Boris Mints lost $ 1 billion due to Zadornov’s hostility

Boris Mintz said in the High Court of London about the damage due to the actions of the top management of the Discovery and the Trust, as well as their shareholder, the Central Bank.
Origin source
The founder and beneficiary of the O1 Group, Boris Mints, presented to the High Court of London his position on the lawsuit of the Trust and Otkritie banks (RBC has a document). He claims that the leadership of the Central Bank - the first deputy chairman Dmitry Tulin and deputy chairman Vasily Pozdyshev, as well as the leaders of the banks Otkrytie and Trust - respectively, Mikhail Zadornov and Alexander Sokolov launched a “campaign” against him in order to “cause damage”. Banks under the control of these individuals violated a number of obligations, which is why, according to Mintz, he lost, "according to a conservative estimate, from $ 650 million to $ 950 million," the document says.

Otkrytie and Trust (both owned by the Central Bank) require in a London court from the Mints family more than $ 700 million. The defendants in the lawsuit are Boris himself and his sons - Dmitry, Alexander and Igor. In July, the court blocked $ 572 million worth of family assets in this trial.

What are Mints accused of?

“Trust” and “Otkrytie” suspect O1 Group of fraudulent transactions in August 2017 in anticipation of the reorganization of Otkritie Bank and Rost Bank (now attached to the Trust). Both acquired bonds of O1 Group for 57 billion rubles. With these funds, the group paid off loans to Otkrytie ($ 500 million) and Growth Bank ($ 350 million). The loans were pledged shares of O1 Properties (owned 15 Class A business centers in Moscow), which were held by the Cypriot companies O1 Group (Nori and Centimila) and Coniston (British Virgin Islands) Alexander Nesis.

Having paid off loans with maturity in 2017–2020, O1 Group released collateral, and banks received bonds maturing in 2032 without paying a coupon. According to the records of telephone conversations that the plaintiffs provided to the court, the bank employees themselves called these bonds the words “bullshit” and “garbage,” Forbes wrote. The lawsuit alleges that the defendants were aware of the financial difficulties of banks that soon got into reorganization.

Mintz told the court that he was not substantively involved in the negotiations between O1 Group, Otkrytie and Rosta Bank before the transaction, and also did not know about its conditions. The businessman said that on July 25, 2017, he met with the then owner of the Discovery, Vadim Belyaev, in France. He himself asked for a meeting to find out if O1 Group can help Otkritie cope with temporary difficulties, the document says. The meeting lasted an hour, and upon completion "the parties came to the understanding that the O1 Group will help Otkritie, but only on conditions commercially beneficial to it." Belyaev and Mintz did not discuss specific conditions, the defendant said.

"Strong personal hostility"

The document claims that after the provisional administrations were introduced in Otkrytie and Binbank (currently merged with Otkrytie), a number of people in these administrations “launched a campaign against” the O1 Group and the Mints family “in order to harm” Boris Mintz.

Mintz believes that the campaigners were:

Anna Orlenko - former director of the Banking Supervision Department of the Central Bank and ex-deputy head of the Provisional Discovery Administration;
Mikhail Zadornov - the former head of VTB24, who headed the Discovery from January 1, 2018 (his appointment was announced on September 14, 2017);
Alexander Sokolov - Trust Bank, ex-member of VTB24. The main objective of the Trust is the return of Central Bank funds from troubled assets of banks that have been rehabilitated;
Vasily Pozdyshev - Deputy Chairman of the Central Bank, overseeing the work of the Banking Sector Consolidation Fund;
Dmitry Tulin is the first deputy chairman of the Central Bank who oversees banking regulation.
The campaign was provoked in part by criticism that Mintz addressed to the Central Bank, claimed in response to the lawsuits of Otkrytie and Trust. An example is the “criticism” voiced both publicly and at a meeting with representatives of the Central Bank in the fall of 2015 (specific details are not given). This, Mintz is sure, set individuals against him in the Central Bank against him.

The campaign was also triggered by "strong personal hostility" on the part of Zadornov, Mints claims. This hostility, as stated in the document, arose when Mints criticized Zadornov "in the presence of his then leadership at VTB." It all happened in mid-2017, when O1 Group and VTB "were negotiating a potential merger of the Future Pension Fund (part of the O1 Group) and the VTB Pension Fund, which was managed by Zadornov."

After gaining control of Otkrytie and Binbank, Zadornov and “specific individuals” from the Central Bank were able to “attack” the O1 Group, the Mints family, and specifically Boris through these banks, the document says. We are talking about three claims - “abuse of litigation”, “illegal refusals to execute mandatory share buybacks from O1 Group structures” and “unlawful interference in the commercial relations of O1 Group and third parties,” follows from the businessman’s explanation.

