Norwich firm caught up in alleged multi-million-pound fraud in US
PUBLISHED: 13:54 20 December 2019 | UPDATED: 09:07 21 December 2019
This small Norwich office is home to a firm accused of being part of an alleged international fraud which saw millions of pounds wiped off the value of a chain of burger restaurants, court documents allege.
US fast food firm FAT Brands, which owns the Fatburger franchise and 400 restaurants across the world, is accusing a company registered on Prince of Wales Road of being involved in a "criminal scheme" - something the company and its directors deny.
The company, SJ Global Investments Worldwide Limited, along with two of its directors and owners, Kristina Fields and Neil Walsh, are named by FAT Brands in a lawsuit filed in a New York district court.
Eight other companies and individuals are also named in the lawsuit as defendants.
In response, SJ Global and its directors denied all allegations against them and said they would be vindicated when the truth emerged during the court case.
Problems began when FAT Brands tried to raise $100m in financing in 2018.
FAT Brands claims that the new finance should have saved the company millions of pounds in interest rate payments and helped them buy two other firms.
The company alleges it used a businessman, named in the court documents as Karl Douglas from a New York company called PPMT Capital, to find an investor. PPMT and Mr Douglas are also defendants in the case.
The court documents allege Mr Douglas presented himself to FAT Brands as a "reputable and established dealmaker".
FAT Brands claim that in August 2018 Mr Douglas told them the Qatari Royals would provide funding for the deal.
But despite repeated promises the money never arrived and in January 2019 Mr Douglas is alleged to have told FAT Brands that SJ Global Investments would provide the money instead.
On January 27, 2019, FAT Brand's chief executive, Andrew Wiederhorn, met Mr Douglas and representatives of SJ Global in Zurich, the court documents state.
The complaint alleges that after the Zurich meeting, SJ Global sent a screenshot of $19 billion in bonds as proof of its funds.
But FAT Brands claim it later emerged that these bonds were fake.
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SJ Global Investments Worldwide's latest accounts shows it has around £4m in assets.
"Ultimately, the PPMT Defendants' lies completely unravelled," the complaint said.
Mr Douglas was a bankrupt who owes millions of dollars in back taxes, the court documents alleged.
They added: "Douglas lied when describing SJ Global as a credible family office with more than $8 billion in assets under management, as SJ Global (and five other Defendants) were simply a bunch of fraudsters."
In a statement SJ Global Investments Worldwide Ltd said it was limited to what it could say because of the ongoing legal case.
But it said: "We categorically deny all the allegations in the lawsuit. At no time did we engage in any fraudulent activity. It is correct that we did explore making an investment in FAT Brands.
"The transaction never got beyond the initial stages of diligence because we were unable to come to terms on either structure or pricing. There was never a non-binding letter of intent between our firm and either FAT Brands or PPMT.
"We firmly believe that the truth will vindicate us in the course of the litigation and we look forward to making our case in court. We regret that we can't be more specific at this time."
The botched deal meant, the documents state, that FAT Brands and its shareholders suffered millions of dollars in losses.
Its share price fell from $8 to $5 and it was also unable to refinance its loans to a lower interest rate.
The complaint alleges: "SJ Global (and five other Defendants) were involved in a criminal scheme to harm FAT.
It alleged that the defendants "made fraudulent misrepresentations of fact regarding their ability to fund the $100 million transaction with FAT Brands, both directly to FAT Brands and through the PPMT Defendants, including but not limited to the presentation of $19 billion in phony bearer bonds".
FAT Brands has not responded to requests for comment
PPMT has not responded to request for comment.
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