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Irish Building Society Sues London Property Mogul Simon Halabi

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A legal action launched by the now-defunct Irish Nationwide Building Society against Syrian born property mogul Simon Halabi, who was once one of Britain’s richest people, has succeeded in securing a US10.4 million judgment against firms connected to him.

When Irish Nationwide went broke in the financial crisis that began in 2008, it was subsumed into the state owned, now also in-liquidation, Irish Bank Resolution Corporation. Its successor entities have since sued Simon Halabi and two firms – Stormex Holdings and Immofra- after a large loan made to Stormex in 1997 had not been repaid.

It seems no interest owed has ever been paid on the loan either. A court in Jersey said bookkeeping by Irish Nationwide in relation to borrowings it advanced to one of the defendant firms in the case “fell short of what would be expected of any well-conducted bank or building society”.

Once a pillar of Britain’s rich elite, Mr Halabi was reckoned in 2007 to have a US$4.5 billion fortune. At one point, he was also involved in the new landmark Shard skyscraper in London after acquiring a 25% stake in the development from Irish Nationwide itself. He later sold his holding to Qatari investors as his financial difficulties began to accumulate.

As part of a 1997 agreement by Irish Nationwide to advance money to Jersey-based Stormex, Mr Halabi and a second company Immofra provided guarantees for the loan. The Chateau des Bois Mures holiday development north of Cannes was provided as collateral for the loan and Irish Nationwide held a charge over the property, which at the end of 2009 was listed as being worth about US$9.5 million.

In its law suit Irish Nationwide claimed that by the year 2000 there was US$3.5 million outstanding on the loan it had advanced to Stormex. Fast forward to today thirteen years later and with interest, the amount owed has jumped to more than US$10.4 million.

A judgment in default had previously been secured by Irish Nationwide against Mr Halabi, but the institution never received a nickel from the businessman, who had declared personal bankruptcy in England and subsequently been discharged.

This newspaper reported two weeks ago that the Reuben Brothers, David and Simon, have announced plans to re-develop Cambridge House in London, an historic mansion dating back to the mid eighteenth century. We reported they had previously purchased the property in 2011 from a large property developer who had gone bankrupt. That developer was Simon Halabi; the world of international property development is a small one it seems.

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