Zala Group Update

My most popular blog posts this past year were not really Russia related. They were a story that I accidentally stumbled upon while researching corruption here in the country of Georgia.

Each quarter a report is put out on the banking sector in Georgia by KPMG [see here for the most recent one]. A company name caught my eye while scrolling through. And the whole story spun out from that.

I’m still getting asked about this story, so I thought a follow-up would be appreciated.

Shortly after I published my series on ESOL BV, Gilbert Armenta, William C Morro, and their partners in crime, a notice appeared regarding a company called MoneySwap.

It was “a notice convening an extraordinary general meeting (the “EGM”)”, whose purpose was:

“…to approve, inter alia:

i.    the subscription for new ordinary shares in the Company by Wraith Holding B.V. (“Wraith”), together with certain options to be granted to Wraith to subscribe for additional new ordinary shares;

Who was Wraith Holding B.V.?

You guessed it!

Gilbert Armenta and William C Morro.

In March, MoneySwap had entered into a loan agreement with Wraith, which “…was incorporated for the purpose of investing in MoneySwap.”

In a statement, MoneySwap’s interim CEO Craig Niven stated:

“I am pleased to be able to announce the involvement of Wraith, which we hope will result in Wraith becoming a controlling shareholder in Moneyswap. Wraith has a real vision as to how the company can be developed and the financial and management resources necessary to achieve this vision,”…

Morro is now a board member of Moneyswap. Of course, none of his fraudulent activities are mentioned, except to note that he is a director of the now infamous Zala Group Limited.

What is MoneySwap and what does it do?

MoneySwap is a Gibraltar incorporated payment solutions provider which allows both online and point of sale transactions to be settled using UnionPay cards with operations in Hong Kong and China.

MoneySwap was advised on Armenta and Morro’s takeover by Hamlins in London, who wrote:

Wraith is an investment company backed by Gilbert Amenta who has considerable experience in the payments sector.

*Cue the laugh track*

Meanwhile, Zala Group is still active and looking for employees.

Screen shot 2017-12-31 at 08.54.01

Zala’s contact page has been updated to show its connection to MoneySwap, using the latter’s addresses in London and Hong Kong.

Where is this going?

According to MoneySwap’s website:

MoneySwap provides a gateway to UnionPay’s MoneyExpress® services. This enables users abroad to remit funds directly to UnionPay cardholders in China. Each remittance is authenticated by UnionPay and the State Administration of Foreign Exchange of China (“SAFE”). The cardholder in China can withdraw cash at an ATM or make purchases where UnionPay cards are accepted. Currently, China is the second largest global recipient of remittances. MoneyExpress® is a secure, cost effective and convenient way to send funds to China. MoneyExpress® is a registered trademark of UnionPay.

Right now it can take days and exorbitant fees to transfer money from one country to another. There are multiple issues with SWIFT, and people are looking for options to move away from it. Getting a company on blockchain to transfer money easily and rapidly and cheaply would be an ideal alternative for many. China is one of the largest countries for remittances (it placed in the top 5 in 2016 with $61 billion), so you can imagine the fees a company like MoneySwap could rake in for their services.

As we know from my previous research into Armenta and Morro, it is also an ideal way to launder money.


My previous blog posts on Armenta, Morro, and their drug running, money laundering, Hawaiian separatist connections (in order):

Bank Fraud & Crypto Scams

Addendum

More Details

Drug Smuggling

Zambia

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Clean Out

The clean-up clean out of the banking sector could last another two years, Central Bank Chief Elvira Nabiullina said in an interview with the TV channel “Rossiya 24”.

“In the summer, we estimated that [it would take] probably two or three more years. …we will still be forced [! -ed] to revoke licenses a little more often than we should.”

The CBR revoked the licenses of 50 banks this year. In 2013, they closed 32 banks. In 2014, the CBR closed 86. In 2015, they shut down 94, and in 2016 they revoked the licenses of 97 banks [see my 2016 list here].

She [Nabiullina] pointed out that after this period [of 2-3 years], the revoking of banking licenses and bailouts will take place only in isolated and exceptional cases.

The Central Bank began implementing their bailout scheme scam this year, targeting the bigger banks: Otkritie, BIN and Promsvyazbank, whose stories I’ve covered here on the blog. Nabiullina also mentioned the newly created Banking Sector Consolidation Fund which is overseeing the bailouts:

“Obviously such large banks had to be bailed out so that depositors and creditors would not lose money.”

TASS quoted Nabiullina as saying:

“We are discussing whether to unite them [Otkritie, BIN, & PSB] or not – these issues have not been resolved yet. For us, the task is to create an effective business model for these banks.”

For more on this discussion, see my blog post here.

Dmitry Ananyev Flees

Promsvyazbank‘s Dmitry Ananyev has left Russia.

