Meyer August (August Meyer)

Meyer August (August Meyer)

August Meyer is an ex-co-owner of the Lenta retail chain, an investor in Dream Industries.

Born in Illinois (USA) and grew up in a very wealthy family. His father, August Meyer Sr., the heir to the Midwest Television media holding and the financial company First Busey, was even on the Forbes list of 400 richest Americans in 1991. ^[1] shareholders^[1]

First he studied history, then passed the law exam and worked for 10 years in the prosecutor's office in San Diego. In America, Meyer never got his own business or family.

1990s: A preacher of Randianism in Russia

Meir traveled extensively and read books by her favorite writer, Ayn Rand, an emigrant from Russia who sang of free enterprise. It is not surprising that once he decided to call on his homeland of Rand - in St. Petersburg.

Since then, he has remained here. He married a Russian woman, had children and even renounced American citizenship. Why? "America is going to the bottom like the Titanic, and Russia has a future," Meyer argues in an interview with Forbes. He recalls how in St. Petersburg, right in the middle of the street, a stray dog tore his shirt, and a girl watching a scene from a street kiosk went out to him with a needle in her hands and helped sew clothes. "In America, this is hardly possible," Meyer summarizes. It's a lovely sketch. But there is also a more practical explanation: the US has too high taxes for those with businesses abroad. Meyer says that he considers himself "practically Russian," but he did not learn the language, and did not accept Russian citizenship - the businessman has a passport of St. Kitts and Nevis, a small island state that issues citizenship to everyone for a small amount without delay.

In the late 1990s, Meyer came to the attention of the FBI, was suspected of having links with the mafia, in 1999 he moved to Russia, to St. Petersburg, renounced US citizenship, bought St. Kitts and Nevis citizenship. He organized a network of mini-hotels. He has ties to the local^[2] mafia].

In Russia, Meyer was initially engaged in buying and renting communal apartments and even founded a small hotel chain called Rand House - in honor of the author of the bestseller Atlant Shrugged. Financial savings, however, allowed him to do something more ambitious. It was then that Dmitry Kostygin arrived.

2001: Purchase of 49% of Lenta retailer

Founded "Lenta" St. Petersburg entrepreneur Oleg Zherebtsov, who has been engaged in trade since 1993. At first, he opened the small wholesale warehouses usual for that time, by the end of the 1990s he had acquired a supermarket, and in 2001 he decided to build a really large store, the first of its kind in the northern capital, but he did not have enough money for the project. Familiar entrepreneur Dmitry Kostygin then brought Zherebtsov with August Meyer, who had recently arrived in Russia from the United States, who readily acquired 49% of the company.

The new investor bought a stake in a very small business - analysts estimated Lenta at only $20-30 million, but the money he brought was enough for the completion of the hypermarket and for the purchase of plots for the opening of new outlets. Lenta began building on a hypermarket a year, and sometimes more. Moreover, Meyer was a convenient partner - the presence of a foreign shareholder helped to negotiate with Western banks and counterparties, and he did not intervene in operational management.

Meyer likes to repeat that he doesn't understand much about business and numbers. He invested money and for almost six years quietly watched his share rise in price, turning from tens of millions to dollars hundreds.

In October 2009, Zherebtsov sold 35% of Lenta to a consortium of TPG and VTB Capital investment funds for only $110 million, after paying all the debts he had only a quarter of this money. The deal was difficult, negotiations dragged on for several months - Zherebtsov and Meyer at that time no longer spoke to each other at all, and investors had to communicate with each separately. (Zherebtsov declined to be interviewed by Forbes for this article. "I don't do much business, I travel more, I go up to the mountains," said the founder of Lenta, who has managed to travel around the world on a yacht over the past three years and open 17 Norma stores.)

2010: Conflict in "Feed" with TPG

It would seem that Meyer received what he wanted: the American investment fund became a major shareholder of Lenta. However, in April 2010, relations between the new partners began to heat up. According to the terms of the October deal, Meyer bought a small part of Zherebtsov's stake from TPG, but he did not receive this share on time. In May, TPG and VTB Capital unexpectedly blocked Lenta from receiving a loan of €200 million.

