High Court Catches Up with Perpetrators of $87 Million Oil Rig Fraud

The commercial courts in London are well used to untangling intricate international frauds and ensuring that those responsible are made to pay for their dishonesty. In a case on point, a judge came to the aid of a natural resources company which was defrauded out of millions by its former managing director and others.

The company had been duped into paying $87 million for an oil rig to which it never acquired title. In those circumstances, the company contacted lawyers in London who issued proceedings against a number of companies and individuals who were alleged to have colluded in the fraud. The latter included the company’s former managing director and one of his advisers.

In ruling on the matter, the High Court accepted that a fraud had been practised on the company. It had been tricked into paying $21 million more than the asking price for the rig and, when the purchase agreement was cancelled, the entirety of the purchase price was dishonestly extracted and dispersed.

The managing director and his adviser had collaborated in dishonestly breaching the fiduciary duties they owed the company. Judgment for the full amount of the company’s loss was jointly and severally entered against them, together with others who had dishonestly assisted them in their breaches, conspired to injure the company or knowingly taken receipt of fraudulently obtained funds.