Valentina Matvienko Does Not Want to Go to London

The businessman who fled Russia accuses St. Petersburg high-ranking officials of misappropriation of his assets.

In London, a trial started concerning a claim of the Russian Bank St Petersburg against the former businessman Vitaly Arkhangelsky and Arkhangelsky’s counterclaim against the bank. Lawyers call this trial one of the largest court cases in Great Britain.

In 2006, a businessman from St Petersburg Vitaly Arkhangelsky received from the Bank St Petersburg a loan of four billion rubles.  In his claim filed with the High Court in London, Arkhangelsky wrote that he agreed with the bank upon a half-year delay of payment under the loan.  The bank required that, as additional security, he transfers shares of companies of Arkhangelsky’s Oslo Marin Group holding to them.  Its assets were valued at one billion rubles, and it comprised, in particular, of shares of Western Terminal port facilities, Scandinavia Insurance company and Onega terminal. 

The bank, as stated by Arkhangelsky, demanded the repayment of the full loan amount that had been used for development and modernization of Oslo Marin Group without waiting for the maturity of the loan.  Arkhangelsky had no money available, and the Bank St Petersburg sold the shares it had received, according to Arkhangeslky, at a lowered price, to its affiliated companies and replaced the management in the companies of former owner. The former Russian businessman’s claim points out that the takeover of his companies was influenced by the former governor of St Petersburg Valentina Matvienko and former Head of St Petersburg Direction of Home Affairs the general Piotrovsky. Arkhangelsky accuses them of collusion aimed at misappropriation of his properties. 

An important businessman Sergey Matvienko was one of the owners of the bank’s assets and, according to Arkhangelsky, he used his mother’s administrative resources to influence decisions of the Bank St Petersburg and the Russian Auction House via which the shares pledged by their owner have been sold.  Later, general Piotrovsky retired and became a top manager in Western Terminal, a company formerly owned by Arkhangelsky. It was supposed that the court may summon Valentina Matvienko from Russia as a witness. Is this still a possibility? And how does Vitaly Arkhangelsky assess the probability of her appearance in court?

- The Bank declared at some point in time that it would have Russian officials as witnesses to the court. In practice, neither Matvienko nor other Russian official concerned by the case, such as the former head of St Petersburg Direction of Home Affairs Vadislav Piotrovsky, did not make statements and were not going to make them, although they are accused of serious things. In accordance with Western practice, they should have at least resigned from their positions of deputies and managers. But, in my opinion, their silence speaks for itself.

- After two preliminary court hearings where procedural issues were treated, the first hearing on the merits took place on 1^st February. How (did it go) and how do you assess it?

- I’m very glad that the trial on the merits has started. My relationship with the bank has been developing (for) more than seven years, since I have emigrated from Russia. At the first hearing on the merits, the examination of the first witness of the Bank Andrey Belykh, one of the managers of the Bank St Petersburg, (has not yet been completed.) His examination will continue at the next hearing.  You understand that it would not be appropriate to comment on the answers of witnesses almost in real time. All hearings in the high Court in London are open and public.

- According to the published court schedule, in the second half of February, it will have external hearings in France.  What is the reason for this?

- Yes, indeed, in two weeks, during two weeks, the High Court of London will have hearings in Paris. The English court decided to keep hearings in Paris to hear my statement since there are reasons to worry about my security if I come to London. France granted asylum to me and to my family and twice refused my extradition to Russia, and here, on French soil, we feel safe, - Vitaly Arkhangelsky told Radio Liberty.

Arkhangelsky calls the behavior of the Bank St Petersburg a raiding misappropriation of his business and valuate his prejudice at 500 million dollars. The Bank and the former Chairman of its Board Alexander Savelyev claim from Arkhangelsky 30 million pounds while Arkhangelsky intends to obtain from Savelyev and the Bank a compensation for his properties that, according to him; were unlawfully expropriated, amounting to 315 million pounds.  According to the Bank, Arkhangelsky, who fled from Russia to France in 2009 with his family because he was afraid for his life, has still not repaid the loans to the bank. 

During preliminary court hearings concerning mutual claims, the court heard an expert report of the former president of the Russian School of Economics and current economist of the European Bank of reconstruction and Development Sergey Guriev in which the latter considers the behavior of the Bank St Petersburg and its former president Alexander Savelyev as a probable fraud against their own shareholders that should be investigated by the Russian Central Bank.

On the eve of the trial in London, activists of the St Petersburg Branch of the Anti-Corruption  Fund carried out an inquiry concerning activities of the Bank St Petersburg.  The Head of the Anti-Corruption Fund Dmitry Sukharev answered to questions of Radio Liberty.

