Law firm denies £5m from Stirling Mortimer fund misappropriated

02 August 2010

Law firm ELS International has denied that £5 million it held on behalf of the Stirling Mortimer Global Property fund has been misappropriated. ELS International said it had launched the investigation into claims by Stirling Mortimer to the Channel Islands Stock Exchange (CISX) earlier this month that ELS had ‘admitted’ €5.9 million it held on behalf of the fund had been ‘misappropriated’. ‘ELS have never admitted whether the funds have been misappropriated and it is currently not our position that they have been misappropriated,' the firm said in a statement. ‘We are carrying out an investigation as to the statement made by Stirling Mortimer to ascertain the instructions given by Stirling Mortimer with regards to these funds and whether the funds were used correctly,' it said. ‘No claim has been served on ELS in relation to this nor have we received a letter before claim indicating that an action may be brought.’ Stirling told CISX earlier this month that it had deposited €12.8 million with ELS in order to purchase 167 right to purchase contracts. It said ELS made a payment of €6.9m to the notary public in Morocco in January last year, but that the balance remained outstanding. Stirling said it was continuing to investigate where the missing money had gone. ‘Stirling Mortimer is continuing to urgently investigate the status of fund monies held on client account by ELS,' it said in a statement. ‘To date, ELS has confirmed that €5.9m it was holding on behalf of Stirling Mortimer is no longer in its possession. Stirling Mortimer does not currently know where those monies are now held and is investigating the underlying transactions as a matter of urgency,' it added. The Global fund is already locked in a legal dispute with ELS, as well as with separate firm European Legal Solutions S.L. and the firm's former partner Joe Ezaz, over €11 million which went missing from cells four and five within the Global Property fund. Published by CityWire