Having read the blogs and various links, I believe that Andy Ruhan ‘cut his teeth’ during our joint venture at the former Financial Times print works (and adjacent site) and then he went on to refine his technique on his subsequent transactions. My claim against Andy Ruhan relates to when I sold him my stake in our joint venture for a minimal sum. Legal proceedings were commenced against Ruhan but were later cancelled when Kevin Maxwell purchased my company (SMC Investments plc) through a Jersey company Symposia Holdings Ltd. However, it later transpired that Maxwell was actually acting as a’ front man’ for Ruhan in order to deceive me. On the same day (within minutes) of Symposia purchasing SMC, Chelsfield plc purchased the FT building and a substantial stake in Global Switch and provided the funds for Symposia to purchase SMC. I have managed to track the funds and they were transferred through a network of Isle of Man companies and trusts before reaching their final destination. The IOM entities all lead back to Ruhan and were set up and controlled by Cooper and McNally on his behalf. I allege that the profit was transferred back to the IOM so as not to appear in Ruhan’s name and to be kept out of reach from his creditors and The Revenue.
Needless to say, the transaction was carried without my knowledge as I had been led to believe that the venture was not a success and would be “mothballed” until such time as myself and Ruhan could recover our investment. During the litigation Maxwell was ordered to produce all relevant documents but, as only Maxwell could, he had the audacity to claim that it was his policy to delete all emails from his hard drive on a weekly basis and he had disposed of all the documentation!
It is only recently that I have become aware of the fact that at the time of the sale to Chelsfield the development profit was a healthy £115.5 million and, as per the executed Agreement I/SMC was entitled to “30% of the Final Development Profit”. I can now see a pattern emerging whereby Ruhan does not like to honour agreements with his partners and, manages to conceal the profits behind a corporate veil of offshore companies, trusts and nominees.
I hope you spend the time to read on and I apologise for the length of the blog – but as you will no doubt appreciate, this was quite a complex transaction and I didn’t want to miss out the good bits!!
Back in 1997 I successfully negotiated and agreed to purchase East India Dock House and an adjacent site (site 4A) from Pearson plc for £7.5 million and paid a deposit in order to exchange contracts on an Option to Purchase. I agreed to accept Ruhan as a joint venture partner as he purported to be the head of Kingspark (a successful property company in the Midlands – now Prologis). Ruhan indicated to me that Kingspark were part of the Richardson Group. As Ruhan was married to Tania Richardson I had no reason to question the connection between the companies. The Richardson family are one of the most successful and well-respected property developers from the Black Country and probably best known for the Merry Hill Shopping Centre in Brierley Hill. I later learned that this was not the case and the Richardsons and Kingspark were not, and never had been connected. Ruhan had started work for Kingspark as a surveyor and worked his way up to a directorship but never really fitting in with the high-flyers that ran the company. The Richardsons had previously undertaken one joint venture (Monks Cross) not numerous transactions as Ruhan led me to believe. Ruhan took this transaction with him when he left Kingspark, one has to assume that this was possibly considered as a ‘Golden Handshake’. Ruhan submitted an invoice for considerable fees for managing the Monks Cross project in excess of £9 million (the invoice was submitted in Mr Ruhan’s own name and not that of a company) and, I believe that this was his first taste of receiving life changing money.
After establishing the viability of the FT project Ruhan spirited the deal away from Kingspark and introduced it to his in-laws. Of course, the Richardson family (Echo Estates Ltd) were acceptable to Pearsons as the purchasers and, they were to provide the funds in order to complete the purchase of the two sites. A Conditional Purchase Agreement was executed between Pearsons and Echo Estates and a Profit Share Agreement between SMC and Echo Estates, which provided for SMC to receive 30% of the Final Development Profit. It should be noted that at this time Ruhan continued to deceptively maintain to me that he was in charge of the Richardson family empire but, we will come back to this below.
The former FT print works were vacant, and we explored various options including retail use which was the Richardsons area of expertise. I arranged to temporarily let the building for telecommunication use whilst we investigated the various options open to us. Being an entrepreneur, I was keen to pursue the option of changing the building into a data centre. As you will appreciate telecommunications was in its infancy but to recognised that this was the way forward and within a short period of time there would be a huge demand for data space. Ruhan who was not technology savvy was not so eager and said that data centre was not an option that he or the Richardson family wanted to take as it would not be financially viable. However, unbeknown to both me and the Richardson family this was the exact route that Ruhan was taking. Ruhan applied for, and was granted permission for the change of use of the property to a data centre but withheld this information from me and the Richardson family more incredibly from his wife Tania Richardson.
