The Supreme Court has ruled against former company director Richard Fagan, ordering him to pay more than 62 million pounds for fraudulent trading and financial mismanagement in his role at two Gibraltar registered companies.
The ruling, delivered by Judge Liam Yeats, found that Mr Fagan, a British and Irish National now living in Dubai, and the captain of the Irish national polo team, knowingly engaged in fraudulent practices, misfeasance, and insolvent trading, leading to significant financial losses for investors.
The case was brought by joint liquidators Edgar Lavarello and Simon Conway, who were represented in court by Nick Cruz, Daniel Lewis and Kayleigh-Anne Revagliatte.
They alleged that 53 year old Richard Fagan was responsible for the dissipation of £56.2 million from Kijani Resources Ltd and £5.8 million from Ratio Ltd. Investor funds, intended for commodity trading, were instead funnelled into companies controlled by Mr Fagan and his associates. Many of these investments were later found to be either fictitious or grossly overvalued. Despite claims that KRL had substantial assets, the liquidators were only able to recover £1 million from the £136 million in investments that had been reported.
The court found that Mr Fagan and his associates engaged in systematic fraud, misrepresenting the financial health of the companies through manipulated Net Asset Valuations (NAVs). These NAVs created the illusion of profitability, encouraging further investments while concealing the reality that company funds were being siphoned off through sham transactions, personal expenses, and extravagant purchases. The funds were also used to sustain a luxury lifestyle, including payments linked to yachts and high-end properties.
Despite being the only respondent still facing legal action, Mr Fagan failed to attend the final hearing. He attempted to secure an adjournment three minutes before it was due to start, citing a medical condition that, according to his statement, caused dizziness and blackouts. However, the court dismissed his request, noting that he had failed to provide any supporting medical evidence. The ruling also addressed Mr Fagan’s previous claim of memory loss, which he attributed to a 2016 polo accident, in which he allegedly suffered a head injury. The court, however, found no credible medical evidence to support his assertion that this affected his ability to recall financial transactions or provide an account of missing funds.
Mr Fagan’s defence rested in part on his claim that KRL’s loans didn’t have to be repaid unless the company had enough money and that its debts were covered by assets already pledged. He also claimed that handing over KRL’s shares to another company, Brighton SPC, settled everything. However, the court rejected these claims, ruling that Mr Fagan had knowingly misled investors and creditors and that simply transferring shares did not count as repayment.
Mr Justice Yeats ordered Mr Fagan to pay £56.2 million to KRL and £5.8 million to Ratio, plus 8% annual interest on these sums. He was also ordered to provide a full account of the misappropriated funds. The court found him liable for fraudulent mismanagement of company assets and breaching his fiduciary duties. A decision on whether costs should be awarded on an indemnity basis will be made in due course, potentially increasing Mr Fagan’s financial liability.
There were three other defendants in this court case.
Judgment in default was entered against the second respondent Simon Hooper on the 30 April 2024 after he failed to comply with a court order. He has recently been convicted in the United Kingdom of three counts of fraud in an unrelated case and sentenced to six years’ imprisonment. The liquidators discontinued the claims against the third respondent, Lisa Billington, when she agreed to give evidence at the hearing. As for William Redford the fourth respondent, judgment in default was entered against him in 2022 as he has not engaged with the court in these proceedings. In 2018, Mr Redford was found to be in contempt of court for breaching the terms of a freezing injunction and was sentenced in his absence to 16 months’ imprisonment. He has not surrendered to serve that sentence.
