17 March 2013

Djibouti Goes After Dissident Businessman's Wealth Overseas

Five years after his fallout with President Ismael Guelleh, businessman Abdourahman Boreh faces a legal battle with the Government of Djibouti, who want to see the restitution of his wealth, which its officials claim was obtained in an illicit manner.

The Government of Djibouti fights its one time prominent businessman to reclaim "tens of millions of dollars" in alleged losses, complaints filed in a London court reads.

"We believe Boreh has taken millions of dollars from the Djibouti projects and hidden them in countries all over the world,"Djibouti's Inspecteur Général d'Etat, Hassan Issa Sultan, reportedly said.

Holding an office that is equivalent to Ethiopia's Ethics & Anti-corruption Commission, Sultan confirmed to Fortune that the government is determined to recover what it believes is money "kept in offshore banks and shell companies."

The Government is seeking restitution of the profits that Boreh "unlawfully obtained, as well as damages and compensation for losses suffered," according to lawyers representing the government.

A law firm hired by Djibouti's government, Gibson, Dunn & Crutcher LLP, opened a civil lawsuit in London in February 2013, claiming the defendant amassed his wealth by abusing his office, whilst serving as chairman of the Djibouti Ports & Free Zone Authority (DPFZA). Boreh, who added Charles to his given name after he left Djibouti in 2009, served in that position for five years, starting from 2003.

But, whether the office he held is defined as "public office" turns out to be a matter of dispute in court. Once a wealthy businessman and vice president of the nation's chamber of commerce in the 1990s, the businessman-cum-politician was instrumental in persuading senior officials of the Dubai Government to invest in Djibouti, beginning in the early 2000s.

Dubai's flagship companies, such as; DP World, which has invested in Doraleh Port, and Nakheel, which runs the luxury Kempinski Hotel, on the Red Sea, came to the Horn of Africa nation in the mid 2000s largely due to his business connections, those who know him claim.

Boreh, who is now a dissident businessman, came from an eminent family, with his uncle dying whilst fighting for Djibouti's independence, which was declared in 1977. He rose to prominence after he allied himself with the incumbent president who took office from the founding leader of the nation, Hassan Gouled Aptidon. Guelleh was chief of the nation's security apparatus, before becoming what is now a three-term president.

A French national, Boreh went into exile after tension developed between him and the President's wife. Faced with criminal prosecution and a civil lawsuit in Djibouti, Boreh attempted to challenge the President in an election two years ago, but without success. He was convicted in absentia of tax evasion and terrorism, and sentenced to 15 years in prison, in what he once described to Fortune as "a 10-minute political trail."

It was this political victimhood that his lawyers invoked as part of their defence when responding to the civil lawsuit Gibson, Dunn & Crutcher LLP opened in a commercial court in London, where Boreh has an official residence, in the Belgravia district. Boreh's lawyers argued, in their written response, that the lawsuit opened against him, by a team of lawyers led by Philip Rocher and Peter Gray, was in retaliation to his bid as "an opposition candidate" back in December 2010.

Lawyers for the government deny this.

"Boreh had no prior involvement in Djibouti politics and was unaffiliated with the opposition to President Ismail Omar Guelleh when Boreh left the country, in order to avoid his and his companies' tax liabilities," said these lawyers, in their complaints lodged in October 2012. "The Government of Djibouti learned of Boreh's wrongful use of his public position to benefit his own commercial interests after he had left the country, in 2008, to avoid his significant tax liabilities."

The defendant denies having held a "public position" in Djibouti, but the plaintiff's lawyers challenged it for having "no legal or factual basis."

It is a claim that the Djibouti authorities reject forcefully, accusing him of abuse of office, whilst serving as chairman of the DPFZA, and enriching himself in the process. Djibouti's government claims Boreh has wronged his country, by collecting "commissions, contracts, and significant shareholdings for himself and his companies."

They are now in hot pursuit of what they claim are "proceeds that Boreh unlawfully obtained and transferred abroad."

"Djibouti seeks to recover tens of millions of dollars in losses that it sustained as a result of Boreh's wrongful misuse of his public authority to benefit himself and his companies during his time as a public official," claim the plaintiff's lawyer. "During his time as Chairman, Boreh obtained significant and valuable shareholdings in several of the new projects; awarded construction, security, and other service contracts on these projects to companies he owned; and demanded commissions from other individuals and companies involved in the projects."

Boreh declined to comment to Fortune, and his lawyers said he cannot comment on issues related to cases pending in a court of law. But, Boreh argued, in his legal submission to the Court, that, "he was entitled to pursue his own commercial gain in connection with those projects because his position as Chairman of the DPFZA did not constitute a public position."

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