The Boris Mints family was not happy with the Discovery

Trust and Otkritie banks accuse the businessman and his sons of replacing and withdrawing assets.
In June, the banks Trust and FC Otkrytie filed a lawsuit in the High Court of London against the former owner of O1 Properties, Boris Mints and his three sons. In July, it became known that the court blocked the assets of the defendants for $ 572 million. Vedomosti got acquainted with the court materials. As it turned out, banks want to recover more than $ 700 million from Mints and his sons. Judge Jacobs's order of July 16 described in detail why the court made such a decision.

Essence of the matter

The lawsuits of the banks are connected with allegedly fraudulent transactions concluded before the reorganization of Otkritie FC Bank and Bank Growth: in August 2017, banks purchased O1 group finance bonds (structure of another Mints company - O1 Group) worth about 57 billion rub. With the money from the sale of bonds, O1 Group repaid its loans to Otkritie FC ($ 500 million) and Growth Bank ($ 350 million), the document says. In the same month, Otkrytie FC was transferred for reorganization to the Banking Sector Consolidation Fund, and the Central Bank took Rostov to the fund in September. Trust, which has become a bank of non-core assets, has annexed Growth Bank. The founder and largest co-owner of Otkrytie FC was Vadim Belyaev - his bank was reorganized by Trust, and the former owner of Rost Bank was Mikail Shishkhanov.

The terms of the bonds testified to their non-market nature and low liquidity, the plaintiffs say: the maturity of the bonds is 2032, while the main coupon on securities is paid only at the end of the term and there is no substantial security for the securities. O1 loans, on the contrary, were well secured: banks had a 34% stake in O1 Properties as collateral - they belonged to Cypriot Centimila and Nori (about 30%) and Coniston from the British Virgin Islands (4.3%). The first two were owned by the O1 Group, the third, as stated in the document, was controlled by the owner of the East group, Alexander Nesis.

The loan maturity date was 2017–2020. As a result, well-secured loans were replaced by low-liquid and not properly secured bonds, banks say. They estimated the amount of losses at $ 572 million - this is the difference between the cost of loans before replacement and the cost of O1 bonds.

Episode 1. In which the assets are replaced

Judge Jacobs decided that only a replacement of assets would be enough to block the assets of Mintz. As stated in the order, in 2017, Mints knew or expected that both Otkrytie FC and Rost Bank would soon be reorganized: this would damage the O1 Group and businessmen themselves. O1 Group had financial difficulties, and it was engaged in the restructuring of its loans. The reorganization of the Central Bank, according to the plaintiffs, would inevitably threaten any hopes for a “flexible” attitude of the banks' management towards the debtor. In addition, the new owner of the banks had an incentive to find valuable assets to fill up holes in the balance sheets: for some of O1 Otkritie loans, Otkritie FC could increase the interest rate, demand an increase in collateral and even immediate repayment. There was a risk that O1 loans could be defaulted - this would lead to banks under the control of the Central Bank collecting foreclosures, and plaintiffs would lose some of their assets.

According to one of the witnesses, the order says that only one person supported the deal with Mints in FC Otkritie - then the former board of directors Yevgeny Dankevich: he authorized the purchase of O1 bonds. Banks examined telephone transcripts in which employees in 2017 referred to purchased bonds as “crazy,” “bad,” “unreasonable,” “stupid,” “strange,” “bullshit,” and “trash.” The day after the bond issue, Dankevich began to actively take steps to obtain citizenship in the Caribbean, and then fled to Israel and refused to cooperate with banks, the document says. Dankevich left the bank in September 2017, and in February of this year, the Investigative Committee put him on the wanted list, accusing him of embezzlement of 34 billion rubles. According to investigators, Dankevich entered into a conspiracy with Otkritie FC borrowers and ordered them to buy their bonds at a cost 2 times higher than the real one. The criminal case against Dankevich is connected specifically with transactions to replace loans with O1 bonds, a representative of Trust said.

The money from the sale of bonds to banks, the document says, was sent to repay loans not directly, but through a complex chain of companies so that it was not obvious that the loans were repaid by the money of the banks themselves. The Latvian account of ICT Holding (BVI), which was owned or controlled by Nesis, was also used in this chain, the order says.

The transaction, if the plaintiffs case is set forth correctly, was carried out with the aim of seizing valuable assets in the form of collateral and replacing them with illiquid and non-market ones, Judge Jacobs concludes.

