British court recovers $140mn from Vladimir Kekhman in Bank of Moscow's favor
The court recognized that the former head of JFC Group of Companies had received a loan by providing forged documents.
The High Court of London satisfied the claim of the Bank of Moscow to ex-Head of the JFC Group of Companies Vladimir Kekhman, former head of the Mikhailovsky Theater and the Novosibirsk Opera and Ballet Theater. The Court recognized that the businessman had received two large loans in the bank with the help of fake documents and fraud, and ordered to recover more than $140 million from him.
The claims of the credit institution part of VTB Group were based on Vladimir Kekhman’s key part in obtaining two loans from the Bank of Moscow of $140 million and of about 305 million rubles ($4.91 million) in the autumn of 2011. The loans were not repaid by structures of JFC Groups of Companies, which used to be the main supplier of bananas and other fruits to the Russian market. In 2015, JFC was declared bankrupt.
In its lawsuit, the Bank of Moscow noted that Mr. Kekhman was the group’s beneficiary and and personally supervised all its activities, including through its Top Manager Yulia Zakharova. In support of their claims, the lawyers pointed out that JFC employees, led by Zakharova, drew up false financial statements of the group of companies.
In particular, according to the bank, JFC’s revenue for 2010 was overstated by $213 million, and receivables by $198 million. In reality, the activity of the so-called ‘banana corporation’ was unprofitable. The appearance of success was created by fictitious contracts for the supply of bananas by certain companies that were not formally part of JFC; it turned out that those companies were controlled by the group of companies from its Cypriot office. According to the Bank of Moscow supported by Judge Brian, Vladimir Kekhman was aware of this.
As follows from the court's decision, Kekhman also knew that 50% of the shares of the JFC group’s holding company – JFC Group Holding (BVI) Limited – were pledged with Sberbank. However, these facts were withheld from the Bank of Moscow – otherwise, it would not have not granted a loan to the banana suppliers.
The third item of the bank's claims was the withdrawal of JFC assets to offshores by Vladimir Kekhman on the eve of the planned financial collapse of the group of companies.
Kekhman, who had submitted a written statement to the London Court, and who personally attended the trial, denied his involvement in the fraud. He insisted that he quit the business in 2007, focusing on the management of the Mikhailovsky Theater. According to him, the documents had been forged by JFC Finance Director Yulia Zakharova, while the responsibility for bank loans rested with Andrey Afanasyev, the general director of JFC Group of Companies.
It is noteworthy that Andrey Afanasyev also testified against Vladimir Kekhman in London, who said that both he and Zakharova were but instruments in the hands of their chief, who made all decisions. In addition, the court agreed with the statement that Kekhman had withdrawn tens of millions of dollars not only for his theatre-related activity, but also for his development projects.
After the decision enters into legal force, it can become the basis for a new criminal case against Kekhman. Previously, he, Yulia Zakharova and Andrey Afanasyev, who testified before the London Court, had been the defendants in the criminal case of swindling on an especially large scale in lending (part 4 of Art. 159.1 of the Russian Criminal Code) and laundering of monetary funds acquired as a result of an offence (part 2 of Art. 174.1), on which the damage done to banks that subsidized JFC exceeded 20 billion rubles ($322.46 million). However, the MIA Investigation Department terminated it under the statute of limitations after the charge was reclassified to illegal receipt of credits (Art. 176 of the Russian Criminal Code).
It concerns entrepreneur Dmitry Motorin, Boris Usherovich, a co-owner of the Group of Companies 1520, and Novoe Vremya board member, Ivan Stankevich. Motorin is accused of giving a bribe on an especially large scale, and Stankevich and Usherovich are charged with bribe-taking.
This week, the judicial debates in the trial of Vladimir Barsukov-Kumarin charged with creation of Tambovskie organized criminal group have been finished in the Kuibyshevsky District Court of St. Petersburg. If the court upholds the stance of the state prosecution, the once-influential criminal ‘authority’ may be convicted to almost 25 years behind bars. In reality, this translates into a life term for the legend of criminal St. Petersburg.