Court and money – Kommersant FM
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Trust Bank cannot return money collected from fugitive bankers to Russia. We are talking about funds that the credit institution seized from former shareholders in the UK and Cyprus. In these jurisdictions, from $2.5 million to more than $3.5 million hung up, the head of Trust, Alexander Sokolov, told RBC.
The bank seized the first $900 million back in 2020. Then a London court recognized that the former co-owners of Trust, Ilya Yurov, Sergei Belyaev and Nikolai Fetisov, had been involved in fraud for years, issuing bad loans to controlled offshore companies. As a result, in 2014 the bank “burst”. As a result of many years of reorganization, it came under the control of the Central Bank.
After the outbreak of hostilities in Ukraine, Trust was not subject to sanctions, and even managed to win several more cases abroad. Several factors hinder the execution of court decisions, explains Finam board member Dmitry Lesnov:
“Despite the fact that Trust Bank is not sanctioned, it belongs to the Central Bank. As we know very well, the regulator’s assets are frozen in many foreign countries.
Therefore, technically, there is certainly a possibility of withdrawing funds, but the execution of such a court decision carries a risk for foreign financial organizations. Moreover, the British government has established a new department that will combat sanctions evasion. This is a clear signal to local financial institutions.
It is quite possible that the bank, together with foreign financial institutions, will reach some kind of agreement so that these assets can not be transferred to Russia, but used to pay off debts to foreign counterparties. Litigation with the former owners is still ongoing, so such assets will certainly come in handy.
The total amount of assets that will be recovered many times exceeds the costs that the bank currently incurs on lawyers and consultants, but the bank will certainly explore additional options for using these funds, perhaps not in the Russian perimeter, but in friendly countries. These could be mergers and acquisitions that increase capitalization, and the launch of some new foreign projects. The main thing is that all parties understand what these funds will be spent on, and there is no risk of falling under secondary sanctions.”
The Trust also stated that they were ready to leave the money abroad and spend it there to continue the trials. Moreover, the bank admitted two years ago that it would only be possible to get a third of the amount recovered, since the former shareholders had $40 million left “at best.” In general, for many Russian companies it has become unprofitable to sue abroad, notes Nikita, head of the Luxembourg office of KRK Group Ryabinin:
“Many lawyers, in principle, do not want to interact with sanctioned companies or financial institutions.
Therefore, the most difficult thing for two years was to agree in principle on who would represent your interests in a foreign jurisdiction. Sometimes it’s easier not to sue at all.
The only thing is that for a private company such a decision is easier to make than for a public one, which has many shareholders. Because shareholders may ask, why don’t you protect our interests?
In the case of Trust, the problem is precisely the cross-border transfer. The bank can always refuse a transaction, not only because it is prohibited. There is a normal position here. The commission for this transfer, even if it is 1%, does not cover the risks. If it were not Trust, but Raiffeisen Bank, and it acted not on behalf of Raiffeisen Bank of Russia, but Raiffeisen Bank International AG, then there would be no problems. Or if the Russian Raiffeisen had opened correspondent accounts with foreign banks, it would be easier. But to what extent is a big question.”
At the beginning of the year, some Trust defendants tried to stop the litigation, citing sanctions. In particular, the family of the former co-owner of Otkritie Bank, Boris Mints, appealed to the fact that Trust acts in the interests of the Central Bank, which means that the collected funds will go to the budget. The court rejected the argument. The dispute between the parties is related to transactions concluded in 2017, shortly before Otkritie Bank was also sanitized and transferred under the control of the Central Bank.
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