Bank of Saint Petersburg: We believed Arkhangelsky's Companies Weren't Facing Default
Justice Hildyard of the High Court of England and Wales continued proceedings on suit of Bank St. Petersburg vs Russian businessman Vitaly Arkhangelsky and Arkhangelsky's counterclaim against the bank.
Witness Vladislav Guz, the chairman of the bank board, told the court that in November 2008, Arkhangelsky's OMG Group asked for the restructuring of its debt, and the board believed its problems to be short-term only linked to non-receiving due payment from Finnish clients.
Answering the question whether the bank believed that the OMG Group might restore solvency in the long run, Mr Guz said the bank didn't think the Group lost its solvency or was facing default believing OMG to deal with only short-term difficulties.
Mr Justice Hildyard noted that then OMG was "in an unusual position" because a lot of companies around the world were suffering from the global financial crisis at that time.
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The bank claims that Arkhangelsky, who, together with his family, left Russia in 2009 and was granted political asylum in France, did not settle with creditors and tries to recover a debt.
Archangelsky in his statement of claim says that during the global financial crisis the bank agreed to defer payment on loans for six months. As a collateral, the bank demanded Archangelsky to transfer the shares of companies that were a part of his Oslo Marine Group - West Terminal port complex and Scandinavia insurance company, the owner of a half of Onega terminal. Before the stipulated term expired, the bank demanded loan repayment and later used its political contacts including top law enforcement officers and St. Petersburg Governor Valentina Matvienko, sold the shares to a sister firm at a lower price and changed the executive of Arkhangelsky's companies. He estimates the damages at $500 million.
The course of the trial will be covered by the press-office.
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