Stay up to date with notifications from The Independent

Notifications can be managed in browser preferences.

David Cameron’s billionaire backer quizzed in court as part of Scot Young divorce battle

Property tycoon, Poju Zabludowicz, called as witness

Tom Harper
Thursday 14 November 2013 21:21 GMT
Poju Zabludowicz was witness-summonsed to the High Court by lawyers for Michelle Young
Poju Zabludowicz was witness-summonsed to the High Court by lawyers for Michelle Young (Rex Features)

A billionaire donor to David Cameron's Tory leadership campaign has been questioned under oath during Britain's most high-profile divorce battle.

Poju Zabludowicz, a Finnish-born property developer who is said to own 40 per cent of the real estate in downtown Las Vegas, was witness-summonsed to the High Court by lawyers for Michelle Young, who claims her estranged husband, Scot, 51, has squirrelled away “a few billion at least” in offshore tax havens.

Mr Zabludowicz, a renowned art collector who backed Mr Cameron's bid to become Conservative Party leader in 2005, had previously been a business partner of Mr Young, who claims he cannot support his wife and two daughters as he lost his wealth just as his marriage collapsed in 2006.

During the High Court hearing, Mr Zabludowicz, whose Israeli-based father built a fortune from the defence industry, admitted funding two ventures with Mr Young - a chip-and-pin technology company called Dione and a property deal dubbed Project Moscow. However, Mr Zabludowicz denied holding any interest with the bankrupt telecoms magnate in a company called BTG.

Rex Howling QC, acting for Ms Young, asked Mr Zabludowicz about a BTG attendance note, dated September 2005 and recovered from Mr Young's laptop, that said “SY and PZ” were “funders/beneficial owners” of BTG. One of the men recorded as present at the meeting was David Halpern, one of Mr Zabludowicz's financial advisers.

The billionaire, who owns a 120ft yacht, replied: “I was not. Perhaps one of my trusts was, but I was not.”

When asked if Mr Young was a funder or beneficial owner of BTG, Mr Zabludowicz said: “I don't know.”

He was also read a letter from Mr Young's former lawyer Stanley Beller, addressed to the “Zabludowicz Trust” and dated a few months earlier. “We are delighted to know that you and Mr Young are going to complete the purchase of 100 per cent share capital of BTG,” it read.

Mr Howling said: “Was Mr Beller writing to that trust because you were intending to buy the shares?” Mr Zabludowicz replied: “I don't recall.”

He also admitted being part of Project Moscow, a deal that Mr Young has previously cited as a cause in his financial meltdown.

Lawyers for Ms Young have labelled the deal a “sham” and one of the vehicles by which her ex-husband secreted his vast wealth offshore. Asked how much money he put into Project Moscow, Mr Zabludowicz replied: “I can't remember the exact interest.”

The billionaire was asked what he knew about an email recovered from Mr Young's wiped hard drive that read: “SY no longer has a requirement for tax-planning as he can already use offshore SPVs (Special Purpose Vehicles) set up by Poju Zabludowicz.” He replied: “I don't know.”

The court also heard from James Creed, who said he had been friends with Mr Young for 20 years.

Despite also being a bankrupt, he admitted borrowing £50,000 against his own home to lend the tycoon to pay his legal fees. “Why would you expose yourself to future financial risk by borrowing money to assist Scot Young?” Mr Howling said.

“He is my friend and he needed help,” Mr Creed said.

Mr Howling asked Mr Creed about account ledgers from one of Mr Young's former lawyers that showed the bankrupt had lent Mr Young £600,000 over the years.

Mr Creed replied: “I have never had £600,000.”

Earlier in the day, the court heard from Mark Besant, an accountant from FTI Consulting, who said he had been unable to trace proceeds from the sale of chip-and-pin technology company Dione, one of Mr Young's largest assets.

He also suggested Mr Young had interest in a company called Allied Minds, although he said it would warrant further investigation. However, Mr Besant lamented the extent to which Mr Young had co-operated with court orders that he disclose how he lost his vast wealth.

He said: “We had identified quite a large number of gaps in the information set….In short, it appears that Mr Young's disclosure was incomplete and, in some respects, disingenuous.”

After examining Mr Young's finances for five months, the accountant concluded the next stage of the investigation should target eight management companies, 30 banks and 30 law firms in a bid to uncover his assets.

In an indication of the scale of Mr Young's alleged secreted wealth, Mr Besant produced an “I2 chart” - a visualisation of assets and entities linked to the tycoon - that he said was the “size of a dinner table”.

Mr Justice Moor said: “There are an awful lot of them.”

Later he added: “I did try to do that (look at the I2 chart) and it looked very complicated.

”This is one of the most complicated financial remedy cases ever to come before the court.“

The hearing continues.

Zabludowicz profile

Poju Zabludowicz is a Finnish-born property developer with close links to the Conservative Party.

A donor to David Cameron's Tory leadership campaign in 2005, the businessman was seated next to London Mayor Boris Johnson at the party's Summer Ball in June at the Old Billingsgate Market in the City.

In 2011, Mr Zabludowicz said he was “extremely disappointed” to hear he had been tricked into funding the lavish lifestyle of former Defence Secretary Liam Fox and adviser Adam Werritty, who spent his £3,000 donation travelling around the world.

The tycoon, said to be worth £1.5 billion, was angry at suggestions he benefited from the payments.

Mr Zabludowicz and his wife Anita own neighbouring “his” and “her” mansions on a north London street dubbed “Billionaires' Row”.

The properties, which a swimming pool, a gym, two cinemas, a wine-tasting venue and a wine cellar, were reportedly the venue for secret talks between Israeli President Shimon Peres and Palestinian President Mahmoud Abbas in 2011.

Join our commenting forum

Join thought-provoking conversations, follow other Independent readers and see their replies


Thank you for registering

Please refresh the page or navigate to another page on the site to be automatically logged inPlease refresh your browser to be logged in