- What is the Bank St Petersburg and what did your investigation of its acts with regard of Vitaly Arkhangelsky’s companies reveal?

- The situation of Oslo Marin Group, of Vitaly Arkhangelsky’s companies looks, in essence, as a raiding capture: the businessman runs a business during a long period of time, pays taxes, takes a loan in a bank to develop this business, and then the bank implements a scheme of misappropriation of the business, and all assets are being taken from the owner and appear in the hands of the owner affiliated with the Bank St Petersburg. This bank is a “pocket” bank of people linked to the top governance of St Petersburg and of Russia.

It is known that, at the time of this raiding capture, Sergey Matvienko, the son of then governor of St Petersburg Valentina Matvienko, was one of the principal owners of the bank’s assets. Some of the main shareholders of the bank were the Director of Vodokanal Felix Karmazinov and the Director of St Petersburg Metropolitan Vladimir Gariugin, one of the richest men in the city.  This is the bank of high-ranked St Petersburg officials. As a result of the raiding capture, Oslo Marin Group’s assets were transferred to people who are directly affiliated with this bank, and an important, if not decisive, role in executing of this misappropriation and executing of the transfer of these assets to the new owner was played by Irina Malysheva who was at that time a member of the Board of the bank.  If one looks at the new owners of Oslo Marin Group’s assets, it will appear that they fell into the ownership of companies of which one was founded by Irina Malysheva, and others – by members of her family and other bank managers. 

At that period, during the misappropriation, Malysheva was a Deputy of Alexander Savelyev, the Chairman of the Board of Directors of the Bank St Petersburg. This operation could not take place without her participation. All official documents available to us witness this.  It should be noted that Irina Malysheva’s and her companions’ companies offices are located in the building of the bank.  It follows from an official report that Valentina Matvienko’s husband Vladimir Matvienko owns 2.65% of shares in the Bank St Petersburg, the son of the ex-minister of defense Anatoly Serdukov, Sergey Serdukov, owns 5.7% of shares and the husband of Anatoly Serdukov’s younger sister, Valery Puzikov, owns 3.11% of shares in this bank.  And, sure, the Chairman of the Board of the Bank St Petersburg Alexander Savelyev owns 23.7% of shares. It is absolutely clear that this raiding capture is aimed not at the development of captured companies but at their destruction. From my point of view, Vitaly Arkhangelsky has very good chances to prove in the court in London that that was a true raiding takeover.

- How often does ACF encounter such takeovers?

- They are quite numerous, and, recently, their number increased. For example, one of businessmen who was an important player in the market of alcohol tests and video-registering devices to whom we are currently proving legal services and who asked not to disclose his name, lost his business in the same way.  All of us remember the story of Euroset, when the company was just taken from the owners.  We all have seen the story of Vkontakte. These are examples that are known, journalists talk about them.  But there are also thousands of middle-level businessmen, not that famous, whose business either has been already taken or attempts to take it are going on. They apply to all instances, write letters to the President, but few know about them. Either they are imprisoned, or they leave Russia.

- May one call the Bank St Petersburg, as well as the property of the Ozero cooperative – Russia Bank, one of the centers and sources of financing the power in the city and in the country?

- Yes. This bank is a tool which allows to officials to misappropriate various companies.  I note from the very beginning that we studied Arkhangelsky case optionally because this story caused our interest. We wanted to understand who the system of business takeover works, to understand the takeover mechanism and to determine its main beneficiaries. The fact that, at that period of time, the Bank St Petersburg belonged to Valentina Matvienko’s family was not a secret for anyone, - says the Head of St Petersburg Branch of the Anti-Corruption Fund Dmitry Sukharev.

To which extent Vitaly Arkhangelsky is optimistic: how does he assess chances to win the case in the court in London?

- I and my family are sure that our cause is just, that our life position, our convictions are right, and that justice will prevail, and it will prevail precisely in the High Court of London. However, the struggle will most likely be long and not easy.  My opponents hire the most expensive lawyers; pay huge money to stifle me and to give me no possibility to represent myself in court.

Court hearings on mutual claims of the Bank St Petersburg and Vitaly Arkhangelsky are supposed to last during three months.

via Svoboda.org
by Natalia Golitsyna, Victor Rezunkov

Update: Court of Appeal orders a re-trial of Arkhangelsky v Bank St Petersburg - a multimillion fraud case involving high-ranking “corrupt” Russian officials