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Liechtenstein proceeds with investigation against fugitive Russian banker

Alex Ivanov. Moscow Correspondent

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It is no secret that Europe, and London in particular, has for many years welcomed dissidents and opposition leaders from around the world, providing a safe shelter for many of them. It is also known than thousands of wealthy Russians found refuge in UK and other cozy corners of the EU, investing lavish amounts of money in business, banking and real estate. But no one can prove that all of them deserve the privilege of living here having in mind their unclear and even criminal background.

Georgy Bedzhamov

Georgy Bedzhamov

Tory MP Andrew Bridgen once again raised a very sensitive and controversial question in his recent query about granting golden visas to wealthy Russian businessmen involved in financial fraud and crimes. One these persons is the infamous Georgy Bedzhamov, who is accused in Russia and in Europe of various banking scams and wanted by Moscow since 2016. This person is seeking UK citizenship. According to MP Bridgen “London trades on its reputation as a safe place to put your money but it can’t be a haven for money launderers”.

Notably similar information about Bedzhamov’s activities came a few month ago from the European Parliament. MEP from Latvia Tatyana Zdanoka sent an official letter to the UK Home Secretary Priti Patel asking her to pay attention to the intentions of Bedzhamov, who is persistently seeking asylum in the UK. In her letter, MEP Zdanoka gives a summary of illegal activities of Bedzhamov in Russia as an organizer of a series of frauds in the Russian banking system.

 

One of the offices of Vneshprombank

One of the offices of Vneshprombank

According to her letter, after being accused by the court of ruining Russian Vneshprombank, a major bank with a £2.5 billion of assets, Mr. Bedzhamov fled to the UK where he faced accusations of a large-scale fraud with the assets of the bank and was put on the international wanted list by Interpol. Creditors from both the UK and the European Union who became victims of Mr. Bedzhamov’s affairs are now seeking recover some of the assets, if these can be found.

In April 2019, the UK High Court in London granted the creditors the right to pursue Mr. Bedzhamov’s wealth and issued a worldwide freezing order on an estimated £1.34 billion of his assets acknowledging credibility of the arguments about Mr. Bedzhamov’s involvement and key role in the fraud.

MEP Zdanoka warns the British authorities that Mr. Bedzhamov is currently seeking citizenship in the UK and addressed the Home Office with this request.

Further news on this highly sensitive and delicate subject came shortly from Europe’s tax paradise which is a tiny Principality of Liechtenstein.

Larisa Markus

Larisa Markus

The prosecution body of Liechtenstein confirmed an investigation into the illegal financial transactions of the fugitive Russian banker Georgy Bedzhamov. This person was convicted in absentia in 2016 and put on an international wanted list by Russia on charges of financial fraud that led to the bankruptcy of one of the leading banks - Vneshprombank. His sister and business partner Larisa Markus was convicted in 2017 and jailed for 8.5 years.

Bedzhamov is involved in many criminal cases and court proceedings both in Russia and Europe. So far, he has been unable to prove his innocence in the courts and get rid of many claims against him from Vneshprombank's depositors, whom he simply robbed. According to information from open sources, Bedzhamov, through criminal actions together with his sister Larisa Markus, stole and took out of Russia more than 2 billion dollars.

Liechtenstein authorities are investigating the former owner of Vneshprombank and his sister on suspicion of money laundering. Their accounts in local and Swiss banks received $143 million, including from the Russian Bobsleigh Federation. It began at least in 2016, according to the financial intelligence information of Liechtenstein and the representative of the Deposit Insurance Agency (DIA) of Russia who is suing Bedzhamov in the High court in London). The DIA acts as a bankruptcy trustee of the collapsed Vneshprombank which still owes creditors over 200 billion rubles ($2,7 billion).

"Liechtenstein has begun investigating on suspicion of money laundering in connection with the mentioned facts," Deputy attorney General of the Principality Frank Haun said in an interview, adding that at this stage of the investigation, he could not provide more details, including the names of suspects, companies and banks.

The DIA demands $1.75 billion from the banker, and his assets are frozen within this amount. Bedzhamov's known property is estimated much cheaper: the banker himself told the Court that his fortune was about $500 million, and his annual income was $2 million.

Bedzhamov's assets include a villa in France and real estate in London, but they are mortgaged to creditors. According to the DIA, the pledge is fictitious and created to protect assets from Vneshprombank. In September 2019, a High Court judge noted that after selling a stake (33%) in Badrutt's Palace Hotel AG on the shores of lake St. Moritz in Switzerland and deducting legal expenses, $12 million remained in Bedzhamov's accounts.

