Highgate mansion ‘faces neglect’ as billionaire loses court appeal

The Ukrainian-born businessman was denied permission to make monthly £30,000 payments to cover the running costs of Athlone House. 

The Treasury’s Office of Financial Sanctions Implementation (Ofsi) also rejected Mr Fridman’s requests to pay £1,850 a month to run an integrated lighting, heating and communications system, and to fund the wages of “non-security” staff. 

Mr Fridman took legal action against Ofsi’s decision, arguing that they were unlawful and that the 168-year-old property, which he bought in 2016, faces “risks of neglect”. 

Ofsi said it refused spending requests that would enable Mr Fridman to enjoy his pre-sanctions “lifestyle” and that it rejected payments to Athlone House Limited (AHL), a company maintaining the property, because its sole director, Nigina Zairova, is also subject to sanctions. 

In a written judgment issued on Thursday, Mr Justice Saini dismissed Mr Fridman’s legal challenge, ruling that Ofsi had acted lawfully, rationally and not in a “procedurally unfair way”. 

The judge said the purpose of the sanction regime would be “undermined” if payments were permitted to be made to a company controlled by a sanctioned person. 

He noted that Mr Fridman was seeking “relatively modest” amounts when compared to sums that had already authorised by Ofsi “which run into several millions”. 

Athlone House on the edge of Hampstead Heath (Image: Archant)

The sanctions office has licensed total annual future payments in relation to maintenance and “basic needs” of around £760,000, while also granting arrears and one-off payments in the past of about £1.38 million and 29,000 Euros. 

The judge said Athlone House, which was built in 1855, had five acres of landscaped garden designed “to emulate the palace at Versailles”. 

After buying the 33,173sq ft derelict house, Mr Fridman renovated it “at substantial cost”, with it containing an art collection “of cultural significance”. 

Mr Justice Saini said Mr Fridman no longer challenged Ofsi’s rejection of a request to pay for a driver, which his lawyers said was on the grounds he was “able to travel by public transport”, because he has left the UK. 

At the time of a hearing earlier this month, the billionaire had left the UK for Israel and then travelled to Russia, the judge said. 

His lawyers told the court he plans to return to the UK, but the judge said this not possible because he was an “excluded person” under immigration law. 

Mr Fridman had financial assets frozen in March last year following the start of Russia’s invasion of Ukraine, originally on the basis of alleged links with President Vladimir Putin. 

But the court was told that the businessman denies being an oligarch, says he is not associated with Mr Putin, nor is he “pro-Kremlin” and is not supporting Russia’s war efforts. 

In September, Mr Fridman’s “designation” under the sanctions regime removed allegations he was “pro-Kremlin”. 

Mikhail Fridman (Image: Archant)

His barrister Rachel Barnes KC said in written arguments that Mr Fridman remains on the sanctions list based on “his former governance positions relating to Alfa Bank Russia”. 

Ms Barnes argued that Ofsi should have allowed the payment of “reasonable fees” to a company providing for the “complex exercise” of “the routine holding and maintenance” of the property. 

She said: “The utility costs at Athlone House exceed those of many properties, but it is a unique property with unique needs for communications, IT, lighting, heating and security, not least in light of its art collection.” 

Ms Barnes previously said Mr Fridman, who regularly appears in the Sunday Times Rich List and is believed to be worth £8.2 billion, needed a staff driver for “security reasons”. 

Ofsi has previously granted a £18,500 payment for TV, audio and phoneline services and “recognised the need for security services”, she said, adding that there had been a “security incident” on September 1. 

Malcolm Birdling, for Ofsi, said in written arguments that it had previously permitted £1,974.43 monthly payments for CCTV and £24,083 monthly payments in relation to seven security staff. 

He said Ofsi “rationally” concluded that “an estate director/manager, six housekeeping assistants, two handymen and one individual providing ad hoc services” are not necessary to maintain the house. 

He added that Mr Fridman has “a strained and unrealistic interpretation” over what counts as “basic needs” under the sanctions regime. 

The barrister also said Mr Fridman had not provided “sufficient information as to what charges were for entertainment and what charges were for security” in relation to house maintenance-linked payments. 

Mr Fridman made his fortune in Russia across banking, retail, oil and telecoms, through companies Alfa Group and Letter One, before moving to London in 2015. 

In July, he received the go-ahead to bring a challenge at the High Court over the National Crime Agency’s raid on Athlone House in December last year. 

A hearing is expected to take place on November 14. 

Reporting by PA.