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20th June 2018, 11:05

GBC investigative report - Sanctioned billionaire Dan Gertler and the Gibraltar links

In answer to GBC questions, Fabian Picardo has confirmed that - before becoming Chief Minister - he had a professional relationship with Israeli billionaire Dan Gertler, who is now the subject of sanctions by the United States for allegedly amassing a fortune through corrupt mining deals. 

Speaking live on Direct Democracy on GBC television, Mr Picardo said he had been involved in the purchase of a uranium mine in the Democratic Republic of Congo some eight years ago.

In 2010, Mr Picardo was a director of one of two companies linked to Mr Gertler, still registered at the address of Hassans law firm as recently as November 2017, which are now the subject of sanctions. Mr Picardo told GBC he was confident the work he did was in keeping with international laws.

GBC investigation

The following is an investigative report which GBC journalists have been working on since December.

Two companies based in Gibraltar for 11 years are named in a round of sanctions announced by the United States Government targeting human rights abuse and corruption.

The companies - Fleurette Properties Limited and Rozaro Development Limited – were registered at 57/63 Line Wall Road, the address of the Rock’s largest law firm Hassans, in 2006 and 2007 respectively. In mid-November 2017, applications were made to move the companies from Gibraltar to the British Virgin Islands.

All the relevant documents for these companies can be found here.

Fleurette and Rozaro are linked to Israeli businessman Dan Gertler, who the US Government says has amassed “a fortune through hundreds of millions of dollars’ worth of opaque and corrupt mining and oil deals” in the Democratic Republic of Congo.

The sanctions were announced in late December by US President Donald Trump. In a strongly worded Executive Order, the President said: “… the prevalence and severity of human rights abuse and corruption… such as those committed or directed by persons listed in the Annex to this order, have reached such scope and gravity that they threaten the stability of international political and economic systems".

Dan Gertler is included in the Annex; the 44-year-old is reportedly worth over 1.2 billion dollars. The US Treasury said he had used his friendship with Joseph Kabila, the president of the Democratic Republic of Congo (DRC), to act as a middleman for sales of mining assets in the country. The DRC is Africa’s largest producer of copper and the world’s largest source of cobalt (used in rechargeable batteries), but it consistently ranks among the poorest and most underdeveloped nations in the world.

The US sanctions, applying penalties for the first time under a new law, target a total of 15 individuals and companies associated with them. Another of the named individuals is Myanmar general Maung Maung Soe, who oversaw the brutal crackdown in 2017 against the Rohingya Muslim minority, which the United Nations called a “textbook example of ethnic cleansing”.

The sanctions are designed to increase the pressure on companies to cut ties with the sanctioned individuals or their related companies, since US citizens are prohibited from dealing with sanctioned individuals. A senior US official added: "In targeting these individuals today, Treasury has frozen their assets and restricted their ability to access the international financial system. This – these sanctions send a strong message to those who profit from suffering and corruption that there is a steep price to pay for abusing human rights while also preventing them from abusing our financial system”.

Gertler denies wrongdoing, highlights employment resulting from investments

Mr Gertler has denied any wrongdoing and has told Reuters his investments in Congo have created thousands of jobs. The Democratic Republic of Congo government has rejected the allegations of bribery and praised Mr Gertler’s commitment to the country.

On its LinkedIn profile, the Fleurette Group says its work has “always been geared towards raising the standard of living for the residents local to its operations”, reportedly facilitating 30,000 jobs for residents of DRC and making tax contributions of $370 million in 2013 alone. Fleurette also says it has “invested heavily in improving the DRC's infrastructure, by funding new roads, schools, hospital, health clinics and social services”.

Gertler, Fleurette & Gibraltar

Partners at Hassans have worked closely with Mr Gertler for the past decade. As well as Mr Picardo, Neil Costa - now the Minister for Justice - was also once a director of one of the now sanctioned Gertler companies, Rozaro, when he was a lawyer in private practice at Hassans, before being elected to Government.

Mr Gertler has administered some of his business through Line Trust Corporation Limited, a professional trustee of the Line Group, the trust and company management arm of Hassans.

Fleurette Properties Limited is incorporated in Gibraltar and is a Dutch tax resident. It owns Rozaro Development and is the parent company of the Fleurette Group, which is “ultimately owned by Line Trust Corporation Limited strictly and solely in its capacity as trustees of the Ashdale Settlement, a trust established in 2006 for the benefit of the family of Dan Gertler”.

The Fleurette Group website said the following: “Line Trust Corporation Limited is a professional corporate trust company licensed and regulated by the Gibraltar Financial Services Commission”. The website is no longer online.

Payments to local client account

At least one large transaction has also been made into a Gibraltar bank account in connection with Mr Gertler’s business. In 2013 and 2014, mining giant Glencore declared that certain royalty and signature bonus payments had gone to the Democratic Republic of Congo’s state-owned company Gécamines when in fact they had gone to Mr Gertler’s Africa Horizons company instead. The campaign group Global Witness said: "The discrepancy between Katanga Mining’s filings and the real recipient of these huge payments runs the risk of misleading investors... Investors need to ask Glencore why it felt comfortable making these payments and why it didn’t clearly disclose Gertler as the recipient”.

Some of these payments by Glencore were made to one of Mr Gertler’s companies via a Gibraltar bank account. An Extractive Industries Transparency Initiative report for 2015 shows $83.5 million were sent over in four transfers, over two different dates (March 3rd & July 3rd 2015) from the Standard Bank in Mauritius into a Hassans Client account at RBS International.

Both sanctioned companies have been active. Publicly available data held by Companies House in Gibraltar shows that the balance sheet for Fleurette Properties Ltd listed net assets of $240 million in 2008 but just over $4 million in 2017. In a summary of its accounts for 2008, Rozaro Development Limited filed total assets of £725 million; a year later, by the end of 2010, the company valued its total assets as £7 billion. The latest data showed net assets of £291 million at the start of 2017.

Hassans refers to Gertler as ‘former client’ & says it acted properly at all times

A spokesperson for the law firm told GBC: “Hassans cannot comment on the affairs of former clients other than to confirm that it has acted properly at all times.”

UK's Serious Fraud Office investigating Gertler

Apart from the US Sanctions, Mr Gertler is also being investigated by the UK’s Serious Fraud Office (SFO) which is probing the acquisition of certain mining assets in the Democratic Republic of Congo. The SFO says the investigation into ENRC Ltd (previously ENRC PLC) “is focused on allegations of fraud, bribery and corruption around the acquisition of substantial mineral assets”.