“Ananyev told Vedomosti via Skype that he left Russia last week. “I had long planned to leave for the New Year, left on Dec 22. And under the pressure of the last four months, unlimited work, and a nerve-racking time, heart problems have appeared,” he said.”

He continued:

“But I do not agree how it was presented in media, like I ran away. I did not run away.” Ananyev did not disclose his whereabouts.

He also apparently gave no indication that he intended to return. It also seems unlikely that Ananyev will return (or not willingly, anyway). PSB is currently being investigated by the Central Bank for fraud.

The CBR’s Pozdyshev claims:

“…the day before the announcement of the bailout, the management of PSB through a non-state pension funds management company sold shares of the credit institution, transferring the received funds to the account of the offshore company Promsvyaz Capital [BV].”

“The transaction was conducted via the [Moscow] stock exchange to conceal the manipulation.” Pozdyshev said. The sale amounted to 16.5 million rubles. “It was evident that a large stake in the bank was sold… 10%.”

“Exactly one week later,” he continued, “the NPF demanded that the… [CBR] return the deposits they had placed on 14 December.”

In addition, the CBR is investigating PSB for financing their subordinated debt via the REPO auctions.

“Transactions of purchase and sale of securities were signed on December 14, by a foreign citizen who was employed by the bank two days earlier, he received a power of attorney from the bank’s president on December 12 to conduct these transactions, says Pozdyshev. “The data of the same employee of the bank appear in the acts of acceptance and transfer of the “missing” credit files on December 14…”

According to Vedomosti that “foreign citizen” is co-owner of the bank Dmitry Ananyev. Recall that Ananyev left the Duma in 2013 due to his dual citizenship and the fact that he had assets “abroad” (is Cyprus really abroad anymore?)

All joking aside, the Ananyevs have assets in multiple jurisdictions including BVI, UK, Ireland, the Netherlands, etc.

Promsvyaz Capital BV is a non-operating holding company based in the Netherlands, which focuses on the Russian banking sector and owns a 50.03% stake in the authorized capital of PSB.

49.9975% of Promsvyaz Capital BV is held by Urgula Platinum Ltd. in the UK. Another 49.9975% is held by Antracite Investment Ltd., also registered in the UK. The two companies are controlled by Dmitry and Alexei Ananyev, respectively.

According to filings for both companies:

“On 10 November 2015, Promsvyaz Capital BV issued one additional ordinary share at par value of EUR1 which was acquired by a new shareholder. The company’s participation in the shares of Promsvyaz Capital BV changed to 49.9975%.”

The identity of the mystery investor is not revealed.

Interestingly, the holding company and its UK owners all changed agents about a year ago, according to corporate filings. Right about the time they would have known they were going under. They had been using InterTrust Group, but they are currently using the services of Centralis Netherlands BV. A comparison of the two websites is revealing. Why would a bank the size of PSB move from a major offshore services firm to one that (quite frankly) looks like amateurs? One possible reason: an investment company associated with the largest private bank in Russia is also using their services. Were the Ananyevs looking for protection? Or was it something more sinister?

Thessaloniki Port & Promsvyazbank

When Promsvyazbank went into administration last week, it delayed the closing of a deal in Greece:

But what was Promsvyazbank’s involvement in the transaction? Nobody seemed to know. The investment was supposed to be backed by Western banks, so what was a Russian bank (albeit the country’s 10th largest) doing in the story?

The Greek press wrote:

Sources from the consortium told Kathimerini that the letter of guarantee concerns the amount of 24 million euros and was submitted some time ago while the Russian bank in question is not participating in the funding of the transaction. However, due to the temporary – as it is being described – exit of Promsvyazbank from the Swift payment system, the letter of guarantee will have to be renewed.

When the deal was announced in April Reuters noted that:

“The bid for Greece’s second-largest port by Deutsche Invest Equity Partners, which has teamed up with France’s Terminal Link SAS, represents a premium of about 70 percent over the stake’s current market value of 136.5 million euros.”

There are not two but three partners in the consortium that won the bid on the concessions for Thessaloniki.

The smallest stake is held by the Russian Greek Ivan Savvidis through Belterra Investments Limited [registration number 358158, -ed.], which was incorporated in Cyprus in July 2016. Savvidis also has a Belterra Holdings [registration number 155741, -ed.], which he registered in Cyprus in December 2004. Both companies are using the address: 30 Tempon, Engomi 2408, Nicosia. Parenthetically, a binary options firm called 10 Trade is also using this address.

According to a recent Forbes Russia article, “Savvidis enjoys the support of the leftist government of Alexei Tsipras, which causes resentment of the country’s political opposition.”

