Heard the one about the rabbi and the oligarch? Business deal turned sour sends shockwaves through London’s Chabad Jewish community

Gennady Bogolyubov and Rabbi Yonah Pruss' bitter legal battle over multi-million pound property deals looks destined for the High Court

Gennady Bogolyubov’s mansion in London’s Belgrave Square is fittingly grand for one of the richest men in this capital city full of billionaire oligarchs. Property agents talk in hushed tones about possibly the neighbourhood’s most valuable home – a rare residential property on a square famous for its embassies.

Inside its high-ceilinged entrance lobby, marble and dark wood stand in a golden light. But most remarkable is the apparently Hebrew texts hanging on the walls. Those, and an all-enveloping hush away from the busy road outside, give the mansion the feeling of a holy place, rather than a family home.

It is not an altogether inaccurate impression. Somewhere among the five storeys of white stucco, Mr Bogolyubov reputedly has his own synagogue. Fitting for a man deeply steeped in the Jewish ultra-orthodox tradition of Chabad-Lubavitch.

The synagogue is said to have been inaugurated by his friend and rabbi at the time, Yonah Pruss, a well-known figure in the Chabad world.

It was not the first favour Rabbi Pruss had done for his wealthy friend. He claims he had helped the billionaire and his family relocate to England at the turn of 2007-2008, assisting him with his local knowhow and connections to move and settle the family. He also says he advised him on getting his charitable foundation off the ground – a charity which smoothed Mr Bogolyubov’s passage into the role of billionaire philanthropist.

But it was not only religious and moral guidance that he gave over a period of five years or more. For, as is not uncommon in orthodox Jewish business circles, the trusted rabbi was also involved with Mr Bogolyubov commercially.

And it was over business – namely British property deals worth hundreds of millions of pounds – that the pair have now spectacularly fallen out. The two men are fighting a bitter legal battle which looks destined for the High Court and is sending shockwaves through the close-knit Chabad community.

For Mr Bogolyubov, London’s civil courts are becoming a fairly regular place of habituation. He has just finished a case against British oil explorer JKX Oil & Gas and is next year being taken to court by fellow oligarch Viktor Pinchuk in a separate action alleging Mr Bogolyubov took a business from him – a claim he denies.

Rabbi Pruss, believed to be an American, is perhaps less au fait with the British legal system, but has just filed a lawsuit claiming the billionaire cut him and another business partner out of tens of millions of pounds.

He says that, in 2008, Mr Bogolyubov had asked him to find properties to invest in the UK. Rabbi Pruss claims that, along with a property surveyor, Colin Gershinson, he and Bogolyubov set up a joint venture together. The plan seemed simple enough: Mr Gershinson and Rabbi Pruss would scour the country for properties likely to rise in value and Mr Bogolyubov would provide the funds to buy them. Rabbi Pruss and Mr Gershinson say they were offered a cut of the profits and rental income.

Gennady Bogolyubov’s five-storey mansion in Belgrave Square is one of the few residential properties in the area (Alamy) Gennady Bogolyubov’s five-storey mansion in Belgrave Square is one of the few residential properties in the area (Alamy)
They claim they located 14 properties around the UK for their venture, including two highly prestigious central London sites in Knightsbridge and Trafalgar Square. Mr Bogolyubov paid for them.

However, when this summer the rabbi attempted to obtain an update from Mr Bogolyubov on the value of the properties to get his share, he alleges the billionaire delayed his response. When the valuation document arrived, it allegedly showed Mr Bogolyubov had only included in their joint venture the cheaper properties in places such as Solihull, Hendon and Southport. The two sites in central London – by far the most valuable – he had allegedly retained in his and his family’s personal portfolio.

Rabbi Pruss and Mr Gershinson are demanding “in excess of £20m” for their share of the spoils and demand that the two London properties be put into the joint venture company as they claim was originally agreed. Mr Bogolyubov claims these two central London properties were never supposed to be shared.

Curiously enough, Mr Bogolyubov has already been in court over one of the sites. No 1 Trafalgar Square is an imposing block overlooking Nelson’s Column and serving as the headquarters for blue- chip companies including National Grid. Its location, with views down the Mall and across Admiralty Arch, is second to none.

