In a stern warning to divorcees who try to hide their wealth that they are on a hiding to nothing, the High Court has pierced the corporate veil of a bewildering array of off-shore companies and ordered a miscreant husband to pay more than £53 million to his ex-wife.
Condemning the husband for his ‘appalling litigation conduct’, the Court found that he had played a game of cat and mouse with his wife’s legal team who had spent £1.4 million tracking down his assets. His attempts to stay one step ahead by moving his wealth between various companies in off-shore jurisdictions across the globe unravelled when the Court found that he had acted as a ‘shady puppet master’ and that his entire defence to his wife’s financial claims was a ‘fantastic charade’.
The Russian couple, aged in their late forties, had met when both of them were lowly factory workers. Whilst the wife acted as ‘home-maker’ for their two children, the husband established a hugely successful electronics retailing business. During their 17-year marriage, they built up a multi-million-pound property portfolio in Russia and England and their total wealth, every penny of which had been acquired during the marriage, was estimated at £107 million.
At a ‘fabulous’ cost of ‘£1.4 million and counting’, the wife’s lawyers had obtained orders as far afield as Cyprus, the British Virgin Islands and the Seychelles in their attempts to untangle the web of corporate structures established by the husband. In the knowledge that the wife was on his trail, the husband had most recently placed his assets in Belizean companies, managed by a Panamanian intermediary.
All the husband’s efforts to disguise his wealth proved of no avail, however, when the Court found that he was a ‘shadow director’ of the various companies and had made ‘each and every decision’ in relation to their management. All of those who had purported to act as directors of the companies were either ‘acquiescent employees or family members’ who had operated entirely at the husband’s behest. The husband was, in reality, the ‘high-handed and somewhat maverick beneficial owner’ of every asset legally owned by the companies.
Recognising the full contribution made by the wife to the marriage and the creation of the family fortune, the Court found that she was entitled to £53,531,168, being half the value of the marital assets that had been successfully uncovered. That Court directed that sum to be realised by the transfer of various English properties to the wife, the release to her of the husband’s share of the proceeds of sale of the marital home and a lump sum of £38 million.