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.”

Start your day with The Independent, sign up for daily news emails
Have you tried new the Independent Digital Edition apps?
ebooks
ebooksA special investigation by Andy McSmith
Arts and Entertainment
musicOfficial chart could be moved to accommodate Friday international release day
Sport
Wes Brown is sent-off
football
News
i100
Sport
Italy celebrate scoring their second try
six nations
Sport
Glenn Murray celebrates scoring against West Ham
footballWest Ham 1 Crystal Palace 3
Arts and Entertainment
Drake continues to tease ahead of the release of his new album
music
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

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

iJobs Job Widget
iJobs General

Recruitment Genius: Bookkeeper / Office Co-ordinator

£9 per hour: Recruitment Genius: This role is based within a small family run ...

Recruitment Genius: Designer - Print & Digital

£28000 - £32000 per annum: Recruitment Genius: This Design and marketing agenc...

Recruitment Genius: Quantity Surveyor

£46000 per annum: Recruitment Genius: This property investment firm are lookin...

Recruitment Genius: Telesales / Telemarketing Executive - OTE £30k / £35k plus

£18000 - £35000 per annum: Recruitment Genius: This company specialises provid...

Day In a Page

The Last Word: For the good of the game: why on earth don’t we leave Fifa?

Michael Calvin's Last Word

For the good of the game: why on earth don’t we leave Fifa?
HIV pill: Scientists hail discovery of 'game-changer' that cuts the risk of infection among gay men by 86%

Scientists hail daily pill that protects against HIV infection

Breakthrough in battle against global scourge – but will the NHS pay for it?
How we must adjust our lifestyles to nature: Welcome to the 'Anthropocene', the human epoch

Time to play God

Welcome to the 'Anthropocene', the human epoch where we may need to redefine nature itself
MacGyver returns, but with a difference: Handyman hero of classic 1980s TV series to be recast as a woman

MacGyver returns, but with a difference

Handyman hero of classic 1980s TV series to be recast as a woman
Tunnel renaissance: Why cities are hiding roads down in the ground

Tunnel renaissance

Why cities are hiding roads underground
'Backstreet Boys - Show 'Em What You're Made Of': An affectionate look at five middle-aged men

Boys to men

The Backstreet Boys might be middle-aged, married and have dodgy knees, but a heartfelt documentary reveals they’re not going gently into pop’s good night
Crufts 2015: Should foreign dogs be allowed to compete?

Crufts 2015

Should foreign dogs be allowed to compete?
10 best projectors

How to make your home cinema more cinematic: 10 best projectors

Want to recreate the big-screen experience in your sitting room? IndyBest sizes up gadgets to form your film-watching
Manchester City 1 Barcelona 2 player ratings: Luis Suarez? Lionel Messi? Joe Hart? Who was the star man?

Manchester City vs Barcelona player ratings

Luis Suarez? Lionel Messi? Joe Hart? Who was the star man at the Etihad?
Arsenal vs Monaco: Monaco - the making of Gunners' manager Arsene Wenger

Monaco: the making of Wenger

Jack Pitt-Brooke speaks to former players and learns the Frenchman’s man-management has always been one of his best skills
Cricket World Cup 2015: Chris Gayle - the West Indies' enigma lives up to his reputation

Chris Gayle: The West Indies' enigma

Some said the game's eternal rebel was washed up. As ever, he proved he writes the scripts by producing a blistering World Cup innings
In Ukraine a dark world of hybrid warfare and murky loyalties prevails

In Ukraine a dark world of hybrid warfare

This war in the shadows has been going on since the fall of Mr Yanukovych
'Birdman' and 'Bullets Over Broadway': Homage or plagiarism?

Homage or plagiarism?

'Birdman' shares much DNA with Woody Allen's 'Bullets Over Broadway'
Broadchurch ends as damp squib not even David Tennant can revive

A damp squib not even David Tennant can revive

Broadchurch, Series 2 finale, review
A Koi carp breeding pond, wall-mounted iPads and a bathroom with a 'wellness' shower: inside the mansion of Germany's 'Bishop of Bling'

Inside the mansion of Germany's 'Bishop of Bling'

A Koi carp breeding pond, wall-mounted iPads and a bathroom with a 'wellness' shower