Months before a pivotal court ruling tipped to trigger a tsunami of claims from creditors and further legal action trusts connected to Eric Watson were re-established in the tax haven of Jersey owning £356m ($698m) in assets, documents from the Pandora Papers suggest.
Watson would later plead penury, serving months in London's Pentonville prison for contempt of court after failing to disclose assets, and the trusts in question would become the subject of still-ongoing court proceedings from Sir Owen Glenn who is said in recent court rulings to still have a "considerable portion of $86m owed in awarded compensation outstanding".
The relationship between Watson and Glenn, who at one stage were business partners and co-owners of the New Zealand Warriors professional league team, has spectacularly broken over the past decade, with tens of millions spent on a legal war between the two parties that has largely ended in Glenn's favour.
Watson is the highest-profile New Zealand businessman identified in the Pandora Papers, a trove of nearly 12 million confidential files obtained by the International Consortium of Investigative Journalists and described as the biggest data leak in history.
The ICIJ shared the records with 150 media organisations around the world, including the Herald, and the collaboration has revealed the hidden offshore financial dealings of an astonishing array of rich and powerful figures, including 35 country leaders, hundreds of politicians, 133 billionaires, celebrities, and sports stars.
Internal documents from 14 trust providers are contained in the Pandora Papers, including Trident Trust which administered several Watson structures in Jersey.
On May 4, 2018, internal Trident emails showed "the client in relation to the subject companies sought to restore three entities including Jersey trust Chanin Holdings".
While the client was not named in the emails, attached Trident forms for Chanin list its beneficial owner as Eric Watson.
The forms state Chanin's purpose was to hold "financial instruments", specifically "loans receivable'' said to have an estimated value of £356m.
Internal emails qualify this reference to Watson: "The beneficial owner on the form has been stated as Eric Watson but this is simply because your forms require an individual … the legal owner of the shares in Chanin are the trustees."
The timing of this restructure came at a crucial juncture in Watson's long legal war with Glenn. The year before the parties had spent eight weeks before Lord Justice Christopher Nugee and the delivery of his substantive ruling on Glenn's claims of fraud was imminent.
Watson told the Herald in January that hearing had not gone well after his trustees had "unilaterally decided to fold up the tent".
"We didn't get to put forward our side of the story. So basically I had to either pull out of the trial completely, or continue on. I should have pulled out and just gone '**** it, we're done and I'll accept whatever judgment comes out'," he said this year.
That ruling, adjudicating Watson had engaged in fraudulent misrepresentation over his handling of the joint-venture with Glenn, landed in July 2018.
Watson did not respond to a request for comment from the Herald this week about Chanin and his appearance in the Pandora Papers, but has previously disputed court findings he had defrauded Glenn.
Watson, once New Zealand's most famous businessman, has a long history of involvement in offshore finance. In 2019 the High Court at Auckland found his 2004 relocation to the United Kingdom - involving shunting his wealth through trusts and companies in the Cayman Islands - amounted to tax avoidance, triggering a largely-unpaid $112m liability.
In January the Jersey Courts declined an opening bid by Glenn to crack open two trusts - including Chanin - with the judge saying the application would have been "a shortcut to what would otherwise be expensive causes of action".
A spokesman for Glenn confirmed Chanin was a party to their proceedings in Jersey and this formed part of "ongoing recovery action against Eric Watson".