“After serving in the army, Savvidis worked as a loader at the Don State Tobacco Factory. After graduating from the [Rostov] Institute [of National Economy], he became a manager in the same factory, and in 1993 the employees elected him general director of Don Tobacco, as the enterprise became known. During the privatization Savvidis took at 75.71% stake in the factory. In 2003, he was elected a Deputy in the State Duma (he was a member of United Russia from 2007 to 2011), and transferred the company’s shares to his wife. Now Don Tobacco is one of the few independent cigarette manufacturers in Russia with revenues of 24.6 billion rubles in 2016.”

In 2004, Savvidis created Agrocom Group. This holding company had a revenue of 57.6 billion rubles in 2016, and includes Don Tobacco, a meat complex, the country’s largest sausage production plant, a beverage producer, an aircraft repair factory, a stake in the Rostov-on-Don airport, the Radisson Blu Hotel and other assets. Forbes assesses the Savvidi’s worth at $600 million.

Savvidis has funded football in Rostov for the past 15 years as well. Football also gave Savvidis a foothold in Greece, according to Forbes. As I have noted elsewhere, football clubs are good places to conduct money laundering operations.

Savvidis has been president of the Russian Association of Greek Communities since 2004, and “maintained close relations with the country, obtaining Greek citizenship in January 2013.”

“Literally a month later, Don Tobacco won the tender for the purchase of 50.36% of the manufacturer of SEKAP cigarettes, offering 3.3 million euros to the Agricultural Bank of Greece, and promising to invest another 25 million euros in the company. Almost simultaneously, Savvidis reached an agreement with tobacco cooperative producers SEKE about the purchase of his package SEKAP and brought its share to 84.5%.”

This next bit has been quoted multiple times, but it was too good to pass up:

In support of Tsipras, Savvidis said in an interview with a Greek newspaper: “Listening to his speech, I felt the same as during Vladimir Putin’s speech in 2000.”

The next shareholder in the consortium is the French-Chinese company, Terminal Link SAS, with 33%. China Merchants Port Holdings Company Ltd., registered in Hong Kong, purchased a 49% stake in Terminal Link SAS in 2013. Terminal Link operates as a subsidiary of CMA CGM SA, a shipping company based in Marseille.

And finally, the largest and most mysterious player is Deutsche Invest Equity Partners GmbH (DIEP). It took me more time to find information about these people than the other two. Unlike the other two partners, this company has no website. The best you can do is pull from CrunchBase’s profile.

The Greek privatization agency (HRADF) names the CEO of DEIP as an Alexander von Mellenthin.

von Mellenthin’s biography varies depending on the company he’s representing, but I was finally able to make a connection through a cached version of dacs-labs.com and I’ve taken a screenshot of Alexander’s profile from there.

Screen shot 2017-12-23 at 11.02.53

Deutsche Invest Equity Partners GmbH is the private equity arm of Goetzpartners. Note that this information is not given elsewhere, but it seems the most likely answer at this point.

von Mellenthin’s profile at Goetzpartners does not mention his involvement with Deutsche at all. But his partner at Deutsche and Goetz, Ruediger Schmid Kuehnhoefer, shows both connections on his profiles at Geotz and on LinkedIn.

An old undated profile (it appears to be about a decade old) of Goetzpartners notes that:

In 2004 the partners combined CEA Europe and TransConnect [von Mellenthin] under the name of goetzpartners, to approach their markets with the concept of ‘One Firm-Two Services’.

In a Greek publication from this past summer, von Mellenthin is identified as a spokesman for DEIP (rather than its CEO) and quoted as stating unequivocally that DEIP has “over 450 investors”, and that “there are no Russian investors. I am clear about this.”

Which brings us back around to the question of Promsvyazbank’s involvement in the financing. And the answer remains unclear.

Fraudsters

I have one more Promsvyazbank story to tell, but this story came up yesterday and I want to clarify a few things about it.

The Financial Times writes:

According to documents seen by the Financial Times, lawyers for Lehram wrote to Russia’s justice minister last week demanding damages of $500m, and threatening to begin international arbitration proceedings if an agreement is not reached within three months.

There are multiple problems with this article, not least of which is that Lehram Capital Investments Ltd. is “British” in name only. Not one person on the paperwork filed with Companies House is British. Second, the company has been “dormant” since its inception in November 2011. According to its most recent filing, there is only £900 “cash at bank and in hand”. What exactly is it doing then? Certainly not buying up “distressed assets”, as it claims.

 

“Daniel Rodriguez”, whom the FT says is Lehram’s shareholder is never named on Lehram’s paperwork, which raises even more questions about Lehram and who it really represents.

The sole shareholder is named as BVI company Hasbrone Overseas Limited. Hasbrone is using the address of the self-proclaimed “leading international offshore law firm” Harneys.

Another dead end.

A quick background for those unfamiliar with the real story as I was:

In October 2013, Russian mining conglomerate Evraz agreed to sell its Gramoteinskaya mine to the unknown Lehram Capital Investments Ltd. for 10,000 rubles. The mine had been shut down since a methane leak that had hospitalized seven miners in late 2012. But even so, the company was valued at $13 million just three months before it was sold.

