Halifax billionaire John Risley suing Saudi businessman over alleged $15M fraud

Halifax billionaire John Risley is back in court, this time over allegations a Saudi businessman swindled his company out of 10 million euros about $15 million Cdn.

In a lawsuit, CFFI Ventures Inc. a holding company headed by Risley, the co-founder of Clearwater Fine Foods Inc. claims Issam Alzahed committed "fraudulent misrepresentation" and "conspiracy."

Court documents allege the Saudi national, who is also a Canadian citizen and has a large home in a tonysuburb of Halifax now listed for sale, positioned himself as a person of "great wealth and vast international business experience and influence."

When Risley met Alzahed

Risley, one of Canada's richest people and a leading philanthropist, was introduced to Alzahed in January 2017, according to the documents filed in Nova Scotia Supreme Court.

Later that year, court filings claim Alzahed propositioned CFFI Ventures through Risley with an investment opportunity.

The alleged scheme involved an Austrian corporation known as TDE Group, which Alzahed claimed he purchased 50 per cent of for 60 million euros through a company he controlled within the Alzahid Group a firm with extensive operations in oil and gas, construction and technology, of which he claimed to be a "principal and controlling mind."

Court documents allege Alzahed proposed CFFI acquire half his shares in the Austrian firm for a total stake of 25 per cent and after a site visit to the corporation's headquarters, the Nova Scotia company agreed.

In December 2017, court documents say a share purchase agreement between CFFI and Alzahed was signed, with the payment of 30 million euros to be paid in two tranchesat later dates to be mutually agreed upon.

However, after signing the documents Alzahed informed Risley he had only paid half of the 60 million euros required for the 50 per cent stake in the TDE Group shares and that funds from CFFI were "urgently required," documents allege.

In response to the Saudi businessman's "vigorous pushing," CFFI paid five million euros to Alzahed through an entity of the Alzahid Group in January, with another five million euros paid in March, court filings claim.

Suspicion grows

But Alzahed's "style and nature of conducting business negotiations generally" prompted CFFI to develop concerns, and suspect the man's wealth and international business influence had been misrepresented, the filings claim.

"CFFI initiated extensive international inquiries into Mr. Alzahed and the Alzahid Group, the results of which caused CFFI's concerns to increase significantly," court documents say.

The company refused to transfer further funds, and Alzahed allegedly later admitted that he had never purchased or owned any shares in TDE Group despite offering to sell shares to CFFI, the documents say.

CFFI is claiming that Alzahed's business proposition was "knowingly fraudulent, false and misleading" and is seeking to recoup the 10 million euros paid.

The allegations have not been tested in court and Alzahed has not yet filed a statement of defence.

Alzahed has claimed the money is being held in a "trust account" owned by the Alzahid Group, and refuses to return the funds, court filings say.

An affidavit filed in court by John Livingstone, a resident of Abu Dhabi, United Arab Emirates, claims that Alzahed was issued a residency card for the country in August, has purchased a home and registered a vehicle.

"Mr. Alzahed has permanently taken up residence in the UAE," the affidavit says.

A motion to set a date for a hearing in the case is expected to be discussed Dec. 20.

Another court battle

Earlier this year, Risley was in small claims court over a much smaller amount a $3,000 claim from a tradesman.

Risley had been sued by Ralph Gordon Spares, a contractor doing renovations on Risley's home in south-end Halifax.

Spares sued Risley for damage to his 1994 Toyota Celica, after a piece of wood from an outdoor garden structure fell on it in June 2017.

Risley, who represented himself at an August hearing, argued he shouldn't be held 100 per cent responsible for the damage, and questioned whether it made sense to fix a car with a resale value of no more than $5,000.

Risley was ordered to pay $2,572.20.

Risley is ranked 88th among Canada's richest people, according to Canadian Business magazine. In September 2016, he gave $25 million to Halifax's Ocean Frontier Institute.