‘Seven-star’ Telman Ismailov to be left with nothing? 

‘Seven-star’ Telman Ismailov to be left with nothing?
Telman Ismailov is facing new troubles amid the collapse of his business empire and escalating creditors’ claims Photo: The CrimeRussia

Russian assets of once-powerful oligarch Telman Ismailov, ex-owner of Cherkizon market, will be put up for sale. In addition, he faces problems abroad: creditors, including structures controlled by VTB Bank, managed to initiate two criminal cases in Switzerland in relation to financial offenses committed by the businessman. In Russia, Ismailov has been charged with assassination of two entrepreneurs and abduction of singer Avraam Russo. The empire built by the oligarch whose name was associated with luxury and chick has collapsed – while Ismailov had to hide in various European countries. And now the businessman is about to be deprived of the last remains of his former wealth.

As it is known, the hotel rating system is limited by five stars. However, descriptions of Mardan Palace Hotel in Turkey – that used to belong to Telman Ismailov, former owner of Cherkizon market in Moscow, – rightfully use the term "seven-star". This refers to the extraordinary luxury offered to its guests. The hotel lobby features a stair built according to a project by Leonardo da Vinci, a chandelier 8 meters in diameter made of Swarovski crystals, and a portrait of businessman's father Mardan Ismailov. The grand opening of Mardan Palace on May 23, 2009 was attended by many celebrities, including Sharon Stone, Richard Gere, Monica Bellucci, Tom Cruise, and Mariah Carey. Ismailov reportedly spent $1.4 billion on its construction, including the delivery of 500 tons of Egyptian ‘gold' sand that does not burn feet for the private hotel beach. In that period, Russia had suffered from the economic crisis and invested vast amounts of money in Olympic facilities.

Исмаилов и Беллучи

Monica Bellucci and Telman Ismailov at the grand opening of Mardan Palace

After the institution of criminal proceedings against Telman Ismailov in Russia, the hotel started deteriorating. Power was repeatedly turned off there for nonpayment of hydro arrears, while marauders had vandalized the building due to lack of security. Ultimately, Mardan Palace was put up for sale in 2014 and purchased by Turkey-based Halkbank for a mere sum of $130 million. 

The new grand opening of renovated ‘seven-star' Titanic Mardan Palace is scheduled on April 27, 2019. Tour operators note that the hotel is going to become one of the most expensive in Antalya. Some operators offer 7-night packages for two in the most affordable suites of Mardan Palace – Premium Rooms – with checking in on April 29 for 235 thousand rubles ($3.7 thousand) and up. Similar packages for two persons with accommodation in the most expensive units – King Suites – cost 2 million rubles ($31.4 thousand) and up. 

Users of social networks eagerly anticipate the reopening of the luxury hotel. Many stars, mostly Russian ones, are expected to perform there on the May holidays, including Grigory Leps, Emin, Lara Fabian, Valery Meladze, Diskoteka Avariya, and Anna Sedokova.    

Mardan Palace Instagram Mardan Palace Instagram Mardan Palace Instagram
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In the meantime, its former owner Telman Ismailov is struggling for his last remaining assets in Russia and abroad. In 2006, he had borrowed $200 million in the Bank of Moscow and pledged as the security his main Moscow assets – iconic Prague Restaurant on Arbat street, Tropikano Business Center on Krasnaya Presnya, and AST Trade Center on Izmailovskoe highway. At that time, nobody had doubts that the owner of Cherkizon (generating, according to operatives, some $10 million of unaccounted cash per month in lease payment for its retail spaces) would pay off the loan. However, in 2009, Ismailov started experiencing serious problems with the law enforcement authorities. On June 7, 2009, the Russian Prosecutor General's Investigative Committee has instituted a criminal case against him under Article 238 of the Criminal Code of the Russian Federation (production, storage, carriage, or sale of goods and products that do not meet safety standards). On June 30, the market was ‘temporarily’ closed – but, as it turned out later, this closure was permanent. Even the good relations with Yuri Luzhkov, then-Mayor of Moscow, who used to call Ismailov a “friend forever” could not help the oligarch.

Рафик Исмаилов

Rafik Ismailov

His brother Rafik Ismailov was arrested and charged under part 2 of Article 105 of the Criminal Code of the Russian Federation (murder of two or more persons). In November 2017, similar charges were laid against Telman Ismailov under paragraphs “a”, “g”, and “e” of part 2 of Article 105 and part 3 of Article 222 of the Criminal Code of the Russian Federation (masterminding two murders in Russia). A few days later, Basmanny District Court of Moscow has satisfied a motion brought by the investigation and arrested in absentia Vagif Ismailov, another brother of Telman Ismailov. Vagif has been charged under Article 222 (illegal storage of firearms) and Article 105 (murder) of the Criminal Code of the Russian Federation. In addition, Telman Ismailov has recently been charged with abduction of singer Avraam Russo in 2004. The investigation believes that the oligarch has masterminded the kidnapping of Russo over a financial dispute. Furthermore, based on the statements of key witness Garri Belotserkovsky having close ties with the Ismailov family, Telman Ismailov may become a suspect in the criminal case pertaining to the murder of members of Koptevskie gang and be charged with creation of an organized criminal group. 

