Share auctions in Russia have sparked fresh contempt proceedings in a legal saga here over alleged "corporate raiding" of €2 billion in shares of a major Russian company by a rival firm owned by an oligarch who is a former member of Russian president Vladimir Putin's ruling party.
Dmitry Mazepin, a Belarussian-Russian billionaire, controls United Chemical Company Uralchem (UCCU), and is also a minority shareholder in Russian firm Togliattiazot (ToAZ), a $3 billion company which is the world's largest producer of trade ammonia used in fertiliser. It has been described as being of strategic economic importance to Russia.
Mr Mazepin is a former member of the Kirov regional duma as a representative of the Mr Putin's United Russia Party.
He, UCCU and 11 other parties are being sued in the Commercial Court by four Caribbean-registered companies that claim they were defrauded, through illegal and corrupt "corporate raiding" actions by the defendants, of their 70 per cent interest in ToAZ.
The claims are denied.
Auction of shares
The complex case, initiated in 2016 and yet to go to a full hearing, is being heard here because one defendant, Eurotoaz Ltd, has registered offices in Dublin.
Because of their concerns about planned auctions of shareholdings in ToAZ, the plaintiffs got orders earlier this month joining two more companies – JSC Khimaktninvest (Kai) and Aktum LLC, both Russian – as defendants.
The auctions proceeded and the plaintiffs contend that, if either Kai or Aktum got shares, it amounts to contempt of an undertaking previously given by UCCU to the Irish court not to enforce a Russian court's July 2019 decision entering judgment for some €1.2 billion against the four plaintiffs and others.
Eoin McCullough SC, for the plaintiffs, told Mr Justice Denis McDonald on Monday he intends to bring a contempt application. The judge will deal with that, and an earlier contempt application, in April.
Kai, the judge was told, intends to challenge the jurisdiction of the Irish court to deal with the matter while Aktum has entered no appearance in the proceedings.
Another judge, Mr Justice David Barniville, indicated last year he was rejecting an earlier jurisdictional challenge and would give a written judgment on a later date. Mr Justice McDonald said he expects his colleague’s written judgment shortly and would consider that before addressing the Kai challenge to jurisdiction.
‘Raider attacks’
The plaintiffs’ application for judgment to be entered against Aktum over failure to enter an appearance will be heard in late March, he added.
The plaintiffs – Trafalgar Developments, Instantania Holdings, Kamara and Bairiki – claim they were subjected to part of an internationally recognised phenomenon known as "raider attacks", involving a so-called raider acquiring a minority shareholding in a target company before a series of improper civil and criminal lawsuits is repeatedly brought to devalue a company's stocks.
Along with improper pressure on judicial authorities to bring regulatory and tax prosecutions against the company’s principals, the raider procures the freezing of shares and cash and the business collapses with effective control wrested from its owners.
It is claimed Eurotoaz was part an alleged scheme to conduct vexatious litigation based on false and sham evidence against ToAZ and that Mr Mazepin led, and was the main beneficiary of, the alleged scheme to defraud the four companies of their interest in ToAZ.
The High Court previously ruled the plaintiffs were entitled to judgment in default of appearance against two other defendants, Sedykin Yevgeniy Yakovlevich, from Togliatti city in Russia, who, it is claimed, acted with power of attorney on behalf of Eurotoaz in the litigation in Russia, and against Cyprus-based Belport Investments Ltd.
The exact damages will be determined later. Both defendants, neither of whom entered an appearance, have been ordered not to reduce their assets below $78 million.