Evraz said that the disposal is part of its ongoing strategy to get rid of badly performing assets, and the company is putting its focus on developing its coking coal mines for steel-making.

The Western press is vague about what happened and when, and has a habit of contradicting itself (see for example this Guardian coverage from 2015), so I had to go to the Russian media for details.

According to Novaya Gazeta, Russian businessman Alexander Shchukin is tied up in the  ongoing political crisis taking place in Kemerovo, where Gramoteinskaya is located.

Interpol put in a request to Russia sometime in the autumn of 2015 for paperwork related to Shchukin’s offshores and illegal transfer of “several hundred million Euros” out of Russia via Cyprus. But nearly a year later, nothing had happened on the Russian side. This was despite the fact, Novaya points out, that the source of the request came “from the materials of the trial in the Royal Court of London, initiated by Shchukin’s relatives.”

The Shchukins were involved in another court case in London at the time, trying to get their money back from a man named Adrian John Lumley Burford who they claimed had defrauded them.

The High Court has heard how Burford, 51, wove an elaborate web of lies by claiming to have links to MI5, a senior role in management consultants McKinsey & Co and business relationships with the rich and powerful around the world.

In 2014, Burford was ordered to repay £12.5 million he had stolen from the Shchukin family.

Back to Russia and the Gramoteinskaya mine. Within two months of the transaction between Evraz and Lehram being reported in the media, the shares were transferred to an offshore entity belonging to Alexander Shchukin.

Allegedly, Shchukin used his influence with Kemerovo governor, Aman Tuleyev, to have Lehram’s representative in Russia arrested and imprisoned for some period of time (between 10 days and three weeks, depending on which version of the story you believe) in order to force Lehram to sign the shares over to Shchukin.

0.01% of the authorized capital of the Gramoteinskaya mine was linked to Shchukin. Later, the mine was sold to KuzGri LLC. Then, as early as April, 2015 the 100% of the mine was transferred again to Cyrith Holdings Ltd. This Cyprus-based company is also the owner of another Shchukin’s mine – ‘Polusukhinskaya’. Cyrith is reportedly owned by another Cyprian offshore – Lassiter Limited that is in turn owned by Forcena Investments Limited. And the latter is owned by the British Virgin Islands-based Yuvia Holdings. Who is behind of this offshore remains unclear…

This was not the first time Shchukin had pulled this stunt in an effort to take control over local mines in Kemerovo.

In April 2013, the local department of the SKR [often referred to as Russia’s equivalent of the FBI -ed.] opened a case against a local coal mine owner, Boris Yakubuk. He was released after two months, but “only after he signed all the documents on the sale of his assets, which eventually came under the management of a company controlled by Shchukin,” Novaya Gazeta writes.

Shchukin was arrested in Cyprus in November 2016, and placed under house arrest. His current status is unclear.

Novaya concludes:

“Moreover, even the presence of Shchukin under house arrest does not hinder his companions and relatives from withdrawing money from Russia, as one might assume. Thus, for the first quarter of 2017, Shchukin’s Polusokhinskaya Mine moved 1.1 billion rubles to his Cyprus offshore as a “dividend”; PTC-Coal, registered in Shchukin’s wife’s name, sent 3 billion rubles to Cyprus in the first three months of 2017. Another 2.5 billion rubles went to Cyprus from Shchukin-controlled JSC Aktiv-Capital.”

Suleiman Kerimov

I’ve been working on a couple of other projects recently, so I’ve been bad about blogging. But Russian billionaire and Senator Suleiman Kerimov was arrested in France this week, and I wanted to at least do a round-up of the Russian blogosphere’s opinions.

According to Reuters:

The investigation, a step that often but not always leads to a trial in the French legal system, was opened on suspicion of aggravated laundering of tax fraud proceeds, a crime that carries a prison sentence of up to 10 years.

Maxim Shevchenko wrote on Ekho Moskvy that Kerimov’s arrest was an attack on Russia itself:

The arrest of Senator Suleiman Kerimov in France is an unprecedented event. Not only is this the first arrest of a Russian senator abroad, but Kerimov is not just a senator, but also one of the richest people in Russia. In addition, he is the largest sponsor of Russian sports and the Russian Olympic team. Let’s ask ourselves: is not the pressure on Kerimov an attack on the Russian-Olympic movement, and even the World Cup?

Bloomberg noted:

“The prosecutor said the investigation, which has been going on for about three or four years ago, didn’t initially target Kerimov and focused on simple drug trafficking suspicions.”

On the social media app, Telegram, Venediktov wondered why Kerimov had flown into Nice without a diplomatic passport when he must have known he was under investigation.

