a day ago
Tycoon buying up North Sea fighting fresh fraud claims
An energy tycoon in talks to buy 5pc of Britain's North Sea gas production is facing new claims of fraud, The Telegraph can reveal.
Francesco Mazzagatti has been accused of stealing £23.5m from his former employer to help fund a deal for a London-listed energy producer, according to recently submitted court documents.
It is claimed that the oil trader extracted funds from Alliance Petrochemical Investment (API), a Singaporean trading company he previously worked for, to purchase RockRose Energy in 2020.
The acquisition established Mr Mazzagatti as a key player in the UK energy market. He is now racing to expand his empire by acquiring 11 North Sea gas fields owned by Shell and ExxonMobil for £403m.
Shell hopes to complete the deal by the end of this year, although it is still awaiting sign-off from the UK Government.
The planned acquisition would hand Mr Mazzagatti control of 5pc of Britain's total gas production, making him critical to the country's long-term energy security.
However, the transaction has been overshadowed by claims made against Mr Mazzagatti of fraud and theft.
Theft accusations
API is already fighting a High Court battle against Mr Mazzagatti in the UK and has launched separate proceedings in Singapore. Recently submitted court documents in the Singaporean case claim to show how Mr Mazzagatti syphoned funds to himself, allegations he denies.
Ngoo Sin Hung Justin, an API director, has sworn an affidavit accusing Mr Mazzagatti of stealing at least £23.5m from API and its subsidiary APT.
He is alleged to have done so via Petrochemical Industries Ltd (PIL), a company he controlled.
In his affidavit, Mr Ngoo Justin alleges Mr Mazzagatti controlled APT's finances for his own benefit and made unexplained transactions to third-party entities.
He said: 'Mazzagatti has deliberately withheld documents pertaining to APT, including the bank statements of all bank accounts held in its name, so as to conceal his misappropriation of funds from APT.'
As part of its lawsuit, API claims to have obtained Mr Mazzagatti's bank statements.
'Mazzagatti's bank statements show that considerable sums were transferred from the accounts of API and APT to Petrochemical Industries and subsequently to Mazzagatti,' court papers said.
'The evidence of Mazzagatti's bank statements is damning and clearly shows direct misappropriation of funds from API by Mazzagatti through PIL.'
Copies of Mr Mazzagatti's bank statements were included in the court filings in Singapore, allegedly showing the flow of funds from API to Mr Mazzagatti and onwards to other entities. The alleged transactions are set out in a range of currencies, underlining the global nature of the claimed fraud.
For example, on Nov 19 2020, €15.5m (£13.2m) was allegedly transferred from API to Mr Mazzagatti before another €3.2m allegedly landed in his account a month later.
In one transaction, Mr Mazzagatti allegedly transferred £2.9m of API's funds directly to RockRose Energy. Another alleged $6.3m transaction is also referenced.
'Contrived and disingenuous'
In his response to the latest claims regarding his bank statements, Mr Mazzagatti said it was a 'contrived and disingenuous' attempt to accuse him of wrongdoing.
The energy tycoon denies the allegations and claims they are part of a 'vexatious campaign of defamation, harassment and extortion'. He also denies deliberately failing to disclose relevant documents in the case to conceal his alleged wrongdoings.
The latest allegations follow previous claims in the English High Court by API that Mr Mazzagatti faked bank statements, forged documents and misappropriated a total of €143m.
The API lodged its UK claim last October, just three months after Shell announced the sale of its Southern North Sea assets to Viaro, Mr Mazzagatti's start-up energy company.
In his reply to the affidavit filed in Singapore, Mr Mazzagatti strenuously denied any wrongdoing and said the issue of the misappropriated funds has 'not yet been determined by the UK court'.
An earlier defence submitted to the High Court in England also attacked the 'false' fraud claims, as he stressed that he was 'not responsible for any unlawful payments'.
According to his defence, 'it is denied that Mr Mazzagatti misappropriated any sums from API' or that he 'made any false representations to the board of API'.
His defence also claims that he 'was not responsible for overseeing or making payments, and did not control API's affairs'.
In the months after his takeover of RockRose, Mr Mazzagatti rapidly expanded his assets in the North Sea, notably purchasing SSE's portfolio of gas exploration and production assets for £120m.
Shell is proceeding with its plans to sell 11 gas fields to Mr Mazzagatti's Viaro Energy despite the fraud allegations.
Viaro said the deal would hand it control of 'the backbone of the UK's energy production and security'.
A source close to Mr Mazzagatti has said the lawsuits will have no bearing on the North Sea deal with Shell. They also claimed that 'there is not a single piece of credible evidence' to support the claims.
Joe Robertson, Conservative MP, urged the Energy Secretary to scrutinise the deal. He said: 'Ed Miliband should look very carefully at these proposed plans to offload 5pc of Britain's North Sea gas production to a man currently accused of fraud in the High Court.'
Lawyers for Mr Mazzagatti pointed to a recent court ruling in the UAE where there was no finding against him regarding claims of embezzlement. An allegation of forgery was also dismissed.
A Shell spokesman said: 'The sale of Shell's offshore gas assets in the UK Southern North Sea to Viaro Energy has received a number of regulatory approvals and is expected to complete this year.
'We have a well-established due diligence process and continue to work with all relevant regulators, including the North Sea Transition Authority.'
