Nige­rian’s US condo un­der the ham­mer

The Star Early Edition - - BUSINESS REPORT | INTERNATIONAL - Oshrat Carmiel

THE OWNER of a $50.9 mil­lion (R661m) Man­hat­tan condo that is sched­uled to be sold at a fore­clo­sure auc­tion next month is Ko­la­wole “Kola” Aluko, a Nige­rian busi­ness­man ac­cused in court fil­ings of de­fraud­ing that coun­try’s gov­ern­ment.

Nige­rian of­fi­cials have at­tempted to freeze Aluko’s as­sets, in­clud­ing a full-floor pent­house at Mid­town’s One57 sky­scraper, as part of a wider in­ves­ti­ga­tion. Aluko and oth­ers are ac­cused of pock­et­ing $1.8 bil­lion meant for gov­ern­ment cof­fers and spend­ing it on lux­ury goods around the globe, court fil­ings in that coun­try show.

Fore­clo­sure pro­ceed­ings were started in Jan­uary on Aluko’s apart­ment on the 79th story of One57, which would be the costli­est ever res­i­den­tial seizure in New York City. The 580m² condo was bought in 2014 by a shell com­pany listed in New York City pub­lic records as One57 79 In­cor­po­rated, whose sole share­holder is Earn­shaw As­so­ciates. Earn­shaw was set up by Aluko in the Bri­tish Vir­gin Is­lands, ac­cord­ing to the Panama Pa­pers, a trove of doc­u­ments leaked in 2016 to ex­pose off­shore tax eva­sion, which cite him as a share­holder and ben­e­fi­ciary.

Forc­ing sale

In Septem­ber 2015, Earn­shaw took out a $35.3m mort­gage from lender Banque Hav­il­land, based in Lux­em­bourg, ac­cord­ing to New York City pub­lic records. The full pay­ment of the loan was due one year later, fore­clo­sure fil­ings in New York State Supreme Court show. The bor­rower failed to re­pay, and now Banque Hav­il­land is forc­ing a sale to re­coup the funds, plus in­ter­est.

The New York Post on Mon­day night iden­ti­fied Aluko as the condo’s owner.

An auc­tion is sched­uled for July 19. It’s the sec­ond time in about a month that a lender filed to seize prop­erty at One57 af­ter a mort­gage de­fault. The tower, on a Mid­town strip known as Bil­lion­aires’ Row for its sky-high condo prices, still holds the record for the most-ex­pen­sive res­i­den­tial sale in New York, at $100.5m.

Nige­ria’s Fed­eral High Court last year is­sued a world­wide freeze on as­sets tied to Aluko, in­clud­ing lux­ury homes in New York, Los An­ge­les and London, three pri­vate jets, 58 cars and a yacht named the Galac­tica Star, the court fil­ings show. Aluko re­ceived oil-ex­trac­tion con­tracts from the Nige­rian gov­ern­ment, and failed to share a por­tion of the oil-sale pro­ceeds.

For Banque Hav­il­land, the money it lent Aluko for his One57 apart­ment ac­counted for the equiv­a­lent of more than 6 per­cent of its loan port­fo­lio at the end of 2015. The bank said its loans then to­talled €388.9m. The mort­gage on the One57 unit was for as much as €25m, ac­cord­ing to New York City pub­lic records. – Bloomberg

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