Irish tussle, Ukrainian tactics

By bne IntelliNews November 25, 2011

bne -

"Foreign investor loses prize asset to oligarch": hardly a new story in Ukraine, but a corporate dispute over a pair of landmark real estate projects has given a new twist to the old tale.

Quinn Holdings Sweden (QHS) claims an oligarch is preventing it taking control of the prestigious Ukraina shopping mall and the Leonardo Business Center in the heart of Kyiv with a variety of raider-style tactics. The difference this time is that the alleged offending oligarch is Sean Quinn, formerly Ireland's richest man who recently filed for bankruptcy.

The Swedish company issued an open letter appealing to Ukrainian Prime Minister Mykola Azarov for help on November 25. "We, the Swedish company Quinn Holdings Sweden AB, are currently locked in a fight to retain control of this enterprise (Ukraina shopping mall), of which we own almost 93% of the shares," the letter says. "Our efforts to protect our rights and our property continue to be obstructed by outrageously crude actions, which systemically violate the law."

According to QHS head Robert Dix, however, it is not a Ukrainian oligarch that has wrested control over the property, but the Quinn family itself, as part of an attempt to thwart its Irish bank seizing assets after debt default. The QHS claim is part of an assets retrieval campaign for real estate owned by Sean Quinn across Eastern Europe. The campaign is at the behest of Ireland's state-owned Irish Bank Resolution Corporation, which claims Sean Quinn owes it around $4bn.

According to the Kyiv Post, the raider-style tactics used to prevent the Irish bank getting hold of the assets include "counter-lawsuits that led to the seizure of properties whose shares had previously been used as collateral, refusal of management to acknowledge the decisions of a shareholder meeting, and appointment of the same judge to hear five cases in a court where cases are supposed to be randomly allocated."

According to Dix, Quinn's actions are not limited to assets in Ukraine, but stretch across Eastern Europe and Cyprus. "We've witnessed consistent actions, albeit slightly different styles, by the Quinn family to frustrate our attempts to take control of these (property) assets," Dix told the newspaper. He claims that court injunctions have been used in Cyprus to prevent directors taking control of assets, while in Russia assets were liquidated through companies connected to the family.

Asked about the possibility that a local entity might be behind the actions at Ukraina department store, Dix said: "No, I don't believe this. I believe this is the Quinn family." The Quinn family, however, have denied any involvement.

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