IEyeNews

iLocal News Archives

Paradise Papers firm [Appleby] criticised by court after hiding money from a daughter

Court orders Appleby Mauritius to pay €53m after helping actor Edoarda Crociani try to keep money from estranged daughter

An offshore firm connected to the Paradise Papers has been ordered to pay almost €53m after a court ruled it had “manufactured” correspondence in a deliberate attempt to help a mother hide money from her estranged daughter.

Appleby Mauritius, an offshore services firm owned by the law firm Appleby until 2016, helped the Italian actor Edoarda Crociani attempt to keep substantial sums of money out of the reach of her daughter Cristiana Crociani.

Appleby Mauritius was named as a defendant in the action and was the subject of substantial criticism in the judgment. However because Appleby’s offshore services business separated from its legal division into a new company called Estera following a management buyout, it is Estera that has had to pay rather than Appleby. Appleby Mauritius has since been renamed Estera Trust (Mauritius) Limited.

Earlier this year, the royal court in Jersey criticised the “brazen” behaviour of Appleby Mauritius and accused it of “a direct interference with the administration of justice”.

An appeal against the ruling will begin in February 2018.

The Jersey court ordered Appleby Mauritius to pay €52.6m (£46.7m) into the court as security for any compensation to make good financial loss suffered as a consequence of its actions. The compensation is to be determined at a later date.

At the time the case commenced, Appleby Mauritius was owned by the law firm Appleby, the firm at the centre of the Paradise Papers investigation by media organisations around the world into the use of the offshore world to hide assets and avoid tax.

Details of the Crociani case were set out in a 238-page ruling from the royal court in Jersey. It describes how in 2012 Appleby Mauritius was appointed trustee of the Grand Trust, potentially shifting the proper law of the trust to Mauritius.

The appointment put Appleby Mauritius in charge of managing assets in the interests of Cristiana and her sister, Princess Camilla de Bourbon des Deux Siciles.

The royal court found the appointment of Appleby Mauritius to be “tactical … the purpose of which was to impede Cristiana’s claims” to money from the trust.

Thereafter, Appleby Mauritius was “consistently hostile and disloyal” to Cristiana and refused a request for information, despite being obliged to act in her interest.

Cristiana sued and in 2014 the privy council ruled that Jersey was the correct jurisdiction in which to hear her case, despite the appointment of Appleby Mauritius.

In response, the firm set about creating further impediments to Cristiana, the ruling states. In January 2016, Appleby’s offshore services business became a separate company called Estera. Appleby Mauritius became part of the new company.

Firstly it amended the terms of a promissory note, the last asset remaining in the trust and one that guaranteed its beneficiaries interest due from an Italian engineering business set up by Edoarda’s late husband.

Under the new terms, proceeds would be due in 2022 rather than 2017. The court found that correspondence justifying the amendment was “manufactured” by Appleby Mauritius.

Appleby Mauritius then resigned as trustee without notifying the royal court, despite being a party to legal proceedings. Before doing so, it appointed another Mauritius trustee in its place following a two-day process apparently involving no due diligence.

The court described the manoeuvre, which effectively transferred the note out of Appleby Mauritius’s control, as “a brazen attempt to evade the decision of the privy council” and “a direct interference with the administration of justice in this jurisdiction”. It said that the case showed the company “in a poor light”.

Bedell Cristin, lawyers for Cristiana Crociani said: “Appleby Mauritius have been found liable in breach of trust for its loss and there is to be an inquiry into the amount of compensation that will have to be paid. The face value of the note lies in the region of €52m and Appleby Mauritius has been ordered to pay this money into court.”

The claims were not actively defended by Princess Camilla or Edoarda Crociani, who did not attend the hearing.

A spokesperson for Edoarda Crociani said: “Madame Crociani relied on Appleby as paid, professional trustees to advise her, which in her opinion they failed to do adequately on this matter.

“Due to her lack of confidence in Appleby’s ability there was a major requirement for confidentiality, but any allegations that Madame Crociani tried to withhold any financial details are simply untrue and unsubstantiated. She is hugely disappointed with the actions of Appleby, both throughout the advisory process and the fact that confidential client information has been made public.

“Madame Crociani would like to make it clear that she has no further dealings with Appleby and strongly dissociates herself with any of the wider media stories currently surrounding Appleby.”

Estera confirmed that its separation from Appleby “included the acquisition of Appleby Trust, Mauritius, leading to the inheritance of any associated legacy matters connected with that entity”, but declined to comment in detail.

Appleby declined to comment.

From originating website …

… we have a small favour to ask. More people are reading the Guardian than ever but advertising revenues across the media are falling fast. And unlike many news organisations, we haven’t put up a paywall – we want to keep our journalism as open as we can. So you can see why we need to ask for your help. The Guardian’s independent, investigative journalism takes a lot of time, money and hard work to produce. But we do it because we believe our perspective matters – because it might well be your perspective, too.

In these times, it is imperative to have an independent newspaper that allows us to understand what is going on around us. The Guardian is an absolute necessity.Delphine M, Mexico

If everyone who reads our reporting, who likes it, helps fund it, our future would be much more secure. For as little as £1, you can support the Guardian – and it only takes a minute. Thank you.

IMAGE:Edoarda Crociani. Photograph: Monaco Princely Pool/WireImage

For more on this story go to: https://www.theguardian.com/news/2017/dec/22/paradise-papers-firm-to-pay-53m-euros-after-hiding-money-from-a-daughter

LEAVE A RESPONSE

Your email address will not be published. Required fields are marked *