April 17, 2024

Tricia Oak

Business & Finance Excellency

Green cards, cannabis and a strip club: JCB heir in US legal battle | Business

The heir to the JCB digger empire, whose father Lord Bamford is one of Boris Johnson’s biggest financial backers, is locked in a legal battle with a former close friend that has shed fresh light on alleged tensions inside one of the UK’s most powerful industrial families.

The case has also raised questions over the conduct of Jo Bamford, a 43-year-old self-styled “green entrepreneur” who is a director at a key JCB holding company and has now set himself up as an investor in bus manufacturing and hydrogen.

His companies, which includes the doubledecker maker Wrightbus, have won taxpayer-funded contracts worth nearly £80m for zero-emission buses in England and Northern Ireland over the last three years.

The prototype of sustainable fuel cell hydrogen bus built by Wrightbus, which Jo Bamford chairs.
The prototype of sustainable fuel-cell hydrogen bus built by Wrightbus, which Jo Bamford chairs. Photograph: Liam McBurney/PA

However, Bamford’s business dealings are now under scrutiny by a judge in civil proceedings in the US.

US court filings and transcripts reveal he is in a bitter dispute over the ownership of a company based in Philadelphia. The documents make public for the first time Bamford’s investment in the Delaware Valley Regional Center (DVRC), one of hundreds of ventures set up to sell fast-track access to green cards under a controversial US government visa scheme known as EB-5.

Bamford is suing Joseph Manheim, a former best friend, accusing him of “surreptitiously” seizing control of the joint venture and using that control to take $5.9m (£4.4m) from the business. Manheim has vigorously denied the allegations, and has brought his own counterclaim. As the dispute escalated, the two men have levelled a barrage of accusations against each other.

The case went to trial in Delaware in June, giving an extraordinary insight into a world of extreme wealth and privilege within one of Britain’s most prominent industrial families.

Joseph Manheim, pictured in 1998.
Joseph Manheim, pictured in 1998. Photograph: Dominic O’Neill

During the hearings, Bamford told the court that he raced classic Ferraris – while Manheim claimed he also collected rare pheasants. Under cross-examination, Bamford admitted to using a company email account to order cannabis and send unspecified “inappropriate, explicit photographs”.

Bamford and a third founding director, who joined him as a plaintiff, have in turn accused Manheim of using company funds for outings to a strip club in Philadelphia, leasing a Porsche, and to cover the cost of playing in polo matches.

In his court filings, Manheim alleged Bamford was intending to use the legal process to carry out a “bloodless coup” to seize control of the company.

Both men deny any claims of wrongdoing. Manheim through his lawyers declined to comment on the cases. The final judgment on the claim and counterclaim is not expected until next year.

Green cards ‘for sale’

Lawyers acting jointly for JCB, Lord Bamford and Jo Bamford said the US legal proceedings had no connection with either the digger firm or the peer.

Anthony Bamford, 76, is one of the UK’s most successful industrialists, with a net worth estimated at £4.6bn. He was made a peer in 2013, campaigned for Brexit and has donated millions to the Conservative party. Jo Bamford, his eldest son, has donated £75,000 to the Tories.

He may also – one day – take over the entire family business.

Boris Johnson pictured with Jo Bamford.
Boris Johnson pictured with Jo Bamford. Photograph: #hydrogenroadshow

Jo Bamford became friends with Manheim in about 2001, when the former investment banker was dating Bamford’s sister.

The court hearings gave a glimpse into a once close relationship: the two men socialised and holidayed together and were godfathers to each other’s children. Bamford eventually gave Manheim access to his $2m Goldman Sachs investment account.

When Manheim came up with the green card business idea in 2012, Bamford backed the venture. The equity in DVRC was split between the two friends and a third partner, all of whom would share profits equally, Bamford claimed. Through his lawyers, Bamford said he was not significantly involved in DVRC’s activities beyond attending board meetings.

The company’s clients were mainly from China but also from Vietnam and South Korea, among other countries. In exchange for investments of $500,000 apiece in local road and public transport projects, and a fee paid to DVRC, they could apply for fast-track visas to live and work in the US.

By January 2021, the fund holding DVRC client money had accumulated assets worth $623m from 1,246 investors, according to Manheim’s pre-trial brief. From the profits, Bamford received total distributions of $2.15m between 2016 and 2020.

DVRC operated under the EB-5 programme, which allowed wealthy foreigners to effectively buy the right to live and work in the US. EB-5 is now suspended for new applicants after criticism from senators that – though legal – it presented a national security risk.

Through his lawyers, Bamford said EB-5 had been reauthorised on several occasions and that DVRC was an entirely lawful business.

Polo and a strip club

The trial revealed allegations of unusual business practices at DVRC. Manheim and the third partner in the business visited a Philadelphia strip club called Delilah’s Den on several occasions, racking up expenses of $3,928, according to Bamford’s pre-trial brief.

Manheim also allegedly took money out of the business to pay between $20,000 and $50,000 to cover the cost of playing in a polo match in Argentina, according to testimony of the third partner.

According to court papers, the relationship between the business partners deteriorated in 2018. In August of that year, Manheim and the other directors agreed to dismiss Bamford from the board of a holding company.

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The circumstances surrounding his removal are highly contentious. Bamford claimed he was unlawfully removed.

In his evidence, Manheim gave several alleged reasons for the dismissal and raised concerns about Bamford’s actions. He claimed that during a board meeting Bamford had put his interests as a shareholder ahead of his duties as a director, and not prioritised the needs of the firm and its 1,200 investors. Through his lawyers, Bamford denied the allegation.

Bamford confirmed in court he had used company email accounts to order cannabis via the website Craigslist, and that he had also used his work email to send “inappropriate, explicit photographs”.

A difficult conversation

During the hearings, Manheim sought to highlight alleged tensions within the Bamford family.

Bamford confirmed during his testimony he had “regretfully left the family firm” in 2016 after a “difficult and painful conversation” with his father. “In essence, my dad didn’t want to stop running the business, and I didn’t want him to stop running the business,” he told the court. “And I didn’t really want to be Prince Charles, I didn’t want to be waiting for the rest of my life. I wanted to go and run my own business.”

In his evidence, Manheim claimed Bamford had asked him some years ago to carry out a DNA test on his younger brother, who serves alongside him on the board of one of JCB’s companies. He alleged Bamford had given him a bag containing samples for analysis. Manheim said he never carried out the test. He claimed Bamford was often “excitable” when discussing family matters and his approach was to “let it settle down”.

Through his lawyers Bamford strongly denied this incident had ever taken place.

During the trial, his lawyers tried to have the claim struck out on the basis of relevance and that the allegation dated from two years before the dispute covered in the trial. But the judge overruled the objection, saying it was pertinent because “past interactions with people contribute to how one views them”, according to the court transcript.

In 2019, Bamford eventually sued Manheim, accusing him of “skimming profits” to allegedly award himself more than $5.9m without the knowledge or consent of his fellow shareholders, and of fraudulently taking control of the company. He is claiming damages and wants Manheim removed and replaced by a trustee.

Manheim’s request to have the case thrown out and costs paid has been rejected. In a verbal ruling on some aspects of the case at the end of the trial, the judge said there had been “an awful lot of money leaving this company for Manheim and his affiliates, and that’s where the outcome really turns”.