![COLUMN | Court reports – Isabel dos Santos versus Angola; Santos of Australia versus Tiwi Island activists [Offshore Accounts]](http://media.assettype.com/bairdmaritime%2Fimport%2Fwp-content%2Fuploads%2F240122-Offshore-Accounts.jpg?w=480&auto=format%2Ccompress&fit=max)
We've said it before and we will say it again; if you want to meet the movers and the shakers of the offshore industry, you don't need to pay big bucks to attend an expensive conference.
Instead, you simply have to go to the public gallery in court, and watch them battle over millions of dollars there.
It's time for an update on the high-profile cases featuring some of our favourite people and companies, with some contract disputes, corruption testimony and asset freezing.
At the end of 2022, we observed that Isabel dos Santos, the daughter of Angola's late former president and herself the former Chairwoman of Angola's state oil company Sonangol, had been slapped with an Interpol Red Notice for alleged embezzlement, fraud, influence peddling, and money laundering. Ms dos Santos was formerly Africa's richest woman, having amassed unprecedented wealth during the nearly forty years that her father ruled Angola before he stepped down in 2017.
Unfortunately, after President dos Santos left office, his successor, João Lourenço, embarked on an examination of some of the apparently murky deals involving the former first family. In January 2020, Isabel's half-brother, José Filomeno dos Santos, was sentenced to five years in prison in Luanda for fraud, money laundering, and trading in influence, after he was caught transferring hundreds of millions of dollars out of the country just days before his father resigned from office.
It has been a rough couple of weeks for Isabel, too.
Last week, Angola's public prosecutor filed 12 criminal charges against Ms Dos Santos, including allegations of embezzlement and fraud at Sonangol, when she was chair of the company in 2016 and 2017.
Ms dos Santos has employed the top London law firm of Grosvenor Law to defend her.
"Isabel dos Santos rejects these trumped-up charges by the Angolan government, which have been launched as part of a sustained campaign of political persecution against her by President Lourenço," her lawyer told the BBC:
Grosvenor Law also emailed a similar statement to Upstream magazine.
Grosvenor Law boasts on its very informative website that it is "a leading Mayfair law firm, specialising in complex disputes arising out of business relationships or personal life. We represent a range of high net worth individuals, companies, partnerships and trusts."
"Whatever your problem, we fight to win," the firm claims.
An excellent choice of lawyers!
When researching this piece, we discovered that Grosvenor Law also represents Douglas Barrowman, the husband of the notorious Lady Mone of Mayfair, the lingerie and blockchain entrepreneur ennobled by Lord Cameron. The couple's company PPE Medpro is currently under investigation over the sale of US$300 million worth of masks and gowns to the British health service in the pandemic, though some of those items were allegedly defective and were rejected.
Grosvenor Law clearly has its hands full as Mr Barrowman also seeks to defend himself from claims that his Knox Group's offshore loans tax avoidance scheme was fraudulent.
And there is more work for Ms dos Santos' lawyers in another big case.
There is one cartoon Ms dos Santos probably won't be watching with her kids. Let it go!
Just before Christmas last year, Ms dos Santos saw £580 million (US$737 million) of her assets frozen by the High Court in London and her appeal against the order denied. This was part of a long-running battle with the Angolan telecommunications company Unitel regarding low interest loans made more than ten years ago to a Dutch company she controlled.
Unitel alleges that the loans were for Ms dos Santos' "own personal benefit," according to the BBC, and that she abused her position as a director of the company. She says that they were approved by both Unitel's board of directors and its other shareholders, and that they were made in good faith. The telecoms company has since been nationalised by the Angolan state, and she has lost her shareholding.
Isabel dos Santos claims that the legal cases against her are motivated by a desire to prevent her standing as a candidate for the Angolan presidency in future, and that they stem from her efforts to root out corruption by other members of the ruling elite in Sonangol. She maintains her innocence and denies wrongdoing.
In the London court judgement, Mr Justice Bright stated that the Unitel claim "seems an obvious case for a worldwide freezing order," and the court heard evidence that Ms dos Santos' owns property in the UK worth up to £33.5 million (US$42 million) with an additional US$95 million worth of property in Monaco and Dubai. Bellingcat had previously revealed she apparently lives at the Bulgari Resort and Residences, prompting us to ask whether the Dubai authorities actually did any anti-money laundering checks on her funds.
