Community news and investigative journalism for Wapping E1W and Tower Hamlets London

Lutfur Rahman and the Election Petition costs – latest episode

By on August 6, 2015 in Corruption, News

Despite the tube strike our entire Court Reporting Team (Royal Courts of Justice Branch) managed to get to the Strand and loiter for an hour or so to hear the judgement in the latest episode of the election petitioners attempt to get some cash out of Lutfur Rahman’s pockets and into theirs.

The hearing only lasted an hour and was the concluding part of Monday’s court events which you can read about below:

 

File-06-08-2015-18-54-01

Today’s hearing was mainly to get the formal judgement relating to the various issues of disclosure of Rahman’s assets and finance details as well as getting his assets frozen until January 2016.

You can read the full text of the judgement here (PDF) and we have extracted one or two highlights below.

The full judgement is worth reading – honest. Better than any of the soaps on tonight.

If you can’t be bothered to read either the bottom line is that it may be the case that the ex-Mayor is showing just a little reluctant to provide proper details of his finances and that some of the loans to Rahman may be slightly, well, dubious?

“I spent it all on politics, honest guv!”

One of these is the loan by Foujiya Sultana, Rahman’s niece who is in her early twenties and, despite having a normal NHS admin job, managed to scrape together £82,500 to loan to her uncle.

Justice Edis also seems unconvinced when Rahman’s solicitor asserts that his client “had spent all his money on “politics”.”

A little more precision may be needed we think.

There again LW spends all its money on “life” so….

Extracts from judgement of Justice Edis of the hearing between Andrew Erlam (Claimant) and Mohammed Lutfur Rahman below,  full text of the judgement here (PDF) – headlines are LW’s just for clarity.

3 Grace Street & 30 Deal Street

17. As I have noted above, the directions in the Charging Order proceedings require both the defendant and his wife to have given disclosure of documents already. The defendant did not disclose anything else.

Exhibit MLR 6 is the list of payments exceeding £500 from the three bank accounts in the relevant period.

It shows that since January 2010 the defendant has been paying Redstone Mortgage a monthly sum by direct debit which must be the mortgage on [30] Deal Street.

The defendant has not explained or produced any documents which explain:

i) Why he has been paying the mortgage on a property in which he has no interest?

On the face of it the discharge of the mortgage would appear to evidence a claim to a beneficial interest in the property.

He has also been paying what I understand to be the whole mortgage on the other property [3 Grace Street] although he says he has only a 26% interest in it.

I know this because of the authorisation which I have granted to the Bank to continue to make these payments, which are less than £500, under the existing direct debit.

ii) Why he has been receiving the rental income from a property in which he has no interest, see MLR/4. He told me through counsel (the defendant was present at the hearing on 3rd August 2015) that the rental income has been declared to HMRC. The account of the rental income was drawn up very recently by Consilium Consulting LLP and shows the defendant as the “proprietor” of both Deal Street and 3 Grace Street. It confirms that the mortgage interest was deducted from the profit and also certain other sums which are itemised going back to 2010.

Cheques

18. Secondly, the defendant produced a list of payments out of three bank accounts, which are the same ones which he had previously disclosed.

These payments exceed £500. Where they were payments by cheque, no information is given apart from that fact. No information at all was provided about who the money went to, and what the defendant bought with it. I asked whether he filled in and kept counterfoils. I was told, by counsel speaking in the presence of the defendant, that he does not keep records and could not possibly identify the payees of all these cheques. I do not know how Consilium LLP have managed to vouch for the deductions from the rental income going back to 2010 without any records.

I was told that two cheques totalling £35,000 paid in April 2014 were for legal expenses in contemplated defamation proceedings. This fact was not disclosed in compliance with my order, but shows that information does exist which could have been given in the affidavit, for which I allowed time to ensure it could be properly and completely prepare

20 [… ] It is quite clear from what I have already said that he [Lutfur Rahman] has not disclosed the full position in regard to [30] Deal Street and 3 Grace Street.

His failure to identify the destination of any payment by cheque over the last five years may or may not amount to a contempt of court, but it justifies a finding that his approach to these proceedings is such that unless restrained there is a real risk that he will dissipate his assets.

