Chabad mining magnate Rabbi Joseph “Diamond Joe" Gutnick and one of his companies, Legend International Holdings, are being sued by India's largest fertilizer collective, Indian Farmers Fertiliser Co-operative (IFFCO), and its Kisan International Trading subsidiary for $40.4 million plus interest after Gutnick allegedly welched on a deal made in 2008. An arbitration panel has already found for IFFCO, but Gutnick has allegedly refused to pay even a penny of the award.
Above: Rabbi Joseph “Diamond Joe" Gutnick
Prominent Chabad Rabbi Joseph “Diamond Joe” Gutnick Sued For More Than $28 Million
Shmarya Rosenberg • FailedMessiah.com
Chabad mining magnate and one of his companies, Legend International Holdings, are being sued by India's largest fertilizer collective, Indian Farmers Fertiliser Co-operative (IFFCO), and its Kisan International Trading subsidiary for $40.4 million plus interest after Gutnick allegedly welched on a deal made in 2008, the Sydney Morning Herald reported last week.
In 2008, Gutnick and his business partners signed a deal to sell $103 million of Queensland phosphate to IFFCO. The deal called for IFFCO to invest that $103 million by buying shares and options in Legend International Holdings.
The lawsuit, which was filed in Melbourne, Australia where Gutnick – who now lives primarily in Singapore – keeps a home, seeks to enforce a decision issued by the Singapore International Arbitration Centre in May. In that decision, Gutnick was ordered to pay $28.05 million and Legend International $12.35 million. The lawsuit says the arbitration award was based on a share options agreement, a shareholder agreement, and a deed of adherence, all dated July 14, 2008.
Gutnick, who has a checkered financial history, ridiculed the arbitration panel’s decision and called it "bizarre.”
"I have instructed my solicitors to take all steps necessary to prevent the enforcement of the award in Australia on the basis that the award was made contrary to the public policy of Australia and the rules of natural justice. I reject absolutely the findings made against me personally. The findings are entirely against the evidence," Gutnick reportedly said.
He also claimed the arbitration panel was “biased” against him.
“The arbitral panel, which is not a court of law, acted with actual or ostensible bias as shown by the fact that the panel made findings that were entirely inconsistent with the objective facts, ignored evidence which was destructive of IFFCO's case, provided no reasons for its so-called findings,” Gutnick insisted.
Gutnick also insisted he “absolutely” denies any wrongdoing on his part of the part of Legend International Holdings.
But Gutnick and Legend International Holdings have allegedly made no payments at all to IFFCO, meaning they haven’t even tried to satisfy a portion of the arbitration panel’s award.
"They have paid no sums to the applicants to satisfy the final award, in part or full. Neither of the respondents have responded to letters of demand…nor otherwise communicated with the applicants any intention to comply with the final award," Kisan International director Mahesh Chandra Gupta said in his affidavit, noting that IFFCO believes Gutnick and Legend International Holdings, which is a US company, have assets in Australia.
Gutnick, who was the late Chabad-Lubavitch Rebbe’s personal shaliach (emissary) designated to fight against the Oslo Peace Accords, has been linked to a number of alleged pump-and-dump stock scams that saw average investors, many of them Chabad-Lubavitch ba’al teshuvas, lose large amounts of money while major Chabad and other Orthodox organizations – who all sold their stock (much of which they often held only because it was gifted to them by Gutnick or a related entity) just before the stock suddenly crashed – made millions.
Gutnick has never been charged with a crime related to these alleged scams. But he did lose a $1 million lawsuit filed by a fellow Chabad hasid who claimed Gutnick cheated him. And in June, another Australian Jewish businessman filed suit against Gutnick after Gutnick allegedly welched on a multimillion dollar loan which, like the deal with IFFCO, was made in 2008.