News reports: Yanukovych tied to Ukraina shopping mall dispute

The president’s spokesperson did not immediately respond to a Kyiv Post request
for comment.

But Business News Europe reported that a Ukrainian company with a $45
million debt claim over the lucrative Kyiv property is linked to Tantalit. That
is the company that leases the land where Yanukovych’s Mezhyhirya palatial
estate lies. The Left Bank, a Kyiv online news site, reported a similar link.

According to Business News Europe, the link between Tantalit and Elegant is the
man who bought Elegant in 2009, and who obtained its brokerage licence:
Dmitro Nikiforov. Nikiforov and Tantalit are linked by their joint ownership of
investment fund Dominanta.
Citing Interfax
Spark, BNE
wrote that Nikiforov
owned Elegant until March.

BNE linked the current Minister of Natural Resources Edaurd Stavitisky
to Yanukovych. BNE said Stavitsky, as head of Ukraine’s state agency for
natural resources, Ukrnadra, divested the Mezhyrhirya estate to Tantalit.

Stavitsky didn’t respond to a Kyiv Post inquiry emailed on Nov. 30.

Tantalit is believed to be a front for the president, who says he has
less than two hectares on the gargantuan 130-hectare estate.

A state-owned Irish bank has since April 2011 been unable to wrest
control over the estimated $78 million asset in a bid to recover debt owed by the
billionaire-turned-bankrupt Irishman Sean Quinn Sr. and his family.

Peter Fitzgerald, head of corporate affairs for the Irish Bank
Resolution Corporation, declined to comment on the matter.

Quinn Sr.’s family once owned the property, but he’s currently serving a
nine-week prison sentence in Ireland for keeping the asset beyond the reach of
his former creditor, and for stripping the property’s assets.

His son, Sean Quinn Jr., has also served a prison sentence for stripping
the asset, and his nephew, Peter Quinn, was found in contempt of an Irish court
for doing the same.

Despite controlling more than 90 percent shares in Ukraina, the
state-owned Irish Bank Resolution Corporation, has been involved in drawn-out
legal disputes in Ukraine. It has yet to install its manager at the mall, and
access the estimated $10 million yearly rent roll there.

Instead, Laryssa Yanez Puga, the current mall director who worked for
the Quinns, is suspected of thwarting the bank’s efforts together with Russian
and Ukrainian lawyers, affidavits from Irish courts have shown.

The Irish bank has appealed to Prime Minister Mykola Azarov. Even First
Deputy Prime Minister Valeriy Khoroshkovsky as head of the inter-governmental
committee of company takeovers and mergers has stepped into the fight.

On May 29 he ordered law enforcement bodies to investigate the alleged
illegal takeover of the mall, as well as the actions of judges and courts
involved in legal proceedings surrounding the property.

And last year in Warsaw, Irish Prime Minister Enda Kenny raised the
difficulties the bank was having is asserting its rights through the Ukrainian
court system when he met with Yanukovych.

“It was referenced, not discussed, and with a full expression of respect
for the independence of the Ukrainian judicial process,” Kenny’s spokesperson
said in November 2011 to the Irish Times.

The $45 million debt claim by Ukrainian Elegant Invest originates at a
Quinn firm based in Northern Ireland. The right to the debt was subsequently
transferred to a British Virgin Islands company that involved two Ukrainian
lawyers when the Quin family decided to put its $500 million foreign properties
portfolio beyond the Irish bank’s grasp.

Next, the debt was transferred to Elegant Invest using another Ukrainian
firm, Zenit, as a conduit, whose right to the debt was recognized by Kyiv
courts this summer.

Meanwhile, in a sign of desperation, the Irish bank, according to Irish
court affidavits, has decided to retain the asset recovery unit of Russia’s
Alfa Group, the country’s largest private conglomerate worth billions of
dollars.

Called A1 Group, the Russian company, according to Irish court
affidavits, will get to keep a portion of any assets it recovers on behalf of
the Irish bank, including the Ukraina mall. The scheme is incentivized in a way
that the more the Russian company retrieves, the more it gets to keep.

But once the debt claim over the mall transferred to a Ukrainian
company, it would appear the Quinns really don’t control the asset as the Irish
bank has suspected.

And the Ukrainian conduit company that passed on the debt claim to Zenit
is headed by Artem Basmadzhan who in 2009 headed Ukraine’s only gold producer,
state-owned Zakarpatopolymetally when the company was heading into bankruptcy,
reported BNE.

Dmytro Zaitsev headed the creditors’ committee for the gold producer
back then. Zaitsev is now facing contempt of court charges in a Northern
Ireland court for his role at the British Virgin Islands company that once held
the debt claim over the mall. Moreover, Volodymyr Hurtovy was the administrator
of the creditors’ committee of the gold producer.

Hurtovy is the deputy director of Ukraina’s management company and
featured with Zaitsev in a verified video taken in January in Kyiv, including
Quinn Jr. and Peter Quinn, Yanez Puga discussing the fate of the shopping mall.

According to BNE, Elegant Invest and Tantalit “are affiliates of one more company
that has recently been the subject of journalist investigations: according to Ukrainskaya Pravda and tender
watchdog Nashi Groshi, an obscure
company TOV
Premier Leasing, set up by the same Nikoforov who set up Elegant, in August won
tenders held by state railway operators to lease 3,000 freight cars for a total
contract volume worth around
$700 million.

Kyiv Post editor Mark
Rachkevych can be reached at rachkevych@kyivpost.com.