I had every intention of working the project as a Joint Venture in order to maximise the capital return and commenced research in order to be able to evaluate the best possible route to take. I discussed the various alternative uses with Ruhan and provided him with spreadsheets of projected income. I commenced putting a team together that included town planning consultants, traffic engineers etc. By this stage, Ruhan had taken over the day to day running of the development and was giving instructions directly to the architects who had been instructed by me. During this transition period I arranged for parts of the property to be let on a temporary basis to generate income for Echo Estates.
For a considerable period of time the property was let for filming purposes and for the recording of music videos and the adjacent site was let for car parking. All of the revenue generated was given to Ruhan and it was presumed that it would be accounted for Echo Estates’ accounts. I now know that Ruhan did not forward the money to Echo Estates or account for it.
In January 1998 I was approached by Dr O’Mahony who requested permission to dig up the pavement outside the building in order to install telecommunication ducts. I met with Dr O’Mahony and was impressed with his knowledge and foresight of the telecommunications business. During our meetings, Dr O’Mahony told me that the former FT Building would make an ideal location for a telecommunications site as it would be easy to run fibre optic cable from the FT Building to the nearby Telehouse building which was already joined to the national fibre optic cable network.
I telephoned Ruhan to report the details of the meeting and suggested that we investigate this route further. Ruhan was not interested in the telecom business but was open to the idea of installing some telecommunication equipment on the roof of the FT Building and, the possible use of the old plant room to install some communication cabinets and generate additional revenue over and above that provided by leisure use. I was keen to pursue the matter, so I set up a meeting between Ruhan and Dr O’Mahony so that they could discuss the telecom idea.
The telecommunication business was an avenue that I wanted to take and arranged for analysis and studies to be undertaken as to the potential revenue that could be generated and reported the findings to Ruhan on a regular basis. During discussions with Dr O’Mahony, I was advised that they could possibly attain a rental income of £200 per ft² which was of obvious attraction and, this was relayed to Ruhan. At this time, Ruhan was continuing to pursue the retail/leisure development element but was open to the idea of renting part of the property for telecommunication use. I agreed to set up Dr O’Mahony and his colleagues in part of the property in order for them to pursue the telecom business further. Ruhan sent me draft Heads of Terms dated 29 June 1998 for the telecommunication project and the proposal to call the new company “London Switch Ltd” (which later became Global Switch).
It is known that Ruhan was indeed excited about the idea of a Data Centre within the FT Building and this was reflected in his change in attitude toward me. Ruhan reluctantly agreed to further pursue of the telecom business and was informed when I had commenced negotiations with DialNet who were interested in taking space within the property and, had provided me with a draftData Centre Contract – a copy of which was given to Ruhan.
HE SHOULD HAVE BEEN AN ACTOR
At this time Ruhan appeared to be in despair, walking around with his head in his hands whenever he saw me ‘” the project is a complete flop and the Richardsons are threatening to withdraw from the venture” he said, “we will be lucky to even recover our investment and me and the Richardsons will be looking to you to reimburse us for our substantial losses”. As we now know, Ruhan is a skilful actor, a skill he frequently uses to his advantage. By this time my wife and I had become friends with Ruhan and Tania.
Even though I wanted to pursue the telecom business he continued to identify tenants and even a possible purchaser for the property. Dr O’Mahony & co continued to work on the top floor of the building and I had regular meetings and discussions with them. Dr O’Mahony & co were subsequently employed by Mr Ruhan and were extremely excited about the new project. They were promised that the new company would offer them Profit Share Agreements, and this is possibly the reason why they were prepared to forfeit the wages as promised by Ruhan. Needless to say, no Agreements were forthcoming.
SOLICITORS IN HIS POCKET
I now know that at this time Ruhan did not want to pay me my entitlement of 30% of any profit in the venture. On 7 July 1998 Mr Dakeyne of Wragge & Co (who represented Ruhan) wrote and suggested to Ruhan that they rewrite the Profit Share Agreement in their favour. On the same day Mr Dakeyne prepared the first draft of the Commitment Agreement for potential tenants and, ironically this was based on the DialNet Contract provided by me! I have only recently been made aware that my involvement was of concern to Ruhan and an Attendance Note dated 27 July 1998 between Mr Dakeyne and Ruhan records that the telecom scheme was going well, and that work had commenced on the installation of the fibre optic connection. They further say that they are not looking to give me my 30% of the profit and that they are concerned about the Profit Share Agreement not only with SMC but also with the Richardsons family. The position was becoming increasingly worrying for Ruhan’s team that comprised of Mark, Dakeyne, Simon Cooper and Simon McNally (all qualified solicitors) and on 21 September 1998 Mr Dakeyne wrote to Ruhan to remind him that “he is occupying the property under the Financial Times Contract (16.01.98) and therefore under licence only and therefore certain major issues need to be addressed sooner rather than later”.