Ilya Shumanov wrote on Facebook:

“The detention of Senator Kerimov in France is a good story and a wonderful lesson for the Russian elite. The lesson is that the formal rewriting of their assets to nominees and friends is seen in Europe as a childish joke. That is, telling European law enforcers that you and your family live at your friend’s villa 365 days a year, that you and your family drive around your friend’s cars all year round, and that you are not the actual owners of this property is just silly. Just like how a kid standing in front of a broken vase will tell his parents – it wasn’t me, it’s her fault it fell.”

Another Telegram user wrote:

“Firstly, this is a transparent signal to the Russian elite that there are no untouchables, and there is a lot of information about both assets and related ties with the Russian state…

“But, strangely enough, the plot is beneficial in some part of the Kremlin. In the example of Kerimov, the topic of the nationalization of the elites is again raised in the current agenda. When was the first time VV [Vladimir Vladimirovich Putin] talked about this? In April 2013. There was enough time and opportunity [for them] to clean up [their act].”

It’s still unclear exactly what is happening, but I have started my own investigation and hope to provide something in the near future.

How I Work

I was talking to a friend the other day and trying to explain my process. And I thought: why not write an explanation / tutorial on my blog? I’ve been working on a project this past week, and it seems like the perfect example to use.

Usually it starts with me reading an article (it doesn’t matter where, it can be Bloomberg, Reuters, the WSJ, etc.) This was in a publication that writes small blurbs on the business situation in Ukraine:

Screen shot 2017-11-08 at 08.27.30

This one raised a red flag for a couple of reasons, and I will list them here:

1. “Cyprus-based American” (what?)
2. Mining of any sort in this part of the world is rife with corruption and Russians.

So I went looking.

My first source is usually opencorporates.com. You can search by the name of the company, or by the name of a person who is connected to the company. Usually I just put in the first word of the company name, and then try to narrow it down from there. With this one, we know the name, and we know it’s in Cyprus.

Screen shot 2017-11-08 at 09.30.28

I type in Avellana, and click the magnifying glass.

Screen shot 2017-11-08 at 09.31.03

79 results is too many, but I can now narrow it down to Cyprus:

Screen shot 2017-11-08 at 09.31.36

 

Screen shot 2017-11-08 at 09.32.46

And here it is:

Screen shot 2017-11-08 at 09.33.20

The Greek names are generally (but not always) the local company representatives (accountants / lawyers etc.) who will file the paperwork for the company as necessary.

The person I’m looking for is Brian Charles Savage. I click on his name, and it leads me to this page:

Screen shot 2017-11-08 at 09.35.54

Now I see that Brian Charles Savage is also an “agent” at something called Pioneer Management LLC in Colorado.

I’ve been poking around mining for a bit now, and I also recall that Brian Charles Savage has come up before. But where?

Next I would go to Google. I’d Google Brian’s full name first, and then if it got me too much, I’d probably narrow it down by adding Avellana to his name. But that’s not necessary here.

First four links that come up?

Screen shot 2017-11-09 at 08.56.03

I could look at the second and third options because they are probably him, based on the Colorado connection, and I might do it just to satisfy my own curiosity. But I don’t go in for doxing people, so even if I did look, I probably wouldn’t tell you about it. Just know that the information is easily available.

The fourth one is likely not the Brian Charles Savage I’m looking for, but I would click on the link just to make sure that I am not missing any information.

Now let’s look at Brian’s Bloomberg profile:

Screen shot 2017-11-09 at 09.02.12

Now I remember where I have seen Brian before: Amur Minerals. But notice that this profile has not been updated in some time, because it does not mention his connection to Avellana Gold.

I would probably go to Amur Minerals’ website next. Or I might backtrack and look for Avellana Gold’s website. Let’s go to Amur first:

Screen shot 2017-11-09 at 09.04.32

Now he’s given me more to work with. Let’s look at his profile on Avellana Gold, and see if there is any other information:

Screen shot 2017-11-09 at 09.34.59

Some of the information is the same and some of it is different. We already saw Pioneer Management LLC. I’d probably head back to opencorporates.com next, and continue on from there.

I hope this helped and intrigued you enough to maybe pursue some of your own investigations.

Mikhail “Mandela” Khodorkovsky

A couple of days ago, a blog post appeared on Ekho Moskvy by economist Nikita Krichevsky. Of course it caught my eye because it aligns with my interests in both the Russian political system and corruption. I will try to explain the somewhat complicated story as simply as possible.

In April, a story appeared in the Russian press that the Federal Anti-Monopoly Service [FAS] had approved the buyout of Ivanovo Polyester Complex [IPK in Russian]. “100% of the voting shares” were purchased by a Cyprus registered company called Honson Management Limited [the Russian spelling is not correct, and I cannot find it in Cyprus’ registry].

