InvestigationNews

Paradise Papers: Secret battle for the control of Nelson Mandela’s offshore trust revealed

167

[dropcap]D[/dropcap]etails about an offshore trust linked to former South African president Nelson Mandela have emerged from the Paradise Papers, a trove of financial records from the offshore law firm Appleby.

The MAD Trust, believed to short for Mandela’s clan name, Madiba, was set up in 1995 in the Isle of Man, a British dependency in the Irish Sea. The previous year, the anti-apartheid revolutionary Mandela became South Africa’s first post-apartheid president.

 

The trust existed in near-total secrecy until 2015,  more than one year after Mandela’s death, when lawyers representing his estate contacted Appleby to try to wrest control of its million-dollar bank accounts.  A summary of the case contained within an Appleby spreadsheet from the Paradise Papers labeled the case “HIGHLY CONFIDENTIAL.”

On one side, Mandela’s estate argued that the trust and money it held belonged to the former president. On the other, Mandela’s one-time friend, lawyer and MAD Trust administrator said the money was for charity, not Mandela.

The lawsuit underscores the shadowy ownership rules of offshore trusts, popular entities often used to manage personal wealth or hide money from creditors, former spouses or courts.

In 2015, lawyers for Mandela’s estate filed a lawsuit in South Africa against the late president’s estranged former lawyer, Ismail Ayob, to force the money’s return.

Ayob created the MAD Trust without Mandela’s consent, lawyers argued, and its bank accounts – which at one point held $2.1 million – belonged to Mandela.

“The money held in the MAD Trust accounts is the personal money of the late Mr Mandela and is not owned by the trustees of the MAD Trust, if indeed such a trust exists,” lawyers for Mandela’s estate argued, according to court documents obtained by ICIJ’s South African media partners, the Financial Mail and amaBhungane Centre for Investigative Journalism.

Ayob, the signatory of the MAD Trust, testified that he created the trust at Mandela’s request to receive personal donations.

Money came from foreign beneficiaries, Ayob said in his court affidavit, “invariably in large currency amounts” via check or bank drafts made out in Mandela’s name.

Mandela “wanted the trust created so that he could give away money to people abroad, who’d been ‘good’ or needed it — he was always very generous,” Ayob told ICIJ media partner The Financial Mail in an interview.

Part of the money in the MAD Trust went to the widow of Erich Honecker, the last president of East Germany,  Ayob told The Financial Mail.

“At the time, she was really struggling, as she had no pension,” Ayob told The Financial Mail. “So Mandela said he’d like to assist her,” he said.

“Mr Mandela, as a trained lawyer, was perfectly familiar with the concept of a trust,” Ayob wrote in a court affidavit. “In fact, I formed some thirty trusts on his instructions.”

Lawyers for Mandela’s estate countered that Ayob’s version of events was largely “fact-free” and unreliable.

“His assertion that he established the MAD Trust at the request of Mr Mandela is a good example,” the estate’s lawyer said in an affidavit. “Where? When? How, and why did Mr Mandela give the instruction? Why did he open the account before the trust deed was signed? Why was the trust never registered?”

The estate’s lawyer also argued that Ayob, with whom Mandela had a public falling out, should no longer have been involved with the trust since Mandela had demanded he quit all his trusteeships in 2004.

In June 2015, Appleby, hired by the estate to give an opinion of the trust’s legitimacy, concluded that the MAD Trust was too broadly defined and did not identify any concrete beneficiaries of the money. The trust was not exclusively a charitable trust, Appleby wrote, because documents declared that the trust’s assets could be used for any company or organization.  As a result, Appleby concluded, the MAD Trust “does not exist and has never existed.”

In November 2015, a South African court held that Mandela’s estate owned the MAD Trust’s three bank accounts and that Ayob had no authority over them.

The funds, which had grown to more than $1.2 million, were transferred to the estate.

Micah Reddy, a reporter with ICIJ’s South African partner amaBhungane, contributed to this story.

Leave a comment

Related Articles

Niger’s ousted president is being denied food and electricity, says European Union

The European Union Friday said it had “deep concern” about the treatment...

Just in: Guinea-Bissau President, Embaló, Visits Tinubu In Lagos

The President of Guinea-Bissau, Umaro Sissoco Embaló, on Saturday paid a visit...

Max Air Acquires 16 Year Old Boeing 777-200

Kano based Max Air Limited has taken delivery of its first Boeing...

Hours after Reps cleared NNPCL, Kyari, of complicity in stolen crude, U.S. court to sentence, Ann Ramirez, wife of fraudster in crude saga

Barely 30 hours after Nigeria’s House of Representatives cleared the Nigerian National...

Fuel Subsidy: Need for Labour to tread softly, Softly 

The Labour Movement in Nigeria is up in arms against the Federal...

Between the dialectics and the benefits of petroleum subsidy removal

By Paul Njowusi For many years, successive administrations in Nigeria had embraced...

Inside Mele Kyari’s Gas Credentials

By Femi Soneye In March 2021 a few months before the Petroleum...

Details of how convicted wire fraudster, Bidemi Rufai, was receiving $50,000 per transaction from Ogun Gov. Abiodun –U.S.

United States of America’s comprehensive court documents have disclosed how Ogun Gov....

Nigeria, US Military Officers Confer on Techniques for Protecting Civilians

Through these engagements, the U.S. and Nigeria aim to further develop the...

Just in: Accountant-General’s probe: EFCC reveals another stolen N90bn

As the the Economic and Financial Crimes Commission (EFCC) continues investigation into...

2023: Ex-Zamfara Gov. Yari, Sen. Mafara quit APC, join PDP

Amid intractable crisis in Zamfara APC, two chieftains of the party in...

Scandal! Sterling Bank, MD of Eatrich Farms defraud 40 staff of N88m spurious loans

A smudge of fraud has hit Sterling Bank as the founder of...

Controversial ASUU payment platform, UTAS, faces another integrity test — Ngige

  Labour and Employment Minister, Dr Chris Ngige, said on Tuesday that...

Former mayor of Kabul becomes refugee in US after fleeing Taliban

Former Kabul mayor Fazal Karim Aimaq had seen more than his share...

Former DPR boss, Auwalu, busted for multi-million dollar fraud, returns huge sums of money

  Following an audit team’s report exposing fraud, bookkeeping deficiencies, and abuse...

Lagos Govt. releases White Paper on #EndSARS Panel report

  Living up to its billing, the Lagos State Government says it...

CTN multi-billion dollar contract scandal: Amaechi, hoodwinks Buhari, at daggers drawn with NSA, Chief of Staff, BPP – Persecondnews investigation

In perpetrating the “AmaechiGate”, the minister spurns National Security Adviser’s invite for...