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Firm formerly controlled by Browder again demands $2 mln from HSBC

10:38 20/09/2019

MOSCOW, September 20 (RAPSI) – Dalnaya Step has filed an appeal against a lower court’s ruling ordering HSBC Bank and HSBC Management to pay the company believed to be formerly controlled by William Browder’s Hermitage Capital Management 388,400 rubles ($6,000) instead of 125.3 million rubles (nearly $2 million) demanded, according to court records.

The Sixteenth Commercial Court of Appeals will hear the appeal on October 30.

In August, The Commercial Court of the Republic of Kalmykia issued the ruling in favor of Dalnaya Step and jointly recovered 388,400 rubles ($6,000) from in favor of Dalnaya Step. However, the plaintiff sought for 125.3 million rubles/ The court therefore granted a claim filed by Dalnaya Step in part.

According to Kirill Nogotkov, bankruptcy manager of the former Browder’s companythese costs accumulated during review of his claim on recovery of 1.2 billion rubles ($18 million at the current exchange rate) in debts of the Dalnaya Step from the HSBC Management and HSBC Bank (RR).

In June 2017, the plaintiff filed a claim to collect funds totaling to 1.2 billion rubles, $255,500 and £1,800,000 from the defendants, who were formerly in control of the company. In August of that year, the Commercial Court of the Republic of Kalmykia granted the lawsuit.

The Sixteenth Commercial Court of Appeals upheld the ruling in October 2017. However, in November, the North Caucasus District Commercial Court reduced the amount to be collected from the defendants in favor of Dalnaya Step by $255,500 and £1,800,000 respectively.

On March 21, 2016, the court ruled to resume bankruptcy proceedings with regard to Dalnaya Step. According to an acting manager back then, proceedings were still in effect and there was a need to make former controllers of the company accountable.

In 2015, the department of Russia’s Federal Tax Service (FTS) for the Republic of Kalmykia filed a motion with the court to declare void a decision made in October 2007 to complete the liquidation of Dalnaya Step. The FTS department said the reason for the petition was that Russia’s Interior Ministry was investigating Alexander Dolzhenko, a former bankruptcy manager at Dalnaya Step, on suspicion of premeditated bankruptcy.

Criminal cases

The conflict between Russian authorities and Hermitage Capital CEO William Browder is long-lasting.

In December, Browder was arrested in absentia as part of a new criminal case over organizing a criminal network. Browder is to be detained for two months from the day of his potential arrest, extradition or deportation. The defendant did not show up for the hearing as he lives in Great Britain.

The new case was launched against Hermitage Capital CEO on November 16. Browder is charged with organization of a criminal community and faces up to 20 years in prison. According to Russian law enforcement, the defendant is on the international wanted list and the damage he allegedly caused is estimated at 10.5 billion rubles ($153.2 million). Investigators believe that Browder created and leaded an organized criminal group to make grave crimes in Russia including tax evasion, fraud, deliberate bankruptcy, money laundering.

In December 2017, a Moscow court sentenced Browder to 9 years in prison in absentia for deliberate bankruptcy and tax evasion. His business partner Ivan Cherkasov received 8 years in prison. The defendants were also fined 200,000 rubles (about $3,000) each. Moreover, Moscow’s Tverskoy District Court granted a civil lawsuit and recovered 4.3 billion rubles (about $65 million) from the defendants in favor of the Russian Federation. In June, the sentence was upheld.

In 2013, a Russian court sentenced Browder in absentia to 9 years in a penal colony. It was found that between 1997 and 2002, Hermitage Capital auditor Sergey Magnitsky created and applied an illegal tax evasion scheme in the interests of Browder.

Magnitsky worked for Firestone Duncan and represented Hermitage Capital, which the Russian authorities accused of tax evasion. Magnitsky was arrested on fraud charges in November 2008 and found dead in a Moscow detention center in November 2009. The lawyer’s death provoked an international outcry, including international sanctions against Russia.

In July 2013, Moscow’s Tverskoy District Court found Magnitsky guilty of tax evasion and closed the case due to his death. According to the case materials, Magnitsky’s and Hermitage Capital director William Browder’s actions cost Russia over 500 million rubles (about $8 million).

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Firm formerly controlled by Browder again demands $2 mln from HSBC

10:38 20/09/2019 Dalnaya Step has filed an appeal against a lower court’s ruling ordering HSBC Bank and HSBC Management to pay the company believed to be formerly controlled by William Browder’s Hermitage Capital Management 388,400 rubles ($6,000) instead of 125.3 million rubles (nearly $2 million) demanded.
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