Attacked by the Russian state, these former bankers could be saved from sanctions

The invasion of Ukraine by President Vladimir Putin had an impact on the wealth held by Russians around the world. Western sanctions have in fact targeted the country’s billionaires, freezing yachts, property and works of art stored abroad.

But, on the other hand, the sanctions could allow another sub-category of the Russian upper middle class, a dozen former bank owners living abroad, to reclaim their homes and cars, and restore their reputations. .

For years, Russia has been suing disgraced oligarchs and business executives in Western courts to recover assets the Kremlin believes were illegally obtained. Now the former owners of some of Russia’s largest banks, which came into conflict with the government during a crackdown on creditors accused of corruption, are in a position to be the beneficiaries of unexpected sanctions against Moscow.

Lawyers representing the Russian state in lawsuits brought against these men in the United States, the United Kingdom and the European continent have decided to withdraw. In the US and UK, MPs have supported the cause of these former bankers, calling for more sanctions against Russia that could benefit them. And the courts are being asked to take into account that the Russian regime was able to win some cases by resorting to fraudulent tactics.

Sergey Belyaev is one of the former owners of the National Bank Trust (NBT), which was taken over by the Russian state. Moscow is suing him to recover his fortune. But, currently, he is asking a South Carolina court to overturn the $ 900 million sentence handed down against him and two of the former co-owners of NBT by a London commercial court. For this, he claims that it was obtained by fraudulent means. Mr. Belyaev claims that if the Russian state received this sum, it would allow him to finance the war.

The former owners of NBT are among those who claim that the powerful Russian state apparatus seized their banks for spurious reasons and then used Western courts to steal the rest of their wealth.

Russia claims that Belyaev and the co-owners of NBT falsified bank loans to finance their own business ventures and misrepresented NBT’s health to regulators. Mr. Belyaev denies being aware of these loans and the existence of any misrepresentation. The co-owners also claim to have acted in accordance with Russian banking standards.

“It is against the interests of the United States to recognize a ruling that would allow the financing of the Russian central bank,” Belyaev points out. Exiled to Connecticut, he earned a masters degree in business administration and began photography.

Ilya Yurov, one of the co-owners of NBT, has settled in England. His estimated $ 8 million Gothic mansion is being sold there to creditors by a bankruptcy trustee and he says he fears the money will be used to finance the war. His wife, Nataliya Yurova, wrote to liquidator Mazars in March to tell him that her collection efforts appeared to be in breach of British sanctions. She also accused him of lack of morality.

From around 2014 to 2018, Russian Central Bank Governor Elvira Nabiullina shut down hundreds of credit institutions and regained control of some of the largest in what was then considered a necessary cleanup by international investors.

A spokesperson for Mazars says the company has been appointed co-trustee for the creditors of two of NBT’s former co-owners by UK courts and any relationship with sanctioned entities requires judicial clearance.

A British MP, Christine Jardine, is pushing the government to extend sanctions to NBT, which would make it more difficult to enforce the ruling against the two men. Russia’s central bank was sanctioned in February, but a related institution, the Deposit Insurance Agency (DIA) and NBT are not blacklisted. These two entities are the source of most of the causes.

A spokesman for the Russian central bank says sanctions are making its recovery efforts more difficult, but plans to pursue them. He adds that directly sanctioning NBT would be tantamount to allowing the former owners of the bank to evade any responsibility for their embezzlement.

He said the central bank “is confident that UK courts and parliamentarians will continue to uphold the fundamental principles of fair justice so that fraudsters can be brought to justice. “

From around 2014 to 2018, Russian central bank governor Elvira Nabiullina shut down hundreds of lenders and regained control of some of the largest in what was considered a necessary cleanup by international investors at the time. Kremlin critics say the confiscations have transferred coveted assets to the state and competing banks. For them, they have become an indirect way of directing more capital to prime lenders. The state has thus consolidated its hold on the economy by assuming control of over 70% of the banking sector.

US Congressmen Steve Cohen (Democrat, Tennessee) and John R. Curtis (Republican, Utah) urged President Biden, in a letter dated May, to issue new sanctions to end Russia’s stripping of private finance companies. . They wrote that he would be welcome to protect “the brave Russian dissidents and Putin’s opponents abroad” by imposing direct sanctions on the Russian Deposit Insurance Agency.

Among the legal targets of the DIA are Sergey Leontiev and Alexander Zheleznyak, whose license Probusinessbank was revoked in 2015. Previously, a branch of the bank tried to launch, in collaboration with the Russian opposition leader Alexei Navalny, a debit card through which 1% of the transactions were donated to his foundation.

In 2019, the DIA convinced Mr. Leontiev to turn over the documents to the New York Southern District Court for use in the bank’s bankruptcy proceedings in Russia. He accuses him of driving the establishment into insolvency. For his part, he claims that the takeover of the bank was actually a political expropriation.

The DIA states in an e-mailed statement that the agency acts as a bankruptcy administrator and has no political interests. The central bank spokesperson explains that the political positions of the Probusinessbank holders were never taken into account in the procedure.

“We are concerned only with returning the money these runaway bankers have taken, leaving huge holes in the coffers”

“We are only concerned with paying back the money that these runaway bankers have taken, leaving huge holes in the coffers,” he said.

The legal action against Mr. Leontiev in Austria stalled this spring when a law firm working for the DIA broke off relations with all of its clients close to the Kremlin.

A lawyer representing Russia’s interests in a lawsuit in the Netherlands against Dmitry Ananyev, owner of another bank, Promsvyazbank, along with his older brother Alexei, also stopped working. This lawsuit aims to recover more than a billion dollars that Russia accuses the brothers of stealing, which they deny.

Russia nationalized Promsvyazbank in 2017 and soon changed its status to make it the official army bank. Western countries sanctioned Promsvyazbank in February.

Mr. Ananyev indicates that the state seized the bank out of pure interest. “I have lost everything I had built in twenty years and my life now comes down to fighting the absurd accusations against me,” he says. Other cases involving him are ongoing, including legal action by NBT in Cyprus.

Mr. Ananyev and his brother began their careers importing computers in the early 1990s, after the perestroika reforms launched by Mikhail Gorbachev. They then became billionaires thanks to their activities in the real estate, media and banking sectors. Mr. Ananyev at the time hosted senior Russian officials, including Ms. Nabiullina, the central bank governor, in a theater he financed.

In 2017, the central bank informed Promsvyazbank that it needed capital to cover its bad loans. She then gave the bank two days to find the money, which she was unable to do.

Moscow later claimed the brothers stole money from the bank. Mr. Ananyev and his family moved from their home near the Kremlin to rent accommodation in Limassol, Cyprus, a popular location among Russians. The government then tried to put the two brothers on Interpol’s wanted list. The institution refused, believing that such requests appeared politically motivated.

Mr. Ananyev’s assets, including a house in Moscow and a rented private jet, have been frozen by Russia. Authorities also confiscated his brother’s collection of more than 5,000 Russian and Soviet realist paintings.

According to the central bank spokesperson, “it is clear that the money used by former bank owners to finance their luxurious lifestyle was obtained through questionable activities.”

Today in Cyprus, Mr. Ananyev is dedicated to his defense and has dinner with his family in a checkered tablecloth inn serving fresh fish. They also spend time in the French Alps, where they enjoy picking mushrooms.

Mr. Ananyev says he is concerned about seeing the bank he created to finance the Russian economy go to support the war. He doesn’t want his business to contribute to a war chest.

“I don’t expect my problems to end overnight, but I’m confident,” he concludes.

(Translated from the original by Paul Julhiet)

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