"I believe they deliberately impede the work of Lenta," Meyer resents. "Why?" Ask them. " According to Meyer, who now spends most of his time in the Virgin Islands, where the courts are going, the new shareholders want full control over Lenta, although the agreement with them seems to say about joint management. "I only demand the execution of the agreements, and I will not stop, I will go and go forward like the Terminator," Meyer raises his voice

According to the mentioned shareholder agreement between Meyer and TPG, Meyer had the right to return to the place of general director Sergei Yushchenko, but only with the approval of the company's board of directors and only until August 31, 2010. At the end of May, the council took place, but representatives of the new owners left it ahead of schedule and did not sign the decision, which did not prevent Meyer and Kostygin from declaring the council valid and on this basis expel Jan Dunning from the Lenta office. Their triumph was short-lived.

Screams, broken glass doors, security guards get into a fight... This is not a showdown of the mid-1990s - the case takes place in St. Petersburg in September 2010. Two solid foreign companies, the main owners of the Lenta hypermarket chain, did not agree on corporate procedures, and now one group is storming the office to expel competitors from there.

The foreigner August Meyer (41% of the shares), his partner Dmitry Kostygin (1% of the shares) and now the former general director of the network Sergey Yushchenko play in defense. The attack includes Luna Holdings, which has a 30.7% stake in Lenta. It, in turn, belongs to the large American fund TPG and VTB Capital, a subsidiary of VTB. Luna has the support of a number of minority shareholders, including the European Bank for Reconstruction and Development (EBRD).

On that September day, the victory remained with Luna Holdings - its private security company managed to seize Lenta's office, expel Yushchenko from there and put his man, Dutchman Jan Dunning, in the chair of the general director, under whose shoulders INSEAD, 10 years of work in the European network of discounters Aldi and five years of experience in Russia. After that battle, the war entered a "cold" phase: the parties filed numerous lawsuits against each other in Russia, London and the British Virgin Islands, where Lenta Ltd., the holding's parent company, was registered. The confrontation between the two groups of shareholders continues.

Meyer and Kostygin now say that they were victims of the "oligarchic fund." TPG Capital does manage a whopping $47 billion in capital. TPG's head office is located in Fort Worth, Texas, and the company's aggressive style has repeatedly given reason to recall the American saying "Do not mess with Texans." And although Time magazine called TPG founder David Bonderman and his partners "shameless predators," it is difficult to refuse success - restructuring problem companies that are not too interesting to other investors generates seven, or even ten times more invested funds.

However, the last thing any investment fund is interested in is a shareholder conflict. The task of investors is to increase the capitalization of the acquired company as quickly as possible. That is why the TPG in the conflict with Meyer is supported by a majority of shareholders, including the EBRD. How does August Meyer's strategy for capitalization growth not suit?

For many years, Meyer at Lenta sat silently on the boards of directors. "He was even less active than the shareholder was supposed to be," recalls one of the Lenta employees. - But in 2007 everything changed dramatically, he suddenly became intolerant, refused compromises. He began to do some crazy things, made a war with Zherebtsov, although there was no need for this. "

First, the war with Zherebtsov, whom Meyer suspected of spending Lenta's resources on a personal project, is now with TPG. VTB Capital and TPG claim that they are ready, together with Meyer, to look for compromise solutions, for example, the candidacy of a third director - one that would suit everyone. However, Meyer does not make contact. "I can't trust them anymore," he explains.

"It seems to me that for Augustus everything is either black or white. If you are his friend, you are right in everything, and if you disagree with him in something, you are immediately a crook and a scoundrel for him, "says Vladimir Senkin, who was the general director of Lenta for some time. Perhaps that quality helped when Meyer was in the US attorney's office (he recently wrote on Facebook that he missed such work), but business needs flexibility.

And Meyer always seems adamant. One of the minority shareholders of Lenta recalls how Meyer, sweating, jumped out of the restaurant, in fact, even before the start of negotiations, because the interlocutor, disagreeing immediately with his demands, offered to discuss them. In addition, Meyer too often relies on the opinion of his friend Kostygin. "He is like Rasputin under the emperor," says one of the participants in the conflict. "Meyer keeps saying: Dima knows better." TPG and VTB Capital had claims against Kostygin and Lenta director Yushchenko. "We were alarmed when Kostygin secretly issued himself a salary of $1 million a year as a part-time consultant," says Dmitry Shvets, TPG's operations director in Russia. Perhaps this is where the true reasons for the conflict^[1] lie^[1].

