The Office of Alexander Bastrykin underestimated the shares of the Calvi case

The initial investor paid 4.4 million dollars for the IFTG shares that caused the arrest of Michael Calvey. The investigation estimated them at 600 thousand rubles. One of the methods gives such a figure, but startups do not appreciate it, experts say.
Origin source
Shares of Luxembourg International Financial Technology Group S.C.A. (IFTG), in exchange for which Vostochny Bank forgave a loan of 2.5 billion rubles to the First Collection Bureau (PCB), the initial investor bought for $ 4.4 million. This is 430 times more than the estimate of 600 thousand rubles, which appears in the criminal case of the founder of Baring Vostok, Michael Calvi and his partners, but 11 times less than the grade, on the basis of which the shares were transferred to the balance of Vostochny Bank.

According to the investigation, in February 2017 Calvi convinced the board of directors of Vostochny, where Baring had 51.6% of the shares, to vote for the compensation agreement providing for the forgiveness of a PKB loan (also controlled by Baring funds) in exchange for the IFTG stake. The investigation proceeds from the fact that for this transaction the shares were valued at 3 billion rubles, while their real value did not exceed 600 thousand rubles. Calvey rejects fraud charges.

We are talking about the actions of classes C and D Luxembourg IFTG, follows from the decision to initiate a criminal case. These papers were issued two months before the deal in the criminal case (December 15, 2016) in favor of the Cyprus Balakus Company Limited, which paid $ 4.4 million for the package (RUB 256 million at the official rate of the Central Bank on that date), from company reporting.

For Balakus, an additional issue of IFTG class C (566 thousand) and class D (6.2 million) investor shares was held. Almost the entire amount went to the payment of Class C securities, with Class D shares having only $ 621. As a result, the IFTG turned out to be $ 4,400,621, which follows from the disclosure of information. PKB does not disclose how these shares were later at its disposal.

According to the latest version of the IFTG charter, funds invested in Class C and D shares are invested in ITI Group Ltd, ITI Asset Management Holding Ltd, ITI Technologies Ltd, Freedom Tower Assets Limited and Jemmott Investments Limited. These are investments in start-ups of the ITI group of companies specializing in investment activities, brokerage and financial services, as well as in a 2can & ibox startup offering mobile bank card acquiring.

Da Vinci Capital is invested in all these companies by Oleg Zhelezko, who is also the IFTG investment manager and PKB portfolio investor. At the end of 2016, investments in start-ups amounted to $ 12 million. This suggests that funds from other classes of IFTG shares were also invested in them.

At Vostochny Bank, Baring Vostok and Da Vinci Capital declined to comment, PKB did not respond to RBC's request.

What is known about Balakus Company Limited

The Cyprus company Balakus Company was established on October 2, 2014, three years later - on November 22, 2017 - was liquidated. As follows from the data of the Cyprus registry, it was established by Peter Yurasov, but then it came under the control of the Cyprus trust WCN Worldwide Corporate Nominees, which in turn is owned by WCS Worldwide Corporate Services.

WCS has a website where it is stated that the firm has been operating since 1997 and is engaged in consulting in trust management, banking, finance, corporate matters and real estate. WCS operates in Cyprus and in a number of offshore jurisdictions from Jersey to the UAE.

Trust WCN and previously appeared in cases in the Russian jurisdiction. In 2013, the minority shareholders of Kamkabel tried to obtain invalidation of the pledge agreements concluded by the company with the company Uraltekhnokabel. The plaintiffs could not prove the connection between the Cyprian company Singroves Holding Limited, which owned more than 20% of Kamkabel, and the WCN-controlled Cypriot company Darnex Limited, which owned 100% of the shares of Uraltekhnokabel.

WCN Worldwide Corporate Nominees also briefly held in 2010 6.46% of Loko-Bank shares in the interests of Leonid Strunin and Leonid Fridlyand, the founders of the luxury merchant company Mercury (owner of TSUM).

Where did the estimate of 600 thousand rubles.

A criminal case against Calvi was filed by the FSB, according to Sherzod Yusupov, a minority shareholder of Vostochny (4.8% of the shares). He, along with the owner of 32% Artem Avetisyan and another minority shareholder Yuri Danilov (3.2%) is in the group of shareholders of Vostochny, which is in conflict with Baring Vostok, whose funds own a controlling stake in the bank.

At the meeting of the Basmanny Court, when the inquiry of the investigation about the election of Calvi’s preventive measure was considered, the investigator said that the assessment of the Luxembourg IFTG shares taken by Vostochny in exchange for forgiveness of the 600,000 rubles PKB debt was not commented on by information). In the future, the name of the appraiser was not mentioned, it was only said that the assessment was ordered by Cypriot Finvision (through her, Avetisyan owned a package in Vostochny).

The assessment document was made available to the BBC Russian service, which did not disclose the name of the appraiser, calling it a report from a Luxembourg law firm. Lawyers, having studied the company's charter, considered that the valuation of these papers should be made in terms of the amount of dividends that can be obtained from them. At the same time, to calculate dividends, the nominal value of securities was used, which is spelled out in the IFTG charter. According to its latest version, dated September 20, their face value is $ 2,831 and $ 621, respectively. The amount of the nominal value of the shares was multiplied by two, as it was about paying dividends for two years - it turned out $ 6905. The trial sounded ruble equivalent of this amount - 600 thousand rubles. (the investigator did not say at what ruble exchange rate the stock valuation was calculated).

