The chief executive of a North Sea oil and gas company is being accused of faking bank statements and forging documents to misappropriate over €143 million, according to a London lawsuit filed by his former company, which once backed an Iranian petrochemicals firm.
This High Court case is one of several legal issues facing Francesco Mazzagatti, who is an Italian national and leads Viaro Energy. The company gained prominence in the UK’s energy sector after acquiring RockRose Energy for £247 million in cash back in 2020.
Mazzagatti, along with Viaro’s CFO Francesco Dixit Dominus, is being sued by Alliance Petrochemical & Investment (API), a Singapore-based trading company that Mazzagatti previously owned. API claims that Mazzagatti used part of the allegedly stolen funds to purchase a majority stake in RockRose Energy.
Both Mazzagatti and Dixit Dominus have denied the allegations.
API, which Mazzagatti headed from July 2018 to September 2020, co-owns the Mehr Petrochemical Company (MHPC) in Iran and distributes its petrochemical products, such as polyethylene.
Shortly after taking the CEO role, Mazzagatti allegedly set up a new firm, Alliance Petrochemicals Trading (APT), in Sharjah, UAE, without informing the other API directors. He reportedly forged documents to authorize himself as the sole signatory for APT’s bank accounts. API’s customers were asked to send payments to multiple accounts set up by Mazzagatti and Dixit Dominus in Singapore and the UAE, in exchange for products from MHPC.
According to API, the full extent of the alleged fraud is not fully known but they estimate that about €143.8 million was misappropriated, representing debts owed to MHPC by API as of August 2023.
API claims that Mazzagatti misrepresented financial information to board members. For instance, in 2021, he allegedly presented a false bank statement claiming there was a significant balance in a UAE account. He also previously communicated that it was safer to hold the funds owed to MHPC outside of Iran due to regional instability.
In May 2023, a Tehran court ruled that MHPC should halt further deliveries to API, citing that the company owed around $170 million to the Iranian firm.
The lawsuit reveals that Mazzagatti might have used misappropriated funds to help finance the acquisition of RockRose Energy, with Viaro securing a £250 million loan guarantee from Sheikh Zayed bin Surror bin Mohammed Al Nahyan of the Abu Dhabi royal family to facilitate the deal.
This arrangement supposedly eased concerns from Taqa, Abu Dhabi’s state-owned water and electricity provider, regarding Viaro’s cash management after the acquisition, ensuring that RockRose could still meet its financial obligations.
Moreover, RockRose allegedly loaned around £202 million to Viaro to aid the transaction, with misappropriated funds covering the remaining cost, according to the lawsuit.
Taqa has launched its own legal action in the High Court against Viaro and Mazzagatti, alongside other parties, claiming RockRose paid out an $84 million dividend before offloading an oilfield worth $1, purportedly leaving it unable to handle its liabilities. The accused deny these claims, and a judgment is pending.
In response to API’s allegations, both Mazzagatti and Dixit Dominus refute any wrongdoing, suggesting that a former associate, Arshiya Jahanpour, orchestrated the lawsuit out of frustration after being sold only a partial stake in the trading company.
The defense asserts that Jahanpour controlled API from September 2018 onwards and claims that any questionable transactions are the result of his actions, not those of Mazzagatti or Dixit Dominus.
A trial date has not yet been established.