Russian oligarchs fight €267 mln claim in Limassol court
The Limassol District Court will hear a landmark bank fraud case when Russian oligarch brothers Dmitri and Alexei Ananyev fight a worldwide freezing order issued in Cyprus in a bid by Moscow authorities to recover €267 mln.
“This case will test the willingness of the Cyprus courts to
exercise their powers and provide remedies to help the Russian banks recover
their assets,” explained Alexandros Gavrielides, a partner in Skordis,
Papapetrou & Co.
The Ananyev brothers, presently living in Cyprus, are being
sued by Bank of Non-Profile Assets ‘Trust’, a Russian state-owned bank tasked
with restructuring the country’s banking system.
The bank alleges the brothers are responsible for illegal
syphoning of significant assets from Promsvyazbank (PSB) and wholly-owned
subsidiary Avtovazbank (AVB), the rights under which were subsequently assigned
to ‘Trust’ Bank.
‘Trust’ Bank also alleges the brothers and their wives,
Lyudmila, and Daria, are responsible for the unlawful concealment of assets to
put them beyond the reach of their creditors.
By December 2017, PSB was in a critical condition and in
need of financial rescue.
The Russian Central Bank intervened to appoint temporary
administrators, who then discovered a substantial ‘black hole’ in PSB’s balance
sheet of around €1.5 bln, leading to a bailout and rescue by the Russian state.
In November 2020, ‘Trust’ Bank obtained a worldwide freezing
order (WFO) from the Cyprus courts against the brothers and their wives,
fearing, based on their previous history of asset dissipation, would continue
hiding their assets from the Bank and other creditors, who are suing them.
The Cypriot case is based, among other evidence, on a
forensic report by auditors KPMG, submitted to the Cyprus court in November
2020, setting out four schemes through which the bank says more than €267 mln
was syphoned from PSB.
While the bank will oppose the cancellation of the asset
freeze during the hearing on April 6, it is also continuing its investigations
with KPMG.
The case management hearing on the underlying lawsuit to
order the return of the missing millions to the Bank is expected to be heard in
Cyprus later in the year.
The case also shines a light on Cyprus’s former ‘golden
passport’ scheme, whereby Cyprus sold citizenship – and thus the right to live
and work anywhere in the EU – to wealthy investors in Cypriot property schemes
and government funds.
The scheme was popular amongst Russian and Chinese oligarchs
but was unceremoniously shut down in November when the EU threatened to sue
Cyprus over how the scheme was operated after a revealing Al Jazeera scoop.
The video newsreel forced two senior politicians, the
then-House President and a senior MP, to resign over their seeming involvement
to secure ‘golden passports’ in exchange for bribes or favours.
Forbes fame to Limassol ‘exile’
According to the ‘Trust’ Bank court claim, Dmitri Ananyev
and his wife, Lyudmila, purchased Cypriot citizenship, thereby EU residency
rights in June 2017 – just six months before the collapse of PSB. Shortly
after, the brothers became aware of the Russian central bank’s inspection of
PSB, which led to it placing PSB into temporary administration.
Alexei and his wife Daria also purchased Cypriot citizenship
approximately at the same time as Dmitri and Lyudmila.
Dmitri and Lyudmila reportedly live in a multi-million villa
in Cyprus.
Alexei and his wife, Daria, live in exile in a luxurious 800
square metre apartment, spanning the entire fifth floor of one of Vienna’s most
famous buildings on the Hoher Markt.
In 2017, Forbes cited the Ananyev brothers as the 58th and
59th richest men in Russia, together worth over $2.8 bln, largely based on the
value of PSB.
By 2010, PSB was the ninth-largest bank in Russia and
recognised, in 2014, as “systemically important” (in other words, it was on
Russia’s list of ‘too big to fail’ banks).
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