Mark Dakeyne represented Wragge & Co during the FT project but now is a Director of Emms Gilmore & Liberson Solicitors in Birmingham. Mr Cooper and Mr McNally worked directly for Ruhan and all three remain associated with him to this day. Mr Dakeyne recently wrote me to say that he does not act for Mr Ruhan however, Companies House records show that a company of which Mr Ruhan is the sole shareholder is in fact registered at Emms, Gilmore & Liberson’s offices in Birmingham.
HIDING BEHIND NOMINEES
McNally and Cooper remain in the background (i.e as nominees) as far as Ruhan is concerned and work from their addresses in London, Switzerland, Dublin and the Isle of Man. I then began to feel that my presence at the former FT Building was not welcome by Mr Ruhan and, it became increasingly difficult for me to follow the progress of the development. There were two main offices in the building from which they conducted their business and from sometime in July 1998 these offices were sealed off and I was swiftly shown into a vacant office whenever he entered the building.
This pattern of behaviour commenced at about the same time that Ruhan’s brother Gabriel Ruhan and Ruhan’s associate Martin Ashford began spending a considerable amount of time at the premises. Mr Ruhan gave written instructions that I was to be omitted from all team meetings. Having a better knowledge of the telecom industry than his brother, Gabriel was working full time at the FT Buildingand Dr O’Mahony enquired as to why I was not included in the development discussions. Gabriel replied that I was “out of it” and would be “paid off”, he also said that “it’s our building”.
I now have evidence that by the end of August 1998 Mr Dakeyne was encouraging Ruhan to “press the button” to start the development and to sort out the position with regard to the Richardson family and SMC. He reminded Ruhan that the Profit Share Agreement states that the building could be used for “retail and/or leisure use or such other development or uses as the Richardsons required”
GETTING RID OF THE IN-LAWS
At this time, I had no reason to doubt Ruhan as he was convinced that we had a strong business relationship which had overflowed into a friendship. This seemed to be borne out when Ruhan said that as a favour to me he would be willing to buy my share of the venture (ie. The Profit Share Agreement) for £700,000 and take a chance to sit with it and, hopefully at some stage be able to recover part of their outlay (this amount basically covered my initial deposit outlay and expenses). I questioned Ruhan carefully and was confident that there was no ulterior motive for him wanting to buy me out. As couples we regularly dined together and naturally the subject of the joint venture had been raised and my wife and I truly believed that Ruhan was transparent and there was nothing untoward going on that we did not know about.
Ruhan’s acting skills were employed not only to deceive us but also to deceive his wife. At this time, Ruhan was now desperate to complete the purchase in his company (Echo Property Investments) but needed to get both the Richardsons and SMC out of our contracts in order to do so.
Ruhan tells Mr Dakeyene that he needs to “square them off”. Echo Property had been formed offshore in the Isle of Man by Mr Cooper and Mr McNally.
On 12 October 1998 Ruhan wrote to Pearsons and later meets with them in order to paint a very gloomy picture “even though we have investigated all forms of development none have proved financially viable”. This was purely a tactic employed to renegotiate the purchase price. Neither I or the Richardsons were informed of this or invited to attend the meeting. As a result of the meeting the purchase price was reduced to £6.5 million (a £1 million reduction) with a further £1 million payable if retail/leisure use was granted. Ruhan did not let Pearsons know any details regarding the telecom business or that there was to be an alternative development scheme.
Ruhan was aware that I was attempting to sell the property under the false impression that the venture was a flop and had agreed to honour to pay me 30% of the profit if the building was sold before February 1999. However, Mr Dakeyne and Ruhan met on 8 December 1998 and Mr Dakeyne recorded the meeting in an Attendance Note in which he noted: “We will agree to give SMC a 30% profit share of the FT gross lease profit if it’s sold before 1 February 1999 “secure” in the knowledge that the FT Building will not be sold and therefore the 30% will not be payable”.
