A man who took millions of pounds from people buying flats in Bristol and then spent most of it on his mother’s diamonds has told a judge it was a cultural thing to do.
Prosecutors say Sanjiv Varma created a made-up person to complete the £5 million deal, which meant he was effectively able to take all the money and spirit it away into bank accounts abroad.
Mr Varma told a hearing of the High Court of the Chancery Division that he advised the development company’s director, a mysterious man called Manit Singh, to take £5 million of the investors’ cash and spent it on diamonds and jewellery – his own family heirlooms.
Scores of people had handed over £50,000 each as a deposit on student flats which would be developed inside one of Bristol’s biggest eyesore buildings – the derelict Grosvenor Hotel at Temple Meads, during 2017 and 2018.
But the company they paid money to, Grosvenor Property Developments, didn’t own the building or have planning permission to do the work.
Mr Varma faces possible time in jail at the end of this week’s hearing in the High Court of the Chancery Division – not for carrying out the deals and spending the money, but for allegedly lying to company liquidators and breaching court orders requiring him to show what happened to the money.
With an elaborate network of companies and bank accounts, counsel for the liquidators of the company have already proved that the money was in fact spent on a, an Indian businessman who said his permanent residence is in Dubai.
At a court hearing last month, Mr Varma was found to be liable for a total of £9 million of investors’ cash – and this hearing now sees the liquidators ask for him to be jailed for allegedly trying to cover up the scam, making false statements to investigators and breaching court orders demanding he give over documents.
On the first day of court hearings this week, the court was told Mr Varma had told investigatorsand send it to Dubai’ to be able to access a safe containing all the paperwork that would prove his innocence.
On the second day of cross examination, Mr Varma said the deal to buy the diamonds and jewellery ‘might seem strange to Westerners’ but was normal in Indian culture.
He told Rory Brown, the counsel for the liquidators who were bringing the legal action, that Grosvenor Property Developers was owned and run by a Mr Singh, and he was acting only as its advisor.
Varma was the person who engaged architects to come up with plans and artists’ impressions for the student flats within the Grosvenor Hotel, and engaged estate agents to sell them.
But he said the project to convert the flats stalled, in 2017 and 2018 because Bristol City Council planners were not keen on the idea, he advised Mr Singh to put the money into diamonds and jewellery for safe keeping.
And he suggested the company, Grosvenor Property Developments, transfer the money to a different company, Grosvenor FZE, to buy his own family heirlooms.
“That’s quite a change of investment strategy, from investing in developing a hotel in Bristol to buying diamonds and jewellery Mr Varma,” said Mr Brown, for the liquidators.
“Were the investors who had given their money over informed of this change?”
Varma said he did not know because he was only the consultant for the company, and he would have to ask Mr Singh.
But he said buying diamonds was ‘normal’.
“It’s a cultural thing. I don’t think you’d understand,” said Mr Varma.
“In Indian culture, the thing is to always invest in gold and diamonds to keep money safe.
“For you it might sound odd or weird, but if you need a safe haven, this is what we do.
“It might not make sense, to you as a westerner it does not make sense,” he added.
Mr Brown quizzed Mr Varma on where Mr Singh was now.
In finding Mr Varma liable for the millions invested in the property deal at a court hearing last month, the judge in that case said he concluded Mr Singh didn’t actually exist.
Mr Varma said Mr Singh, after buying the diamonds and the collapse of the plan to develop the Grosvenor Hotel, had disappeared.
“He had health problems, and his partner had died.
“He told me he needed to move away and clear his head. I couldn’t find him. I think he’s gone back to India,” Mr Varma, who has not been allowed to leave Britain since May last year when investigations into what happened reached a crucial point, said.
“I had his phone number on my old phone, and I don’t have that phone anymore.
“If I could go to India I would try to find him because there are some choice words for him. If you give me my passport back I will go and find him,” he said.
“But I don’t know if he’s dead or alive.
“He told me he was moving on and he’d changed his contact details, why should I try to find him?” Mr Varma asked the court.
“Well, we’re suing you for £6 million and trying to put you in prison, Mr Varma, don’t you think it might not be worth an email to him?” said Mr Brown.
“Mr Singh isn’t a real person, he’s an avatar of yours, isn’t he Mr Varma?” he asked.
“How can you say he’s an avatar, he owns three properties here in the UK,” Mr Varma replied.
“You can’t get a mortgage or buy a property here if you’re an avatar.”
The case continues.