Savelyev: Nobody Forced Archangelsky to Transfer Assets

Justice Hildyard of the High Court of England and Wales continues proceedings on suit of Bank St. Petersburg vs Russian businessman Vitaly Arkhangelsky and Arkhangelsky's counterclaim against the bank.

On Monday, March 21, four-day cross-examination of the former chairman of the Bank's board Alexander Savelyev was finished.

One of the focal points of the cross-examination was the sale of Arkhangelsky's OMG assets. Savelyev denied that in December 2008, they reached an agreement on the restructuring of the Group's debts and a six-month moratorium on payments due to the Bank. "I do not remember any such agreement," Savelyev said. "I do not believe that there was any agreement. In any case such agreement would have required the ratification of the Bank Management Board."

Arkhangelsky's representative suggested that the parties reached a preliminary agreement on a moratorium, and Savelyev promised to settle all the formalities. Otherwise, Arkhangelsky's decision to increase the collateral for the OMG loans transferring to the Bank the shares of Scandinavia insurance company and the Western Terminal seems illogical. Savelyev reiterated that he "did not force Arkhangelsky" to transfer the shares for the subsequent repo transaction.

After the board meeting, in late December 2008, the parties signed a memorandum with regard of the repo transaction. The deal included the possibility of buy-back after OMG fulfilled its obligations to the bank. The assets were sold at auctions and bought by Solo, Mercury and Contour companies linked to either the BSP or Renord Group. One of Renord divisions, the Renord-Invest, worked at one of the BSP offices.

Answering the questions about the assets sale price that was significantly lower than the market prices Savelyev cited the lack of liquidity during the global financial crisis, when "no one was buying any assets." He called a "miracle" the fact that the Bank managed to sell them and receive some money.

Some OMG assets were sold through the Russian auction house whose director Andrey Stepanenko who worked at Valentina Matvienko's administration. According to Arkhangelsky, Stepanenko told him that Matvienko personally asked to arrange the sale. Savelyev flatly denied that saying that Matvienko was a "serious politician" who had never been interested in commercial projects.

via sovetnik.eu

Bank of Saint Petersburg Named Its Friends and Relatives

Justice Hildyard of the High Court of England and Wales continues proceedings on suit of Bank St. Petersburg vs Russian businessman Vitaly Arkhangelsky and Arkhangelsky's counterclaim against the bank.

On Monday, March 21, four-day cross-examination of the former chairman of the Bank's board Alexander Savelyev was finished. Savelyev, who headed the bank in 2001-14 he told the court that it was a period of the Bank's rapid growth at the rate of up to 100% a year. For the most part of that period the governor of St. Petersburg was Valentina Matvienko who headed the region in 2003-11.

Answering the questions of Arkhangelsky's representative, admitted that Matvienko was one of his old friends and they had event been business partners. Together they found KomAvtoServis Company. However, he stressed that they were the business partners for "very short time" before he came to the bank in 2001.

Savelyev called a "coincidence" the Bank's rapid growth in the time of Valentina Matvienko's governorship. He flatly denied Arkhangelsky representative's suggestion that the Bank used its contacts in the city administration to receive the exclusive access to St Petersburg subway databases that contributed to the BSP's success in the Visa card market in the city. Savelyev stressed that the bank's success was only the result of "hard work".

* * *

When she served as the governor, Matvienko's son Sergey was invited to the Bank of Saint-Petersburg to take a vice-president position. According to Saveliev, Matvienko Jr. was responsible for installation of computer hardware and the Bahkir software bought for "a lot of money" by the bank that made nothing of them. Asked by Justice Hildyard about Sergei Matvienko's contribution to bank's development, Savelyev admitted that the new vice-president had to take software from the warehouse and install it on the existing hardware. Savelyev, however, pointed out that nobody could manage it before Sergey Matvienko and his team of "IT-experts" arrived in the bank. Answering Justice Hildyard's question whether Sergey Matvienko's team was selected at a tender of any kind Savelyev said the bank had no time to arrange any competition.

Inviting Sergey Matvienko to join the bank, the BSP offered him a shareholding as a reward for installing software. Answering Justice Hildyard's question who calculated the size of Matvienko's share against the value of the work performed, Savelyev said the BSP at that time was loss making and the share transfer was just a "gesture." According to him, Valentina Matvienko was not involved in that decision.

