A Russian Tycoon Is Suing The 'King Of Diamonds' For $1 Billion

Lev Leviev Russia

Photo: Getty

The head of Angola’s secret service made “fraudulent representations” to induce a settlement between two oligarchs warring over their African diamond interests, the high court in London has heard, as a controversial Russian tycoon launched a $1bn claim against a rival known as the King of Diamonds.Arkady Gaydamak, best known in the UK as the father of the former Portsmouth FC owner Sacha, is suing his former business partner, diamond billionaire Lev Leviev, over claims Leviev failed to pay dividends earned trading diamonds from Angola. Gaydamak had previously received monthly payments from Leviev of “on average $3m” from 2000 to 2003.

The dispute centres on the pair’s interest in a diamond sales operation called Ascorp, previously thought to be jointly owned by the Angolan government, Leviev and Antwerp-based Omega Diamonds. Gaydamak claims he owned a secret stake in the business, which held an exclusive deal to market the country’s gems in an effort to prevent rebel fighters being funded from the proceeds of so-called blood diamonds.

Angola’s efforts to force a truce in the case and avoid further negative publicity for the country emerged as Gaydamak, who was forced to give evidence via a video link as he fears arrest in the UK over his French tax affairs, admitted to signing a document giving up his claims to the diamond operations. However the businessman insists he was “induced to do so by fraudulent misrepresentations made on behalf of [Leviev] by one General Kopelipa, a highly influential member of the Angolan administration”.

In August 2011, “General Kopelipa turned up at [Gaydamak’s] hotel in Luanda, armed with copies of the draft settlement agreement drawn up by [Leviev’s] London lawyers,” Gaydamak’s written evidence states. “Kopelipa informed [Gaydamak] that the presidential administration had approved the draft and that its terms were not negotiable, and pressured him to sign it there and then.”

Apart from pointing to the existence of the settlement agreement, Leviev argues there was no signed contract between the pair when Ascorp was created. Gaydamak disputes that claim, arguing that a document dating to December 2001 was entrusted to the chief rabbi of Russia, Berel Lazar. Rabbi Lazar says an envelope containing a document “might have [been] shredded by accident” but he is refusing to come to London to testify in person.

The opening of the case is the latest in a line of infamous skirmishes involving Gaydamak, who last year succeeded in getting a conviction for illegal arms dealing overturned in the Paris court of appeal. Charges of tax fraud were upheld, however.

The image of Gaydamak’s colourful business career is enhanced by his evidence, including insights into how he forged close relationships with the Angolan government during its civil war by constructing deals to sell it $70m worth of helicopters, as well as being involved in the “logistics and financing of the legal supply of arms, weapons and food to the official Angolan army”.

The court also heard lengthy exchanges between Justin Fenwick QC, for Leviev, and Gaydamak over why the claimant felt compelled to hide his shareholding in Ascorp when he was “openly involved with Mr Leviev in 2000”. Gaydamak claimed his legal troubles in France meant he was protecting Leviev, although the businessman was not forced to leave France until the end of 2000 when Ascorp had already been established.

The case continues.

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