Gibraltar Court Orders Former CEO to Pay €2.5M

Gibraltar Court Orders Ex-CEO Karel Mañasco to Pay Over €2.5M to Mansion Group

In a landmark ruling, the Gibraltar Supreme Court has ordered former CEO Karel Mañasco to pay over €2.5 million and an additional £127,000 to his former employer, the now-defunct Mansion Group. This decision underscores the court’s firm stance on corporate misappropriation and sends a clear message about financial accountability at the highest levels of leadership.

The Case Against Mañasco: Misappropriation and Missing Funds

The court’s decision to rule in favor of Mansion Group revolves around serious allegations of financial misconduct by Mañasco during his tenure as CEO. Mansion Group accused Mañasco of authorizing payments totaling €2,508,035.36 to White Wizard Media Limited (WWML), a company that reportedly provided no tangible services in return. This transaction raised significant red flags, prompting Mansion Group to pursue legal action to recover the misappropriated funds.

In addition to the payments to WWML, the court examined a separate £127,073.28 transaction directed to KM Accountants for consultancy services invoiced by Aventador Media Limited. Mansion Group’s legal team repeatedly sought clarification from Mañasco regarding the nature and legitimacy of these payments. However, the court found Mañasco’s explanations inadequate and lacking in transparency, leading to a decisive ruling against him.

Legal Challenges and the “Unless Order”

A critical aspect of this case was the court’s issuance of an “Unless Order” on 6 May, which required Mañasco to provide full disclosure of the disputed payments by 15 May. Failure to comply with this directive would result in his defense and counterclaim being struck out, significantly weakening his position in court. Although Mañasco submitted a witness statement on 14 May, he argued that the court’s questions were based on incorrect assumptions, claiming, “I cannot be required to give a full and substantive response to an assertion which I denied, which is improperly converted into an admission justifying the subsequent questions.”

Despite his arguments, the court determined that Mañasco’s responses were insufficient and inconsistent with the facts presented. The judge ruled in favor of Mansion Group for the full amount claimed, emphasizing that Mañasco had failed to meet the legal obligations outlined in the “Unless Order.”

An Ongoing Legal Saga and Plans for Appeal

This recent ruling is the latest chapter in a protracted legal battle between Mañasco and Mansion Group. In August, the court sided with Mansion Group on multiple fronts, including accepting a letter from Mañasco’s lawyer as evidence and rejecting Mañasco’s requests to amend his defense and access certain documents. Additionally, a €5 million worldwide asset freeze order remains in effect against Mañasco, highlighting the severity of the ongoing dispute.

Mañasco’s legal team, led by lawyer Christopher Finch, has indicated that they plan to appeal the court’s decision. Finch stated, “The decision is subject to appeal on the grounds that the court has failed to comply with legal principles and bias in the conduct of the hearings.” Mañasco has consistently voiced concerns about the fairness of the legal proceedings and has previously called for greater transparency, especially after the court imposed privacy conditions during earlier stages of the case.

A Ruling with Broader Implications

This case highlights the broader implications for corporate governance and accountability, particularly for high-ranking executives. The Gibraltar court’s decision to hold Mañasco personally liable for the misappropriation of funds sends a strong message to corporate leaders about the consequences of financial misconduct. As Mansion Group seeks to recover its losses, the ruling also underscores the importance of rigorous oversight and transparency within organizations, even those that have since ceased operations.

The Gibraltar Supreme Court’s ruling against Karel Mañasco marks a significant moment in the ongoing legal saga between the former CEO and Mansion Group. With the court ordering Mañasco to pay over €2.5 million, the case serves as a stark reminder of the importance of financial integrity and the legal accountability that corporate executives face. As Mañasco prepares to appeal the decision, the case continues to unfold, highlighting the complexities and challenges inherent in legal disputes involving high-level financial misconduct.