Ismaili.NET - Heritage F.I.E.L.D.

Defendants: Aga Khan's Studs Societe Civile and its managers
Plaintiff: Employee Mary Charlton

Mr. Faughnan is the personel manager and head of security of the Societe Civile. This is what court said was done to an employee of 27 years (who suppoerted her disabled husband) whose manager was involved in fraud:

After investigations by Mr. Faughnan, a memo was written which indicated that she was not part of the fraud. A copy of the memo was sent to HH the Aga Khan and To his lawyer, Carnegie. Afterward, Mr. Faughnan sought to terminate the employee (who also had cheque writing authority) and to do that, he edited the memo so that he could point that she was involved in the fraud. She countered that as the head of security he was complicit in the fraud and that he could not be the investigator, judge and jury, So an independent investigator should investigate.

The main fight in the court by Charlton was that Mr. Faughnan should not do the investigation as he might be complicit in the fraud, while the Societe Civile argued that only he should do the investigation. After the forgery in the memo came to light, they withdrew the allegations against Charlton (and narrowed the investigation to questions about a few deleted files) and they no longer wanted to investigate any fraud by Charlton, and refused to pay her any salary (about 1,186 pounds) while they were dealing with who should replace Faughan to investigate the deletion of the few files.

The extracts below show:

- How a document forgery was perpetrated by a high ranking agent of the Aga Khan to cover up that agent's own possible involvement in a large fraud.

- How this forgery was done on behalf of the Aga Khan and His Societe Civile.

- How this agent attempted to mislead the Irish High Court in order to prejudice it and divert blame to a secretary

- How this nevertheless became a very long court battle that was made to look like a former secretary was conducting a lawsuit against the Aga Khan.

EXTRACTS OF THE JUDGMENT

IN THE HIGH COURT
1998 No. 9515p

BETWEEN

MARY CHARLTON, PLAINTIFF

H.H. THE AGA KHAN’S STUDS SOCIÉTÉ CIVILE, DEFENDANT

JUDGMENT of Mr. Justice Declan Budd on the 22nd day of February, 2000

page 1:

This contentious matter first came before me on the 27th October, 1999 by
way of no less than seven motions; these included motions to attach and commit for
contempt of court, and motions in respect of amendment of pleadings and discovery of
documents and in respect of replies to notice for particulars. While dealing with
allegations of misconduct in respect of flouting and defiance of Court Orders and of
deception, both of the Plaintiff’s advisers and of the Court, by the expurgation of
passages from crucial documents material to the issues and long before the subject of
Orders of Discovery, I have endeavoured, by making Orders in respect of amendments to
the pleadings, replies to notices for particulars, inspection of documents, third party
discovery and by dealing with various other matters to try to push this case towards a trial
of the basic issues between the parties.

Page 3:

On the afternoon of 28th July, 1998 the Defendant’s Personnel Manager and Head of Security, Frank
Faughnan (Mr. Faughnan) handed a letter written by him to the Plaintiff. This letter was
headed “Inquiry into disciplinary matters”, and by it Mr. Faughnan confirmed that he
was holding an inquiry “into matters relating to your involvement in the improper use of
HH The Aga Khan’s Studs’ resources and/or property”.

page 7:

.. Mr. Faughnan alleged serious misconduct on the part of the Plaintiff in having obtained the
services of the Defendant’s stallions for her own brood mares without paying the requisite stud
fees over a period of years.

Page 21

Despite voluminous affidavits from the Defendants, no adequate explanation has been given for the editing of this document nor has it been revealed who was responsible for these deceptive excisions.

From page 2 it is clear that Mr. Faughnan was in liaison with Mr. Coulton about falsification of records on Mr. Drion’s instructions. On page 2 at paragraph 6 the following appears:-

[fraudulent addition:]

“6. Mr. Drion’s Secretary.

From records and information obtained from her computer it is clear that
she was not only aware of the unauthorised horses but actually assisted
Mr. Drion to pay invoices on their account etc. from his Swiss bank
accounts. From records and information obtained from her computer it is clear that
she was not only aware of the unauthorised horses but actually assisted
Mr. Drion to pay invoices on their account etc. from his Swiss bank
accounts. She was also responsible for keeping the accounting records for
the syndicates, which leave much to be desired. Mrs. Charlton is not very
competent from a work point of view and had her position protected by
Mr. Drion. We intend that she should be released as soon as she has
finished assisting Mr. Magee with his queries on the stallion syndicates.
That Mrs. Julie White should take over her responsibilities for the sale of
nominations and that a new secretary/telephone operator/receptionist
should be taken on”.

