Tim Gosling in Prague -

Latvian flag carrier airBaltic has refuted a demand from Russia's AKB Investbank that it should pay down €17m in loans, arguing the claim is unfounded and it is ready to protect its rights in court. The move by AKB appears to place the Baltic airline in a tangled web of intrigue and revenge amongst Russian bankers.

The statement follows news earlier in April that the Russian bank - formerly owned by Vladimir Antonov, who was trying to wrest control of the airline from the government at the time the loans were issued - has filed a claim in the Moscow Court of Arbitration.

airBaltic's council chairman, Andris Liepins, told Nozare that the case concerns documents signed by the airline's former CEO, Bertolt Flick, who was ousted from his role at the company in October. The Latvian government announced recently that it aims to pursue Flick for compensation over damages he inflicted on airBaltic, including the loans from AKB.

A report broadcast by TV3 on April 9 revealed that AKB asked the airline to pay off the debt last week. The loans were obtained by Baltic Aviation Systems - the former holder of 47.2% stake in the airline that was owned by Flick and Antonov via an offshore company. According to the airline, Flick authorized the underwriting of the loans by airBaltic.

Liepins claims: "The matter deals with actions that Mr Flick had likely taken before October 4, which were not reflected in the airBaltic accounting system and were otherwise concealed from the airline's new management and shareholders." The TV3 report said that the loans were received in January, June and July of 2011 by BAS. However, Liepins called the programme's suggestion that airBaltic planes could be arrested in Russian airports no more than "speculation".

He added that the loans were taken during the period when Flick, fearing that he might be arrested in Latvia, was running the airline by phone from Germany. The former CEO fought a long-running battle with the Latvian government for control of airBaltic in the months leading up to the seizure of the BAS stake. At that point, both Flick and Antonov denied speculation that the Russian was the real power behind BAS.

Riga seized the BAS stake in airBaltic late last year in the wake of the collapse of another of Antonov's banks, Krajbanka, due to a massive hole in its balance sheet for which the state had to pay compensation to depositors. Antonov is currently in London fighting extradition to Lithuania over charges relating to €1.4bn of missing assets at Krajbanka's parent Snoras.

Investigators are also looking into suspected asset stripping at AKB, as well as Antonov's Pointon York bank in the UK. Antonov sold AKB in March 2011 to a group of private investors led by Sergei Mendeleyev. Alongside business partner Pyotr Chuvilin, Mendeleyev's name has been mentioned in possible connection to the shooting of another Russian banker - German Gorbuntsov - in London in late March. The potential motive suggested is that Gorbuntsov had recently told police that the pair were involved in a 2009 assassination attempt on Antonov's father Alexander, who worked closely with his son as he built his network of assets.

According to investigative journalist John Helmer's "Dances with Bears" website, missing assets at Antonov's former banks may include cash accounts owned by some of Russia's most powerful oligarchs including Oleg Deripaska's Basic Element and Suleiman Kerimov's Nafta-Moskva, as well as Gazprom. Russian depositors are unlikely to be protected by deposit insurance rules in the Baltics.

Helmer's site quotes an unnamed source as saying of Antonov in December: "I hear that all his roofs - both the red one and the criminal one [the Russian word krisha also refers to 'protection'] - have abandoned him. So plastic surgery looks unavoidable."