The case in question centres upon the high-profile divorce case of Michael and Yasmin Prest and has been described by one of the appeal judges as “truly extraordinary”. Mr Prest, a Nigerian born oil tycoon based in Britain and founder of energy company Petrodel resources, separated from his wife of 15 years. In the subsequent divorce proceedings in the High Court, he sought to argue that Petrodel’s assets did not belong to him but were held on trust for his birth family because his father had provided the initial capital, or seed money, subject to that trust.
His evidence was found to be “deceitful and shambolic” and such manoeuvres were trenchantly dismissed. Mr Justice Moylan at first instance concluded that the whole structure was for Mr Prest’s benefit alone and in his control and he was able to change the structure and distribute the wealth within it as he wished; “Petrodel is Mr Prest and Mr Prest is Petrodel”. Drawing adverse inferences against Mr Prest, the judge concluded that he was worth £37.5 million and awarded his wife £17.5 million.
Relying upon the powers conferred by s.24(1)(a) Matrimonial Causes Act 1973 which provides for the transfer or settlement property by one spouse to another to which the spouse is “entitled either in possession or reversion”, Mr Justice Moylan concluded that the “corporate structure was used as a repository for the family wealth” and therefore there existed “no legal impediment to his procuring the transfer of assets held by the companies in his name” as they were his “alter ego”.
A fundamental principle of company law confers a separate legal personality upon a corporate structure and considers its assets to belong beneficially to the company itself and not its shareholders…
