Monday 28 May 2012

Warsi

Calls for Warsi to stand down for investigation into flat expenses


Baroness Warsi should stand down and an investigation opened into her expenses, the former standards watchdog has said, after it was alleged she claimed for overnight accommodation costs while staying rent free at a friend's house.


House room: Baroness Warsi and Tory donor Dr Wafik Moustafa





By Jason Lewis, Patrick Hennessy and staff1:41PM BST 27 May 2012

Baroness Warsi, the chairman of the Conservative Party and a Cabinet Minister without Portfolio, charged the taxpayer £165.50 a night for attending the House of Lords while staying at a house in Acton, west London. She also admitted failing to declare thousands of pounds in rental income.

The owner of the house said she had her own bedroom and front-door key and said he received no money in rent from Warsi or from Naweed Khan, the party official who was also staying there, it was reported.

She claimed £12,247 in over-night subsistence within six months of taking her seat in October 2007, records show. It was the equivalent of 74 nights' stay. The Lords sat for 84 days in the period. She was then the youngest peer at the age of 36.

Baroness Warsi says she stayed in the house for 12 days and made a financial contribution to Mr Khan.

Sir Alistair Graham, a former chairman of the Committee on Standards in Public Life, said: "At the moment it all looks very muddy and blurred and worthy of a full investigation."

Speaking to Sky News, he suggested that if the standards commissioner decided to investigate then Lady Warsi should relinquish her ministerial office until any inquiries were complete.

"I personally am always of the view when ministers face very serious allegations that seem to have some strength to them, then it's better that they stand down from their ministerial post while that investigation takes place, but of course that is a matter for the Prime Minister," he said.

The property was owned by Dr Wafik Moustafa, a GP. He said Warsi had stayed at the house over four months between Mondays and Thursdays and occasionally at the weekend.

He said: "Baroness Warsi paid no rent, nor did she pay any utilities bills or council tax. It was an informal arrangement, so no tenancy contract was drawn up.”

Mr Moustafa, 63, added: “I’m not exactly sure how many days she stayed in total, but I believe my home was her main London residence [at the time].”

Warsi also said she did not tell House of Lords authorities that she was receiving income from a London property she had bought and rented out.

She apologised last night for the breach of parliamentary guidelines, blaming “an oversight, for which I take full responsibility”. However, she claimed she had paid tax on the rent.

Warsi last night said she had stayed in the flat on "occasional nights" as the guest of Khan at the house but during the period she had "predominantly" stayed in two hotels.

She said when she did stay with Khan she gave him "an appropriate financial payment equivalent to what I was paying at the time in hotel costs".

Mr Khan, who later became Warsi's special adviser, said: "I confirm she made a financial payment on each occasion, which compensated for the inconvenience caused and additional costs incurred by me as a result of her being there.”

But Mr Moustafa said: "Naweed Khan never paid me any money."

Labour MP John Mann said he would write to the Lords commissioner for standards asking him to investigate Warsi's expenses.

"If you are paying no rent where you are staying, you can't possibly be claiming subsistence for staying there," Mann told the Sunday Times.

"It all seems very murky. We need a full investigation into the matter."

Shadow business minister Chuka Umunna told BBC1's Sunday Politics: "To rebuild trust and demonstrate this is being dealt with in a proper way there has to be a proper, independent investigation.

"So long as these stories endure, we are going to struggle to rebuild the trust and confidence we need there to be between Westminster and the people it exists there to serve."

Conservative deputy chairman Michael Fallon said the controversy was "embarrassing" but said Lady Warsi believed she acted within the "spirit and letter" of the rules.

The failure to make a declaration about the rental income from her flat means that the public was unaware that she had another source of income, over and above her salary, which is paid by the Conservative Party, and the £300 a day allowance which she is eligible to claim when she attends the Lords.

The baroness updated the register of interests for members of the House of Lords last Monday. It now states under “land and property”: “Flat in London NW from which rental income is received.”

The Prime Minister and Baroness Warsi have spoken of the commitment to transparency by the Conservatives and the Coalition.