To find allegedly hidden assets, the DIA hired an investment company A1 (part of the Russian Alfa Group), and in addition to legal support for the case, it launched an advertising campaign to search for assets of Bedzhamov and Markus in Russia and the UK.

The DIA recently noted that "is aware of the initiation of criminal proceedings by law enforcement agencies of the Principality of Liechtenstein against the former co-owner of Vneshprombank Georgy Bedzhamov”.

So, what did Liechtenstein's financial intelligence find out?

The investigation into Bedzhamov and Markus is described in an analytical report from 2016 by the Deputy head of financial intelligence of Liechtenstein (Financial Intelligence Unit) Valartis (since 2019, he heads the FIU). According to a source familiar with the dispute between Bedzhamov and DIA, the documents signed by Schëba were intended for Liechtenstein banks Valartis and LGT, which appealed to the Liechtenstein Prosecutor's office.

They became interested in the operations of Bedzhamov and Marcus after the departure of the former owner of Vneshprombank from Russia to Monaco and the announcement that he’s been wanted internationally since 2016. The report may also refer to money withdrawn from Vneshprombank, writes the Deputy head of Liechtenstein financial intelligence.

More than 90 million Swiss francs were transferred to accounts linked to Bedzhamov and Markus, according to Liechtenstein's financial intelligence service. Basically, as follows from the report, the money was transferred to the account of Panamanian Orange Tree Investment, created in the interests of Bedzhamov, in the Liechtenstein Valartis Bank. There are also signs that about 40 million francs were transferred to the company's account in the Swiss Bank Vontobel.

Funds to Markus’ accounts came from the Swiss Bank Vontobel, to Bedzhamov's accounts - from Estonia and Switzerland, according to the financial intelligence service of Liechtenstein. "The money was mainly used to buy luxury yachts and real estate," the report said.

Panamanian Orange Tree Investment, in particular, received €31.9 million from Eurotex, about €18.8 million from Silverrow, €12.8 million rubles from IMET Group and €10.6 million from Venus Corporation, and about 40 million francs were transferred to the Swiss account of Orange Tree, the document notes.

The report also indicates that the financial intelligence service considers that “the British Silverrow and Eurotex offshore companies were operated from Moscow", both having the same email address. The companies were registered in Birmingham and Edinburgh, Silverrow was liquidated on September 6, 2016, according to data from the British registry.

Separately, Liechtenstein financial intelligence indicates that in 2013, Orange Tree received about €1 million from the Russian Bobsleigh Federation (the description indicates that the purpose of payments was an advance for sports equipment) and more than €130 thousand from the International Bobsleigh Federation from the LGT Bank account (the description of payments refers to "prize" and "contributions" in favor of the Russian Federation).

As for the outflow of funds, among other things, Schëb notes that Orange Tree transferred €21 million to the German shipyard Lurssen, and the transfers in favor of Lurssen are most likely related to the construction of the luxury yacht Ester III. The specialized portal Superyachtfan called Bedzhamov the owner of Ester III.  In 2016 it was sold in connection with a lawsuit by the French Bank BNP Paribas against Bedzhamov in the court of Gibraltar. The yacht was bought by the owner of the Liverpool football club, John Henry, who estimates its value at $90 million.

Among the relatively small expenses in the material is the transfer of €1.1 million to the British company Basel Properties, which is directly owned by Alina Zolotova (the same name as Bedzhamov's wife).

It is necessary to assume that the courts in Europe are unlikely to be tolerant and loyal to fugitive Russian businessmen. Their tearfull stories of persecution and threats to life in their homeland no longer evoke the same merciful response in the hearts of European judges as they did before. Similarly, the judicial authorities perceive as fairy tales the claims of Georgy Bedzhamov about falsification of charges against him in fraud and theft of other people's deposits.

It seems that the time of searching for "safe haven" in cozy European nooks and crannies for international scammers and corrupt officials is a thing of the past. Europe is already tired of the flow of fake dissidents and fraudsters from the former USSR. This is evidenced by the increasingly harsh and unambiguous decisions of the courts.

Catalan

Catalan MEPs lose immunity after secret European Parliament vote

Guest contributor

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Clara Ponsati, Carles Puigdemont and Toni Comin are wanted by Spain for their part in the 2017 Catalan independence referendum

The European Parliament has voted to remove the parliamentary immunity of three Catalan MEPs wanted by Spain over the 2017 independence push. Former Catalan president Carles Puigdemont and his ex-ministers Clara Ponsati and Toni Comin are exiled in Brussels, and Madrid could now reactivate European arrest warrants which have so far been refused by Belgium, writes Greg Russell @National_Greg.