Until 2006, Matvienko Jr. owned 5% to 8% of shares. After several additional issues his shareholding was diluted and reduced to 3%, and he gave the shares to his father Vladimir Matvienko. Savelyev pointed out that was a gift as Sergey Matvienko is a "good son" who takes care of his parents. He denied that father and son had always been nominees while the actual shareholder of the bank was Valentina Matvienko.

* * *

Savelyev, who now heads the BSP supervisory board, answering Arkhangelsky representative's questions, admitted that Sergey Serdyukov who owns 5.45% of the Bank shares is the son of former Russian defence minister Anatoly Serdyukov who resigned in 2012, after a notorious corruption scandal. Savelyev said he know the former minister personally as the latter earlier headed St Petersburg tax administration.

Since 2005, one of BSP shareholders has been Valery Puzikov, Anatoly Serdyukov's brother-in-law also involved in the corruption scandal in 2012.

Savelyev denied that Sergei Serdyukov and Valery Puzikov are Anatoly Serdyukov's nominee shareholders in the Bank.

* * *

Saveliev and the Bank top managers formally control 53.15% stake in the BSP. Savelyev holds 23.7% of those shares. The executives mainly own their shares through the Vernye Druziya (Loyal Friends) management company. Through an offshore entity, a shareholder holding 19.95% stake in that company is Oksana Saveliev, the daughter of Alexander Saveliev. This is the official information posted on the bank's website.

Answering Arkhangelsky representative's questions, Saveliev admitted that the management company was established with the only purpose to control the bank's shares in his behalf. He told the court that his daughter received the shares in 2015, and he financed the purchase as she is a medical doctor and he has still given her a kind of financial support. He expressed hope that Oksana Saveliev and Vernye Druziya would control the Bank in the future.

The bank claims that Arkhangelsky, who, together with his family, left Russia in 2009 and was granted political asylum in France, did not settle with creditors and tries to recover a debt.

* * *

Archangelsky in his statement of claim says that during the global financial crisis the bank agreed to defer payment on loans for six months. As a collateral, the bank demanded Archangelsky to transfer the shares of companies that were a part of his Oslo Marine Group - West Terminal port complex and Scandinavia insurance company, the owner of a half of Onega terminal. Before the stipulated term expired, the bank demanded loan repayment and later used its political contacts including top law enforcement officers and St. Petersburg Governor Valentina Matvienko, sold the shares to a sister firm at a lower price and changed the executive of Arkhangelsky's companies. He estimates the damages at $500 million.

The course of the trial will be covered by the press-office.
Contact: Natalia Khmelik natalya.hmelik@gmail.com

Bank of Saint Petersburg Reluctantly Revealed Its Connection with Valentina Matvienko

Justice Hildyard of the High Court of England and Wales continues proceedings on suit of Bank St. Petersburg vs Russian businessmanVitaly Arkhangelsky and Arkhangelsky's counterclaim against the bank. 

22 march / via sovetnik.eu

Last week, Alexander Saveliev, of the former chairman of the Bank's board, was cross-examined for three days. Answering the questions of Arkhangelsky's representative, he told the court that he was the CEO in 2001-14, and it was a period of the Bank's rapid growth at the rate of up to 100% a year.For most part of that period, in 2003-11, the governor of St Petersburg was Valentina Matvienko.

Savelyev admitted that Matvienko was one of his old friends. Together they founded the KomAvtoServis Company and were business partners for "very short time" before he came to the bank in 2001.

When Mrs Matvienko served as the governor, her son Sergeiwas a vice-president of the Bank responsible for the installation of hardware and the Bankir software. At the same time Sergey Matvienko was aBSP significant shareholder. Savelyev explained that the shares were promise to Sergei Matvienko when he was invited to join the Bank. It was a kind of reward for implementation of the Bankirsoftware. Until 2006, he held 5%-8% of the BSP shares. After several issues his shareholding was diluted and reduced to 3%. Then he passed the shares to his father Vladimir Matvienko.

Savelyev pointed out that "Vladimir Matvienko received those shares as a gift from his son", a good son who takes care of his parents.He denied the son was and the father still is a nominee while the actual shareholder of the bank has been Valentina Matvienko.

Savelyev admitted that he and Sergey Matvienko were partners in a number of business projects, but he could not recall the names of those projects.