Subsequent coverage by Al Jazeera on The Gold Mafia in a must-watch documentary series into money laundering, alluvial gold, and corruption in Zimbabwe and South Africa showed that, yes, basic checks on the provenance of both literal bags of cash and wire transfers arriving in the UAE from Harare, Johannesburg, and Hong Kong were sorely lacking.
Will the UAE finally act to freeze Ms dos Santos' assets there if there is a worldwide order?
Recent criminal cases in the UK suggest that money laundering is a major problem in the UAE, with the authorities in Dubai seemingly doing little to enforce anti-money laundering measures.
The British National Crime Agency has been prosecuting the "cash mules" who transported more than US$130 million in drug money on flights from the UK to Dubai on 83 trips in 2019 and 2020.
This wasn't a sophisticated crime. The individuals were paid about US$4,000 each to check in suitcases crammed full of millions of pounds in cash and flew from London to Dubai in business class, to take advantage of the higher check-in baggage allowance and the later, faster check-in. Typically, every courier took US$3 million or more on each trip. The bank notes were vacuum-sealed in plastic and then instant coffee granules and air freshener were used to mask the odour from detection by British customs' sniffer dogs. The drug bosses behind the scheme gave the couriers letters from a company called Omnivest, which they presented to customs in Dubai where the cash was declared and allowed into the country.
Whilst fifteen couriers and the ringleader have now been jailed in the UK, very little appears to have happened on the UAE side despite the obvious questions raised when millions in used cash turns up at customs in Dubai International Airport wheeled in by a motley troupe of ex-models with fake tans. The British authorities say that the UAE is detaining some British nationals who acted as couriers there as part of the case, but there is no word of any action against the institutions that were accepting and processing the wads of cash.
There was an US$80 million money laundering case in Abu Dhabi involving an Emirati and some foreign nationals in 2020, as reported in the local media. However, only this month do the gold refineries of the Emirates have to have a third party auditor, and the country remains on the Financial Action Taskforce Grey List due to its failure to prosecute money laundering and impose sufficient checks on both financial and non-financial institutions. Notably, Jordan, the Cayman Islands, Panama, and Albania all exited the Grey List in 2023. Yes, Dubai lags behind Albania and Jordan in its efforts to tackle financial crime.
Dubai has always been a centre for funds of dubious provenance, and with the efforts by the Russian federation to evade sanctions, the emirate continues to walk a fine line between attracting "investment" from oligarchs and kleptocrats, and trying to maintain itself as a burgeoning international financial centre – a similar tightrope walk that Switzerland and Monaco attempted in the 1980s and 1990s.
Last week, yet another Dubai-registered business, Hennesea Holdings, which owns 18 tankers, was placed on the US Treasury Department's sanctions list. Hennesea was established in late 2022, and the company immediately acquired older tankers that ship Russian crude oil and petroleum products. The US government found that it had violated American sanctions on Russian crude.
If Isabel dos Santos does find her assets frozen, she can console herself that she is certainly not alone in the UAE if efforts to scrutinise the source of funds are stepped up, which is a big if.
We move from one (dos) Santos with legal woes, to another Santos in Australia, with an important legal victory.
A year ago, we reported how Dennis Tipakalippa, an Aboriginal elder, senior law man, and traditional owner of the Munupi clan of the Tiwi Islands, successfully sued the country's environmental regulator the National Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA) to cancel a drilling permit the agency had issued to Santos for the company's US$4 billion Barossa gas project in the Timor Sea.
In the successful court filing, Mr Tipakalippa claimed that he and the Munupi clan, as well as other traditional owners of the Tiwi Islands, had "Sea Country" in the Timor Sea to the north of the Tiwi Islands, traditional underwater heritage that they claimed extended to and beyond Santos' drilling location. Mr Tipakalippa and the Munupi clan asserted rights to that "Sea Country" based upon what they asserted were longstanding spiritual connections to the seabed, where they said their ancestors had engaged in traditional hunting and gathering activities.
This resulted in Valaris' semisub drilling rig Valaris MS-1 being suspended for a year, with Santos still paying for it, as per Valaris' November 2023 fleet status report.
Santos then embarked on a new cultural study for the project for the regulator and a new phase of consultations. Just before Christmas last year, the revised drilling plan was approved by NOPSEMA, drilling was once again approved, and the Valaris rig remobilised.
But that victory came just after another defeat for the company.