2011: Sale of stake in Lenta, investment in Dream Industries

In 2011, August Meyer, teaming up with three minority shareholders - Dmitry Kostygin, Sergei Yushchenko and Gleb Ognyannikov, sold 44% of the Lenta network for $1.14 billion.

In December 2011, August Meyer and Dmitry Kostygin, both citizens of St. Kitts and Nevis, invested Dream Industries in the amount of $25 million.

2012: Conflict in Dream Industries shareholders

In December 2012, a conflict broke out between the company's shareholders. More See Dream Industries

2021: Detention in the case of embezzlement of ₽2,3 billion from Sberbank

On December 8, 2021, it became known about the detention of the co-owner of the once largest Internet retailer Ulmart in Russia, August Meyer, as well as his wife and business partner Inna.

According to Kommersant, a married couple is suspected of embezzling about 2.3 billion rubles from Sberbank, received for the development of the Ulmart business shortly before the collapse of the company.

According to the publication, Augusta and Inna Meyer are interrogated by employees of the Investigative Committee by December 8, 2021. So far, the spouses have the status of suspects, "but, apparently, in the near future they can change their status, becoming accused," the publication says.

August Meyer and his wife Inna after being detained in the TFR building in St. Petersburg

We are confident that law enforcement agencies make balanced and objective decisions. For its part, the bank will continue to collect debt under the loan agreement in accordance with the law, the press service of Sberbank said.

According to Kommersant, Sberbank has already managed to sue the Ulmart structures for the amount of 1 billion rubles in the Arbitration Court of St. Petersburg and the Leningrad Region. At the same time, attempts to recover losses for a similar amount from Ulmart shareholders ended in failure.

Together with Meyer's spouses, another co-owner of Ulmart Dmitry Kostygin is involved in a large-scale fraud case. The criminal proceedings themselves have been going on since October 2017. For several months Kostygin was in jail, but then was released on bail of 25 million rubles.

The charge of especially large-scale fraud (part 4 of article 159 of the Criminal Code of the Russian Federation) Dmitry Kostygin was subsequently reclassified to a less serious article - causing damage without signs of theft (part 2 of article 165 of the Criminal Code of the Russian Federation). However, the prosecutor's office canceled this decision, and, according to Kommersant, this case is being investigated again by December 2021 on the fact of fraud.

August Meyer took 181st place in the ranking of the richest Russian businessmen according to Forbes, published in the spring. His fortune at that time was estimated at $650 million.^[3]

2023: Leaving the pre-trial detention center on bail of 30 million rubles

Augustus Meyer, co-owner of the Riv Ghosh perfume store chain, was released from the pre-trial detention center on bail of 30 million rubles. This was announced on January 12, 2023 by the businessman's lawyer Oleg Tkachenko.

It will be clarified that the investigation in the case has been completed and the defense is getting acquainted with its materials. The accused does not admit guilt. The criminal case is related to the theft of more than 2.4 billion rubles from funds received in the form of loans from Sberbank by Ulmart, of which Meyer was a co-owner.

August Meyer

According to Vedomosti, Meyer's defense has been seeking his release from the pre-trial detention center for more than a year, insisting on the absence of the need to keep the entrepreneur in custody in connection with the liquidated damage in the criminal case and a number of other circumstances. On December 14, 2022, the St. Petersburg City Court refused to release Meyer on bail in the amount of 25 million rubles and extended his preventive measure in the form of detention until March 1, 2023.

The investigation argued that Meyer could leave Russia and even put pressure on witnesses. The court did not agree with the second argument. The first considered it justified.

Meyer has citizenship of three states and is accused of embezzlement of funds in the amount of over 3 billion rubles. by committing crimes, for each of which there is no alternative punishment in the form of imprisonment for up to ten years, - noted in the court session (quoted by Kommersant), and because of the arrest on the property lifted by the court, he has the opportunity to dispose of more than a billion rubles.