Mr Bogolyubov originally paid £173m in August 2010, buying it from Dubai investment firm Istithmar. However, according to the high-profile dealmaker Amanda Staveley, Istithmar did not want to sell. Not, that was, until her personal intervention, using her senior contacts in the Dubai government. After the famously persuasive Ms Staveley weaved her magic, Istithmar relented.

Ms Staveley claimed she was owed a £3m commission for her work, but said Mr Bogolyubov failed to pay. Once again, it was off the High Court for the billionaire: Ms Staveley sued him and the case was eventually settled out of court.

Mr Pruss and Mr Gershinson claim they are owed a cut of the increase in the property’s value since the purchase, plus a share of the £9m-a-year rent from its tenants.

The other disputed property is a prestigious, large office block overlooking Hyde Park at 27 Knightsbridge that was bought for £56m. In 2010, investment group Aviva offered £75m for the block, the lawsuit claims. Once again, the two claimants say they deserve a share of the increased value plus part of the £4.2m-a-year rental income.

Mr Bogolyubov’s solicitor David Kavanagh at Skadden, Arps, Slate, Meagher & Flom said Mr Bogolyubov would contest the claim: “We say [the two London properties] fell outside the terms of the agreement. Mr Bogulyubov is confident the claim will be defeated if the claimant proceeds with the case.”

Arts & Entertainment
Shaun Evans as Endeavour interviews a prisoner as he tries to get to the bottom of a police cover up
tvReview: Second series comes to close with startling tale of police corruption and child abuse
Arts & Entertainment
A stranger calls: Martin Freeman in ‘Fargo’
Review: New 10-part series brims with characters and stories

Arts & Entertainment
Schwarzenegger winning Mr. Universe 1969
arts + entsCan you guess the celebrity from these British Pathe News clips?
Sport
Raheem Sterling and Luis Suarez celebrate during Liverpool's game with Norwich
football Another hurdle is out of the way for Brendan Rodgers' side
VIDEO
Have you tried new the Independent Digital Edition iPad app?
Arts & Entertainment
The star of the sitcom ‘Miranda’ is hugely popular with mainstream audiences
TVMiranda Hart lined up for ‘Generation Game’ revival
News
Portrait of Queen Elizabeth-II by David Bailey which has been released to mark her 88th birthday
peoplePortrait released to mark monarch's 88th birthday
Life & Style
The writer, Gerda Saunders, with her mother, who also suffered with dementia before her death
healthGerda Saunders on the most formidable effect of her dementia
Sport
Manchester United manager David Moyes looks on during his side's defeat to Everton
footballBaines and Mirallas score against United as Everton keep alive hopes of a top-four finish
Sport
Tour de France 2014Sir Rodney Walker on organising the UK stages of this year’s race
Arts & Entertainment
Jessica Brown Findlay as Mary Yellan in ‘Jamaica Inn’
TVJessica Brown Findlay on playing the spirited heroine of Jamaica Inn
News
YouTube clocks up more than a billion users a month
mediaEuropean rival Dailymotion certainly thinks so
Arts & Entertainment
The original design with Charles' face clearly visible, which is on display around the capital
arts + ents The ad shows Prince Charles attired for his coronation in a crown and fur mantle with his mouth covered by a criss-cross of white duct tape
Arts & Entertainment
‘Self-Portrait Worshipping Christ’ (c943-57) by St Dunstan
books How British artists perfected the art of the self-portrait
Sport
Luis Suarez celebrates after scoring in Liverpool's 3-2 win over Norwich
Football Vine shows Suarez writhing in pain before launching counter attack
News
People White House officials refuse to make comment on 275,000 signatures that want Justin Bieber's US visa revoked
News
Sir Cliff Richard is to release his hundredth album at age 72
PEOPLE
Sport
Lukas Podolski celebrates one of his two goals in Arsenal's win over Hull
football
Arts & Entertainment
Quentin Tarantino, director
film
News
The speeding train nearly hit this US politican during a lecture on rail safety
news As the saying goes, you have to practice what you preach
Sport
Mercedes Formula One driver Lewis Hamilton of Britain (front) drives ahead of Red Bull Formula One driver Daniel Ricciardo of Australia during the Chinese F1 Grand Prix at the Shanghai International circuit
sport
Arts & Entertainment
Billie Jean King, who won the women’s Wimbledon title in 1967, when the first colour pictures were broadcast
tv
News
Snow has no plans to step back or reduce his workload
mediaIt's 25 years since Jon Snow first presented Channel 4 News, and his drive shows no sign of diminishing
Life & Style
food + drinkWhat’s not to like?
Independent
Travel Shop
the manor
Up to 70% off luxury travel
on city breaks Find out more
santorini
Up to 70% off luxury travel
on chic beach resorts Find out more
sardina foodie
Up to 70% off luxury travel
on country retreats Find out more
Have you tried new the Independent Digital Edition iPad app?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Geography Teacher

£130 - £140 per day: Randstad Education Ilford: Secondary Geography Teacher Lo...