Within a matter of weeks of completing the sale of the Profit Share Agreement, I learned that Ruhan had fully let the property for telecommunication purposes – and the property had become known as “Global Switch”. I now know that tenants included BT, Swisscom and other blue-chip companies. Now it starts to get interesting, as you will recall Ruhan chose the name Echo Property so as not to alert Pearsons that he was making the purchase and not the Richardsons via their company Echo Estates – who held the original Purchase Agreement. In order to cover his deceit Ruhan withheld the information from his wife Tania and persuaded her to sever links with my wife and I. Obviously, timing was imperative for the switch of the contracts and Ruhan could not risk Tania inadvertently mentioning anything to her family or to us.
I believed that he had resolved the problem and in October 1998 secured an offer from The Sema Group who agreed to rent the entire building for £3.35 million per annum (they would introduce a fund that would purchase the investment at 7½% i.e. £42.5 million), however this was not the route that Ruhan wanted to take.
Sometime after the sale of the Profit Share Agreement had been completed, I approached Ruhan about the development and the birth of Global Switch. Of course, Ruhan was dismissive and tried to convince me that he didn’t know what I was talking about. By simply driving past the property, it was evident to me that the building was close to being fully let and Global Switch was up and running. I eventually realised that I had no alternative but to face the fact that I had been deceived by someone whom I considered to be a friend and, was left with no alternative but to commence legal proceedings against Ruhan and Echo Estates.
Litigation commenced and Dr O’Mahony volunteered to be a witness for me and on 8 October 1999 Dr O’Mahony was at the offices of Nabarro Nathanson (my solicitors) discussing his Witness Statement. During the meeting Dr O’Mahony received a telephone call from Gabriel Ruhan who was very upset that Dr O’Mahony was giving evidence for me. Gabriel Ruhan applied pressure on Dr O’Mahony and made certain threats on behalf of his brother. (A file Note from Mr Hales of Nabarro Nathanson records the call). Dr O’Mahony subsequently received a telephone call direct from Mr Ruhan threatening him and then received a Statutory Demand with a threat of bankruptcy. Previously, Gabriel Ruhan had telephoned Dr O’Mahony and asked him to agree that I knew that the FT Building was going to be a telecom development and had been kept informed of all developments. Dr O’Mahony said to Gabriel Ruhan that they knew very well that this was not the case and this made Ruhan extremely angry. Dr O’Mahony disappeared shortly after the Ruhan threats and to this day cannot be traced.
Although Echo Estates (the Richardsons) were a party to the Profit Share Agreement they were totally unaware of Ruhan’s actions as they had not been told the true position by Ruhan or to be more accurate, had been grossly misled by Ruhan. Ruhan arranged for his solicitor to act for Echo Estates who in turn conveniently failed to inform the Richardson family that a claim had been filed against them. It was only within the last few months that Mr Richardson has become aware of the claim that had been filed against his company and, needless to say, is absolutely furious with his former son-in-law. As one can imagine, at this time Ruhan was on tenterhooks that his subterfuge would become known and forbade Tania from having any contact with my wife or to get wind of the deceit he had carried out towards her family.
KEVIN MAXWELL GETS INVOLVED
In late 1999, I received a call from Kevin Maxwell who said that he was interested in purchasing SMC including the litigation against Ruhan. Maxwell said that he did not have any connection with Ruhan but knew of him via the telecommunication business. Maxwell’s company Telemonde Inc was hovering on a financial precipice and he said that he wanted to use the SMC litigation to get himself involved in Global Switch. After fierce negotiation, a deal was agreed, and Maxwell put forward Symposia Holdings (a Jersey company) to purchase SMC Investments.
I had no real ill feeling toward Ruhan and on several occasions met and spoke with him to tell him the position with regard to Maxwell and, to offer him the opportunity to settle the litigation before it got into the third party’s hands. Ruhan declined and boasted that he would grind “Maxwell into the ground”.
Ruhan had negotiated a sale of Global Switch and the former FT building to Elliott Bernerd of Chelsfield plc who had been introduced by Kevin Maxwell and was obviously concerned that the litigation would hinder the Chelsfield sale. On 2 March 2000 Tim Taylor at SJ Berwin wrote to Ruhan with regard to his concerns about the litigation “A further, perhaps more accurate risk is that if Sullivan learns of the dynamic of these negotiations he will both fully appreciate the value of his litigation in holding you to ransom with respect of your further plan, and point to the conduct of the negotiations as “Similar fact evidence” to say that you have acted deviously with respect to these negotiations, which suggests a pattern of behaviour supportive of his case that you acted deviously in negotiations to get him out of the joint venture in the first place”.
