You're reading: Russia’s Alfa Group enters fray surrounding Ukraina shopping mall

The state-owned Irish Bank Resolution Corporation has formed a joint venture with Russia’s Alfa Group’s asset recovery unit to solidify control over part of a global property portfolio worth in total more than $640 million that once belonged to the former billionaire Sean Quinn Sr. and his family.

The move was announced in Moscow on April 3 at a news conference given by
Ireland’s ambassador to Russia Philip McDonagh and three Alfa Group company
officials.

A1 Group, Alfa’s asset recovery arm, will get 30 percent from the sale
of recovered assets. Kyiv’s estimated $75 million Ukraina shopping mall is part
of the property portfolio that IBRC has taken over to collect on debt Quinn Sr.
and his family owe.

Kenny said all the assets will be sold on the open market.

In turn, Mikhail Khabarov, president of A1,
said that the asset recovery “task is complicated and large-scale, yet, judging
from our experience, is realizable.

“There are several large units in this
project, each one of which is in a special situation.”

Quinn Sr. along with his son and nephew have
been found in contempt and handed prison sentences in Irish courts for
disrupting the efforts of IBRC and shifting assets beyond the state-owned Irish
bank’s reach, including the Ukraina shopping mall.

In Ukraine progress has been made,
however. A new director was installed to represent the interests of IBRC at
Ukraina on Feb. 25 after almost two years of legal battles with the mall’s
former management.

Still, the Ukraina shopping mall has
a $45 million debt claim hanging over its head by an obscure Ukrainian company
whose rights to the debt claim have been recognized by Ukrainian courts.

Current management at Ukraina furthermore
discovered that some
$15 million had allegedly been illegally transferred
from the mall’s
accounts in 2011-2012 by the former management led by Laryssa Yanez Puga to two
Ukrainian brokerages and a company in offshore British Virgin Islands.

The shopping mall’s engineering equipment
has also depreciated severely, the mall’s management said.

Efforts have already been
successfully made to stop assets being moved to Belize and Panama, Kenny said, the Irish
ambassador to Russia.

Progress has also been made in reclaiming assets in the Russian cities of
Moscow and Yekaterinburg, he
added.

IBRC retained A1 four months ago, according to
a Nov. 1 affidavit obtained
by the Kyiv Post that was submitted by Richard Woodhouse, a senior IBRC
executive.

It was
tasked to recover 11 properties worth more
than $315 million in Russia and Ukraine, including the Ukraina shopping mall.

In the affidavit, Woodhouse stated that IBRC
“has exhausted all available legal remedies open to it  to recover the
security on its own both in this jurisdiction (Republic of Ireland) and in the
Russian Federation and Ukraine.”

Woodhouse continued: “…entering into a
cooperation agreement with a commercially strong local partner is now the only
viable means of recovering a significant proportion of the assets for the
state.”

Alfa Group belongs to three Russian tycoons
with links to the Kremlin and President Vladimir Putin.

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.

One of Fridman’s key partners in Alfa Group,
Peter Aven, has known Putin since 1991.

“…any individual or organization will be wary
about being in conflict with such an influential player in the market (as A1),”
read the affidavit.

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 [email protected].