The CEO of a North Sea oil and gas group falsified bank statements and board documents to steal at least €143.8 million, according to a London lawsuit filed by his former company and financier of an Iranian petrochemical manufacturer.
The Supreme Court claim is one of many legal battles around the world that have embroiled Francesco Mazzagatti, an Italian national, CEO and majority shareholder of Viaro Energy. The company and Mazzagatti became major players in the UK energy market after it bought RockRose, a listed group with assets in the UK and the Dutch North Sea. for £247 million in cash in 2020.
Mazzagatti and Viaro’s chief financial officer, Francesco Dixit Dominus, are being sued in London by the Singaporean trading company Alliance Petrochemical & Investment (API), which Mazzagatti once owned. It claims that his former boss may have used “at least some of the embezzled funds to acquire a majority stake in RockRose Energy.”
Mazzagatti and Dixit Dominus deny the claims.
API – where Mazzagatti was CEO between July 2018 and September 2020, according to the company – partly owns Iran’s Mehr Petrochemical Company (MHPC) and is a distributor of its products, such as polyethylene.
Just months after becoming CEO, Mazzagatti set up a new company, Alliance Petrochemicals Trading (APT), in the Gulf state of Sharjah “without the knowledge of API’s other directors,” the company alleges in the London lawsuit.
He then forged a board decision authorizing him to open APT bank accounts, with himself as the sole signatory. API customers then paid into a series of accounts in Singapore and the United Arab Emirates set up and controlled by Mazzagatti and Dixit Dominus, in exchange for products from Iranian company MHPC, the claim said.
“The full extent of the fraud committed by the defendants is not known to the plaintiff,” API claims. But it calculates that at least €143,808,798.66 has been embezzled, which it says represents the total amount API owed to MHPC in August 2023 in exchange for its petrochemical products.
API claims the pair covered up the embezzlement through “false statements” to the board. In 2021, after a meeting in Dubai, Mazzagatti produced “a false bank statement” to show that there was a balance of almost Dh100 million (€25.8 million) in an account in the UAE. He had previously told API’s other directors that instability in the Middle East meant it was “better that the funds owed to MHPC were held outside Iran”.
A court in Tehran ruled in May 2023 that MHPC could no longer supply products to API and that API owed the Iranian company approximately $170 million, according to the London lawsuit.
The Supreme Court claim also alleges that Mazzagatti may have used “at least some of the embezzled funds to acquire a majority stake in RockRose Energy.” To secure the deal, Viaro relied on a £250 million loan guarantee from Sheikh Zayed bin Surror bin Mohammed Al Nahyan, a member of Abu Dhabi’s royal family, according to the claim.
This helped allay concerns from Taqa – the Abu Dhabi state electricity and water company, which was involved in a joint venture with RockRose – that Viaro would use RockRose’s cash balances to pay for the deal, leaving the North Sea company out of would be able to meet its obligations. , including the dismantling costs of the joint ventures, the claim alleges.
RockRose then loaned about £202 million to Viaro to finance the deal, with the remainder of the £247 million purchase price raised from the embezzled funds, the claim alleges. This is denied by Mazzagatti.
Taqa has since filed a separate claim in the Supreme Court against Viaro and Mazzagatti, along with other defendants, alleging that RockRose paid out an $84 million dividend shortly before selling an oil field for $1 without the resources to meet its obligations to fulfil. The suspects deny the claims in the Taqa lawsuit. There is still a judgment to be made.
In response to API’s claim, Mazzagatti and Dixit Dominus deny any misappropriation of funds and say the lawsuit is being orchestrated by a third party, Arshiya Jahanpour, a former close friend of Mazzagatti, who urged him to purchase API on his behalf . Jahanpour then became frustrated with the Italian’s decision to subsequently sell him only half of the trading company and the remaining 50 percent to another friend, Nejla Baccouche, according to defense arguments.
The defense argues that it was Jahanpour, not Mazzagatti, who had “sole control” over API from about September 2018. Neither Mazzagatti nor Dixit Dominus “is responsible for any unlawful payments,” the defense said. Instead, it argues that API is attempting to “(erroneously) blame or impute liability to the Defendants for transfers that were either legitimate or must have been an acquisition of funds by Mr. Jahanpour.”
The defense claims that the various bank accounts opened by Mazzagatti “were opened by or at the request of Mr. Jahanpour, and that Mr. Jahanpour controlled them at all material times. [ . . .] Mr. Jahanpour was concerned about having assets in his own name, partly because of the increased scrutiny due to his American citizenship. It adds that Mazzagatti trusted Jahanpour enough to allow him to use his name “but was not involved in the operation of the accounts.”
Jahanpour could not be reached for comment.
A trial date has yet to be set.