Do you want to work in Education?

£55 - £70 per day: Randstad Education Cheshire: Are you a dynamic and energeti...

SEN Teaching Assistant

Negotiable: Randstad Education Group: SEN TAs, LSAs and Support Workers needed...

Private Client Senior Manager - Sheffield

£50000 - £60000 per annum: Pro-Recruitment Group: The Sheffield office of this...

Day In a Page

How I brokered a peace deal with Robert Mugabe: Roy Agyemang reveals the delicate diplomacy needed to get Zimbabwe’s President to sit down with the BBC

How I brokered a peace deal with Robert Mugabe

Roy Agyemang reveals the delicate diplomacy needed to get Zimbabwe’s President to sit down with the BBC
Video of British Muslims dancing to Pharrell Williams's hit Happy attacked as 'sinful'

British Muslims's Happy video attacked as 'sinful'

The four-minute clip by Honesty Policy has had more than 300,000 hits on YouTube
Church of England-raised Michael Williams describes the unexpected joys in learning about his family's Jewish faith

Michael Williams: Do as I do, not as I pray

Church of England-raised Williams describes the unexpected joys in learning about his family's Jewish faith
A History of the First World War in 100 moments: A visit to the Front Line by the Prime Minister's wife

A History of the First World War in 100 moments

A visit to the Front Line by the Prime Minister's wife
Comedian Jenny Collier: 'Sexism I experienced on stand-up circuit should be extinct'

Jenny Collier: 'Sexism on stand-up circuit should be extinct'

The comedian's appearance at a show on the eve of International Women's Day was cancelled because they had "too many women" on the bill
Cannes Film Festival: Ken Loach and Mike Leigh to fight it out for the Palme d'Or

Cannes Film Festival

Ken Loach and Mike Leigh to fight it out for the Palme d'Or
The concept album makes surprise top ten return with neolithic opus from Jethro Tull's Ian Anderson

The concept album makes surprise top ten return

Neolithic opus from Jethro Tull's Ian Anderson is unexpected success
Lichen is the surprise new ingredient on fine-dining menus, thanks to our love of Scandinavian and Indian cuisines

Lichen is surprise new ingredient on fine-dining menus

Emily Jupp discovers how it can give a unique, smoky flavour to our cooking
10 best baking books

10 best baking books

Planning a spot of baking this bank holiday weekend? From old favourites to new releases, here’s ten cookbooks for you
Jury still out on Manchester City boss Manuel Pellegrini

Jury still out on Pellegrini

Draw with Sunderland raises questions over Manchester City manager's ability to motivate and unify his players
Ben Stokes: 'Punching lockers isn't way forward'

Ben Stokes: 'Punching lockers isn't way forward'

The all-rounder has been hailed as future star after Ashes debut but incident in Caribbean added to doubts about discipline. Jon Culley meets a man looking to control his emotions
Mark Johnston: First £1 million jackpot spurs him on

Mark Johnston: First £1 million jackpot spurs him on

The most prize money ever at an All-Weather race day is up for grabs at Lingfield on Friday, and the record-breaking trainer tells Jon Freeman how times have changed
Ricky Gervais: 'People are waiting for me to fail. If you think it's awful, then just don't watch it'

Ricky Gervais: 'People are waiting for me to fail'

As the second series of his divisive sitcom 'Derek' hits screens, the comedian tells James Rampton why he'll never bow to the critics who habitually circle his work
Mad Men series 7, TV review: The suits are still sharp, but Don Draper has lost his edge

Mad Men returns for a final fling

The suits are still sharp, but Don Draper has lost his edge
Google finds a lift into space will never get off the ground as there is no material strong enough for a cable from Earth into orbit

Google finds a lift into space will never get off the ground

Technology giant’s scientists say there is no material strong enough for a cable from Earth into orbit