When a wealthy financier called Richard Fagan emerged from obscurity to become the sponsor and captain of the Irish polo team, sporting success seemed to follow his apparent success in business.
In 2014 the team won the European silver medal at the Federation of International Polo tournament in Normandy, France. At an awards ceremony the following Christmas, Horse Sport Ireland marked the achievement by presenting Fagan with an Irish bog oak sculpture.
Fagan, who ran a large investment fund, was an ambitious rider who spoke of taking the polo team to the Olympics. A tall and dashing figure of athletic build, he seemed to fit the part for an expensive game played on horseback with mallets.
But storm clouds were gathering. As financial regulators moved to tackle a vast fraud in his business, Fagan dropped out of the Irish polo scene.
“It didn’t last very long,” said one senior figure in the sport who knew him but never suspected anything shady.
The Kijani Funds run by Fagan came to the attention of investigators in early 2015 after claims they were involved in a Ponzi scheme, a form of financial fraud that pays existing investors with funds collected from new investors.
Within months Cayman Islands supervisors took control of the business, whose roots were in Gibraltar. Ten long years of legal wrangling finally reached a conclusion last month when Gibraltar’s top court ordered Fagan to repay £61.98 million (€73.77 million) over “fraudulent acts” and insolvent trading.
“I have found that Mr Fagan was misfeasant and in fraudulent breach of his fiduciary duties,” said the ruling by Liam Yeats, judge of the Gibraltar supreme court.
A lawyer for liquidators argued the fund’s demise “was a case of fraud” and “not a case of bad business”, Yeats noted.
“In light of the evidence which has been presented by the liquidators, I can only but conclude that he was correct.”
The judgment cited a damning legal statement by Edgar Lavarello, a Gibraltar partner with accountants PricewaterhouseCoopers who was joint liquidator of Kijani Resources Ltd (KRL) and another Fagan venture called Ratio Ltd. These companies were established in the British territory in September 2010.
In Lavarello’s analysis, the total paid for Fagan’s personal benefit was £30.33 million from KRL and £3.88 million from Ratio. These were huge sums.
Assets recovered after the liquidation included the motor yacht Ratio, which was valued on Ratio’s books at £2.92 million but realised only £344,374 when recovered in Morocco
The liquidator said “fraudulent investments” by Kijani “added to the illusion of a healthy fund, making substantial returns on its investments” that further enabled it to attract new investors.
He went on to say Fagan and certain associates “would utilise the funds paid by Kijani Funds to KRL into companies controlled by them for their personal purposes with no or no adequate benefit to KRL and thus the investors of the Kijani Funds”.
Many companies in the fraudulent scheme had similar names “to add difficulty to any investigation and tracing of assets”, the judge found.
Assets recovered after the liquidation included the motor yacht Ratio, which was valued on Ratio’s books at £2.92 million but realised only £344,374 when recovered in Morocco. A second yacht was recovered in Estepona, Spain.
“The expenses of the captain and crew of the yachts were also paid out of Ratio’s funds. There were at least six crew members, according to Mr Lavarello,” the ruling said, adding that such expenditure drove Ratio into insolvency.
These days Fagan is based in Dubai. He did not turn up for the November trial of the civil case, sending an email three minutes before the hearing began claiming he was struck by illness 10 days previously and could not attend. He claimed medical advice against travel because he was at risk of “significant and permanent cognitive damage” but the judge refused his request to adjourn the proceedings.
Lawyers based in London, Gibraltar and Dubai who have acted for Fagan did not reply when The Irish Times sought his comment.
Polo, the oldest equestrian sport, is often associated with the high-born. Britain’s King Charles III is the world’s best-known aficionado. The current Irish team captain is Richard de la poer Beresford , the earl of Tyrone with a seat at Curraghmore Estate in Co Waterford.
Born in Britain but with Irish family links, Fagan’s origins were far from all that. His career started in the family motor-repair business. Along the way, he took up polo.
He is said to have started working in investment funds around 2007 in Gibraltar. The territory on the southern tip of the Iberian Peninsula is located by the narrow strait between the Atlantic and the Mediterranean that separates Europe from Africa.
Ruled by Britain since 1713 but subject to a territorial claim by Spain, Gibraltar is a financial centre. There are no taxes on capital gains or dividend income from other companies and no foreign exchange controls. For people intent on making money, the advantages are obvious.
