The real reasons for using “Nominees” and determining whether they are “Shams”

Written By: on FAMILY LAW, FORENSIC ACCOUNTING NEWS

In Richardson-Ruhan v Ruhan [2017] EWHC 2739 (Fam), the Court had to determine whether the Husband used a nominee for legitimate business dealings. In particular, the Court considered a transfer of £92 million to the Husband’s company, the subsequent transfer of his shares in that company to his nominee, and the creation of a loan note in the amount of £73.75 million in favour of his nominee.

Mr. Justice Mostyn concluded that:-

…I am satisfied on a strong balance of probability that in relation to the agreement reached on 29 April 2016 Mr Stevens acted as the husband’s nominee. This is not a case where the husband’s lies can be explained as being an example of a false bolstering of an otherwise truthful case, or where he has tried to cover up matters that would bring upon him shame or disgrace. The lies were told in order to conceal the truth. The other evidence which I have set out strongly supports this finding”.

…It follows that inasmuch as the documents proclaim that Mr Stevens (or his creatures) were genuine parties to the agreements then they are shams. I am satisfied that the test for a sham (which I attempted to summarise in Bhura v Bhura [2014] EWHC 727 (Fam)at para 9) is fully met. The true agreement was made between Dr Smith and the husband, as I have sought to explain”.

The full judgement can be downloaded here:-
http://www.bailii.org/ew/cases/EWHC/Fam/2017/2739.html

How can JLA assist?

JLA is experienced in family law disputes including assets tracing and investigating matters. We can perform in-depth investigation by collating all the evidences, perform analysis and conduct interviews.

In recent cases we

  • successfully identified evidence to connect the Husband’s:

    (a) use of former subordinates, business partners and friends (in the US, the Mainland and HK) as nominees to hold his financial interests in multiple listed companies,
    (b) possible insider trading,
    (c) non arms length sale of company interests, and
    (d) undisclosed overseas bank accounts.

  • performed financial analysis on all the documents provided by the Husband including Form E Financial Statement, bank statements, credit card statements and documents in relation to the shareholdings in private companies, investments and retirement benefits in order to identify any undisclosed assets.

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