London court considers Russian oligarch’s collection methods abnormal
London court has disapproved of Mikhail Fridman’s A1 hunt for Georgy Bedzhamov’s assets. The judge said that the campaign that included advertising in newspapers and on billboards is abnormal.
Ex-banker Georgy Bedzhamov, arrested in absentia in Russia,
accuses A1 of persecution, as the company has unraveled an active and
non-conventional search for his assets. The judge agreed that A1’s advertising
campaign was abnormal for the process.
Former co-owner of Vneshprombank (VPB) Georgy Bedzhamov
filed a lawsuit against A1 investment company (part of Russian Alfa Group) in
connection with the steps they took to search for his oversees assets. In this story, A1 represents the Russian
Deposit Insurance Agency (DIA), the bankruptcy administrator of VPB that is
trying to recover assets from Bedzhamov in favor of VBP’s creditors after the
bank lost the license.
It is a normal practice for a company like A1 to have
undertaken the search and collection of Bedzhamov’s assets in international
jurisdictions for and on behalf of DIA, yet it is the methods the company
employed that have raised brows and questions.
In his harassment proceeding, Bedzhamov reports about the
alleged covert surveillance of him and his family in late 2018 and early 2019,
as well as a press campaign in Russia in August 2019 that publicised an award
that A1 offered for information on the ex-banker’s assets. Similar campaign was
launched in the UK, and consisted of advertisements in the Evening Standard and
City AM newspapers, as well as advertising on a car that was cruising through
London center.
Fridman’s A1 launched the public hunt for Bedzhamov’s assets
in the summer of 2019, announcing a reward for any relevant information (the
amount was not disclosed). The ads ran on screens of Sheremetyevo Airport and
the Vnukovo-3 business aviation center in Moscow. In December 2019, A1
purchased advertisements in the British media and sent a car with the reward
announcement cruise through Knightsbridge, where Bedzhamov allegedly lives.
A1 explained these actions by the need to “keep control” of
the freezing order for Bedzhamov’s assets, the court records say, while VPB
representative said it was normal to have surveillance over ‘a known
fraudster’. The judge found that wrong, as no court order has so far declared
Bedzhamov guilty, and even if it did, advertising campaigns are not a normal
method of litigation.
The whole role of A1’s in the process is also far from
usual, the judge concluded. A1 does not only finance its clients’ proceedings,
but also controls them tightly and daily, while the VPB legal team seeks
instructions from A1 lawyers – the length A1 goes to to get its percentage of
the recovered assets.
Extreme control, persistence and methods bordering on abuse
and harassment are part of Alfa Group’s ethos (A1’s Russian mother company). In
2016, Alfa Group’s collecting agency was the first one ever warned of being
expelled from the largest Russian association of collecting agencies for severe
breach of ‘the requirements of the ethical code of the association’, and ‘the increase in the number of complaints
about the collection methods used by the company’, the association declared.
Russian media reported that the main complaint against
Alfa’s collectors was excessively harsh methods, in particular threats to the
life and health of debtors’ and their families. RIA Novosti news agency even reported
on a threat to burn the debtor’s child for a debt to Fridman’s Alfa-Bank.
The most recent and prominent object of Fridman’s debt
collecting activities is none else then the richest woman of Russia, widow of
Moscow’s former mayor Yuri Luzhkov. A1 acquired the right to claim an alleged
GBP32 million debt of her bankrupt brother Victor Baturin, and consequently the
official right to support him in his claim for 25% (worth almost GBP140mln) of
Elena Baturina’s company he once co-managed.
The story repeats itself with A1’s generously financing
Victor in his proceedings, and with A1’s lawyers present in every court
meeting. The real percentage that A1 hopes to get from Victor in the end,
remains unknown. The company prefers to see its involvement in the case as
‘helping a man in a difficult situation’.
It is worth noting though that before allying with Fridman’s
A1 Victor Baturin has made multiple attempts to get money off his sister and
former business partner over the past 5 years, all of which have been rejected
by Russian courts. Those attempts commenced once he had done his time in prison
for financial crimes and been declared bankrupt.
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