In November 2010 Mr Cameron said “it is our ambition to be one of the most transparent governments in the world”.

In July last year the peer said: “This Government is delivering unprecedented transparency.” The total amount that she failed to declare is not known because Baroness Warsi did not disclose it last night.

Peers are required to register any rental income worth more than £5,000 in a calendar year but do not have to say how much.

However, the amount is likely to run into five figures because it involves rental income from a home in London for at least 12 months.

As well as raising questions over her own financial affairs, it will further strain relations with grassroots members, among whom the 41-year-old baroness is not believed to enjoy widespread popularity.

The political career of her special adviser was also in question last night.

The revelations follow a dispute that emerged between Baroness Warsi and the Egyptian-born Conservative donor and fund-raiser, Dr Wafik Moustafa.

He was upset when the Conservative Arab Network, which he founded, was told earlier this year to sever its links with the party and was subsequently threatened with legal action by Baroness Warsi.

That prompted him to disclose that he had given her and her special adviser, Naweed Khan, accommodation in London.

In the course of inquiries made because of his public statement, the failure to make a disclosure about her rental income was discovered.

Baroness Warsi said last night that she bought a flat in Wembley, north-west London, in September 2007 to use after being ennobled.

However, she said that the property transaction was not “due for completion” until 2008 and so she had to find accommodation elsewhere, “predominantly” in two hotels.

“Not having made advance bookings for these hotels, there was a period of about six weeks when I spent occasional nights at a flat in Acton, which was occupied by Naweed Khan, at the time a member of Conservative Campaign HQ staff,” she said.

“For the nights that I stayed as a guest of Naweed Khan, I made an appropriate financial payment equivalent to what I was paying at the time in hotel costs.” However, Mr Naweed was actually staying rent-free at Dr Moustafa’s home in London, meaning that by extension Baroness Warsi was receiving his hospitality.

Baroness Warsi said she moved into the Wembley home in March 2008 and stayed there until June 2010, when “upon security advice, I moved to another address closer to the House of Lords”.

She said that some months later she began, “with the prior approval of the Cabinet Office and the Leader of the House of Lords, to let out the Wembley property”.

“Due to an oversight, for which I take full responsibility, the flat was not included on the Register of Lords’ Interests when its value and the rent received came to exceed the thresholds for disclosure,” she said.

“When the discrepancy became apparent this week, I immediately informed the Registrar of Lords’ Interests of its omission. I repeat: at all times my ownership of the flat and the fact that it was being let out was fully disclosed to Cabinet Office officials and HM Revenue and Customs, and was appropriately reported on the register of Ministers’ interests held by the Government.”

The disclosure means that she failed to declare rental for at least 12 months, and up to 18 months. An average rent for a one-bedroom flat in Wembley is currently £1,000 a month, meaning the amount undeclared could be as high as £18,000.

Conservative deputy chairman Michael Fallon said: "These sorts of thing are always embarrassing but the key thing here is that Lady Warsi has admitted she's made a mistake, she's apologised for it."

"She's corrected the record now and she's very happy to cooperate with any investigation back into her claims and I think it should be left at that until any investigation is reported."

Speaking to Sky News, Mr Fallon said Lady Warsi had paid the other tenant but not the owner of the Acton property.

"She stayed overnight in the other property before her own house was available and she believes she was fully entitled to claim the overnight allowance from that and to pay the other tenant for some of the costs involved," he said.

"She believes that was within the spirit and the letter of the rules as they were then and she's very happy to cooperate with any investigation."

Louise Mensch, the Conservative backbencher, wrote on Twitter: "What a lot of fuss about absolutely nothing on Lady Warsi. She declared her payments on one registry, forgot to declare on a second."

Asked where the money had gone given Mr Moustafa's claims to have received no rent payments, Mrs Mensch wrote: "Up to Khan to explain that as he's already confirmed Lady Warsi did pay him her rent."

Baroness Warsi has been criticised over her performance as Tory party chairman.