First some background on the project itself:

“IPK is the largest investment project in the production of raw materials for light industry in Russia…. IPK will replace imported raw materials for light industry, which will become the main consumer of… materials for the automotive industry, the basis for roofing materials, the production of clothing, furniture, etc.. Currently there is no production of synthetic (polyester) fibers in the country, the main supplier is China…”

The total cost of the project is more than 25 billion rubles. In December 2016, VEB approved a 13 year loan of 20.4 billion rubles for the complex… the loan is in foreign exchange. In addition, the owners of the complex must invest in the project more than 5 billion [rubles] of its own funds, VEB reported.”

There have, of course, been multiple objections to the project.

In February:

“…the co-chairman of the State Secretary of the Ecological Chamber of Russia, Vadim Petrov, expressed the opinion that the results of the environmental impact assessment for the construction of the plant may not [be realistic].

The factory will process a huge amount of highly toxic chemicals. And representatives of the plant and the local administration say that the plant will not have any waste. But worldwide there are no such technologies that would ensure zero emissions… We are sure that we are dealing with either a lack of environmental expertise, or with deliberate silence of important facts.”

In addition, the director of the Institute of Contemporary Economy Nikita Isaev wondered in April who IPK’s “customers” would be, and where the raw material would come from. The projections indicate that IPK will have a monopoly on domestic production, producing more than is currently being imported. As for the “raw material”, IPK would have to import it from South Korea, which would raise costs significantly compared to the current costs of importing the finished materials from China.

The only way to make IPK profitable, Isaev said, would be to subsidize it from the federal budget, or “…to oblige state companies to purchase products… even if they are not needed.”

In other words, more state sponsored theft from the Russian taxpayers.

And now for the new “shareholders” who will benefit from the scheme scam:

According to Vedomosti:

“The final beneficiaries of Honson Management are Sergei Presnyakov (with a share of about 52%), Alexei Golubovich (25.1%), Alexei Prudnikov (about 15%) and Ruslan Kryazhev (about 10%).”

Alexei Golubovich should be familiar to those who have followed the Yukos case for any amount of time. After his 7 year stint at Menatep (and later Yukos), Golubovich went on to found Arbat Capital in 2007.

 

Presnyakov and Kyrazhev have worked together for over a decade. The two were both shareholders in a company called Fuera Invest Limited starting in 2006.

Presnyakov’s LinkedIn profile says that he is the owner of Active CIS, though his name does not appear on the website.

Kyrazhev is/was a partner in the investment firm, Waarde Capital along with Alexei Prudnikov. Waarde Capital says that it invests in the IT, telecommunications, finance and trade sectors in Russia, Europe, Israel, South-East Asia, and the US. However, Kyrazhev does not currently appear on Waarde’s website. Kyrazhev also worked at Yukos in the 1990s.

Alexei Prudnikov says that he is also President of Finematika, another venture capital company.

But wait! There’s more!

In April, VEB and IPK said that they were working on financing the new project in Ivanovo. Krichevsky writes that the stated cost of the project increased by nearly 10 billion rubles in about a two month period. And in early 2015, Ivanovo’s governor said that the project would cost about 17.7 billion rubles. Allowances can be made for inflation, Krichevsky concedes, but the exchange rate has actually stayed pretty steady in the past two years.

Meanwhile, Krichevsky notes that an article appeared in the Czech press last month reporting that at least partial financing for the project was provided by the Czech bank CSOB through a loan to VEB. The loan will finance the construction of a plant in Ivanovo by the Czech company Unistav Construction. The contract between Unistav and IPK was signed in Prague in March 2016, before Golubovich and partners bought IPK.

VEB’s chief who approved the loan is Sergei Gorkov. Gorkov has appeared in the US media recently due to his alleged connection to Jared Kushner. But what is more interesting about Gorkov is his long-time relationship with Yukos and Khodorkovsky.

In another twist, Krichevsky cites an investigation into Khodorkovsky’s international business empire that appeared in Komsomolskaya Pravda back in April.

“In the Czech Republic, Khodorkovsky’s name is associated with businessman Dusan Novotny… Novotny ensures Khodorkovsky’s interests in a number of development projects of the companies Panorama, Unistav Holding and Novodevelop – both residential and commercial complexes. All these companies, according to the Czech Register of Legal Entities, were registered in 2015. They are all connected to the large Czech holding company Unimex Group through Unistav International.”

And who is building IPK’s new factory? Unistav Construction, which is a subsidiary of Unistav Holding, “whose owner is associated with “Mandela” [Khodorkovsky]. A contract with a foreign contractor, signed, as far as I know, without a tender, despite the fact that they are planning to build IPK with public (well, quasi-public) funds.”

And the authorities have turned a blind eye.

So, Krichevsky concludes, “…VEB actually finances “Mandela”, “Mandela” supports the opposition, the opposition demands the resignation of Putin, and Putin… And Putin, it turns out, approved the entire scheme.”

Tell me again that Mikhail “Mandela” Khodorkovsky is being persecuted by the Russian state.

