The company was linked indirectly to ongoing scandals in Eastern Europe, Germany and the UK.
LONDON—Duet Private Equity is in insolvency over a lost arbitration claim against Starbridge Development Holdings, a Seychelles company whose beneficial owner was not disclosed, according to public data filed with Companies House and people involved in the proceedings.
A liquidator was appointed on August 26, after Duet lost a claim for compensation to the tune of around €2.6 million. The initial court filing to demand insolvency was made in March.
Duet, meanwhile, has invested in several controversial deals in Eastern Europe and has been connected by authorities and media reports with several high-profile financial scandals in recent years. However, there is no indication that either Duet or its principals have broken the law.
After notorious Latvian ABLV bank was sanctioned by the United States in 2018 for large-scale money laundering related to North Korea and Russian organised crime and security services, the firm was put into voluntary liquidation in the same year by authorities in Riga. ABLV executives were charged in Latvia in July for laundering some €2.1 billion but the amount of money passing through the bank was much higher.
Duet Private Equity announced it had bought ABLV’s unit in Luxembourg in January 2019, through which the bank had conducted capital markets activity on behalf of its clients. The deal was said to have collapsed by June.
Two months later, Duet purchased two profitable Moldovan utility firms, Red Union Fenosa, and Gas Natural Fenosa, for €141 million, according to a company announcement.
At the time, one of Moldova’s most powerful oligarchs, Vladimir Plahotniuc, was still in charge of the government of the country through his Democratic Party. He had been linked by investigations and media reports to ABLV through his use of offshore accounts to conduct allegedly corrupt deals in Moldova. Plahontiuc is now under US sanctions for alleged corruption and is sought for arrest by Moldovan authorities. He left the country in the summer of 2019 after his party lost the election. There is no indication of a direct link between Duet’s interest in ABLV and its investment in Moldova’s Fenosa.
Moldovan investigators are understood to be in discussions with Latvian counterparts over ABLV’s role in multiple financial scandals involving Chișinău.
Reporter has learned from one person briefed on the matter that Latvian officials investigating the carcass of ABLV are also taking an interest in Duet’s bankruptcy.
Media reports linked Duet principal Henry Gabay to the German cum-ex tax fraud scandal, for which he was reportedly detained and released without charge by German authorities in 2020. Speaking to journalists at the time, Gabay maintained his innocence and said he offered his full cooperation with the investigators. Separately, Duet was allegedly connected to controversial businessman Lars Windhorst, who used a Duet subsidiary, Merit Capital, to conduct bond trades. The director of Duet, Henry Gabay, did not respond to a request for comment sent by Reporter on LinkedIn and to his lawyer.
Merit Capital is also in bankruptcy proceedings in Belgium, amid around seven different ongoing legal proceedings into its activity, at least one of which regards alleged criminal activity, according to media reports. The Belgian regulator took away Merit’s license earlier this year, De Tijd reported.
Guy Harper, a lawyer with Stephenson Harwood LLP, the law firm that represented the claimants against Duet in the successful insolvency application, told Reporter over email that “Our client seeks to recover EUR2.65m plus costs pursuant to an arbitration Award. The underlying claims are confidential and I cannot disclose more unfortunately.” Harper declined to name the ultimate beneficiary of Starbridge when asked by Reporter.
Duet was also hit with a compensation order of £20,718 in March by a UK employment tribunal in a claim brought by a former worker. The judgment published by the UK government said Duet was unrepresented in the tribunal.
The website of Duet Group was still operational in June, according to the Internet archive, but has since been taken offline.
(Thanks to J.W. who was kind enough to help edit this article.)