Episode 2. In which the pledge was irrevocably withdrawn from banks

After the Central Bank took Otkrytie FC for reorganization, in September 2017, the bank demanded that O1 group companies cancel the asset replacement transaction, threatening otherwise with a lawsuit. After that, the defendants tried to do everything to prevent the bank from getting to the shares of O1 Properties. One month after the stock was returned in Cyprus, Agdalia Holdings, a wholly owned O1 Group, was registered. Nori and Centimila gave her 30% O1 Properties. In the same month, Otkrytie began litigation in Russia against Centimila, Nori and Coniston with a view to canceling the transaction and returning shares to itself. After the start of the proceedings, Nesis - Coniston also transferred its stake in O1 Properties to a company called Parmera Assets (BVI), the document said. The story with the shares ended with the fact that in December 2017 Agdalia pledged O1 Properties shares to the O1 Group creditor - Moscow Credit Bank (MKB), which, obviously, required additional security, the judge writes.

Boris Mints

“But Vadim Belyaev <...> we sat all our lives through the wall, always had one reception room, in general we are friends. We didn’t have this: you invented it, I invented it. “We looked for different ways, once we came up with banks to sanitize, then we decided to buy pension funds.”

In an interview with Vedomosti 2014

If the shares had remained with the previous owners, the banks could have returned them, the plaintiffs are sure: the Moscow Arbitration Court in September invalidated the transactions between the O1 Group and Otkritie FC structures and restored the bank's right to pledge in the form of a 35% stake in O1 Properties. As a result, according to the plaintiffs, the transfer of O1 Properties shares to other companies and, consequently, the further provision of part of the shares as collateral to MKB were made in order to prevent Otkritie from returning the collateral.

Mintsev’s defense argued that it was normal for one company in the group to help another by providing assets that could be used as collateral for loans.

The judge did not agree with this opinion: the transfer of shares to Agdalia at the start of the trial speaks of a classic withdrawal of assets, even if they did not decrease in the group itself. In addition, the Mints have not yet provided evidence of a commercial justification for this transaction. The fact that the O1 group may have wanted to use Centimila or Nori assets to secure debt to another creditor does not give any reason for the companies to transfer their assets, especially when they were notified of the intention of FC Otkritie to cancel the transaction, considered Judge Jacobs.

Now 61.2% of O1 Properties shares are owned by the Cyprus Riverstretch Trading & Investments (RT&I), the beneficiaries of which are the former manager of Region Group Pavel Vashchenko and Valery Mikhailov. RT&I received this package in July 2018 for O1 Group debts to IBC.

Episode 3. In which Nori and Centimila reduce capital

Nori and Centimila, in addition to losing shares in O1 Properties, also decided to reduce their capital. In December 2017, the O1 Group decided to reduce the capital of Nori, in March 2018, with the permission of the court of Cyprus, the company reduced it from $ 202 million to $ 2,289. The capital was reduced by Centimila, but the plaintiffs have no evidence of this, the judge writes. The judge notes the importance of the fact that money from Nori was withdrawn in violation of the potential rights of FC Otkrytie. The withdrawal of assets by the company is supported by the fact that Nori and Centimila are currently in the process of voluntary liquidation in Cyprus, follows from the judge’s explanation, thus, as a result of the transfer of capital, Nori became an “empty” company.

The fate of $ 200 million is not clear, the judge writes: the defendants have not yet provided substantial evidence and clarification as to where the money was sent. But banks were able to provide evidence that confirmed that at about the same time that Nori had reduced capital, the Mintsev family trusts reorganized. In his written testimony, Boris Mintz indicates that he created the MF Trust. “When transferring assets to the MF trust, I lost the right of ownership (title) to these assets: they are owned and controlled by the trust,” the judge quoted Mints as saying. The date of establishment of the trust is December 27, 2017, this trust may have received assets on the same date, and possibly later, the judge writes. It seemed reasonable to him that the $ 200 million left Nori for the Mintsev Family Trust is another confirmation of the risk of asset withdrawal, as it would be more difficult to execute a decision in favor of the plaintiffs against Nori if the former Nori assets were transferred to the trust.

What is the defense of Mintsev

Mintsev’s defense believes that there is no need to block family property. Their main argument is that the transactions in question took place in the fall of 2017 and in the next 18 months there was no evidence of the withdrawal of assets, the document says.

The judge did not consider this argument strong: Nori’s capital reduction and subsequent payment of $ 200 million apparently occurred in the first six months of 2018, a little more than a year before the application for blocking the property was filed. The judge does not consider that the banks needed to provide convincing evidence of the risk of asset disappearance, referring to later transactions, especially taking into account the nature and scale of the transactions that were the subject of the lawsuit, and how they were completed.

Vedomosti was unable to contact Dankevich and Belyaev, the representative of the East group declined to comment, O1 Properties and FC Otkritie did not respond to requests from Vedomosti. Vedomosti also relayed questions to Boris Mints through a friend of his, but received no answers.