Lambert & Warnig

I wrote here in February 2016 about Matthias Warnig and his involvement in a UK registered company called Lambert Energy Advisory. Though it garnered little attention at the time, I thought it was worth keeping track of. I went back to check up on the situation at Lambert recently and to see if anything had changed, and was surprised to see that Novaya Gazeta had also been interested in the subject. I won’t go into all the details of how I found this information initially, but Novaya came into it from a different angle than I did last year.

First some background on Lambert Energy Advisory and its activities. One of the board members is Onursal Soyer. According to his biography:

“LEA [Lambert Energy Advisory] is a leading advisory firm to the global oil and gas industry and, since its inception, has been involved in more than $60 billion worth of transactions for major companies such as Statoil, Petronas, BP and Wintershall. Some recent transactions, on which Lambert Energy Advisory was a core Advisor, included acting for BP on its $28 billion deal in Russia (whereby BP became a c. 20% shareholder in Rosneft), acting for Statoil on four large divestments of North Sea assets to Centrica, Wintershall and OMV worth over $7 billion and acting for Wintershall on its UK and Norwegian divestments. LEA has been actively involved in the Middle East oil and gas sector and has advised on several deals mainly in the Kurdistan Region of Iraq. LEA was also advisor in major infrastructure deals in NW Europe, including assets like Dragon LNG regasification terminal in the UK, the Norwegian offshore gas transmission network, Gassled, and the Central Area Transmission System (UK’s largest offshore gas transmission pipeline).

Now to Novaya Gazeta‘s interest in the firm. The article begin by discussing Warnig’s background (which as I’ve said before, I think most people are familiar with). How much is fact, and how much is myth, I’m not entirely sure. What we do know is that Warnig was definitely Stasi (Novaya shares the documents proving it), and that he worked at Dresdner Bank in the 1990s. The official story is that Warnig met Putin while doing business in St Petersburg. Rumor also has it that Warnig aided the Putin family after Lyudmila Putina had a car accident in 1993 and needed medical help. There’s also the story that Warnig and Putin met in East Germany, but I suspect this is more myth than reality and the confusion comes from the similarities between the names Dresden and Dresdner.

Novaya’s concern is over possible improprieties related to Lambert’s firm advising BP on the deal it made with Rosneft in 2012. Under that deal BP took “…$16.7bn in cash and a 12.5% stake in Rosneft in return for its 50% stake in the TNK-BP venture.”

Warnig became the co-owner of the British consulting company Lambert Energy Advisory in 2008 – this is not only a classic British office on the 4th floor of an old brick building on Hill Street in the central London area of Mayfair just 300 meters from Hyde Park, but it also has famous founders and managers. The company was founded by Lord Rockley, an aristocrat who was an advisor to Her Majesty’s government in privatizing the state-owned British Telecom (the £4 billion deal involving 2.3 million private shareholders was completed in 1984).

In the mid-1990s, Lord Rockley was chairman of the British investment bank Kleinwort Benson, and his business partner, co-founder of Lambert Energy, Philip Stephen Owen Lambert, also worked there. [Rockley] died at the end of 2011. The main owner of the consulting company Lambert Energy is now Philip Lambert and his family.

Novaya continues:

Excessive publicity and even a website [for the company] are not needed. the consultations are strictly confidential, and the composition of shareholders guarantees their popularity – among them the former head of the Ministry of Energy of Norway Tore Sandvold, and a former British diplomat, former special advisor to the oil and energy gas giant BP Sir Jeremy Greenstock. He is also chairman of Lambert Energy.

How the British aristocrats met Warnig, and why he became a co-owner of their company, neither the representative of Warnig, nor Lambert Energy answered. But given that Dresdner Bank, where Warnig worked, bought Kleinwort, where Lambert and Lord Rockley worked in 1995 (for $1.6 billion) they could have had points of contact and occasions to meet.

Novaya asked Lambert about Warnig’s involvement with his firm, and got the following response:

Philip Lambert replied only that since 2008, Warnig was “an exemplary, proven, and long-term shareholder of Lambert Energy”… and invited them to visit the office on occasion.

Warnig owns 12% in consulting Lambert Energy through his Swiss firm Interatis AG. This was also confirmed by a representative of Warnig…

Concerning any improprieties, Novaya writes:

[Lambert] and BP do not want to answer questions about why Lambert Energy was chosen as a consultant, and whether Matthias Warnig, a member of the board of directors of the state-controlled Rosneft, was involved. They also do not answer the question of whether or not Warnig did anything during the period of these consultations.

