Oaktree exec arrested in London

An Oaktree Capital Management official could be extradited from London to the United Arab Emirates on allegations of stealing $264 million of a $644 million arbitration award, multiple mediaoutlets have reported.

Martin Graham, a senior vice president who joined the distressed investing giant in 2007, appeared in the Westminster Magistrates’ Court on 21 June after British authorities arrested him at the request of UAE officials, press reports showed. The British court will not consider the theft allegations but rather whether Graham can be extradited. He was reportedly released on conditional bail and denied any misconduct.

Oaktree said in a statement the claims were “meritless” and that Graham “intends to resist extradition through the legal process.” The UAE has already convicted him to three years in prison without his appearance, known as ‘in abstentia’ in legal jargon. The investment house said Graham did not have the chance to defend himself.

The firm said his possible extradition would be decided under the auspices of the 2003 Extradition Act and the UK-UAE 2006 Extradition Treaty. The theft allegations arose from a disagreement between Oaktree and a former employee of Gulmar Group, a construction company in which Oaktree once held a majority stake.

That employee, Jean-Michel Tissier, asserted Graham acted on behalf of Oaktree and stole a portion of the arbitration award to Gulmar subsidiary Gulmar Offshore Middle East, news reports showed. GOME won the award after a Venezuelan state oil company illegally seized assets owned by Gulmar.

Gulmar Group and GOME are in administration, a process being conducted by AlixPartners. The New York-based business consulting firm did not return a request for comment but did tell The Financial Times that a third-party law firm conducted a confidential investigation. The inquiry did not find any wrongdoing by Graham, who appeared to be a GOME director at one point.