Some Conservative MPs want Mr Cameron to replace her with Grant Shapps, the housing minister. Earlier this month the Conservatives performed poorly in local elections, losing more than 400 council seats.

Baroness Warsi became the first Muslim woman to be selected as a parliamentary candidate by the Tories, contesting the Dewsbury seat in 2005, but failed to win.

She went on to be a special adviser to Lord Howard, the former Conservative leader, but saw her career take off under Mr Cameron, who made a special effort to promote ethnic minority candidates and party officials as part of his drive to modernise the Tories.

This month she said a small minority of Pakistani men saw white women as “third-class citizens” and “fair game” — following a case which saw nine Muslim men found guilty of grooming young white girls for sex.

Warsi

Cabinet minister Baroness Warsi admits breaking cash rules


David Cameron has suffered a fresh political blow as the Conservative Party chairman admits that she failed to declare thousands of pounds in rental income.

Baroness Warsi Photo: EDDIE MULHOLLAND



 By Jason Lewis, and Patrick Hennessy7:10PM BST 26 May 2012

Baroness Warsi said she did not tell House of Lords authorities that she was receiving income from a London property she had bought and rented out.

She apologised last night for the breach of parliamentary guidelines, blaming “an oversight, for which I take full responsibility”. However, she claimed she had paid tax on the rent.

The disclosure, the latest in a series of crises to hit Mr Cameron, comes as the future of Jeremy Hunt, the Culture Secretary, is called into question once again.

Senior sources told The Sunday Telegraph that Mr Hunt, who will be questioned under oath at Lord Leveson’s inquiry into media standards this week, could temporarily step down from front-line politics after the Olympics.

It follows intense pressure over his handling of the attempt by Rupert Murdoch’s News Corporation to take full control of BSkyB.

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The admission by Baroness Warsi is a serious blow to the Conservative Party’s pledge to be transparent in its dealings, and will increase pressure on Mr Cameron to replace her in a reshuffle.

The failure to make a declaration means that the public was unaware that she had another source of income, over and above her salary, which is paid by the Conservative Party, and the £300 a day allowance which she is eligible to claim when she attends the Lords.

The baroness updated the register of interests for members of the House of Lords last Monday. It now states under “land and property”: “Flat in London NW from which rental income is received.”

The Prime Minister and Baroness Warsi have spoken of the commitment to transparency by the Conservatives and the Coalition.

In November 2010 Mr Cameron said “it is our ambition to be one of the most transparent governments in the world”.

In July last year the peer said: “This Government is delivering unprecedented transparency.” The total amount that she failed to declare is not known because Baroness Warsi did not disclose it last night.

Peers are required to register any rental income worth more than £5,000 in a calendar year but do not have to say how much.

However, the amount is likely to run into five figures because it involves rental income from a home in London for at least 12 months.

As well as raising questions over her own financial affairs, it will further strain relations with grassroots members, among whom the 41-year-old baroness is not believed to enjoy widespread popularity.

The political career of her special adviser was also in question last night.

The failure to make a declaration emerged from a dispute between Baroness Warsi and a Conservative donor and fund-raiser, Dr Wafik Moustafa.

He was upset when the Conservative Arab Network, which he founded, was told earlier this year to sever its links with the party and was subsequently threatened with legal action by Baroness Warsi.

That prompted him to disclose that he had given her and her special adviser, Naweed Khan, accommodation in London.

In the course of inquiries made because of his public statement, the failure to make a disclosure about her rental income was discovered.

Baroness Warsi said last night that she bought a flat in Wembley, north-west London, in September 2007 to use after being ennobled.

However, she said that the property transaction was not “due for completion” until 2008 and so she had to find accommodation elsewhere, “predominantly” in two hotels.

“Not having made advance bookings for these hotels, there was a period of about six weeks when I spent occasional nights at a flat in Acton, which was occupied by Naweed Khan, at the time a member of Conservative Campaign HQ staff,” she said. “For the nights that I stayed as a guest of Naweed Khan, I made an appropriate financial payment equivalent to what I was paying at the time in hotel costs.” However, Mr Naweed was actually staying rent-free at Dr Moustafa’s home in London, meaning that by extension Baroness Warsi was receiving his hospitality.