What Mintz Blames Otkrytie and Trust

In June 2018, the actions of the Trust and Otkritie led to the O1 Group defaulting on loans from the Moscow Credit Bank, Mints claims. Shortly before, in March 2018, the O1 Group learned that the loan was transferred to Riverstretch Trading & Investment Limited (in Mints’s counter-claims, it is called “one of the most aggressive debt collectors on the market”). The loans included Mints’s stakes in O1 Properties and FG Future, which had to be transferred to Riverstretch in order to settle the debts.

The settlement occurred at a price significantly reduced due to the campaign that the plaintiffs conducted, the document says. As an example, Mintz cites several “unlawful refusals” by plaintiffs to fulfill obligations. So, Trust refused to buy shares of Otkritie Bank from NPF Future, and the bank refused to buy shares of Rosgosstrakh from NPF. Otkritie also refused to pay RUB 7.25 billion to O1 Group. under the guarantee issued by him. The bank guaranteed obligations of a certain Today Investments Limited, which borrowed 7 billion rubles. O1 Group, but could not pay, follows from the documents of a London court.

Finally, Mintz mentions the situation with Promsvyazbank (PSB), which “by Tulin’s motivation” did not return 13.3 billion rubles to the NPF Future placed on deposit. The NPF requested a refund of deposits on the day the provisional administration was put into PSB on December 15, 2017. In a position for a London court, the sons of Mints Dmitry and Alexander (RBC has one) state that the first deputy chairman of the Central Bank, in a letter to the head of the interim administration of the PSB, Dmitry Pozhidaev, said that the Central Bank does not support the return of deposits without a court decision. This was explained by the fact that the fund “illegally used deposits to help Promsvyazbank redeem its own shares from the majority shareholder Promsvyaz Capital” (Mints asserts that this is not so).

As an example of “interference [of the plaintiffs] in the relations of [Mintsev’s structures] with third parties”, the O1 Group attempts to sell 51% of O1 Properties to the Chinese developer Vanke. According to the position of the sons of Boris Mints, negotiations were conducted throughout 2017, in September Vedomosti was written about a possible deal. In December of the same year, the parties already signed a declaration of intent (O1 was ready to sell control in its “daughter” for $ 672 million), but in February 2018, Vanke turned off negotiations: the Chinese company conducted due diligence and was notified that the conclusion of the transaction would entail for her financial risks due to lawsuits against O1 Group from Otkritie and Rost Bank, follows from the testimony of Dmitry and Alexander Mintsev.
Disputes surrounding the redemption by Trust of the shares of Otkritie from NPF Future, the redemption by Otkrytie of shares of Rosgosstrakh and the non-return of pension accumulations of NPF Future from the PSB deposit were considered by Russian courts. In the first case, the NPF lost the dispute in three instances, the second and third ended with the conclusion of amicable agreements between the parties, but after the change of ownership of the "Future". Dispute over compensation of 7 billion rubles. under the guarantee, O1 also lost in the Russian court.

As a result of the actions of the plaintiffs, the capital of the O1 Group (its shares were owned by the Mints Trust MFT Cyprus Trust) fell from $ 1.75 billion to almost zero, and now the O1 Group is being liquidated, the document says. The businessman lost the opportunity to receive payments from the MFT Cyprus Trust, which was the indirect owner of O1 Properties and the Future financial group. “The size of these losses will be subject to expert assessment, but a conservative estimate is from $ 650 million to $ 950 million,” Mints counteracts claims.

What did Otkritie and Trust say?

The press services of Otkrytie and Trust called Mintsev’s statements “completely contrived.” “They were made in order to distract attention from transactions and actions performed with the participation of members of the Mintz family, which entailed significant damage to the banks“ Opening ”and“ Growth ”. Members of the Mintz family did not present any real evidence, ”the Trust said. According to the revealed violations at Otkritie Bank and Rost Bank, legal proceedings and appeals to law enforcement authorities were initiated, therefore, Mikhail Zadornov, Alexander Sokolov “and the other top managers mentioned are not guided in any way by personal attitude to individuals, but solely by the facts of the revealed violations,” they say in the bank.

In the "Discovery", in turn, they pointed to "obvious inconsistencies in the evidence of Mints." “Transactions disputed by Otkritie and Trust banks in the High Court of London that damaged the Otkritie and Rost banks were completed before the interim administrations were introduced. Therefore, no actions of the provisional administrations, the Central Bank of the Russian Federation or the new leadership of the banks can be the cause of the events Mints indicate, ”the Otkrytie press service said, adding that Alexander Sokolov headed the Trust in July 2018 and did not could be the initiator of any campaign. “The illegality of the transactions and the real damage caused by Mints are confirmed by court decisions,” the bank reminded.