The submission that such large payments in round sums by cheque justifies an inference that the money has been used to acquire assets is sound.

If it is wrong, the defendant could have shown that by explaining where the money went.

Mr. Khan, counsel for the defendant, told me on instructions that the defendant had spent all his money on “politics”.

I cannot act on that assertion, unless and until it is supported on oath, accompanied by persuasive detail and documentation. If he did acquire any assets with the money, he has not disclosed them.

If he is concealing them, it is because he does not wish them to be available to satisfy the judgment debt. This is, in itself, a form of dissipation for present purposes.

Lutfur and those loans

21 […] A comparison of MLR/6 (the payments out of the three bank accounts) and MLR/7 (the “loans” made by third parties to fund the defendant’s legal expenses) reveals further questions.

The “loans” identified in MLR/7 total £749,500 and were made by 53 different donors.

Ms. Turner, the claimant’s solicitor has filed evidence to show that some of these individuals are not likely to have been able to afford such sums.

I will not set it out in full, but an example is Foujiya Sultana.

She is said to have lent the defendant £80,000 between September and December 2014 and a further £2,500 since.

The defendant said in his evidence at the trial that Foujiya Sultana was his niece aged 23 or 24 years.

She has a job which is not likely to enable her to acquire large capital sums.

Rafia Munni is said to have paid £8,000 directly to K&L Gates on 17th July 2014.

This is the only payment so described and I infer that the rest of the payments (amounting to £741,500) were made to the defendant who paid them onwards to K&L Gates.

This inference is supported by the payments out to that firm from the defendant’s Natwest account to which I will come shortly.

In addition to that payment Rafia Munni paid further sums amounting to £34,730 in September and November 2014.

Again, the evidence suggests that her employment is unlikely to generate such sums.

Limehouse.com is said to have lent £25,000 and the London Training Centre £22,000.

The financial circumstances of these companies, so far as the evidence reveals, do not permit the making of such loans.

Therefore, the suggested sources of these payments into the defendant’s bank accounts are questionable.

Where did the money come from?

A further question is this: why did all these people lend the defendant money?

A donation to a political cause is one thing, but a loan implies an expectation of repayment.

Why did anyone think that the defendant would be able to repay £749,500 in loans?

According to him, he has a 26% share in one property in London and £12,659.62 in the Bank.

It is reasonable to infer that some of these lenders must have a different view of the creditworthiness of the defendant than this.

How has this come about?

Now that is what we all want to find out.

It’s not rocket science to work out that this will not be a straightforward process.

But then some things are worth waiting for.

For more information

Full text of the judgement (PDF)

 

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There Are 3 Brilliant Comments

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  1. Billericaydickie says:

    What we have here is surely perjury? If these statements are made to the court in the knowledge or belief that they are untrue that is a criminal offence.

  2. Monja says:

    Thanks for keeping us informed- and providing (morbid) entertainment.
    It’s amazing how many people got entangled in the Lutfur’s web of deception, dishonesty and corruption which he spreads around those close to him like some moral plague. I am sure some of them are sucked into this against their will. I will never forget the experience during the election petition trial when a man, who had been clearly talked (or threatened) into changing his story in Lutfur’s favour, was faced with a prospect of having to lie under oath on Koran. It was a terrible sight, really hard to watch, but Lutfur and his henchmen were unmoved.

  3. You couldn't make it up! says:

    Nice one! I enjoyed a good read. Thanks for taking the time out to go to Court.

    One cannot help but think somebody somewhere is referring this document to HMRC for further investigation of the tax affairs of the ex-Mayor and his wife. Shades of Al Capone! 😉

    I couldn’t quite make out the contempt statement. He seemed to be saying that the ex-Mayor was clearly in contempt of Court but that he’d not be ruling on this until such time as somebody brings a charge of contempt of court – or did I get that wrong?

    My personal favourite quote was “I asked whether he filled in and kept counterfoils. I was told, by counsel speaking in the presence of the defendant, that he does not keep records and could not possibly identify the payees of all these cheques. I do not know how Consilium LLP have managed to vouch for the deductions from the rental income going back to 2010 without any records.”

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