The takeover of the 49-year concession rights for Moldova’s main airport in Chisinau by a Rothschild investment vehicle has been blocked, Moldovan President Igor Dodon stated after the State Security Council meeting on this topic, held on August 23. The concession contract is being reviewed and should be canceled, Dodon added.
Rather than employing detailed legal arguments, Dodon underlined the reputational risks involved in such a deal, as a means to discourage Nathanial (Nat) Rothschild from going ahead with buying the concession contract from local businessman Ilan Shor, or those behind him. Such a deal would be a major defeat for the new authorities in Moldova, who promised to return the money siphoned out of the country under the previous regime — including, allegedly, by Shor.
On August 19, PR agency Emerald Media announced that NR Investments Ltd, a Guernsey, Channel Islands property investment 100% controlled by Nat Rothschild, had agreed to acquire 95% of Avia Invest, the concession company of Chisinau International Airport, the only international airport in Moldova.
The announcement caused a political storm in Moldova since the representative of Avia Invest and its owners is the controversial (currently fugitive) businessman Shor. The owner of 95% in Avia Invest is a Cyprus-registered offshore (represented by Shor), while the final beneficiary is not known, which leaves room for various scenarios. Shor is known as the visible beneficiary of the $1bn bank frauds that surfaced in 2014-2015.
While the legal details of the developments related to Chisinau Airport have been unclear from the very beginning and remain vague, President Dodon stressed that “we have warned the investor not to take further steps [in taking over the management of the airport] because the concession contract will be terminated at the state’s request.”
In an interview with Radio Free Europe, Prime Minister Maia Sandu provided more details.
On August 20, after Rothschild arrived in Chisinau to sign the preliminary agreement, Moldovan prosecutors seized the assets of Avia Invest and therefore “nobody can take over the concession contract as long as the assets are seized,” Sandu stated. Separately, Sandu explained that the takeover is currently subject to due diligence, it is not completed and cannot be completed under current circumstances.
“Avia Invest will not be able to transfer the airport [the concession contract] to a third party as long as the assets are seized,” Sandu stated.
However, she added that the legal grounds for the termination of the contract are weak. Even if Avia Invest failed to make the investments it pledged under the concession contract, the provisions of the contract give it three more years to comply, Sandu explained, blaming those who signed the concession contract in 2013.
On a technical note, there is an ambiguity in the statements from Moldovan officials, partly induced by the press release of Emerald Media: namely, the deal related to Chisinau Airport is not between Avia Invest and Nat Rothschild’s fund, but between Cyprus-registered offshore Komaksavia Airport Invest Ltd (the owner of 95% in Avia Invest) and the fund. Given this, it is hardly likely that Moldovan prosecutors can halt the sale of Komaksavia Airport Invest Ltd by the unknown owners to Rothschild. In the banking sector, such delicate situations have been settled by forcing the nontransparent owners to sell their shares in major banks Agroindbank and Moldindconbank to “good owners”, but this is hardly possible in other sectors.
This is why Dodon made clear that the concession contract was “in his view” fraudulent; although such statement has no legal value, it invalidates possible claims by Rothschild that his fund was acting in good faith when signing the Chisinau Airport deal, as Emerald Media portrayed the story. The termination of the contract can be obtained in local courts, but would probably be easily invalidated in international court.
The termination of the contract might pass the test of international arbitration depending on who the owner of the contract is: Rothschild's fund making use of the provisions of the contract could easily keep the contract and cash the nearly $1bn revenues generated by the $9 per passenger stipulated in the contract. But even such gains could not justify the reputational risk involved by being associated with Shor, the $1bn theft, dubious Russian businessmen and money laundering — a risk stressed by Dodon.