At the foot of the next page there appears:-

“Conclusions
I think that Mr. Drion has been very lucky to get away with his actions for
so long. However, he has been supported by a secretary who appears to
have been, at least passively if not actively, in league with him”.

Page 25 of the undeleted memo:

The deleted sentence reads:-
“He has managed to mislead the auditors, employ a low quality accounts
clerk, confuse your stud staff or coerce them to obey him and somehow get
the compliance of Mme O’Bin.”

The paragraph continues:
“Under these conditions any internal control system would break down,
which has been the case. I hope Your Highness will appreciate that Mr. Drion
has made my job difficult and I much regret that this matter has not come
to my attention sooner.”

page 26:

It is very disturbing to realise that some person in the Defendant’s
organisation has taken it upon himself or herself to delete parts of this Coulton memo so
that what remained was misleading and a snare and a deception to the Court and the
Plaintiff’s legal advisors.

page 26

In the light of this information and the letters from the Plaintiff’s Solicitors it
seems incomprehensible that the senior people in France failed to instruct Mr. Faughnan
and the Société’s Solicitors in Ireland of the general conclusions in the Coulton memo
when the Defendant Society was vehemently fighting the motion before Laffoy J.

page 27

I also mention in passing that there was a considerable reluctance on the
part of the Defendant to co-operate with the Court by nominating an appropriate officer to
make a further Affidavit of Discovery. This reticence was combined with reluctance to
nominate a Solicitor to accept service of documents on behalf of Mr. Coulton and Mr.
Carnegie. All this prevarication regrettably fostered the impression of non co-operation.
Coming after the improper and misleading editing of the Coulton memo, there was the
unfortunate failure to nominate an appropriate officer to make the affidavit of of Discovery
on behalf of the Société Civile in France.

FINALLY:

Page 28:

For the record and in the hope that this may cause the parties to give pause
for thought and to seek a way of circumventing the anxieties and expense of litigation, it
may be helpful if I put on the record that Counsel for the Defendant conceded that the
Defendant was no longer saying that the Plaintiff was a beneficiary of or aided and
abetted any such fraud as was perpetrated.

page 39:

I have come to the conclusion that only an ignoring of the meaning
of the words in the judgment and both Orders, or arrogant obduracy or reckless
insouciance could have lead Mr. Faughnan on behalf of the Defendant to proceed himself
with an inquiry into the alleged deletion of computer files.

page 48:

I regret to have to say that it was reprehensible on the part of those giving
instructions on behalf of the Defendant Société to try to force this case on on 26th
February, 1999 when only the expurgated edition of the Coulton memo had been seen by
the Plaintiff’s Solicitor and no disclosure had been made that this was a mutilated and
censored document.

page 50

The unlawful expurgation of
relevant material in the Coulton memo was tantamount to the hood-winking of the High
Court. The expurgated six further pages were only revealed eventually on 15th
November, 1999. The heading “Conclusion” in the last paragraph on page 3 gave a false
impression that it was the last paragraph and a crucial sentence was even deleted from
this.

page 52:

While I have come to the conclusion that there have been flagrant breaches of both the
Court Orders, either from arrogant insouciance or reckless perversity, I ascribe this to
misguided zealousness on the part of the Defendant’s personnel manager and
misconceived notions of the interests of his employer. It would certainly be open to the
Court to make orders to attach and commit and to order sequestration of the Defendant’s
assets and to strike out the Defendant’s defence for failure to comply with the Orders of
22nd December, 1998 and 2nd July, 1999. However, the Court is always reluctant to
impose a prison sentence and I am mindful that the personnel manager is an employed
person. I trust that the rebuke implicit in this judgment both to the personnel manager
and the Defendant should suffice in the circumstances, although it must be understood that
the Court cannot countenance disregard of or defiance of Court Orders.
Only ill-considered self-delusion or reckless insouciance can
explain, but not justify, his letter of 29th June, 1999 to the Plaintiff.

page 53:

It is a matter of regret that I have had to come to such conclusions. I am
sure that His Highness will be surprised and upset at the manner in which the litigation
has been approached and at how the Orders of the High Court have been dealt with by his
agents on behalf of the Defendant Société. It is most unfortunate in view of the high
regard in which his family, and in particular his grandfather, have always been held in this
country where his name is well remembered annually in the competition for the famous
Aga Khan trophy. This is all the more a matter for regret in a case in which the letters of
praise and commendation of the Plaintiff, written in such gracious terms to the Plaintiff
by His Highness, stand out as a ray of sunshine amid the bleak atmosphere of
confrontation and distrust engendered by the conduct of some of the agents and
employees of the Defendant.

FULL TEXT OF THE JUDGMENT