On October 14, the Luxembourg company Fortinvest Investments Holding of the ex-head of Rosneft, Sergei Bogdanchikov, filed a lawsuit in the Supreme Court of New York against the management company Edmond de Rotschild (EDR), founded by the descendants of the Rothschilds. The plaintiff accuses the defendants of causing damages of more than $ 100 million, and also asks to reimburse the legal costs incurred and lost profits (the amount is not specified). Fortinvest is asking that all charges against EDR and several other co-defendants be reviewed by a jury.
Bogdanchikov is the sole owner of Fortinvest, it follows from the claim. He told RBC that his position on the case was reflected in 45 pages of the lawsuit, he did not come into contact with the defendants.
The lawsuit was filed in a New York court on the grounds that EDR has a business in that state and the other defendants are residents of New York. RBC sent a request to Edmond de Rotschild.
What Bogdanchikov accuses the descendants of the Rothschilds
EDR, to which Bogdanchikov's company transferred funds into trust in 2001 and 2007, according to the Fortinvest lawsuit, withdrawn them through kickbacks and other fraudulent schemes in favor of the New York-based firm Fontanelle Capital Inc. Vladimir and Olga Oblonskikh. The latter, in turn, transferred them to the investment company from Manhattan OIM Capital and its financial director Mikhail Filimonov. All of them are also defendants in the Fortinvest claim. RBC failed to contact the Oblonskys, Fontanelle Capital and Filimonov.
What is known about Edmond de Rotschild
EDR is a management company founded in 1953 by Baron Edmond de Rothschild, representing the French branch of the Rothschild family. He is a descendant of the younger son of the founder of the dynasty. The president of the board of the company is its main owner, Edmond's son, Benjamin de Rothschild with a fortune of $ 1.9 billion, his wife Ariana de Rothschild has been heading the Swiss subsidiary Edmond de Rothschild since April 2019. Baroness Ariana Fortinvest calls in the lawsuit a participant in the conspiracy, who is not the defendant: she allegedly misled him. According to the plaintiff, this consisted in the following: as a "bait" Bogdanchikov was invited to the Swiss castle of the Baroness, where she assured him of the highest reputation of EDR and the reliability of his investments.
EDR has 2,600 employees, 32 offices in 15 countries and manages assets of CHF 173 billion.
The lawsuit mentions that in October 2017, Bogdanchikov's structures began litigation in Switzerland and Luxembourg in the same case against EDR. No decisions have yet been made there. At that time, Fortinvest did not know the ultimate beneficiaries of the withdrawn funds, whose firms are registered in the United States.
The former president of Rosneft since 2001 has transferred over $ 150 million to the trust management of the investment company Edmond de Rotschild (he headed Rosneft from 1998 to 2010). He hoped that managers with a big name and 250-year history in the financial world would increase his capital. However, in 2016, he discovered a fraudulent scheme - a loss of $ 81 million and a lost profit of another tens of millions of dollars, which Fortinvest could receive if EDR had faithfully fulfilled its duties. At the same time, during the management of Bogdanchikov's money, a company associated with the Rothschilds received more than $ 12 million in commissions from him, according to the text of the lawsuit. Fortinvest later took the remaining funds.
The Plaintiff suspects the Defendants of having acted with malicious intent from the outset. They first convinced him to create a special corporate structure in Luxembourg, in which they received the right to make decisions. Then, contrary to the agreement with Bogdanchikov, they delegated the management of his money to "unscrupulous" brokers and investment firms in the United States, such as the Oblonskys. For example, the investment company OIM, according to the lawsuit, invested part of his money in the Indian company Geodesic, which turned out to be a scam and went bankrupt. OIM has invested in Geodesic convertible bonds. In 2013, the company was unable to pay off creditors, in 2014 it went bankrupt by the decision of an Indian court, and its directors were accused of defrauding investors.
In addition, Bogdanchikov accuses EDR of falsification of reporting: she allegedly did double-entry bookkeeping in order to demonstrate good results to the client and hide the real losses and theft.
Who else has faced fraud abroad
This is not the first case of courts between European or American trustees with businessmen from Russia or the former USSR. Bidzina Ivanishvili, a billionaire and former Prime Minister of Georgia, accused a Credit Suisse employee who provided him with private banking services in 2016 of violations in the management of his capital, which led to significant losses. Then Ivanishvili filed two applications to the Geneva prosecutor's office with accusations of fraud against the banker Patrick Lescaudron, who managed his portfolio at the bank.
Billionaire Dmitry Rybolovlev has been suing the Swiss art dealer Yves Bouvier in Europe since 2015, believing that the art dealer sold him paintings at an inflated price. The billionaire's lawyers believe that he lost 1 billion Swiss francs (about € 1 billion).