In the meantime, Ismailov had tried to sell his Russian assets and hide money in offshore territories amid the collapse of his business empire and escalating creditors’ claims. According to Vedomosti newspaper, Dutch company Tropicano Finance B.V. acting in his interests used the $55 million received from the Bank of Moscow to purchase from Tounder Holdings Limited incorporated in the British Virgin Islands 100% of shares in Ergon Incorporate Ltd., Tigerim Holdings Limited, and Tounderwide Holdings Ltd. (all these companies have been incorporated in the British Virgin Islands in August 2013). The above offshore structures became the owners of Prague Restaurant, Tropikano Business Club, and AST Trade Center in the Izmailovo district. Other assets of Telman Ismailov were transferred to his sons Alekper and Sarkhan and nephew Zaur Mardanov. Two multi-room apartments on Kutuzovsky avenue, Moscow, with the total living space of 292 square meters have been donated to his 12-year-old grandson – a full namesake of Telman Mardanovich Ismailov. But despite all the attempts to hoodwink the creditors, they have uncovered the schemes used by the businessman and requested to seize the assets on account of debt repayment.

прага.jpg

Prague Restaurant

At some point, AST Group belonging to Telman Ismailov had united some 30 companies whose total annual turnover was estimated at $3 billion by the businessman. 

In March 2017, Ismailov was declared bankrupt following a lawsuit filed by VTB Bank, the 100% owner of BM Bank (formerly the Bank of Moscow), whom the businessman had owed 17.4 billion rubles ($272.8 million). The court noted that the total value of Ismailov's assets, "at an optimistic estimate", was not much than 696 million rubles ($10.9 million), which evidenced his insolvency. VTB Group rejected the debt restructuring plan proposed by the businessman. After that, the creditor has seized the primary residence of clan Ismailov – Prague Restaurant, as well as Tropikano Business Center, and AST Trade Center. 

Concurrently, the Bank of Moscow has focused efforts on foreign assets of Ismailov. Its lawyers addressed the Nicosia District Court in Cyprus requesting a number of Cypriot banks to disclose financial transactions of Vesto Trading Limited incorporated in the Seychelles and belonging to Ismailov. Based on that information, the bank managed to seize, via a Nevada court, Craig Valley Plaza in Las Vegas. It turned out that the trade center consisting of five one-storey buildings with the total space of some 7 thousand square meters had already been transferred to Marker Craig LLC and Marker LLC controlled by Nailya Sadykhova, a relative of Telman Ismailov.    

Craig Valley Plaza Craig Valley Plaza
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All the Russian real estate of individual bankrupt Ismailov is about to be put up for sale soon. The creditors’ claims have been satisfied, and a 5-room apartment 132 square meters in size and a 6-room apartment with a living space of 158 square meters in the historical building at 18 Kutuzovsky avenue – where members of the Central Committee of the Communist Party of the Soviet Union, military generals, and top functionaries of the State Planning Committee of the USSR used to live – will be sold. The list of other properties to be auctioned off includes a three-storey home with a garret (1.1 thousand square meters) and a two-storey mansion (some 500 square meters) in Aprelevka, Naro-Fominsk district, Moscow region, land lots accommodating these structures with a total area of 3 thousand square meters, a 3-room apartment (350 square meters) in Zarech’e township, Odintsovo district, and a lot in Skolkovo village 2.4 thousand square meters in size allocated for golf club construction.

Кутузовский проспект, 18

Kutuzovsky, 18

Experts are unable to estimate the total market value of the above real estate because the condition of the properties is unknown. The sale proceeds will be divided between the three main creditors of Telman Ismailov: BM Bank, Cyprus-based Sezaria Limited, and Deutsche Bank. Ismailov owes them 19.2 billion, 10.4 billion, and 967 million rubles respectively ($301, 163.1, and 15.2 million). 

Recently, BM Bank managed to get access to Swiss assets of Telman Ismailov. According to the statement of claim, in the period since September 2012 and until February 2014, the Bank has granted three loans totaling over $230 million to Ruslain 2000 Limited Liability Company and Dutch company Tropicano Finance B.V. Both of them were parts of AST Group controlling Cherkizovsky Market and belonging to Telman Ismailov. The oligarch had acted as the guarantor for the loan to the bank. Over time, structures of Ismailov ceased servicing the loans. His current indebtedness, including late payment fees and penalties, is some 15 billion rubles ($235.2 million).

Бизнес-центр «Тропикано»

Tropikano Business Center

The bank became aware that the funds were transferred to foreign states, including Switzerland, via a chain of intermediaries. In the course of the legal proceedings ongoing abroad, it turned out that Telman Ismailov had ties with a number of Swiss companies and individuals – who became new nominal owners of his assets. 

BM Bank managed to initiate a criminal case against Telman Ismailov in Switzerland. The oligarch is suspected of three economic crimes involving fraud with borrowed funds and falling under Articles 163, 164, and 165 of the Criminal Code of Switzerland (fraudulent bankruptcy and fraud against seizure, reduction of assets to the prejudice of creditors, and mismanagement). Now Ismailov faces 3 to 5 years behind bars under the most grievous article.

Торговый центр «АСТ»

AST Trade Center

Lawyers of Telman Ismailov are not aware of the probe launched against their client in Switzerland yet. The Prosecutor’s Office hasn’t notified the oligarch and his Swiss attorneys about the criminal case. On the other hand, a source of Kommersant newspaper in the inner circle of the businessman claims that Ismailov has no assets in Switzerland. 

The CrimeRussia managed to locate in the Swiss Commercial Registry more than ten legal entities whose names include the “AST” abbreviation, as well as ZWI Ismailov company. However, open sources do not specify whether the fugitive oligarch has something to do with these structures or not.


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