Savelyev called a "coincidence" the BSP's rapid development in the time of Valentina Matvienko's governorship. He denied her involvement in the Bank's business. He stressed that the BSP's success was a result of hard work rather that the city administration's benevolence.

Savelyev, who now heads the Bank's supervisory board,also answered questions about the BSP's connections with the family of the former Defense Minister Anatoly Serdyukov.

 * * *

The bank claims that Arkhangelsky, who, together with his family, left Russia in 2009 and was granted political asylum in France, did not settle with creditors and tries to recover a debt. 

Archangelsky in his statement of claim says that during the global financial crisis the bank agreed to defer payment on loans for six months. As a collateral, the bank demanded Archangelsky to transfer the shares of companies that were a part of his Oslo Marine Group - West Terminal port complex and Scandinavia insurance company, the owner of a half of Onega terminal. Before the stipulated term expired, the bank demanded loan repayment and later used its political contacts including top law enforcement officers and St. Petersburg Governor Valentina Matvienko, sold the shares to a sister firm at a lower price and changed the executive of Arkhangelsky's companies. He estimates the damages at $500 million.

The course of the trial will be covered by the press-office.
Contact: Natalia Khmelik natalya.hmelik@gmail.com

Head of SKIF Company Told About Work on "OMG Project"

Justice Hildyard of the High Court of England and Wales continues proceedings on suit of Bank St. Petersburg vs Russian businessman Vitaly Arkhangelsky and Arkhangelsky's counterclaim against the bank.

Vladimir Sklyarevsky,CEO and owner of The Strategy of Corporate Investment and Finance Company(SKIF), which in 2009 worked on the realisation of the Western Terminal assets,was cross-examined on March 4, 7 and 8.

The witness told the court that back in 2009, Bank of Saint-Petersburg was one of the largest clients of his company. Early in that year the deputy chairman of the bank's board Irina Malysheva invited Sklyarevsky and the owner of Renord-Invest Mikhail Smirnov to the meeting and informed them that Arkhangelsky's OMG was a troubled debtor. According to Sklyarevsky, Malysheva instructed him and Smirnov to do whatever was necessary to replace the management of Scandinavia Insurance Company and the Western Terminal.

The change of both companies' management happened on April 7 2009. It is unclear whether every stakeholder received notification of upcoming conferences timely but Sklyarevsky admitted the Renord's lawyers could backdate them. He, however, stressed that it was not of great importance, as Renord owned 100 per cent in the Scandinavia. while the Sevzapalyas, one of Renord companies, was the owner of 99 per cent in the Western Terminal. After the change of management the both companies were transferred between different owners within Renord and ended up under the control of the group's offshore entities. Sklyarevsky explained, the bank and its partners in OMG project tried to protect themselves from Arkhangelsky's claims for recognition of transactions with his companies null and void. The claims actually followed and Arkhangelsky won the cases in the courts of the first and second instances. However, at the federal level those courts' decisions were overturned, presumably after Valentina Matvienko's interference.

Sklyarevsky denies that working on "OMG Project" he received confidential information about Arkhangelsky's group from Alexei Berezin, an OMG financial manager and his old friend.

"We are not Mafia"

Sklyarevsky's friends draw special attention of the court. Answering Arkhangelsky representative's questions the witness told that before founding SKIF he, in 1996-2006, worked for the AVK Group that included the AVK-Securities Company. His colleagues at the time were Irina Malyshev, Mikhail Smirnov, Alexei Berezin, the present Renord COO Dmitry Gubko, the present Bank of Saint-Petersburg press secretary Anna Barkhatova, and many other present Bank's employees.

AVK was founded in 1990 by Igor Kostikov, who in 2000 was appointed the chairman of the Federal Commission on Financial Markets. At that actually ministerial position Kostikov initiated the revocation of licenses of many AVK's competitors. Another Kostikov's reform was a requirement that issue of any securities on the market could only be done with the approval of a financial consultant. One of the largest consulting companies in the sector was AVK, and for some time the group blossomed. The court was told that back then about 80 per cent of financial consulting market in Russia was under control of only two companies - AVK and Federal Fund Corporation (FFK) associated with Alexander Voloshin who until October 2003 headed Russian President's administration. Arkhangelsky's representative suggested that AVK was Kostikov's corruption scheme, but Sklyarevsky denied it and stressed that before leaving for the government Kostikov sold his AVK shares and had no formal link to the group.