In a secret ballot held last night but only revealed this morning, more than 400 MEPs voted to lift their immunity, almost 250 against and more than 40 MEPs abstained.

Puigdemont is expected to raise the issue at the European Court of Justice (ECJ) after a report from the parliament’s Legal Affairs Committee recommending the removal of their immunity was leaked to the media.

This is the third time the Spanish Supreme Court has tried have them extradited, after previous attempts failed in Scotland, Belgium and Germany.

Losing their immunity will not affect their status as MEPs, which they will retain until they are barred from office by a conviction.

Aamer Anwar, lawyer for Ms Ponsati, tweeted: “Shameful vote by @Europarl_EN giving into Spain to lift immunity of MEPs @ClaraPonsati @toni_comin @KRLS Who face extradition & political persecution for exercising the democratic will of the Catalan people-The legal battle goes on”

The Spanish government immediately welcomed the decision by the European Union’s legislature as a victory for the rule of law and against those who sought to break the north-eastern region away from the rest of Spain.

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Business

Has the shine worn off activist investment?

Graham Paul

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A few recent cases suggest that the tide may finally be turning on activist investment, which until recently seemed as if it was becoming an entrenched part of the business world. Although the value of activist investor-held assets may have been climbing in recent years (in the UK, this figure grew 43% between 2017 and 2019 to reach $5.8 billion), the number of campaigns fell by 30% in the year leading up to September 2020. Of course, that drop-off can partly be explained by the fallout from the ongoing coronavirus pandemic, but the fact that more and more plays appear to be falling on deaf ears could signal a bleaker long-term outlook for activist agitators going forwards.

The latest case in point comes from England, where wealth management fund St James’s Place (SJP) were the subject of an attempted activist intervention on the part of PrimeStone Capital last month. After purchasing a 1.2% stake in the company, the fund sent an open letter to the SJP board of directors challenging their recent track record and calling for targeted improvements. However, the lack of incision or originality in the PrimeStone manifesto meant that it was brushed off with relative ease by SJP, with little impact being felt on its share price. The underwhelming nature and outcome of the campaign is indicative of a growing trend in recent years – and one that could be set to become more pronounced in a post-Covid-19 society.

PrimeStone unable to inspire

The PrimeStone play took the traditional form favoured by activist investors; after acquiring a minority stake in SJP, the fund tried to flex its muscles by highlighting the perceived shortcomings of the current board in an 11-page missive. Among other issues, the letter identified the company’s bloated corporate structure (over 120 head of department on the payroll), flagging Asian interests and tumbling share price (stocks have fallen 7% since 2016). They also identified a “high-cost culture” in SJP’s backroom and made unfavorable comparisons with other prosperous platform businesses like AJ Bell and Integrafin.

While some of the criticisms had elements of validity, none of them were especially novel—and they didn’t paint a complete picture. In fact, several third parties have come to the defence of SJP’s board, pointing out that equating the company’s downturn with the rise of interests such as AJ Bell is unfair and overly simplistic, and that when set against more reasonable touchstones such as Brewin Dolphin or Rathbones, SJP holds its own remarkably well.

PrimeStone’s admonishments over SJP’s high spending may hold some water, but they fail to recognize that much of that outlay was unavoidable, since the firm was forced to comply with regulatory changes and succumb to revenue headwinds beyond its control. Its impressive performance against its competitors confirms that the company has been dealing with sector-wide issues exacerbated by the pandemic, something which PrimeStone singularly failed to fully acknowledge or address.

Momentous vote imminent for URW

It’s a similar story across the Channel, where French billionaire Xavier Niel & businessman Léon Bressler have collected a 5% stake in international shopping mall operator Unibail-Rodamco-Westfield (URW) and are adopting Anglo-Saxon activist investor tactics to try and secure URW board seats for themselves and push URW into a risky strategy to drive up its share price in the short term.

It’s clear that, like most companies in the retail sector, URW needs a fresh strategy to help weather the pandemic-induced recession, particularly given its relatively high level of debt (more than €27 billion). To that end, URW’s board of directors are hopeful of launching project RESET, which targets a capital raise of €3.5 billion in order to maintain the company’s good investment-grade credit rating and ensure continued access to all important credit markets, while gradually deleveraging the shopping mall business.