Estimating the value of the company from the point of view of the dividend flow is possible, but not always applicable, notes the partner of Law Bureau A2, Alexandr Aleksandrov. “This is a standard question: what is called, as they thought. If we consider stocks from the point of view of the dividend flow - the classical approach, then we need to stand up and say: “Look, the Uber company is worth zero. Why does it cost zero? Because she never paid dividends and she has a loss. And in the US, they are going to put it on IPO for $ 120 billion, ”he cited the example. Investors go to venture capital funds not for dividends - they are counting on a rapid increase in the value of the company, the lawyer said.

Yusupov explained to Vedomosti that the low valuation of the IFTG shares was due to the fact that Vostochny received securities on its balance sheet that were subject to restrictions. "They relate to the payment of dividends, as well as any payments during the liquidation of the company," he said. These restrictions, according to him, were mentioned in the company's charter, which became known only in the spring of 2018. Calvi admitted at the trial that there were restrictions, but at the time of the transaction no one noticed this error, and later the restrictions on the papers were lifted.

Sherzod Yusupov did not answer the corresponding question of RBC.

What restrictions were imposed on IFTG papers

Simultaneously with the purchase of Balakus class C and D papers, the rights to these papers were recorded in the IFTG charter (December 15, 2016). In accordance with the articles of association, the profit from investments exceeding the costs necessary for the company's operating activities may be transferred to the accounts of its shareholders. For such payments, a certain priority was established: payments to holders of classes C and D were to be made after payments to holders of securities of classes A and B.

Upon liquidation of the company, after all payments to creditors, 10% of the company’s remaining funds were sent to class A holders of shares, and 90% to Class B holders. Holders of C and D classes could qualify for payment as a last resort in amounts comparable to their initial contribution to capital. At the same time, the charter did not spell out the possibility for holders of shares of classes C and D to present the right to buy back their securities. Similar restrictions are in the charter of April 27, 2017.

The changes to the document were made only on August 27, 2018: the owner of shares of classes C and D had the opportunity to make a demand for the repurchase of his papers or to exchange them for papers of Fintech start-ups in which IFTG had invested. Restrictions on the sale of shares to a third-party company are not found in any version of the charter.

How to evaluate the IFTG for transfer to the "East"

Two months after buying shares of C and D by a Cyprus company with unknown beneficiaries for $ 4.4 million, they switched to the balance of Vostochny Bank at a multiple higher price through PKB. The asset was valued by independent appraisers in the range from 2 billion to 3 billion rubles, Michael Calvey said in court. This assessment raised questions from the Bank of Russia, which in 2018 conducted an audit of the Vostochny. The report of the Central Bank indicated that this asset is subject to additional reservation. As reported by RBC Sherzod Yusupov, an IFTG bank is ordered to form a 100 percent reserve.

“For a bank in itself, obtaining a stock of a company that invests in startups or technology projects on its balance sheet does not necessarily have to result in additional pressure on capital if the stock price at the time of their acquisition reflected a fair assessment of the risks inherent in such investments,” says the analyst Moody's Olga Ulyanova. But on the basis of only public data, it is impossible to accurately assess what risk such an investment as an investment in the IFTG bears for the bank, adds Fitch senior analyst Alexander Danilov.

“We need to understand whether the assessment was adequate and by whom it was carried out. You also need to know how a company is managed, who makes decisions on the disposition and purchase of assets, and so on. In view of such uncertainty, we usually attribute such investments to high-risk ones, ”he explains, adding that it is easier to assess risks with a loan, since“ there is a repayment schedule, there is a borrower with some credit quality ”.

Baring Vostok declined to comment on discrepancies. But, according to a source from RBC close to an investment company, when assessing the value of IFTG shares, an independent appraiser at the time of the transaction took into account the “synergy related to access to the multimillion-dollar base of the bank’s clients - individuals and small enterprises”, since the activities of IFTG portfolio companies brokerage services and other fintech areas) are a logical continuation of the bank’s line of services. According to the interlocutor of RBC, such projects in Vostochny could be launched in 2017–2018, if this were not prevented by a corporate conflict within the bank.

Company valuation should be integral, Gleb Davidyuk, managing partner of investment company iTechCapital, points out. “Any qualified appraiser will confirm that stocks or shares in a business can and should be assessed with a whole set of traditional tools for the financial industry, starting from the valuation method based on the book value of assets, method of evaluating comparative analogues and ending with a whole set of more scientific approaches in the method of estimating future discounted cash flows, ”he described a variety of approaches to assessments nke assets.

How the IFTG works

The International Financial Technology Group was established in 2012 and was originally called the Russian Exchange Holding S.C.A. (created for investments in the shares of Mosbirzhi, at the end of 2016 owned its securities for $ 13.8 million). The name change occurred in December 2016. The company is registered in Luxembourg as a limited liability partnership. To create it you need two partners - a general and a partner with limited liability. The general partner is liable for the company's obligations, while the responsibility of the second partner applies only to the funds invested by him.

Structure S.C.A. allows to issue additional shares of the company without diluting the share of the general partner, which is another Luxembourg company - Russian Exchange Holding GP S.à r.l., established by the Da Vinci Capital Foundation (ultimate beneficiary - Oleg Zhelezko).

The company has managerial and investor shares (according to the last charter, these are class B, C, D, E shares). All of them have different nominal values ​​on which voting rights depend on Luxembourg law. Managerial shares (4.5 mln A1 + 1 class A2 class shares) are held by the general partner, the Russian Exchange Holding GP S.à r.l., they hold the main managing rights. Under the funds of various investors, additional issues of investor shares are held.

According to the latest published IFTG statements for 2016, its assets amounted to $ 82 million (4.8 billion rubles at the rate of the Central Bank at the date of approval of the transaction), net profit - $ 22.7 million (1.3 billion rubles). As a private company IFTG is not obliged to publish reports, its report for 2016 was published at the end of 2018.