If you couldn’t trust Gaddafi who can you trust?
Why an English judge reprimanded one the world’s richest men for lying to Colonel Gaddafi when selling an A340 business jet.
At times it must be fun being a judge. Last month, Mr Justice Peter Smith, an English judge, found himself telling His Royal Highness Prince Al-Waleed Bin Talal Bin Abdul Aziz Al-Saud – one of the world’s richest men – that it is not OK to lie when selling an aircraft. Even when the buyer was Colonel Gaddafi.
Must read: Selling a jet to Colonel Gaddafi
In March this year, Forbes estimated the Prince’s wealth at $20 billion (the Prince says it is closer to $30 billion). The Judge ruled that the Prince should pay a $10 million commission to am aircraft broker who helped him sell an A340 business jet to Gaddafi. The Prince had argued that the payment to Daad Sharab, a Jordanian businesswoman, was discretionary. A key part of the trial was a letter that the Prince had sent to Gaddafi. In the letter, the Prince had said: “The aircraft price of $135 million represented what the aircraft cost us, including extras and modifications that were made to the aircraft since we bought it.” But when cross-examined by Sharab’s counsel, Prince Al-Waleed admitted that this was not true.
Al-Waleed: “We bought it at $95 million, your Lordship and the objective was to maximise our sale price. So when you said $135 million, you had to give some justifications. So, yes. And actually, not only that, we have done zero modifications on it, not only minor modifications, we have done no modifications whatsoever.”
Counsel: “So, it was not true when you said it cost $135 million, including modifications?”
Al-Waleed: “When I sell the plane, I have the right to sell it at any price I want.”
Counsel: “What you don’t have the right to do is to lie about the original cost of the aeroplane?”
Al-Waleed: “I didn’t lie.”
After more of this questioning, Justice Smith intervened, saying: “I think, Your Highness, when you speak to your lawyers after this case, you might be disappointed and you might want to consider the way that you enter into contracts, if that is the way you go. Because you cannot, as a seller, say things which are untrue to induce a contract and expect the contract to survive.” The Judge later added: “Sometimes, when you buy something, you rely upon what people tell you they’re selling. In an area where people are honest with each other, you take a man at his word.”
Although, to be the fair to the Prince, Gaddafi who dragged the deal out for several years, was not a reliable buyer.