Niel and Bressler, however, want to forego the €3.5bn capital increase in favour of selling off the firm’s US portfolio—a collection of prestigious shopping centres which have by and large proven resistant to the changing retail environment—to pay down debt. The activist investors’ plan is being opposed by a number of third party advisory firms such as Proxinvest and Glass Lewis, with the latter calling it “an excessively risky gambit”. Given that credit rating agency Moody’s have predicted an 18-month slump in rental income that is likely to hit shopping centres – and have even gone as far as to warn that failure to implement the capital raise underpinning RESET could result in a downgrading of URW’s rating – it seems likely that Niel and Bressler’s ambitions will be rebuffed at the November 10th shareholder meeting, in the same way that PrimeStone’s have been.

Long-term growth over short-term gains

Elsewhere, Twitter CEO Jack Dorsey appears to have also overcome an attempt by high-profile activist investor Elliott Management to oust him from his role. Although a recent committee meeting did cede to some of Elliott’s demands, such as reducing board terms from three years to one, it chose to declare its allegiance to a chief executive who had overseen total shareholder returns of 19% prior to Elliott’s involvement with the social media behemoth earlier this year.

Alongside the atypically uninspiring campaigns conducted elsewhere in the market, and the retrogression of the sector as a whole, could it be that activist investors are losing their clout? For a long time, they have drawn attention to their ventures through flashy antics and bold prognoses, but it seems that companies and shareholders alike are catching on to the fact that behind their bluster, their approaches often contain fatal flaws. Namely, a focus on short-term inflation of the share price to the detriment of long-term stability is being exposed as the irresponsible gamble that it is – and in a shaky post-Covid economy, judicious prudence is likely to be prized above immediate profit with increasing regularity.

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coronavirus

Russia has launched a propaganda campaign to smear the coronavirus vaccine being developed by Oxford University scientists

EU Reporter Correspondent

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The Kremlin is accused of spreading fear about the serum, claiming it will turn people into monkeys. The Russians base the suggestion on the fact the vaccine is using a chimpanzee virus. The Russians have disseminated pictures and memes of Prime Minister Boris Johnson looking like “a yeti”. It’s captioned: “I like my bigfoot vaccine”.

And other shows a “monkey” scientist holding a syringe and working on the treatment.

The monkey is wearing an AstraZeneca lab coat.

The pharmaceutical giant is at the forefront of developing a vaccine.

Last month the London Globe and the EU Reporter carried stories about the Russian campaign.

Both publications have since removed two articles from their online sites.

Publisher Colin Stevens said:

“We were given the story by a freelance journalist in Brussels.

“However, after an investigation by The Times we now know the story has no basis.

“When I heard the stories were false, they were taken down straightaway.

“Sadly, we have been the unwilling victims of a Russian campaign to discredit the excellent work being done by Oxford University scientists.

“Even the very best get caught out now and again. Indeed even the Times was fooled into publishing the fake "Hitler Diaries" some years ago.”

AstraZeneca's chief executive Pascal Soriot condemned attempts to undermine their work.

He said: “Scientists at AstraZeneca and at many other companies and institutions around the world are working tirelessly to develop a vaccine and therapeutic treatments to defeat this virus.

“But it is independent experts and regulatory agencies across the world that ultimately decide if a vaccine is safe and effective before it is approved for use.

“Misinformation is a clear risk to public health.

“This is especially true during the current pandemic which continues to claim tens of thousands of lives, significantly disrupt the way we live and damage the economy.”

Professor Pollard, who is professor of Paediatric Infection and Immunity at the University of Oxford, told BBC Radio Four's Today programme:

“The type vaccine we have is very very similar to a number of other vaccines, including the Russian vaccine, all of which use the common cold virus from humans or from chimpanzees.

“To our bodies, the viruses look the same.

“We don't actually have any chimpanzees involved at all in the process of making the vaccine, because it is all about the virus, rather than animals it might more commonly

Meanwhile, Doctor Hilary Jones told Good Morning Britain the attempts at disinformation were “utterly ridiculous and shameful”.

He added:

“Oxford have a fantastic reputation; they are doing this thoroughly and are looking at thousands of people from all different groups and ages.

“They are doing this safely and effectively and for the Russians to try to besmirch what they are trying to do because parts of the vaccine comes from chimpanzee material is utterly ridiculous and shameful.

“I would put my money on Oxford every time.”

A Russian Embassy spokesman in London said: “The suggestion that the Russian state may conduct any kind of propaganda against the AstraZeneca vaccine is itself an example of disinformation.

“It is obviously aimed at discrediting Russia's efforts in combating the pandemic, including the good co-operation we have established with the UK in this field.”

 

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