The England and Wales High Court has voided a USD3-billion worldwide freezing order it granted to Angola's sovereign wealth fund FSDEA in April 2018.
The order was made against two individuals – FSDEA's former chairman José Filomeno dos Santos, and his business partner Jean-Claude Bastos de Morais – and 18 companies, all of them members of the Quantum group of companies. FSDEA accuses dos Santos of a 'dishonest conspiracy' with Bastos, who is the 95 per cent beneficial owner of the Quantum companies. It says that dos Santos gave USD5 billion to Quantum to manage and invest on FSDEA's behalf, but most of the money has either not been invested or has been channelled into other projects belonging to Bastos, 'to divert money from FSDEA into his pockets'.
Bastos and dos Santos claim they are merely victims of political change in Angola, and the current regime is trying to get its hands on money that the previous government invested with them. dos Santos himself is, in fact, the son of a former president of Angola who set up the fund in 2011, and appointed him to run it. That president stepped down in September 2017, after 38 years in power, and was replaced by President Lourenco.
The defendants approached the court to have the freezing order set aside on jurisdictional grounds. They also argued that FSDEA had not established a good arguable case in respect of some of the causes of action or established a sufficient risk of dissipation, as well as the breach of the duty of full and frank disclosure.
The judge ultimately found eight counts of 'non-disclosure and an unfair presentation,' which undermined FSDEA's case for the freezing order. He found FSDEA in 'serious and substantial' breach of its disclosure obligations. There was also no solid evidence that there was enough of a risk of dissipation of assets to justify a freezing order.
'The breaches of duty are sufficiently serious and culpable to warrant discharging the order and not granting fresh relief, irrespective of the other grounds of challenge', commented Popplewell J. Proper disclosure would have put a very different complexion on FSDEA's application for the order, he said, and duly discharged the order (Fundo Soberano De Angola v dos Santos, 2018 EWHC 2199 Comm).
Sources
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