Russia’s National Bank Trust (NBT) is seeking transactional records from three New York-based correspondent banks to support its lawsuits in Cyprus against Dmitri and Alexei Ananyev, the former owners of PJSC Promsvyazbank and JSC Avtovazbank.
In a discovery application, filed in the District Court in the Southern District of New York on 29 Dec., NBT claims the brothers caused the two Russian banks “to transfer large sums of money in purported loans to shell corporations” they controlled and then dissipated the funds, instead of paying them back.
NBT, the state-owned financial institution established by Russia’s central bank to hold ‘bad bank’ assets, said it became the assignee of these bad loans after first Promsvyazbank fell into administration and then Avtovazbank was taken over by the Bank of Russia in 2017.
The Ananyev brothers subsequently left Russia, where they have outstanding arrest warrants and are facing criminal charges for embezzlement of approximately US$1.6 billion.
NBT has applied to obtain documents and records held by JP Morgan Chase, BNY Mellon and Citibank of all SWIFT messages and transactions related to 50 companies and 11 individuals, including the Ananyev brothers.
The three New York banks are believed to have functioned as correspondent banks “for some of the Ananyev brothers’ fraudulent transfers” and NBT therefore requires the banking records “to help it establish where funds were sent, at what times, and in what amounts”, the discovery application said.
Most companies named in the filing are based in Cyprus, but they also include Peters International (Cayman) Limited, a special purpose vehicle for the issuance of notes, and formerly Cayman-registered Promsvyaz Real Estate Private Equity Fund L.P., which at some point was the indirect owner of Atecia and Lerage Holdings Ltd, two Cyprus entities belonging to the Ananyevs, which allegedly received ‘bad loans’.
In October 2020, more than 100 Russian investors filed a lawsuit in the Cayman Islands against Dmitry Ananyev and Pieters International (Cayman) claiming Ananyev had directed “a dishonest scheme” to fraudulently transfer or dissipate the proceeds of $240 million of loan notes.
The notes were sold by Promsvyazbank and guaranteed by Peters International Investment NV in Curacao and Promsvyaz Capital BV in the Netherlands, which in turn was owned by the brothers through a network of companies in the UK and Cyprus.
Noteholders previously sued in the High Court in London, which first granted, and then lifted, a freezing order of Ananyev assets. Other investors filed a suit in the Netherlands.
National Bank Trust, meanwhile, has filed three lawsuits in Cyprus, alleging that after regulators took over Promsvyazbank and Avtovazbank “investigations revealed that the brothers had been self-dealing and embezzling depositors’ assets for years”.
NBT asserts that the Ananyev brothers caused Avtovazbank to transfer millions of dollars in purported loans to shell corporations tied to the brothers, while Promsvyazbank made similar bad loans, which were then assigned to Avtovazbank, often in return for full payment, even though the loans had little or no prospect of being repaid.
“In addition to making fraudulent loans in order to siphon off depositor funds to their own accounts,” NBT said the brothers had maintained two sets of books at Promsvyazbank to deceive banking regulators and creditors.
NBT hired KPMG to investigate what led to the collapse of the two banks.
The report by the advisory firm, included in the court filing, and published by Offshore Alert, revealed at least 26 transactions with 11 borrowers that harmed Promsvyazbank and Avtovazbank and concluded that there were “signs of fraudulent activities potentially aimed at siphoning assets and funds away from Promsvyazbank and Avtovazbank”, NBT said.
The Ananyevs deny the charges. In an interview with The Guardian in February 2020, Dmitry Ananyev, who is now living in Cyprus, claimed he is the victim of a politically-motivated nationalisation.
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