You're reading: Ukraina shopping mall stripped of $15 million as former management accused of ties to bankrupt Irish family

An internal audit has found that $15 million was allegedly stripped from Kyiv’s lucrative Ukraina shopping mall in 2011-2012, an April 1 news release says from the mall’s current management. The management team represents the interests of a state-owned Irish Bank which controls the property.

 

According to the
news release, $15 million was transferred from the mall’s bank accounts to two
mysterious Ukrainian brokerages and a company in offshore British Virgin
Islands involving a Ukrainian lawyer and economist. 

“The group of
fraudsters while maintaining operational control over Univermag (Ukraina) has practically destroyed the company,” said
Rostyslav Levinzon, who took over the mall as acting director on Feb. 25 following
almost two years of court battles with former management. “We’ve discovered
that virtually all the mall’s current revenue had been shifted to the accounts
of companies that today are resisting us in courts, calling themselves our
‘creditors.’

“The stripping of
assets is evidence of collusion between these companies and former management.”

Levinzon said that
monies were transferred to accounts belonging to Elegant Invest and Zenit in
Ukraine. Elegant furthermore currently has a $45 million debt claim over the
shopping center that Ukrainian courts have recognized. Offshore Lyndhurst
Development Trading is the other alleged recipient of funds, which was once
represented by Ukrainian economist Oleksandr Serpokrylov and lawyer Dmytro
Zaitsev. 

Newly appointed Ukraina mall director Rostyslav Levinzon.

Ruslan Gorbik of
Elegant Invest refused to address the money transfers when the Kyiv Post called
him on April 1. A listed number for Zenit was answered by a male who wouldn’t
identify himself but said that the Kyiv Post had dialed a wrong number.

The whereabouts of
Ukraina’s former management led by Laryssa Yanez Puga are unknown.Her deputy director Volodymyr Hurtovy told the Kyiv Post he has no relation to the asset stripping allegations “since I wasn’t a party to the financial aspects of running the shopping mall.”

State-owned Irish
Bank Resolution Corporation, which controls nearly 93 percent of the shopping
mall had since April 2011 been stalled in various Ukrainian court battles to
assume control over Ukraina and its estimated $10 million annual rent roll.

Allegedly the
mall’s former management led by Yanzes Puga and associates, including Moscow
lawyers, kept the property beyond the bank’s reach through drawn out legal
wrangling, Irish court affidavits have shown.

Yanez Puga was
suspected of working on the behalf of the Quinn family in Ireland, led by Sean
Quinn Sr., his son Sean Quinn Jr. and nephew Peter Darragh Quinn.

The state-owned
Irish bank has been trying collect an estimated $3 billion in debts from the
bankrupt Quinn Sr. and his family, including a $500 million international
property portfolio, of which the Ukraina shopping mall is a part.

Quinn Sr. and some
of his family members have challenged the bank’s debt claims.

When IBRC
took over Quinn’s
business empire, the Quinns engaged in asset stripping to disrupt the bank’s
debt recovery plan, Irish courts have found. As a result, Quinn Sr., Quinn Jr.,
and Darragh Quinn, were found in
contempt and handed prison sentences.

Shown in this Oct. 27, 2011 picture taken at Kyiv’s Byblos restaurant, is Laryssa Yanez Puga, the former general director of the capital’s Ukraina shopping mall’s management company.

The contempt of court
convictions included keeping the Ukraina mall beyond the grasp of the bank, including
asset stripping.

In December 2011, a Kyiv court recognized Lyndhurst’s $45 million debt
claim against the Ukraina mall. Rights to the debt claim were subsequently
transferred to Kyiv brokerage Zenit, and then onto an equally obscure Elegant
Invest. On March 13, a
Kyiv high court upheld Elegant Invest’s right to collect on the $45 million
debt claim against Ukraina shopping mall. However, on
March 26, a Kyiv commercial court granted a six-month postponement on the
enforcement of the debt’s collection.

IBRC considers the legal debt holder to be Demesne Investment Ltd. in
Northern Ireland where it originates, based on court rulings in Belfast. Quinn
Sr. had been director of Demesne.

Meanwhile a Belfast court in November questioned Serpokrylov and Zaitsev of
Lyndhurst via
video-link to defend contempt of court proceedings over the $45 million debt
transfer.

They allegedly ignored a court injunction
against any transfer of debts surrounding the mall.

In April 2011 Demesne
transferred its rights to the debt to Innishmore Consultancy, another Northern
Ireland company run by Quinn Sr.’s nephew, Peter Quinn. From there the loan was
moved onto Lyndhurst in October 2011.

Separately, on
Feb. 7, debts due to IBRC were transferred to a similar body in Ireland called
the National Assets Management Agency.

Kyiv Post editor Mark
Rachkevych can be reached at [email protected].