In addition to Meyer, charges in the case were brought against his wife Inna Meyer and business partner, head of Bigbox LLC Elena Streltsova. After the arrest, the women were sent under house arrest.

By mid-January 2023, the defendants get acquainted with 150 volumes of materials, after which the case will be submitted to the court for trial on the merits, the newspaper reports.^[4]

2024

The state prosecution requested 8 years in prison for August Meyer in the case of embezzlement of 3.14 billion rubles from VTB and Sberbank

On September 12, 2024, it became known that during a meeting in the Moscow District Court of St. Petersburg, the prosecutor's office requested as punishment for the co-owners of the company "Ulmart" Dmitry Kostygin and August Meyer for 8 years in a general regime colony. They are suspected of committing fraud on an especially large scale (Article 159 of the Criminal Code of the Russian Federation). Read more here.

"They accuse that we killed Ivan, and he walks alive and well along Nevsky Prospekt." Final say in court

In mid-September 2024, the Moscow District Court ended the debate on the case of the owners and top managers of the Ulmart retailer, who are suspected of missing more than 3 billion rubles issued in the form of bank loans. The prosecutor's office requested terms of imprisonment from six to eight years for entrepreneurs Dmitry Kostygin and August Meyer, as well as top managers and partner of the company: Meyer's wife Inna, Sergei Fedorinov, Vladimir Shonurov and general director of Big Box LLC Elena Streltsova.

According to the network publication "Fontanka," the owners and top managers of the bankrupt "Ulmart" made the last word in court. All defendants took advantage of this right. In particular, August Meyer made an emotional speech.

source = United Press Service of the Judicial System of St. Petersburg

Let's imagine that all six are accused that we killed Ivan, and he walks alive and well along Nevsky Prospekt. Someone decided to organize psychological torture. I appeal to you humanly and ask you to do to us as you would like to do to you, "Meyer said.

Shonurov and Inna Meyer said they would not plead guilty and expect a "fair sentence" from the court. Fedorinov says that he did not fully understand the essence of the accusation. Streltsova in the last word indicated that she needs to take care of her sick mother. Kostygin asked for a delay in serving his sentence until his children reach adulthood, if the court nevertheless sets a real term. In general, none of the defendants pleaded guilty.

According to the Kommersant newspaper, the defense asked the court to issue an acquittal in this criminal case. Most lawyers also said that they did not object to the retraining of the article to a softer one and the termination of proceedings due to the expiration of the statute of limitations.^[5]

Sentence - 3 years in prison in the case of embezzlement of 3 billion rubles and release due to the expiration of the statute of limitations

On September 30, 2024, the Moscow District Court St. Petersburg announced the verdict against the former co-owners of the bankrupt Internet retailer Ulmart Dmitry Kostygin and August Meyer. They received prison sentences in the case of embezzlement of more than 3 billion rubles from and, banksVTB "Sber" as well as from the company "Sberbank."

The court found Kostygin and Meyer guilty of three episodes under Part 2 of Article 165 of the Criminal Code of the Russian Federation - causing property damage by deception or breach of trust. They were sentenced to four years and three years in a general regime correctional colony, respectively. At the same time, the state prosecution asked to sentence the ex-co-owners of Ulmart to eight years in prison with a fine of 900 thousand rubles from each. At the same time, the defense side indicated that the defendants fully compensated for the damage. Previously, civil lawsuits were withdrawn in full.

source = United Press Service of the Courts of St. Petersburg

At the same time, sentences were passed against other persons who, as established by the investigation, were related to theft. In particular, Meyer's wife and business partner Inna Meyer received two years in prison, the general director of Big Box LLC Elena Streltsova - two years and two months, the former directors of Ulmart legal entities Sergei Fedorinov and Vladimir Shonurov - two and a half years each. All of them were found guilty of committing crimes under clauses a, b, part 2 of article 165 of the Criminal Code of the Russian Federation. The prosecutor's office requested six years in prison for them with a fine of 700 thousand rubles each. At the same time, all the defendants in the case, including Kostygin and Meyer, were released from the appointed punishment due to the expiration of the statute of limitations.

It is necessary to comprehend the decision. While there is a state of slight shock, - quotes "" Interfax the words of Kostygin, who commented on the possibility of challenging the verdict.[6]

Notes