The Daily Mail has reported that former Dragon’s Den star Duncan Bannatyne deliberately undervalued his company by £10 million before his 2012 divorce.
He allegedly did this by attempting to embroil his ex-CEO in a dishonest scheme to reduce the company’s value, so he would have to pay his wife less in their bitter divorce.
The twice married entrepreneur, currently in the Australian outback as part of ITV’s I’m a Celebrity Get Me Out of Here is accused of dishonesty and illegality in a civil action brought by his ex-CEO, who was dismissed from the company in 2014.
Bannatyne has been accused of setting up offshore companies and bank accounts in Monaco and the British Virgin Islands. He is under suspicion for backdating company documents as well as illegally forging company board minutes. In addition to this, it has been suggested that he was using company money to “reward” associates for helping him to move large quantities of cash for his benefit during the divorce proceedings.
The allegations against Bannatyne come just a month after the landmark Supreme Court judgments in the cases of Sharland and Gohil. These redefined the law and clarified the procedure in cases where one party on divorce alleges that the other has been dishonest in their financial disclosure. It is now more difficult than it has ever been to conceal or hide assets on purpose in order to reduce the other spouse’s claim for financial remedy.
In the case of Sharland, it was discovered that Mr Sharland had misled his wife and the court as to the value of his shareholding in his IT company. In the original settlement he retained the majority of the IT company. Mrs Sharland was then successful in overturning the original settlement.
In the case of Gohil, Mr Gohil had disclosed to the court during his divorce in 2004 that he had only a modest income and no assets. In 2006, Mrs Gohil began a lengthy battle to overturn the original settlement and provided evidence of how her husband had moved money around the world for his own benefit. Mrs Gohil was successful and the financial order upon divorce was set aside.
It is understood Bannatyne will face a police investigation when he returns from Australia. Could he now also face an application to the Family Court by his ex-wife to set aside their financial order upon their divorce, on the basis of his non-disclosure?
Georgina Chase is a family law solicitor at Slater and Gordon Lawyers in Manchester.