In November last year, another Tiwi islander, the Jikilaruwu traditional owner Simon Munkara, won an emergency injunction at the Federal Court to stop Santos' contractor Allseas laying the 260-kilometre-long export pipeline from the Barossa field in over 200 metres of water to the Darwin LNG plant.
Mr Munkara's lawyers argued there were two culturally significant "songlines" intersecting the proposed pipeline, out of sight and underwater, the ABC reported. These had not been included in the updated environment plan from Santos, and he claimed that the pipeline could cause irreparable cultural damage to his people.
Santos has always highlighted that the minimum depth of the pipeline is 34 metres and that no dredging or trenching is used – it is simply laid on the seabed.
Supported by a taxpayer-funded agency, the Tiwi Island activists commissioned reports from independent experts, which stated that the proposed route of the 263-kilometre Barossa pipeline would potentially damage burial sites on the sea floor, as well as dreaming tracks and songlines, and would offend several legendary creatures in indigenous culture, namely, the serpent Ampiji and the Crocodile Man.
Such claims would have significant impact on other offshore oil and gas projects in Australia if the precedent was established for protecting sites of allegedly underwater cultural significance far offshore.
Last week, despite the threat of divine disapproval, Justice Natalie Charlesworth dismissed Mr Munkara's application and lifted the injunction, allowing Santos and Allseas to commence work on the pipeline. Both Santos and its opponents presented evidence on the traditional beliefs of the Tiwi Islanders and the topography, both real and imagined, of the seabed in the area.
The judge's ruling could be described as damning of the case made by the Tiwi Islanders. She ruled that traditional accounts of Ampiji and Jirakupai varied widely, and that there was a "negligible chance that there may be objects of archaeological value in the area of the pipeline route."
Justice Charlesworth stated in her judgement that one of the so-called "cultural mapping exercises" undertaken by an expert witness for the islanders was inaccurate. She wrote that the related opinions expressed about it "are so lacking in integrity that no weight can be placed on them… I am satisfied that this aspect of the case does indeed involve 'confection' or 'construction', at least in part, and that it cannot be an adapted account of the kind discussed by the anthropologists."
The judge also found that some of the islanders had been coached in their testimony by their cultural heritage expert and their lawyer, who had encouraged them to emphasise the connections of their traditions on the seabed excessively.
So, Allseas and Valaris can get back to work. The Australasian Centre for Corporate Responsibility (ACCR), an industry lobbying group, claimed that the delays to the project had cost Santos over US$500 million.
"While today's court ruling may clear the way for Santos to restart its Barossa project after 16 months of delay, the ACCR stated in its press release, "it leaves a colossal haemorrhage of shareholder money in its wake."
Indeed, the lesson of both the Santos cases is that litigation is time-consuming and expensive. We suspect that further claims of cultural significance will be raised against new drilling off Australia in future, adding delays and costs to offshore projects. It is nice business for lawyers in Sydney and for cultural heritage experts, however.
Compared to these legal dramas in the UK and Australia, the news that Solstad's restructuring has been completed in Norway seems a little tame. However, its importance cannot be under-estimated.
The company claims that the deal with Aker "preserves shareholder values in a highly challenging situation for the Solstad Group, through avoidance of reconstruction, debt conversion, and high equity raise dilution."
It also hands control of most of the company's vessel fleet to the Aker Group, as we pointed out in October. Aker Capital, controlled by Norwegian tycoon Kjell Inge Røkke, now holds 72 per cent in a new company owning 22 of Solstad's construction support vessels (CSVs) and 14 anchor handling tug supply (AHTS) vessels.
However, Solstad had less than three months to refinancing debt of NOK11.4 billion (US$1.09 billion), which matures on March 31, 2024.
In the end, Mr Røkke proved the only party with the sheer financial firepower to fix Solstad's problems. The other shareholders in the company are left with crumbs and have reason to feel aggrieved.
Perhaps a discussion with some Oslo cultural heritage experts might open up some new legal challenges to the Aker deal? That's a genie that probably ought to remain uncorked.
Background reading
It has been four years almost to the day since we ran our first two-part series on the legal battles of offshore operators, which covered the litigation between Pacific Drilling and its Korean shipyard, Malaysian FPSO operator Bumi Armada and its customer Woodside, SBM and its whistleblower, and McDermott's US$373 million in bankruptcy and restructuring fees (here and here).
For more background on one of Africa's largest dynastic corruption scandals, see our obituary here of Isabel's father, the deceased former President of Angola Jose Eduardo Dos Santos, who died in July 2022.
