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Business Petersburg quoted Valeria Ivacheva in an article titled “Don’t hide your money: ASV bets on a search for debtors’ assets”

The State Corporation Agency for Deposit Insurance (GK ASV) is accelerating the search for the assets of debtors abroad and in Russia, and it is looking for those who will do it.

In early May, there was a deadline to submit applications for the first stage of the tender to search for the assets of debtors’ controlling persons (KDL), the details of which the ASV announced in March of this year.  The search lists include court decisions regarding former top managers, shareholders, and bank employees who either incurred losses or have subsidiary responsibilities.  The total amount of penalties due from KDLs is 95.5 billion RUB.

Potential ASV contractors need to have experience in finding and foreclosing assets, not only in Russia but also abroad.  They must have confirmed sources of funding to undertake such projects and have good business reputations.  They will receive remuneration only from the funds they enter into the bankrupt estates from the discovered assets, as the ASV indicated on its website.  The determination of the amount of remuneration will take place when coordinating the draft contract with the contractor.

According to what ASV told BP, it has received 16 applications for the first list of bidders, and the agency is conducting its inspection. “We continue to receive applications for two more lists of liquidated financial institutions that were published on 27 March and 21 April,” the ASV added.

Urban Stories

The ASV lists include four St. Petersburg banks–Lenoblbank, VEFK, Fininvest, and Sovetskiy.  Their top managers either are liable for damages or have subsidiary liabilities.  In almost all cases relating to banks, criminal cases followed bankruptcy proceedings.  From Alexander Gitelson, the chairman of the board of VEFK, and other top managers, the arbitration process has recovered almost 11.4 billion RUB.  In 2015, the financier received a sentence of three years in prison for embezzling almost 2 billion RUB from the government of Leningrad.  The funds were in Inkasbank.  After his release from prison, investigators expected to charge him with the embezzlement of almost 10 billion RUB from VEFK, but they could not find the banker.  Alexander Gitelson was arrested in absentia.

In 2016, Valentin Landgraf, the chairman of the board of directors of Fininvest Bank, and Natalia Gromova, the chairman of the board of the same bank, were convicted of embezzlement in St. Petersburg. They received four years and three years and six months’ suspended imprisonment, respectively.  They faced charges for losses incurred by the bank in the amount of 1.4 billion RUB.

The case of the Sovetskiy Bank still is underway.  To date, the ASV filed 19 arbitration claims for recovery from top managers and shareholders of the bank totaling 4.8 billion RUB.  At the same time some ex-managers of Soviet became defendants in a criminal case.

At the end of last year, Andrei Karpov, the former chairman of the bank, received a sentence of three years in a penal colony for the theft of 1.8 billion RUB.  The former member of the board of Sovetskoye, Kirill Laskin, was sentenced to house arrest.  He is the defendant in a criminal case involving the theft of assets amounting to almost 2 billion RUB.

Lenoblbank, whose official registration was on the Road of Life, in Vsevolozhsk, was not a serious player in the St. Petersburg financial market.  After its bankruptcy in 2015, the ASV sought damages from Aleksandr Popov, CEO of the bank, and Tatyana Zozuli, of the bank’s Moscow branch.  The amounts were nearly 1.6 billion RUB, 4.45 million USD, and 4.67 million EUR.

What the investigations will reveal

The volume of financial claims from ASV on KDL has increased almost ten times, over the last three years, to 148 billion RUB.  Potentially, this money goes into the bankrupt estates, including the accounts payable of the banks under liquidation.

Valeria Ivacheva, a lawyer with the Dispute Resolution and International Arbitration Practice at ART DE LEX, believes that the agency’s initiative is appropriate.  She said that “the state corporation ASV forms a significantly smaller share of the bankruptcy mass through the enforcement and sale of property (at the end of 2019, this amounts to 32.4 billion RUB and 16 billion RUB, respectively, of 109.5 billion RUB).  The successful implementation of this project will increase such revenues.”

Experts believe that the ASV’s initiative is likely to be economically justifiable for companies that have information about the location of assets and can assess the prospects for their recovery in advance.

Author: Dmitriy Marakulin

The full article is available here.