Republic of Djibouti Seeks to Recover Funds from Former Official for Abuses in Office

LONDON & DJIBOUTI--(BUSINESS WIRE)--The Republic of Djibouti has filed a civil lawsuit in the Commercial Court in London against Abdourahman Boreh, a Djiboutian businessman who served as Chairman of the Djibouti Port and Free Zone Authority (DPFZA) from 2003 to 2008. Djibouti seeks to recover tens of millions of dollars in losses that it sustained as a result of Mr. Boreh’s wrongful misuse of his public authority to benefit himself and his companies during his time as a public official.

To develop the country’s port facilities, the Government of Djibouti created the DPFZA in 2003 to oversee and supervise all port facilities and appointed Mr. Boreh as Chairman of the DPFZA Board. During his time as Chairman, Mr. Boreh obtained significant and valuable shareholdings in several of the new projects; awarded construction, security, and other service contracts on these projects to companies he owned; and demanded commissions from other individuals and companies involved in the projects.

The Government of Djibouti learned of Mr. Boreh’s wrongful use of his public position to benefit his own commercial interests after he left the country in 2008 to avoid his significant tax liabilities. He was subsequently convicted in Djibouti of tax evasion, fraudulent insolvency, and related criminal offenses.

In October 2012, through its lawyers at Gibson, Dunn & Crutcher LLP, Djibouti filed suit in the London Commercial Court against Mr. Boreh, who is now a resident of London’s Belgravia district. In the claim, Djibouti identified the numerous examples of Mr. Boreh’s wrongful misuse of his public position to obtain commissions, contracts, and significant shareholdings for himself and his companies.

The Government is seeking restitution of the profits that Mr. Boreh unlawfully obtained as well as damages and compensation for losses suffered. To assist in its recovery efforts, the Djbouti Government has also taken steps to identify the proceeds that Mr. Boreh unlawfully obtained and transferred abroad.

In Mr. Boreh’s written legal response, he argues that he was entitled to pursue his own commercial gain in connection with those projects because his position as Chairman of the DPFZA did not constitute a public position. As the Government demonstrated in its submissions, however, that claim has no legal or factual basis. Mr. Boreh also sought to dispute the tax assessments imposed against himself and his companies, despite having unsuccessfully litigated those claims to the Djibouti Supreme Court.

On February 25, 2013, Gibson Dunn, on behalf of Djibouti, submitted an application to the Court to strike out Mr. Boreh’s counterclaim in which he alleged that the London action is part of a politically motivated campaign against him as an “opposition candidate,” noting Mr. Boreh had no prior involvement in Djiboutian politics and was unaffiliated with the opposition to President Ismail Omar Guelleh when Mr. Boreh left the country in order to avoid his and his companies’ tax liabilities. A hearing is expected to be scheduled on that application in the coming months.

According to Djibouti’s Inspecteur Général d’Etat, Mr. Hassan Issa Sultan, “We believe Mr. Boreh has taken millions of dollars from the Djibouti projects and hidden them in countries all over the world and in offshore banks and shell companies. He was already a businessman in Djibouti, and we have difficulty understanding why he had to take this from our people when they already have so little.”

The Republic of Djibouti is represented by a team led by Philip Rocher and Peter Gray, disputes partners in Gibson Dunn’s London and Dubai offices.

Copies of the February application are available on request. Please contact Pearl Piatt at [e-mail] or +1 213.229.7963.