Separately Marley is also at loggerheads with IBRC, formerly Anglo Irish Bank, over a debt of about £12m. Marley is best known in Ireland for building up the Ely Property Group, which he floated on the stock exchange in 2005 making him a millionaire while still in his 30s.
Sunday Indo Business