An Iranian millionaire and business associate of David Mills, the estranged husband of Tessa Jowell, has had his assets frozen by the High Court as part of a claim that he and his company received £6.2m in unauthorised fees and payments from a Welsh steel mill which collapsed with the loss of more than 300 jobs, The Independent can reveal.
Shahram Shirkhani, whose properties include a £6m house in Britain and a £1.2m property in Malta, has been accused by the liquidators of Alphasteel Ltd of receiving seven-figure sums for negotiating "non-existent" credit facilities for the Newport manufacturing firm prior to its closure in 2007.
A judge sitting in the companies division of the High Court granted an emergency injunction last month, freezing £6.5m of Mr Shirkhani's assets. A full hearing will be held this month at which the Iranian will reject the allegations against him and his Dubai-based firm, as well as a further claim that he served seven years in prison in the US for fraud.
Mr Shirkhani's links with Mr Mills, who was earlier this year sentenced to four-and-a-half years' imprisonment by an Italian court for taking a £400,000 bribe while working for Italy's Prime Minister, Silvio Berlusconi, date back to at least 2003 when both men were involved in an attempt to sell British Aerospace passenger jets worth £125m to Iran.
The deal foundered because the jets were fitted with US-built engines and contravened strict US trade sanctions. Mr Mills had approached a family friend, Baroness Symons, at the time a Foreign Office minister, for advice.
The British lawyer did legal work between 2005 and 2006 for Alphasteel, which was bought for £40m in 2003 by an Iranian magnate, Mohammad Rostami-Safa. Mr Mills and Ms Jowell, the then Culture Secretary, attended the firm's 2005 Christmas party. Mr Shirkhani, who was a director of the steel processing plant, attended the same party.
Mr Mills and Mr Shirkhani have been joint directors of at least two companies, including the now dissolved Saint James Capital Ltd, a London-based firm set up by both men in 2005 to offer "financial intermediation" services.
There is no suggestion that Mr Mills was involved in the transactions that are the subject of the High Court proceedings. But it is another example of the barrister finding himself in close proximity to controversial individuals.
In a statement, Mr Mills confirmed he had had dealings with Mr Shirkhani but insisted he was one of many contacts. "Dr Shirkhani was a client of a firm which I left in 2003, and has referred work to me subsequently," he said. "He was one of many clients. In December 2005 I was acting as a solicitor for Alphasteel and attended their Christmas party at their invitation with my wife... I acted for Alphasteel in certain matters from 2005-06."
The closure of Alphasteel, which opened in 1974, was a bitter blow to the 320 staff who were told four days before Christmas 2007 that Mr Rostami-Safa's Swiss holding company, Satico, could no longer finance its operations. A tribunal found last year that employees had been unfairly dismissed.
Mr Shirkhani resigned from the board of Alphasteel shortly before it was put into administration, and it is as a result of investigations into the company's accounts by liquidators Begbies Traynor that proceedings were brought.
A report to creditors obtained by The Independent shows that concerns were raised by forensic accountants about a range of transactions related to Mr Shirkhani, from credit card transactions to £4.7m paid in fees to Summit Development General Trading, a Dubai-registered company in which the Iranian has a 24.5 per cent holding.
The High Court heard last week that the £4.7m fees related to so-called "counter-guarantees" for a €15m (£13m) credit facility offered by Rosbank. The liquidators allege that the guarantees never existed. The Begbies Traynor report said: "The primary issues of concern are payments made to Mr Shirkhani in respect of supplementary professional fees to which Mr Rostami-Safa claims he was not entitled, ad hoc cash withdrawals and substantial payments made to Summit in respect of fees for the issue of counter-guarantees."
Among the claims levelled against Mr Shirkhani is that he was convicted in Virginia in the early 1990s of defrauding a US insurance company, Markel Corporation, of $2m and jailed for 78 months. But his lawyers insist the allegations are incorrect and a different man of the same name was jailed. The Independent has seen a document claimed to be a translation of Mr Shirkhani's marriage certificate; it shows he was married in Tehran on 16 March 1997 – one month before the Shahram Shirkhani jailed in the US was released.
Lawyers for Mr Shirkhani said they would present evidence later this month to prove that the cross-guarantees were authentic and had been copied to Mr Rostami-Safa, and that Rosbank would confirm the transaction was genuine.
Addressing the High Court last week, Neil Kitchener QC, for Mr Shirkhani, said: "There is reason to believe that these proceedings are the product of a private dispute between Mr Rostami and my client." In a statement, Mr Shirkhani's solicitors, Gordon Dadds, said: "Our client denies all the allegations made against him in this case. They are incoherent and factually incorrect."Reuse content