Crime and Courts

Big win for RAK Investment Authority as UK court nods to Azima's trial

Ahmed Shaaban /Ras Al Khaimah Filed on July 21, 2018
Big win for RAK Investment Authority as UK court nods to Azimas trial


US-Iranian arms dealer faces setback after judge rejects applications for the hearing to be heard in private.

The US-Iranian arms dealer Farhad Azima will face a trial in London as he failed to halt claims brought by RAK Investment Authority (Rakia) filed at the High Court of Justice in UK.

Rakia had claimed that he tried to create dissent in the emirate of Ras Al Khaimah as well as paying bribes, taking secret commissions and forging US Government documents in order to embezzle RAK public funds.

The US-Iranian arms dealer also faced a setback after a judge rejected his applications for the hearing to be heard in private and for the London case to be halted until the 'final' resolution of proceedings Azima brought against Rakia in the US.

The claim by Rakia, the former investment arm of the Government of Ras Al Khaimah, is based on various claims of serious misconduct. The case follows the settlement agreement he signed in March 2016. The agreement expressly required Azima to confirm that he had: "at all times acted in good faith and with the utmost professional integrity, and would continue in the future to act in good faith and with the utmost professional integrity towards Rakia, RAK Airways and any other RAK entity."

Rakia presented the court with further evidence of Farhad Azima's wrongdoing arising out of a joint venture between Azima's wholly-owned entity HeavyLift and RAK Airways, the former national airline of RAK, The joint venture concerned the establishment of an aircraft simulator and training facility at the RAK International Airport.

During settlement negotiations with Rakia, Azima and those acting on his behalf repeatedly claimed that he (through HeavyLift) had invested a total of $2.68million in the training academy, including supposedly spending $1.73 million on a flight simulator. In fact, the court was told that Azima (through Heavylift) only paid $167,500 for a 40-year-old flight simulator.

The London High Court allowed Rakia's claim to be amended to include allegations that Farhad Azima played a central role in instigating and coordinating a wide-ranging media and public relations campaign which set out to deliberately denigrate the reputation of the Ruler of the Emirate of Ras Al Khaimah, the governing authorities in RAK as well as the Emirate's employees and advisors. As part of this campaign, Azima allegedly procured and edited a 'Security Assessment' on behalf of convicted fraudster Dr Khater Masaad, who at the time was a fugitive from justice.

The court heard that the proposal included various recommendations including deceiving institutions and companies in RAK into entering commercial transactions with hardened criminals as well as inciting "protests and other forms of manufactured dissent" in the emirate.

Azima will also have to pay Rakia's costs (estimated to be 150,000) relating to the applications before the court in London, with 50,000 payable within 28 days.

David Hughes, a partner at Stewarts Law LLP, said: "My client Rakia is delighted with this result which provides further judicial support to the RAK government's quest and determination to recover monies from Farhad Azima. Rakia will continue to pursue Azima in the English courts, as well as his co-conspirators in jurisdictions around the globe.

"It does not stop here. Rakia looks forward to the high court trial next year where it will prove beyond all doubt that Farhad Azima engaged in a systematic course of deception and unlawful conduct over many years. This is drawn from material widely available on the internet of which we have been given notice."

What is the sensational case about?

The first aspect of RAK Investment Authority's (Rakia) claim against US-Iranian arms dealer Farhad Azima dates back to 2011 and his role in the acquisition of the Sheraton Metechi Palace Hotel in Tbilisi from Rakia. The $62.5 million buyout was made through his company, Eurasia Hotel Holdings Ltd, with an agreement made with Rakia Georgia. However, the deal was quickly shrouded in secrecy as the contract was made with the former-CEO of Rakia and convicted suspect, Dr Khater Massaad.

With Massaad and Azima central to the transaction, the two were allegedly able to manipulate the deal with 'secret commissions' and bribes, with Azima receiving a 10 per cent interest in the hotel worth $6.25million for a mere nominal fee of $10 and Massaad receiving a bribe of $500,000 for his facilitation of the fraud.

Following the uncovering of these transactions, it has come to light that Azima proposed to Rakia in late 2015 a joint venture to buy military aircraft valued at $52 million. It was proposed that the joint venture company would be called GDS Middle East with Azima's majority-owned GDS owning 60 per cent and Rakia owning 40 per cent.

However, much like the Sheraton Hotel deal, it became apparent that things were not what they seemed for Rakia. The alleged value of the aircraft of $52 million, of which Rakia would contribute $21 million, was more like $6 million. Yet the deception did not stop there. In an attempt to seal the hollow deal, Farhad Azima sought to take advantage of his US Government connections by falsely posing them as the ultimate customer and forging US Government documents.

Ahmed Shaaban

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