Tensions are rising within the long-running and more and more complicated battle over the dramatic nationalisation of Russian financial institution Promsvyazbank.
Readers of our story in August might keep in mind that brothers Dmitri and Alexei Ananyev had fled Russia after the financial institution, which they based and beforehand owned, fell into administration and was taken over by the nation’s central financial institution in 2017 (although not earlier than some quite uncommon transactions in its shares). Alexei moved to the UK, whereas Dmitri went to Cyprus.
Russian authorities put out a warrant for his or her arrest and charged them with embezzlement of round $1.6bn. A lawyer for Alexei mentioned the fees and warrant for his arrest have been “completely groundless”. Dmitri maintains he’s the sufferer of a politically motivated nationalisation and he did nothing flawed. In accordance with the brothers, Interpol’s Basic Secretariat says the accusations in opposition to Dmitri and Alexei have a political dimension to them and they’re not topic to an Interpol discover. Interpol declined to remark.
Now a courtroom case within the Netherlands this week may shed additional gentle on what occurred at PSB, because the financial institution is thought, across the time of its nationalisation.
This case is being introduced by among the largely Russian savers (together with the proprietor of a fertiliser firm and a wine service provider) who’re looking for a solution to get their a refund after they purchased $240m of assured notes bought by PSB that subsequently defaulted.
The brothers have an online of offshore corporations across the globe, and claimants say they’ve discovered it exhausting to resolve the place to pursue a authorized criticism.
Nonetheless, the claimants have lately been aided by enter from a gaggle of enthusiastic German MPs and MEPs who’ve taken up their combat. These politicians have been briefed on the Ananyevs by high-profile lawyer John Sandweg — former performing basic counsel on the US Division of Homeland Safety and now a lawyer advising some noteholders. After an industrious strategy to letter-writing to varied political leaders, strain is now constructing in some jurisdictions.
With German savers mentioned to be among the many alleged victims (and little doubt conscious each of Commerzbank’s shareholding in PSB between 2006 and 2012, in addition to the embarrassment of the Wirecard fraud again house), the German politicians have written to European Fee President Ursula von der Leyen, UK Chancellor Rishi Sunak, House Secretary Priti Patel, Cyprus’s Minister of Finance Constantinos Petrides, European Commissioner for Justice Didier Reynders, the Netherlands’ Minister of Inside Kajsa Ollongren . . . the listing goes on.
All that glitters
A September letter from MEP Sven Schulze to Mr Sunak, for example, raised questions over the provenance of the cash used to realize residency within the UK and Cyprus. Mr Schulze has requested Dishy Rishi for entry to the knowledge the brothers disclosed within the UK residency software — together with the revenue sources given for the brothers’ wives and youngsters — and for that software to be scrutinised.
He has additionally requested Cyprus’s Mr Petrides to look at Dmitri’s visa software in Cyprus, which was made underneath the nation’s so-called golden visa course of.
That course of got here into the highlight in October when, following an Al Jazeera undercover investigation, Cyprus suspended its golden passport scheme. The European Fee has additionally launched legal action in opposition to the nation. The Fee had been irked by the truth that such schemes seem to let rich people purchase the advantages of EU membership, following controversial instances involving Malaysian businessman Jho Low, and relations and associates of Cambodia’s authoritarian prime minister Hun Sen.
One of many letter-writers, German MP Peter Beyer, informed us he’s now requesting “severe reclaiming of already-issued golden passports by the Cypriot authorities, since this apply clearly is opposite to European widespread pursuits”.
Dmitri’s stance is that, in contrast to candidates who hid the supply of their cash, his software was based mostly on paperwork verified by Cypriot authorities and is supported by his lengthy monitor file within the banking sector and the actual fact PSB had a department in Cyprus.
Alexei’s lawyer mentioned any such issues raised by the German politicians appeared “deceptive and never correct”.
In Russia, in the meantime, investigators lately arrested five people and put 4 extra on a wished listing in reference to the alleged siphoning off of funds at PSB.
In George City within the Cayman Islands, some noteholders filed a writ within the Grand Court docket in October. The declare, printed on the courtroom’s web site, alleges that Dmitri’s “dishonest scheme . . . fraudulently” moved the proceeds of the notes into his corporations. Dmitri apparently has not obtained discover of the case.
And within the Netherlands, some noteholders gained a doubtlessly significant victory in August when a choose dominated the 2 administrators of a Dutch firm owned by the brothers may very well be questioned.
Noteholders hope the listening to, scheduled for this week, will assist them present whether or not the administrators acted on the brothers’ directions in finishing up the weird share transactions simply earlier than PSB was nationalised.
They hope that proof may, in flip, show helpful in asking the UK Excessive Court docket to rethink a freezing order on the brothers’ property. Final 12 months a choose threw out the noteholders’ declare in opposition to the brothers’ English corporations, ruling England was not the right jurisdiction, ordering frozen cash to be repaid to Dmitri and the noteholders to pay prices.
The choose additionally mentioned that “essentially the most pure targets for any declare are PSB and (presumably) the primary defendant [Dmitri]”.
Final week a courtroom in Cyprus issued an order for the seizure of the worldwide property of the brothers and their wives for as much as €267m, according to Kommersant. Alexei “had nothing to do with the alleged unlawful actions or transactions acknowledged within the declare”, a spokesperson reportedly informed the newspaper. Dmitri’s spokesperson informed the paper the defendants “categorically disagree with the calls for made within the Limassol District Court docket and dispute them”.
Dmitri, a former member of the higher chamber of the Russian parliament, contests lots of the allegations and issues raised. His place, in a nutshell, appears to be that previous to the Russian central financial institution’s intervention, PSB had a robust worldwide fame, and that he’s the sufferer of a politically motivated nationalisation.
He has filed an software to the European Court docket of Human Rights, which was declared inadmissible by an ECHR choose, the ECHR informed us (there’s understood to be a problem in the mean time about jurisdiction). Nonetheless, a separate software, PSB vs Russia, is “into consideration”, the ECHR mentioned.
From Dmitri’s authorized illustration:
Issues associated to Russia’s nationalisation of PSB are the topic of unbiased judicial scrutiny. We anticipate that to place an finish to the years of unfounded accusations Mr Ananiev has since confronted.
A lawyer talking on behalf of Alexei mentioned his consumer didn’t “at any time… have authority or capability to have an effect on the transactions” of PSB or some other entities. The UK Excessive Court docket choose final 12 months mentioned that, whereas PSB had been collectively owned by the brothers, it was “Dmitri’s enterprise”. Alexei by no means had an govt or managerial function on the financial institution, though he did have a non-executive function on its supervisory board, the choose mentioned.
Victims of alleged frauds unfold throughout offshore jurisdictions hardly have a terrific monitor file of getting their a refund. Company secrecy, an absence of worldwide co-operation, questions of jurisdiction and the sheer price of such courtroom instances ultimately delay many complainants.
Nonetheless, within the case of PSB, issues seem slowly to be coming to a head. Helped by some German politicians’ enthusiastic letter-writing, extra particulars about what actually went on at PSB — together with what occurred to noteholders’ cash — may ultimately come out within the numerous contested courtroom proceedings.
We will probably be watching.
Cayman, Curaçao and Cyprus: the hunt for $240m of Russian bank bonds — FT Alphaville