But they continue:

It’s not just about his acquaintance with high-ranking Russian officials, but also about business. If one of Warnig’s Swiss firms – Interatis AG owned 12% of the BP consultant [i.e. Lambert] in the deal with Rosneft, then another company – Interatis Engineering in 2014 participated in a joint pharmaceutical project with the Moscow company, Artpol Holding, [belonging to] Sergei Shmatko. “Artpol” and Interatis held 10% of the producers of anti-tumor drugs… The total revenue of these pharmaceutical companies exceeded 1.2 billion rubles over a 5 year period. Prior to this, Shmatko was Minister of Energy during the conflict between BP and the Russian shareholders [ed. Alfa, Access, Renova]. And if Deputy Prime Minister Shuvalov opposed the deal between BP and Rosneft, Minister Shmatko in 2011 publicly announced that it would be implemented.

The board of directors of Rosneft approved the deal with BP in November 2012, and by 2013 it was completed.

Others were not so willing to answer Novaya’s questions:

The representatives of Warnig, BP, Lambert Energy, and Rosneft do not answer detailed questions, whether there was a conflict of interest in this story and how much a member of the board of directors of Rosneft, Warnig, earned because the company advised BP with his participation.

A spokesman for Warnig told Novaya Gazeta that “his participation in the affairs of Lambert Energy is limited solely to his role as a minority shareholder” and that “he does not have any managerial or supervisory position in the company,” and that his “financial benefit consists solely in receiving dividends, which are set by the decision of the general meeting of shareholders of Lambert Energy.”

This is technically a true statement. Warnig has never been a member of the board at Lambert’s firm. And it is unclear who is acting in his interests on the board given the fact that he is the second largest shareholder after the Lamberts. Warnig is likely receiving some dividends, according to Lambert’s own accounting, but it’s unclear exactly how much. For example, last year Lambert paid out £1,596,975 in dividends. Of that, £1,402,138 went to the company’s board of directors. The majority went to Philip Lambert as the largest shareholder. It seems likely that Warnig got at least a portion of the remaining £194,837.

“Mr Warnig attaches paramount importance to good faith conduct of business in accordance with the standards of corporate governance and prevention of conflict of interests. This also applies to his minority participation in Lambert Energy,” assures Warnig’s representative.

And:

“We observe strict standards of confidentiality with regard to our clients and our business, and we have neither the will nor the opportunity to discuss your detailed questions,” said Philip Lambert… emphasizing the rigidity of the company’s standards and control procedures.

BP replied:

“The work that Lambert Energy performed for us is confidential, and we cannot comment on it,” a BP spokesman told Novaya Gazeta without answering questions about Warnig’s role in the deal with Rosneft.

And, of course, there was no response from Rosneft.

Experts find it difficult to assess what could be the fee for consulting the framework of such a transaction.

“It can be very expensive… The uniqueness of the composition of consultants and potential to influence the situation usually directly affects the amount,” Paragon Advice Group partner Alexander Zakharov shares his opinion.

According to Lambert’s accounting, the firm had a turnover of £12,413,790 in 2012, and a turnover of £11,904,880 in 2013. How much of that was from the consulting done for BP and how much was from other work is not laid out.

At the time of the transaction, Rosneft approved a policy on combating corruption: the company had to collect and verify the information, in particular, about the possible conflict of interests.

“The board of directors of Rosneft has agreed to a deal with BP in 2012. Warnig – a member of the board of directors of Rosneft and a person with great connections, was simultaneously a shareholder of the BP consultant firm. And then took up business with a man who at the time of the deal was the Russian Minister of Energy. All this could form a conflict of interest.” The general director of Transparency International Russia Anton Pominov shares his opinion.

Zambia

At about the same time Capital Bank was being shut down by the Central Bank in Georgia, another bank associated with Zala Group was taken over by the authorities, and its assets seized. The bank was Intermarket Banking Corporation in Zambia. Local media reported:

Intermarket Banking Corporation has become the first victim of the Bank of Zambia stringent capital adequacy requirement which has forced the bank to become insolvent.

Closure seemed imminent. People lined up at the bank’s headquarters in Lusaka to demand their money back.

Zambia’s Central Bank released a statement saying:

The Bank of Zambia has determined that Intermarket Banking Corporation Zambia Limited is insolvent and not able to meet its obligations as they fall due.
The statement continued:
The Bank of Zambia wishes to remind the general public that the decision to take over the affairs of Intermarket Banking Corporation, is intended to safeguard the interests of depositors and preserve the integrity of the financial system.
“…the Bank is not going into liquidation but is being restructured so that it meets its obligations and consequently its capitalization requirements to continue its normal operations.”
“…as a result of financial commitments by shareholders and a new equity partner, the Statement of Affairs of the Assets and Liabilities shows that IBC is now solvent.”
So a new (unnamed) “equity partner” had appeared on the scene and provided a cash injection to restore the bank to solvency. But a month later account holders still are not able to access their funds. And just two days ago, the country’s Finance Minister urged the Central Bank to reopen the bank “as soon as possible.”
But, as one commentator noted, who will keep their money in a bank with a proven track record of irresponsibility?