It was there that Fagan seemed to build up a big international business selling investments in gold, oil, olive oil, timber and fish farms to wealthy individuals. At one critical point he claimed KRL assets worth $207 million (€189.8 million). The judge ruled such figures were “grossly overstated and false”.
But Fagan still lived a life of horses, boats, luxury goods, entertainment, holidays and financial transactions counted in the millions. As a result, the rider who saddled up for Ireland around 2014 seemed to have all the trappings of money and success.
Of the $207 million in assets claimed by Fagan in KRL’s statement of affairs, the liquidators realised little more than $1 million
Despite the aura of wealth and glamour associated with the sport, the running of the national team was informal. Although the exact circumstances of Fagan’s arrival remain unclear, one polo figure said he approached him in South Africa with questions about the status of the Irish team. Fagan’s captaincy flowed from such conversations – and money was not a problem when it came to sponsorship.
International polo is an ad hoc affair, said Kim Mullahey, a photojournalist who knows the sport well and speaks for the All Ireland Polo Club at Phoenix Park, Dublin.
“Teams playing abroad are known as teams playing for Ireland, nothing more or less,” she said.
These teams of four riders usually come together under the leadership of a patron or sponsor who bears some expenses for travel, accommodation and other costs.
“It’s all organised among themselves,” Mullahey said, adding that “the days of full patronage” from the captain for all costs are long gone.
“Teams are organised by one person who would then be the patron of the team who then selects the players they want on their team. That’s always the way for international tournaments.”
There is no Government funding for Irish polo. The sport in this State is governed by the Hurlingham Polo Association (HPA) in Oxfordshire, England. The HPA referred queries about Fagan’s role in the Irish team to the Phoenix Park club, which was established in 1873 and is Europe’s oldest.
“Richard Fagan was never a member of the All Ireland Polo Club and we were not involved with the international team in any way,” said David Stone, club polo manager, in reply to questions.
Polo people who knew Fagan were reluctant to talk openly about him. Although some who met Fagan found him “very affable” personally, he did not have the reputation of an outstanding player.
“He was fine,” one rider said. “He wasn’t at the higher level but he was competent.”
Another rider said Fagan was an “okay player” but acknowledged he was still a good horseman: “I wondered if he had a hunting background.”
Still, team success under Fagan led to public plaudits.
“The award presented to him in 2014 was on behalf of the Irish polo team,” said Horse Sport Ireland, the State-backed national body for equestrian competitions.
“It is our understanding that Mr Fagan at that time had provided sponsorship to the team and the sculpture was in recognition of this.”
The garlands came to an abrupt halt as Fagan’s empire collapsed around him the very next year, surprising people in Irish polo circles who had no reason to believe there was anything suspicious.
But plenty was wrong. Of the $207 million in assets claimed by Fagan in KRL’s statement of affairs, the liquidators realised little more than $1 million.
Lavarello, the joint liquidator of Fagan’s KRL, did not reply to a request for comment but his statement was unambiguous: “From our investigations ... it is now clear to the [liquidators] that KRL was not a genuine investment entity but a mechanism to dissipate Kijani Funds investors’ monies through multiple layers of related entities with little or no real substance.”
The judge agreed: “Having considered the evidence presented by the liquidators, I conclude that this is the only reasonable inference that can be drawn.”
Ratio’s money included a sum of some £7 million, most of which was “likely directly and indirectly derived from the Kijani Funds”. Over two years and eight months between 2012 and 2015, some £2.34 million of that money was paid out to “directors, family and related companies” and £1.71 million was spent on entertainment and travel expenses.
“The remaining £2 million was paid in legal fees, rent, salaries and office overheads as part of the elaborate fraud and deception they were portraying to the outside world of being a genuine investment business,” the liquidator’s statement said.
All told, the judge found the only reasonable inference to be drawn was that the business of KRL and Ratio was carried on with intent to defraud creditors or for a fraudulent purpose – and that Fagan was a knowing party to it.
“The evidence shows that large sums of monies were paid out to companies owned, controlled or related to Mr Fagan. The monies were dissipated with only a small proportion of these being applied towards the purchase of assets or investments,” he said.
“I am satisfied that Mr Fagan breached his duties to KRL by causing or permitting the stating of asset values for KRL’s purported assets which were grossly overstated. This misled investors into believing that their investments were safe and increasing in value, when in reality the monies were being dissipated.”
The swashbuckling horseman is down. Out of business and out of favour, the prospect of Fagan making a comeback in Irish polo seems remote.
