UK prosecutors have thrown out a request from United Arab Emirates authorities to extradite Oaktree Capital Management senior vice president Martin Graham, after he was accused of stealing $264m of a $644m arbitration award, PDI sister title Private Funds Management has reported.
On Tuesday, the Crown Prosecution Service at Westminster Magistrates’ Court determined that there was an insufficient case against Graham, who has worked at the distressed debt investor for almost 10 years, leading to the extradition proceedings being discontinued.
Oaktree, which supported Graham’s innocence throughout the case, said the British prosecutors’ decision affirms what they have always known: “that Martin acted entirely appropriately and professionally throughout the GOME restructuring.”
“We’re pleased to see the record set straight and this injustice begin to be remedied,” John Frank, vice chairman of Oaktree said in a statement.
The theft allegations resulted from a disagreement between Oaktree and a former employee of Gulmar Group, a construction company in which Oaktree once held a majority stake, as previously reported by pfm.
The employee, Jean-Michel Tissier, said Graham acted on behalf of Oaktree and stole a portion of the arbitration awarded to Gulmar subsidiary Gulmar Offshore Middle East (GOME). This compensation was awarded to GOME after a Venezuelan state oil company illegally seized assets owned by Gulmar.
Gulmar Group and GOME are in administration, a process being conducted by AlixPartners. The administrator previously commissioned a third-party law firm to conduct a confidential investigation, which determined that no wrongdoing was committed by Graham.
“In our role as administrators to GOME, AlixPartners commissioned an independent, third-party law firm to conduct an investigation into the settlement of the GOME arbitration proceedings. While the contents of that report are a matter of commercial confidentiality we can confirm that in its preparation no wrongdoing was identified on the part of Mr. Graham either personally or in his capacity as a director of GOME,” AlixPartners previously said in a statement.
The UAE sentenced Graham to three years in prison without his appearance, known as ‘in abstentia’ in legal terms. The investment house said he received no prior notice of the charges and did not have the chance to defend himself.
Graham first appeared in the Westminster Magistrates’ Court on 21 June after British authorities arrested him at the request of UAE officials, as previously reported by pfm.