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Hard to hide

Member: Nifa

The UK’s costliest divorce is currently playing out in the UK courts after a Russian oligarch refused to pay the equivalent of $646 million to his ex-wife following their divorce in England.

In December 2016, billionaire Farkhad Akhmedov was ordered by a High Court judge to split his assets down the middle. However, Mr Akhmedov refused, arguing that the couple had already been divorced, in Russia, more than a decade ago.

Unconvinced, in April this year, judge Haddon-Cave ordered the billionaire to hand over his yacht, Luna, which has been valued at around $500 million.

With a spa, a swimming pool, two heliports, a crew of 50 and room for 18 guests, the Luna is not easy to hide. However, according to the judge, the Russian has been on a “campaign” to conceal his assets in a “web of offshore companies.”

Starting in November 2016, the yacht went on a ‘paper voyage’, in a feat of asset protection and financial engineering so elaborate that the judge was forced to diagram it in the April ruling.

Mr Akhmedov has argued that Luna does not belong to him but to a family trust and that its fate should be decided by a court in Dubai, where it is in dry dock, using Sharia law.

If this were to be decided, it is unlikely Mrs Akhmedov would be given the yacht, as she is a Christian, who has acknowledged infidelity in their marriage.

Given the intricacy of the case, lawyers and accountants started a forensic investigation of the ownership of Luna and whether or not the Akhmedovs were indeed divorced in Russia.

The judge ruled that the Russian divorce documents were forged. However, even when these experts come to a conclusion, it will likely be too late for Mrs Akhmedov, as her ex-husband will almost certainly litigate until Luna rusts. According to her lawyer, “he would rather see the Luna rot in the Dubai heat than see it handed over.”

Roger Isaacs, Forensic Partner at Milsted Langdon, said: “Forensic accountants are often asked to act in complex divorce disputes in order to scrutinise the finer details of ‘paper voyages’ such as this one.

“In such instances, the experts appointed are sure to leave no stone unturned during their investigations.”

Author: Roger Isaacs 8 June 2018

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