Special Advsier: Naweed Khan

Baroness Warsi said she moved into the Wembley home in March 2008 and stayed there until June 2010, when “upon security advice, I moved to another address closer to the House of Lords”.

She said that some months later she began, “with the prior approval of the Cabinet Office and the Leader of the House of Lords, to let out the Wembley property”.

“Due to an oversight, for which I take full responsibility, the flat was not included on the Register of Lords’ Interests when its value and the rent received came to exceed the thresholds for disclosure,” she said.

“When the discrepancy became apparent this week, I immediately informed the Registrar of Lords’ Interests of its omission. I repeat: at all times my ownership of the flat and the fact that it was being let out was fully disclosed to Cabinet Office officials and HM Revenue and Customs, and was appropriately reported on the register of Ministers’ interests held by the Government.” The disclosure means that she failed to declare rental for at least 12 months, and up to 18 months. An average rent for a one-bedroom flat in Wembley is currently £1,000 a month, meaning the amount undeclared could be as high as £18,000.

Baroness Warsi has been criticised over her performance as Tory party chairman.

Some Conservative MPs want Mr Cameron to replace her with Grant Shapps, the housing minister. Earlier this month the Conservatives performed poorly in local elections, losing more than 400 council seats.

Baroness Warsi became the first Muslim woman to be selected as a parliamentary candidate by the Tories, contesting the Dewsbury seat in 2005, but failed to win.

She went on to be a special adviser to Lord Howard, the former Conservative leader, but saw her career take off under Mr Cameron, who made a special effort to promote ethnic minority candidates and party officials as part of his drive to modernise the Tories.

This month she said a small minority of Pakistani men saw white women as “third-class citizens” and “fair game” — following a case which saw nine Muslim men found guilty of grooming young white girls for sex.

Prince Andrew

Money laundering probe puts spotlight on the £15 million sale of the Duke of York’s home


The deal which saw Prince Andrew’s marital home sold for £3 million more than its asking price is being examined by two international money-laundering investigations.


The Amanpuri Resort.



By Jason Lewis, Investigations Editor10:00PM BST 26 May 2012

Prosecutors in Italy and Switzerland are looking into how the purchase of the Sunninghill estate was put together by a group of oil executives.

The inquiries are focusing on “a network of personal and business relationships” allegedly used for “international corruption”.

Under the spotlight is what was decided when a group of wealthy Kazakh oil executives and Prince Andrew’s close friend Goga Ashkenazi met at a Thai beach resort, when the deal to buy the Prince’s home was discussed.

The sale of the Sunninghill estate, a wedding gift from the Queen to the Prince and his then wife, the Duchess of York, has already raised concerns after it was disclosed the buyer was an offshore trust belonging to Timur Kulibayev.

Mr Kulibayev is the billionaire son-in-law of the Kazakh president, Nursultan Nazarbayev, with whom Prince Andrew had a number of meeting as part of his former role as the Government’s trade ambassador.

Prince Andrew and his close friend Goga Askenazi

The two investigations centre on the activities of Enviro Pacific Investments, a company based in the British Virgin Islands, a tax haven which offers secrecy to companies and individuals who conduct their affairs there.

Enviro Pacific Investments is an oil and gas firm working in Kazakhstan, which charges multi-million pound fees to other firms seeking energy contracts in the country.

In the course of the meeting at the resort the trust is understood to have agreed to put up at least £6 million towards for the purchase of the house.

Sunninghill, made up of a house once nicknamed derisively Southyork for its resemblance to an American ranch home, and its five acres of grounds were purchased by the trust in June 2007, having been on sale for more than five years at a price of £12 million.

Despite the £15 million price tag, the house has been left empty ever since and is now apparently derelict. The Duke moved to Royal Lodge in Windsor, which remains his home.