Once Kostikov was out of office the requirement of mandatory financial consulting was abandoned and business collapsed. A number of the group op managers now work at Bank of Saint Petersburg. Sklyarevsky stressed that former colleagues "trust each other, because we have been through a lot together".

"I am sorry to put it a little crudely, but you guys are a bit of a mafia, aren't you?" Arkhangelsky's representative said.

"No, we are not mafia," Sklyarevsky answered. "Do you understand mafia meaning family, as translated from Italian? We are definitely not family."

"We Aren't Raiders, They Aren't Financiers"

Arkhangelsky's representative showed Sklyarevsky a piece of report on raiding prepared by Russian National Anti-Corruption Committee. Its authors researched a large number of cases typical schemes of raiding in Russia. Arkhangelsky's case perfectly fits in one of those schemes. Sklyarevsky pointed out that although the report authors were well-known and reputable people none of them was a financier. He flatly denied his involvement in raiding.

"I worked bona fide in the financial markets," he stressed.

* * *

The bank claims that Arkhangelsky, who, together with his family, left Russia in 2009 and was granted political asylum in France, did not settle with creditors and tries to recover a debt.

Archangelsky in his statement of claim says that during the global financial crisis the bank agreed to defer payment on loans for six months. As a collateral, the bank demanded Archangelsky to transfer the shares of companies that were a part of his Oslo Marine Group - West Terminal port complex and Scandinavia insurance company, the owner of a half of Onega terminal. Before the stipulated term expired, the bank demanded loan repayment and later used its political contacts including top law enforcement officers and St. Petersburg Governor Valentina Matvienko, sold the shares to a sister firm at a lower price and changed the executive of Arkhangelsky's companies. He estimates the damages at $500 million.

----------

The course of the trial will be covered by the press-office.

Contact: Natalia Khmelik natalya.hmelik@gmail.com

Transcripts are available at: http://www.rpc.co.uk/index.php?option=com_flexicontent&view=category&cid=660%3Absp-v-arkhangelsky-transcripts&Itemid=27 

Arkhangelsky trial hears of ‘inconsistent’ testimony

The London trial in which Bank St Petersburg (BSP) is claiming Oslo Marine Group (OMG) chief executive Vitaly Arkhangelsky is liable for loan guarantees, and the Russian businessman is counter claiming for damages, has heard about inconsistencies in evidence given by bank witnesses.

In the second week of the trial, executives of the bank denied taking actions that led to BSP selling cheaply shares in OMG companies — which it had taken as collateral for deferred loans — to associated companies before their terms expired. The sales were made in 2009 after OMG ran into trouble following the financial crash of 2008.

 Questioned about a 25 December 2008 meeting between then chairman of BSP’s management board Alexander Savelyev and Arkhangelsky, Savelyev’s deputy Vladislav Guz denied the agreement to transfer the shares under a ‘repo’ (repossession) agreement was a strange move.

 “I don’t think it would be strange, because according to this transfer, he would have got all his shares back after repayment of the debt, and I think that was his only opportunity to restructure the loan,” Guz said.

 By March 2009, BSP believed OMG had no real prospects of returning to solvency, Guz added. 

Arkhangelsky’s legal representative Pavel Stroilov asked why specific terms of the restructuring were not agreed at the December meeting.

 “There was a maturity date for some of the loans in the amount of a few hundred million roubles, in case there was no agreement about any restructuring, the default would happen in the end of 2008,” Guz responded.

 But in separate questioning, Tatyana Stalevskaya, a senior manager at BSP’s corporate finance department until November 2010, agreed that her witness statement did not concur with evidence given by other executives.

 Stalevskaya, who was responsible for drafting the memorandum of agreements between BSP and Arkhangelsky as a safeguard for the bank’s loans, agreed that documents shown in court did not accord with statements made by her senior manager Irina Malysheva, who oversaw the corporate finance unit.

 “If to evaluate the information that I can see here, considering what I know, yes, this is not true; this does not accord with what I know, because I know that a memorandum has been signed, and the repo transaction has been signed about the separate sale of Western Terminal as a separate asset, that was never discussed, at least it is not something I know,” Stalevskaya said. 

 Later Stroilov claimed: “In the evidence of these six witnesses, which you have looked through, all of it tells the same lie, doesn’t it?”

