The plot has thickened in the fight over the lucrative Ukraina shopping mall in Kyiv between a state-owned Irish bank and that country’s once richest man, Sean Quinn Sr. and his family.
A high court in Dublin on Nov. 2 sentenced Quinn Sr. to nine weeks in jail for stripping the assets of Kyiv’s Ukraina shopping mall and other foreign properties worth up to $430 million that once belonged to his family.
The state-owned Irish Bank Resolution Corporation is after the properties, including the $78 million Ukraina shopping center, as part of a debt recovery plan over the Quinn family.
In June, Quinn Sr., 66, his son Quinn Jr., and nephew, Peter Quinn, were found in contempt of court in Ireland for failing to stop the relocation of multimillion-dollar assets beyond the reach of the bank.
Quinn Jr. and Peter Quinn were subsequently sentenced to three months in jail this summer.
According to the Irish Times, Quinn Sr. told reporters following the sentence that he will go to jail but intends to appeal the ruling.
The Quinn family members have maintained that they no longer control the disputed assets. However, IBRC has presented evidence in courts that the Quinn family exercised control over some properties, including Ukraina in Kyiv, while under restraining orders.
At the height of his success, Quinn Sr. was Ireland’s richest in 2008 with an estimated $6 billion net worth. He employed thousands, mostly in the previously job-starved areas bordering Northern Ireland. However his and his family’s business empire dissipated in the wake of the global financial crisis.
Quinn Sr. filed for bankruptcy in 2011 and owes the bank an estimated total of $3 billion.
In Ukraine, IBRC has met stiff resistance in courts since April 2011 to install its manager at Ukraina and access the shopping center’s estimated $10 million yearly in rent.
The bank said it has exhausted all legal options available to it in Ukraine despite taking the legal battle to the highest levels of government.
The IBRC nominally controls nearly 97 percent shares in the Ukraina shopping mall. However, IBRC has been stalled in numerous litigation battles.
In a Nov. 1 affidavit taken by IBRC senior executive Richard Woodhouse obtained by the Kyiv Post, an allusion was made towards Ukraine’s notoriously corrupt legal system.
“IBRC have been involved in extremely complex and detailed litigation in numerous jurisdictions and have been continuously and unlawfully been frustrated in obtaining any tangible return on their efforts,” the Nov. 1 affidavit reads.
The Kyiv Post has been unable to reach Laryssa Yanez Puga– who worked for the Quinns and still manages Ukraina – for comment via personal visits to the management office at the mall and repeated phone calls – a message left as recently as Oct. 5 with her office went unanswered.
Separately, the asset recovery unit of Russia’s Alfa Group was retained by IBRC to go after 11 disputed properties, including Ukraina in Kyiv, according to the Woodhouse affidavit.
Called A1 Group Limited, the company will try to recover properties worth more than $315 million in Russia and Ukraine.
Alfa Group belongs to three Russian tycoons with links to the Kremlin.
Mikhail Fridman, German Khan and Alexei Kuzmichov, all of whom together are worth an estimated $33 billion, according to Forbes, are Alfa’s three main shareholders.
Khan is a native of Kyiv.
According to Alfa’s 2010 audited accounts, the company had $60 billion in assets making it one of Russia’s largest privately-owned conglomerates with interests in natural resources, telecommunications, retail, finance and leisure.
One of Fridman’s key partners in Alfa Group, Peter Aven, has known Russian President Vladimir Putin since 1991.
IBRC and A1 will form a joint venture to go after the disputed assets. A1 will bear all the costs of the recovery process, including litigation costs.
They will, however, split the recovery proceeds.
The Russians will also try to recover the estimated $45 million in rental income that the properties produced over the past year.
“…any individual or organization will be wary about being in conflict with such an influential player in the market (as A1),” read the affidavit.
A1 spokesperson in Moscow Andrey Kocherov wouldn’t answer questions from the Kyiv Post when reached by telephone on Nov. 6.
Meanwhile, the Irish Times reported that two Ukrainians could face jail time in Northern Ireland if they’re found guilty of violating a court injunction in their role of alleged asset stripping of Ukraina.
Oleksandr Serpokrylov, an economist, and Dmytro Zaitsev, a lawyer of Makiyivka, Donetsk Oblast, allegedly transferred what IBRC has called fictitious debts surrounding the mall in violation of court orders.
They were questioned in the Northern Ireland High Court on Nov. 6 by video-link to defend contempt of court proceedings over the transfer of a $45 million claim against Ukraina.
Kyiv Post staff writer Mark Rachkevych can be reached at [email protected]
