“Victim of leaving a rich man”: the bitter breakup of a star fund manager | Business


HWe are one of the City of London’s most successful investors, with an estimated fortune of £ 300million, a luxury yacht and a collection of fine mansions. But star fund manager Terry Smith has been having a hard time in the tropical paradise of Mauritius, where he runs his business.

Since February, Smith has been locked in an acrimonious public legal battle with his 13-year-old former partner. He launched a series of court cases and complaints against Teresa de Freitas, covering at least eight separate cases ranging from alleged hijacking of a joint account to disputes over cars and household items. She fought back with at least four complaints.

The former colleague, 21 years his junior, claims to be “victimized for having left a powerful and rich man”.

Due to the cases against her, De Freitas, 47, has been ordered to surrender her passport and cannot leave the Indian Ocean island. Her bank accounts have been frozen, her legal bills are piling up, and in April she was arrested and released on bail after Smith, 68, accused her of stealing furniture and other items, including a Nespresso machine, Black & Decker drill and linens.

Legal battles have erupted over a custody and access dispute over De Freitas’ child who Smith says has treated as his from birth and would like to continue a relationship with him. De Freitas says she cut her child and Smith’s ties because she believed her actions would deprive her of all parental rights. She says the couple were engaged in negotiations and making progress when Smith unilaterally ended their talks and filed complaints against her.

Smith’s lawyers say that although he was not legally obligated to provide financial support to his ex-partner, he made offers and continued to provide for the child. De Freitas says she does not consider her financial offer adequate and therefore the couple – who never married – did not come to an agreement on the matter.

Smith’s lawyers say there is no power imbalance between the parties and that his ex-partner has the means to defend himself. They say this is a private family dispute and Smith’s preference has always been to reach a settlement.

However, articles in several newspapers and numerous court hearings pushed the multi-millionaire’s fiercely guarded privacy into the public domain.

Smith rose from humble beginnings as the son of a truck driver in east London to become one of the city’s most admired stock pickers, hailed as Britain’s answer to Warren Buffett. Fundsmith, which he founded in 2010, is the UK’s largest equity-focused investment fund and manages £ 27bn on behalf of clients ranging from small savers to large institutions.

In 2014, Smith and a handful of his associates opened an office in Mauritius, and he and De Freitas moved there with his child. The couple shared a villa on the grounds of an exclusive luxury golf resort, overlooking the turquoise waters of Tamarin Bay, where dolphins brush the waves and tourists bask on the white sands.

Smith and De Freitas in Mauritius in 2018. Photography: Teresa de Freitas

The couple met in 2005, at brokerage firm Collins Stewart, where Smith was managing director and De Freitas was deputy secretary of the company. Although still married at the time, the couple began a relationship in 2007.

She says she gave up her career to raise her child and help run their homes, which included a Georgian townhouse in Marylebone and a farm in the Cotswolds. Smith’s attorneys say De Freitas did not manage the properties in question.

In April of this year, the villa in Tamarin Bay became the scene of a bitter argument between the couple.

According to various publicly available Mauritian court documents, Smith left their shared home in May 2020 after the couple separated. De Freitas finally left the villa in February, she says after Smith ordered her new boyfriend to leave the property, which he owned. After discovering that De Freitas was removing trucks of items from the villa, Smith alerted police and De Freitas was briefly taken into custody in early April before being released on bail.

De Freitas denies the theft and says she has receipts to prove that some of the items were purchased with her own money.

Household items
Household items Teresa de Freitas says she was accused of stealing from their former family home in Mauritius. Photograph: document by Teresa de Freitas

Months earlier, in February, the financier sent De Freitas an email warning her that he would sue her in court unless she agreed to let him spend time with her child. .

“Due to your about-face and reluctance to even respond to proposals, I began to take action,” the post read. “I intend to take legal action against you in all respects, regardless of which jurisdiction you find yourself in indefinitely. Even if I don’t win, I’ll cause you trouble for years. He also said: “However, I am still ready to come to an agreement with you.”

Smith went on to promise that “all proceedings would stop” if De Freitas gave him legally binding access to his child and had a say in their education.

Smith’s lawyers said it was a snippet of a longer private email that was taken out of context, and his preference would be to settle the dispute between him and De Freitas amicably..

Referring to his former partner in one of the court documents, De Freitas said Smith was now an “enemy,” “someone powerful and extremely wealthy, with money to spare to ruin me in litigation. “.

Smith’s lawyers say De Freitas’ comments do not reflect the reality of the situation and constitute an unbalanced interpretation of events.

According to court documents, Smith has also initiated proceedings seeking repayment of around 14.6 million Mauritian rupees (£ 248,300), money he claims De Freitas stole from a joint account fully funded by his salary. Smith said he expected De Freitas to use the funds for “reasonable household and personal expenses,” his lawyers said.

De Freitas claims that the joint account was in their two names and that the funds belonged to him equally. She placed most of the funds in her account at Fundsmith.

Courts have ordered the freezing of personal and business bank accounts used by De Freitas, at Smith’s request, after allegations of embezzlement.

De Freitas has a total of $ 1 million (£ 724,000) in savings at Fundsmith, which includes money Smith claims to have embezzled. She claims Smith is blocking her cash withdrawal requests and alleges she is subject to an excessive due diligence process by Fundsmith agents, including demanding the source of her savings over a 10-year period and details on the origin of funds. inherited from his grandmother.

Smith’s attorneys said all checks were standard and delegated by Fundsmith to authorized agents, and Smith was not involved.

“Terry is using his power as head of Fundsmith to block me from the last source of money I had,” De Freitas said in a statement to The Guardian.

A Fundsmith partner also emailed a Mauritian car dealership using their Fundsmith email account on April 29, 2021. He suggested that the dealership stop servicing the Toyota that De Freitas had recently seized from. Smith, and informed him of the legal dispute over the owner of the vehicle.

Smith’s legal team said the Fundsmith partner correctly informed the dealership that the vehicle was in litigation.

Smith’s lawyers separately filed court documents to seize a £ 69,000 Porsche and demanded 1.6 million Mauritian rupees (£ 27,000) to cover the car’s alleged damage and negligence. De Freitas denies the allegations. She then filed a claim for the seizure of the Toyota and a Jaguar, which Smith also paid for, in response.

In a statement, Smith said, “My primary concern is and always has been for a child whom I have treated like my own since he was born over ten years ago. I just want to make sure they are well looked after.

His lawyers have said he remains open to a deal with De Freitas that includes additional financial compensation for his child and that he does not want to resort to legal action until all other options have been exhausted.

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