 Stalevskaya answered: “The background, the history of the purchase of the shares in this evidence is not consistent with the knowledge that I have now, sitting here today, and it only shows the first component of the repo transaction without referring to the second component, which had been agreed upon, ie the repurchase of the shares in the event that Mr Arkhangelsky complied with his part of the deal, ie the obligations that he had assumed under the memorandum.” 

 Shares in the OMG companies, including terminals in St Petersburg, were sold to firms that were part of Renord-Invest, a company owned by a former BSP employee, Mikhail Smirnov. BSP argues that it needed to sell the shares in repo deals to an independent partner company to prevent them being consolidated into its balance sheet for reporting purposes.

 The case moved to Paris in its third week to hear evidence from Arkhangelsky in sessions for which public transcripts have not been made available. The case, which is expected to last for 12 weeks, continues.

 via TradeWinds - 25th February 
Paul Berrill, London

Gloves off as BSP and Arkhangelsky trade London blows

Bank St Petersburg claims the Oslo Marine Group chief executive is liable for $90m in loan guarantees, while the Russian hits back with action for $500m in damages.

A London trial has got underway in which Bank St Petersburg (BSP) is claiming Oslo Marine Group (OMG) chief executive Vitaly Arkhangelsky is liable for $90m in loan guarantees, while the Russian businessman is counter claiming for damages of $500m.

BSP has frozen Arkhangelsky’s assets and is pursuing a lawsuit that claims he misappropriated funds after OMG ran into cash-flow problems arising from the global credit crunch in 2008.

Arkhangelsky alleges the bank sold cut-price shares in OMG firms it had taken as collateral for deferred loans before their term expired.

He claims the Russian bank sold the shares in West Terminal port and Scandinavia Insurance, which owned half of the Onega terminal, to an outfit connected to the bank at a lower price than their value.

In 2009, Arkhangelsky fled Russia for political exile in France and says he is unable to leave the country. He is represented at the UK High Court by a layman, Pavel Stroilov, who is a Russian political exile with an English law degree.

An order for BSP freezing some $70m of his assets remains in place.

In early exchanges, Stroilov sought to argue that the bank conspired to defraud Arkhangelsky.

But High Court judge Justice Hildyard told Stroilov he would have to prove individuals at the bank were involved in a conspiracy.

“Your case is that Mr Savelyev and Mrs Maylsheva got together and decided to rip you off, and they were in a position not only to agree that, but to implement their agreement because of the positions they held in the bank,” Hildyard said. “You must show they agreed that. And you must then show how they implemented that.” 

Alexander Savelyev is the chairman of BSP and Irina Maylsheva is an ex-senior executive of the bank.

Acting for BSP, British lawyer Tim Lord argued OMG outfit Scandinavia Insurance transferred funds to a company called City Centre — claiming figures of RUB 950m ($12.2m) in 2008 and RUB 725m in 2009.

Lord said Arkhangelsky, who claims no knowledge of City Centre, was the director-general of LPK Scandinavia, although it appears that role passed to his mother-in-law.

“We have had no satisfactory explanation to why City Centre, a company we can’t identify — we can’t track it down — seems to have been the beneficiary of money from LPK Scandinavia, PetroLes and the Scandinavia insurers,” Lord said.

In cross examination of Andrei Belykh, a director of a department at BSP dealing with branches and clients, Stroilov raised the issue of a bank proposal to lease the real estate in Western Terminal and pledge it to a British Virgin Islands company called Gunard Enterprises Ltd.

The 49-year lease provided for a rent of $200,000 plus VAT to be paid at its expiration, which Hildyard said would “mean the value of the land would be enormously reduced” as he sought to clarify the line of questioning.

In a discussion about bank reports on a loan to OMG unit Vyborg Shipping, Elena Blinova, the BSP executive dealing with problem debts, was questioned about the authenticity of duplicate documents with her signature, “which purport to be the same document”.

Stroilov claims there are up to 170 duplicate documents with or without signatures.

“I don’t think that either of them is a forgery,” Blinova responded, adding she may have altered reports if a mistake had been made but the older versions might not have been destroyed before the loan file was passed to the bank’s client monitoring directorate. 

Stroilov said: “I’m not for the moment suggesting that you personally were part of the fraud but I am saying that some of your superiors, from whom this instruction came, were dishonest.”

Blinova replied: “I have nothing to say about that. I know nothing about it.”

The case, which is expected to last for 12 weeks, continues.

(c) TradeWinds | 05 February 2016