London court declares trusts of ex-Russian senator Pugachev sham
MOSCOW, October 11 (RAPSI) – The High Court of Justice in London on Wednesday recognized trusts owned by ex-Russian senator Sergey Pugachev as sham, the Deposit Insurance Agency (DIA) stated.
The court ruled that the assets within those trusts may be enforced.
According to the court’s ruling quoted in the DIA’s statement, “the point of the trusts was not to cede control of his assets to someone else, it was to hide his control of them. In other words Mr Pugachev intended to use the trusts as a pretence to mislead other people, by creating the appearance that the property did not belong to him when really it did.”
Proceedings over trust assets have been initiated in London’s court by the Deposit Insurance Agency (DIA), a bankruptcy supervisor of Mezhprombank formerly owned by Pugachev. The DIA claimed that Pugachev used these trusts to conceal his property.
On April 30, 2015, the Moscow Commercial Court ruled in favor of the Deposit Insurance Agency (DIA) in a lawsuit filed to declare Pugachev and other Mezhprombank executives guilty of knowingly bankrupting the bank, primarily through the transfer of liquid assets. The court decided to debit 75.6 billion rubles ($1.3 billion) from former managers of the bank.
The Moscow Commercial Court in late October granted DIA the right to forcibly collect 75.6 billion rubles from former Mezhprombank staff, including 68.5 billion rubles from Pugachev and Marina Illarionova, the last CEO of Mezhprombank, and 7.16 billion rubles from two former chief executives, Alexander Didenko and Alexey Zlobin.
In 2014, DIA filed a lawsuit with a UK court to collect the assets which Pugachev allegedly embezzled from Mezhprombank. In July 2014, London’s High Court granted an injunction to seize $2 billion worth of Pugachev’s assets in various countries. Pugachev appealed the decision, but in December 2014 London’s High Court refused to release his assets.
In September 2015, Pugachev filed a lawsuit against Russia within Permanent Court of Arbitration (PCA) in The Hague demanding $12 billion. The plaintiff said that the lawsuit is filed because of the alleged violations of obligations under bilateral investment contract with France by Russia. According to the ex-senator, from 2009, he has lost some of his assets without receiving compensation for them. Such assets include “Middle Trading Rows" on the Red Square in Moscow as well as the Yenisei Industrial Company.
The Moscow Commercial Court declared Mezhprombank bankrupt in November 2010 after the bank defaulted and received a 40 billion rubles ($690 million at current rate) bailout from Russia’s Central Bank. DIA was appointed liquidator of IIB’s assets.
Investigation into the bankruptcy was launched in January 2011 on suspicion of illegal operations in the process of filing for bankruptcy and premeditated bankruptcy.
Pugachev was charged with embezzlement and arrested in absentia. In November 2014, he was put on the international wanted list. In January 2015, Russia sent a request for extradition to the UK.