Untangling a complex multi jurisdictional company structure exploited for unjustifiable payments

Quist were engaged in relation to a mega project which was beset with difficulties.

A complex company structure spanning five jurisdictions was set up to manage one of the largest new city developments in the MENA region.

The expected investment to complete the proposed 15 year project exceeded $13 billion. Financing was secured on the international markets.

Quist investigated and advised the ultimate beneficial owners (UBOs) of shares in the holding companies on a strategy to wrest control from a rogue nominee shareholder who had put up a smokescreen to cover, amongst other things, a scheme to provide unnecessary services and extract payments. That individual refused to cooperate with legitimate requests to allow for the reconstitution of boards and shareholder resolutions to facilitate a restructuring of the Group. He sought to use his positions to maintain leverage to continue to demand vast levels of unjustifiable fees – having previously exploited the Group for substantial payments by deploying unjustified various methods and mechanisms.

The sophisticated company structure was set up by the nominee shareholder , also a lawyer, consultant, and self-professed tax specialist. He put in place a bewildering plethora of consultancy agreements with companies in which he had an interest and corporate service providers (based in various jurisdictions). Trust declarations naming himself and further offshore entities as nominee shareholders operated and some of these instruments were previously undisclosed to the UBOs.

In order to avoid legal proceedings, the shareholder relinquished his interests and submitted to a negotiated settlement. Following this, steps were taken in the relevant jurisdictions – including the commencement of proceedings for declaratory orders – to allow for the intended restructuring to proceed with a view to a revival of the project. In the meantime, Quist has advised on the prospects of further claims for damages.