DERELICT: Prince Andrew's former home Suninghill Park

The meeting at the Thai resort of Amanpuri, Phuket, between January 31 and February 5 2007 involved 18 people.

Among those at the meeting were the Duke of York’s close friend Miss Ashkenazi, a socialite and businesswoman, and Arvind Tiku, a wealthy Indian who is Mr Kulibayev’s business partner.

Other guests included Marianna Belchanskaya, a Russian lawyer, and Kairat Boranbayev chairman of the Russian-Kazak Oil company KazRosGaz, which is jointly owned by Kazakhstan and the Kremlin.

They were also joined by a mystery man, who stayed in Miss Ashkenazi’s private villa, who used the alias “John Smith” on the resort’s reservation record.

The Italian authorities are interested in the trust because of allegations of corrupt payments made by Italian firms to politicians in Kazazkhstan.

On Tuesday Milan prosecutor Fabio De Pasquale is due to ask a judge for account details to be disclosed so financial transactions from Italy’s ENI group to Kazakhstan can be tracked.

An indictment lodged with the court earlier this month accused several Italian firms of paying bribes to leading members of Kazakh President Nazarbayev’s regime, including Mr Kulibayev, who is alleged to have received £12.8 million.

Italian prosecutors are looking into the possibility that the bribe may have been used to buy Sunninghill Park, although there is no firm proof as yet and that is why the request for bank details to be disclosed is being made to a Milan judge.

Mr De Pasquale said: “The investigation is still in the early stages we are making a request for information on the 29th May and then we will see what happens. At this moment in time I cannot say anything else.”

In letters to Lucie Wellig, his counterpart in the Swiss prosecutor’s office, written in February last year and March this year, he asked for her assistance in gathering evidence.

In the letters, obtained by the Sunday Telegraph, he said he was aware of allegations surrounding the Sunninghill sale involving the firm Enviro Pacific Investments, which he described as linked to people “at the summit of the Kazakh government”.

Details of the meeting in Thailand obtained by the Sunday Telegraph show that Mr Tiku used his assistant to arrange for $140,000 (£89,370) to be paid in advance to cover the Kazak team’s expenses during their stay, plus an additional $40,000 (£25,550) in cash in an email headed “hotel and stay expenses - Kazak team - Phuket -Enviro Pacific Investments Ltd”,

On other hotel bills and receipts, the party is referred to as the Ocean Oil Group, part Mr Tiku and Mr Kulibayev’s business empire through which they control oil and gas fields in Kazakhstan.

Miss Ashkenazi stayed in Villa number 7, a £2,000-a-night pavilion, which she shared with “John Smith” for the five night trip between January 31 and February 5 2007.

Mr Tiku paid for three $950 dollar a night rooms and four Thai-styled Pavilions located away from the hotel “interspersed throughout a coconut plantation”.

Guests spent £30,000 on food and drink, and a further £3,500 on a fireworks display and £800 on a jazz band to celebrate the birthday of one of the guests, who also ordered several Cuban Cohiba mini cigars on their tab costing £17 each.

Ten days after the Thai trip Bor Investments, the secretive offshore trust which owns Miss Ashenazi’s £27.5 million home in Holland Park, west London, was set up.

Prince Andrew’s close friendship with Miss Ashkenazi had blossomed during 2007 and he introduced her to the Queen at Lady’s Day at Royal Ascot in June that year, when she had lunch in the Royal Box.

Last week she failed to answer questions sent to her via her London office. Other guests who were in Phuket also failed to respond to requests for comment. Sources close to the Prince said he was not present at the meeting.

Oxford University educated Ms Ashkenazi is chief executive of MunaiGaz Engineering Group, a multi-million-pound oil and gas company with operations in Kazakhstan, Russia and Ukraine. She has previously denied rumours of an affair with Prince Andrew as “such nonsense”.

Ms Ashkenazi has said: “Andrew has been a very good friend of mine since we met at a dinner party in 2001. We have many common friends.”

It is also unclear where Mr Kulibayev, who is married to President Nazabayev’s daughter, was during the Thai trip. Miss Ashkenazi is rumoured to be his long time mistress and he is named as the father on the birth certificate of one of her two children.