Ruhan attempted to intimidate me by saying that the SMC proceedings were “fatally flawed”as the Defendants in the litigation [Echo Estates Ltd & Andrew Ruhan] were no longer the interested parties in the property, it had in fact been sold to Echo Property Investments Ltd which was an offshore company. Ruhan crowed “the proceedings would be dismissed and Mr Sullivan/SMC would be left with the substantial legal costs”. I pointed out that even if this was true, SMC’s claim was for damages and therefore, the transfer of ownership of the FT Building was not fatal to the case. Ruhan was not happy.
On 31 March 2000, the sale SMC was completed to Symposia and the purchase included the civil action against Ruhan and Echo Estates. The sale was agreed on the basis that the purchaser was not associated with Ruhan, or, that there was any impending sale of the property and/or assets that would affect the action. Based upon new information that I have been made aware of, Symposia Holdings Ltd was represented by a London solicitor (Malcolm Grumbridge) who I later learned was connected direct to Ruhan and within hours of the SMC deal being completed there was a further sale to Chelsfield – the sale to Chelsfield was subject to the litigation being settled. As you would expect, immediately after the sale was completed the litigation was discontinued. However, the Settlement Deed was not signed by the Richardsons (Echo Estates), how could they, when they were unaware that the litigation even existed?
ELLIOTT BERNERD GETS DRAWN INTO THE DECEIT
As you would imagine the sale of the former FT Building to Elliott Bernerd was not as transparent as one would expect, the TR1 Form showing the transfer of the FT Building between Echo Property Investments Ltd and Chelsfield (Bond Street) Ltd is dated 17 October 2002 and certifies that “the transaction effected did not form part of a larger transaction or of a series of transactions in respect of which the amount or value or the aggregate amount or value of the consideration exceeded the sum of £60,000” yet the price paid was £105,750,000! Even though the sale to Chelsfield was concluded on 30 March 2000, the electronically completed TR1 form was dated by hand some 2½ years later on 17 October 2002 – one day before Ruhan crashed his helicopter and was admitted to hospital fighting for his life. [66.7% of the FT/Global Switch Joint Venture was sold to Chelsfield for £105,750,000 and therefore 100% would equate to £158,545,727. The sale of all the issued share capital of Global Switch International Ltd (namely Andrew Ruhan, Simon Cooper and Gabriel Ruhan) dated 31 March 2000 was for the 126,000-ordinary shares of £1 each and the sum of £105,750,000 was paid by the purchaser].
I now know that Mr Bernerd agreed to pay the gross sum of £9.25 million for the purchase of SMC direct to Symposia Holdings Ltd (via his solicitors Bond Pearce). A letter dated 29 March 2000 from Chelsfield to Bond Pearce confirms that funds had been transferred to their client account in respect of Symposia Holdings. Mr Maxwell received the sum of £2 million plus a £5 million unsecured loan for his part in the transaction, money that should have gone to SMC. I now know that Ruhan was in control of the settlement funds and before they reached their final destinations with SMC and Mr Maxwell and they were transferred through a network of Ruhan’s trusts and offshore companies and we have now calculated that an amount of approximately £2.5 million cannot be accounted for.
On 18 April 2000 Bond Pearce wrote to Mr Maxwell and confirmed that the four boxes of files relating to the SMC litigation had been sent to Mr Grumbridge who then they needed to send them to Ruhan in Birmingham.
It took some time for me to suspect that Maxwell was connected to Ruhan but I was eventually convinced that all the parties involved in the sale acted deviously in as much as they conspired to ensure that he was not made aware of the negotiations and imminent sale as it would have had an impact on the value of the litigation. It was quite evident that Ruhan and his co-conspirators (four of which are Solicitors) did not show the utmost good faith in as much as they assisted Ruhan to deceive me of the benefit of the Profit Share Agreement which I was entitled to. They then went on to further conspire with Ruhan to injure my interest regarding the legal proceedings, fraudulently misrepresented the true position regarding the FT Building and were aware of the settlement of the Symposia proceedings by unlawful means.
In 2002 I had no alternative but to issue a claim against Ruhan, Maxwell & Symposia Holdings Ltd. The individual Defendants submitted defences dealing with these allegations and denied that the allegations were made or that the Claimants suffered loss or damage. The litigation was settled out of court and I received a token sum to cover my legal expenses.
However, it has recently come to light that information submitted as part of the Defendants’ defence was not only factually incorrect but tantamount to fraud, lies and a conspiracy to deceive.