Funders and Investors at Odds Over Settlement Terms
As arbitration costs escalated, Bahgat sought additional funding from Vannin Capital PCC. In 2017, Buttonwood and Bahgat renegotiated their terms in a settlement agreement, which the funder claims Bahgat later breached.
Buttonwood sought approximately £14.6 million, including £1.42 million in unpaid principal, £5.15 million in interest, and nearly £8 million in success fees.
Bahgat, however, contested the claim, arguing the agreement was unenforceable due to what he called an “extremely high rate of interest” and an inflated “fund protection fee.”
Egyptian Government’s Role in Investor’s Downfall
Born in Egypt but later a Finnish national, Bahgat was selected in the late 1990s to develop iron ore resources near Aswan. He founded Aswan Development and Mining Co. (Ademco) and Aswan Iron & Steel Co. (AISCO), with Ademco receiving a 30-year mining concession.
But in 1999, a new Egyptian prime minister allegedly took hostile steps to reverse his predecessor’s policies, leading to Bahgat’s arrest in 2000. He spent over three years in jail on misappropriation charges before being acquitted in 2002. His assets were frozen, police seized the project, and mining operations never resumed.
In 2011, Bahgat initiated arbitration, where a tribunal ruled that Egypt had expropriated his investment and unjustly detained him in bad faith.