Ms Ashkenazi has also dismissed the controversy over the purchase of Sunninghill for £15 million after it had languished on the market for more than five years and was valued at £12 million.

“It was a deal struck between friends and the asking price was paid,’ she has said.

'I can’t understand why there has been such a fuss. There was nothing corrupt about it. I think the people negotiating for Timur were not aware they were paying more money. I suspect they were instructed not to haggle with the Royal Family.’

Last night a Buckingham Palace spokesman, referring to the Sunninghill sale, said: “This was a private sale between two trusts. There was never any impropriety on the part of The Duke of York, any suggestions of which are false.”

Tuesday 8 May 2012

Death in China

Neil Heywood murder: Bo's wife, a French businessman and the £40 million property empire


The Chinese politician's wife suspected of the murder of British businessman Neil Heywood has links to a £40 million property empire in Europe.

Gu Kailai and Bo Xilai and the British businessman Neil Heywood

By Jason Lewis, Investigations Editor, Harriet Alexander in Lyon and David Eimer in Dalian7:30AM BST 06 May 2012

Gu Kailai's personal office in Beijing is the base for a highly profitable firm run by the mysterious French businessman, Patrick Henri Devillers, who is at the centre of her affairs.

The company, registered in Luxembourg, a secretive tax haven, has millions of Euros invested in a series of property companies mainly based in France.

The disclosure raises new questions about Mrs Gu's business interests amid allegations that Mr Heywood, a long time associate of Mrs Gu and her husband Bo Xilai, was secretly helping the couple move huge sums of money out of China.

Mrs Gu is accused of ordering the cyanide-assisted killing of 41-year-old Old Harrovian Mr Heywood after he allegedly threatened to reveal his secret role as the couple's middleman in a series of money laundering deals.

His suspicious death created shock waves in Britain and in China and ended the gilded political career of Mr Bo, the Communist leader of the city of Chongqing.

Last week The Sunday Telegraph revealed how Mrs Gu, Mr Heywood and architect Mr Devillers were involved in a £600,000 deal to buy a hot air balloon from a Dorset-based company during which she allegedly suggested paying an extra £200,000 to cover her son's fees at Harrow public school.

But its was Mr Devillers who appeared to be a central figure in Mrs Gu's dealings. The pair set up a UK-based firm together and it was the Frenchman, who she introduced as her "middle man", who apparently signed contracts on her behalf.

Now it can be disclosed that for the last five years Mr Devillers has been running a lucrative property business from her personal office.

The firm, D2 Properties S.a.r.l, registered in Luxembourg, which in 2009 was put on G20's "grey list" of countries with "questionable banking arrangements", has large stakes in a series of property firms.

The 51-year-old Frenchman, whose whereabouts are unknown, claimed to be living at the address, an apartment in the Asian Games Village, overlooking the "Bird's Nest" Olympic Stadium in Beijing.

He has used the address on all official filings to the Luxembourg authorities connected with the firm since it was set up in 2006 and it is listed as his "home" on its most recent accounts, dated 12 October 2011 - a month before Mr Heywood's death.

But the address is also listed as the office of Horus L. Kai, the name used as an alias by Mrs Gu in dealings with Western businessman, and the original name of her law practice, which is now known as Ang Dao. The address was printed her personal business cards and registered with the Beijing Lawyer's Association, the official body overseeing legal practices in the Chinese capital.

D2 Properties is highly lucrative. Its most recent accounts reveal it had a turnover of more than £630,000 last year and profits of £135,000 in the last two years.

The money is generated through stakes in ten French property firms which controls at least £35 million worth of rental property, "real estate" and other developments in France.

According to documents registered with the Luxembourg authorities D2 is run by Mr Devillers, who also owns the majority stake in the firm. The rest of the shares are controlled by a French investment firm, Rainans Investissement SAS, run by Mr Devillers' father Michel from the family home near Lyon.

The French firm controls a vast property and development business empire worth at least £40 million.

While Mr Heywood is believed to have met the powerful Chinese couple after being hired to teach their son English, how and when Mr Devillers met Mrs Gu, and his involvement with her and Mr Heywood, are shrouded in mystery.

In November 1990 newly qualified architect Mr Devillers, who was born in Besancon, near France's border with Switzerland in 1960, married a Chinese musician, Guan Jie, in Lyon.

At first the couple lived in the city in an apartment on the fashionable Quai Claude Bernard on the banks of the Rhone. But in December 1992 the couple's son Alexis was born and, a short time later, the young family moved to Guan Jie's home city of Dalian.

Guan Jie, who specialises in playing the Guzheng, a traditional Chinese string instrument, toured the country and also travelled extensively abroad giving concerts.

What Mr Devillers was doing at this time is unclear, he apparently began to follow the traditional Chinese Taoist faith, and it is also likely that during this period he met Mrs Gu and her husband Bo Xilai, who by 1993 was mayor of Dalian.

Mr Devillers' wife's family was part of the Chinese Communist Party elite. Her great uncle was Guan Xiangying, a hero of the revolution and a leading member of the politburo, who, on his death in 1946, had a eulogy written in his memory by Mao Zedong.

Chairman Mao wrote: "Loyal and devoted to the party and the country, comrade Guan Xiangying lives forever." A large statue of him still stands in Dalian today.

This family connection would have allowed Mr Devillers' access to the elite of Chinese society and is probably how he first gained access to Mr Bo and his wife, and began working on a series of mysterious business deals with Mrs Gu. Mr Bo's own father, Bo Yibo, was a leading revolutionary and a politburo member at the same time as Guan Xiangying.

Several people in Britain who met Mrs Gu and Mr Devillers in the late 1990s suggested that were "very close".

By 2003 the Devillers' marriage had broken down and the couple divorced in the Dalian district of Shahekou on 31 July.




Musician Guan Jie, Patrick Devillers's ex-wife; Ms Guan pictured in 1993 
 Guan Jie, who is now a professor of music at the Liaoning Normal University, last night denied that her former husband's relationship with Mrs Gu had ended their marriage.

Reluctant to talk in detail, she would only say: "It is in the past," when asked about her husband and the politician's wife.

"We split up because I wanted to stay in Dalian to look after my parents," she said. "My mother is not very well and misses me very much when I am away."

She said that she had no idea where her former husband lived now and that they had not had any contact for several years.

"I raised my son alone. He has no contact with his father. Now, he has a new Chinese father," said Guan, who refused to say if she had remarried.

Using the metaphor of "a cake being cut in half" to describe their split, she added: "Patrick is a good guy, a man who understands art and artists. He's a Taoist. I have no contact with him and I don't know where he is, that's the truth. I'm not the sort of person to stay in touch."

Asked about Neil Heywood, she refused to say if she had ever met him or whether her ex-husband had mentioned him. She added: "Everyone has heard of what happened to Neil Heywood. It's a pity."

Last week no one would answer the door at the Ang Dao office where both Patrick Devillers and Mrs Gu were based, in a Beijing apartment block.

Last month staff told The Sunday Telegraph that they had not seen Mr Devillers for three years. The boss of the firm, who gave his name only as Mr Li, said he was a friend of Mr Devillers and that he used to come to the office, but had not seen or heard from him for a "long time".

A Beijing lawyer who works in the complex where the Ang Dao law firm is located said yesterday: "The manager has been arrested and the firm has been shut down. It has been de-listed from the China Law Association. There's a great fear amongst lawyers who have had dealings with this firm. Many people connected with it have been arrested."

Last night Stephane Biver, a Luxembourg lawyer acting for D2 Properties and Patrick Devillers, said he could not answer questions about the business or its links to China. He said: "Our law firm is under strict professional secrecy and is therefore not allowed to disclose any kind of information about clients."

Michel Devillers failed to respond to faxes and emails sent to his business last week.

Additional reporting Patrick Sawer and Josie Ensor