Case of MegaFon

Penalty of "the St. Petersburg operators" as article in the budget of BVO

The legislative assembly of the British Virgin Islands (BVI) approved the proposal of the prime minister and Minister of Finance of the republic Ralf O'Neill on creation of special fund for the order of $22.73 million received from "the St. Petersburg operators", BVI Online News reports. In 2003-07 registered in the territory of other British colony - Bermuda - the IPOC International Growth Fund fought in courts for the rights of 25.1% of stocks of MegaFon mobile operator. The Supreme Court of BVO because in this jurisdiction the former owner of a disputable packet – LV Finance Group and also the offshore of Alfa Group which became share purchasers is registered was one of legal actions which the fund took. As interim measures IPOC demanded arrest of actions in this connection the claimant had to post bail in the amount of $30 million. At the end of 2003 the claim was rejected, but IPOC submitted the appeal to higher instance - the East Caribbean Supreme Court in this connection the amount of pledge was increased by $10 million.

However results of judicial proceedings were more than depressing for the "St. Petersburg" group: IPOC not only could not assert the rights to a quarter of stocks of MegaFon, but, in additives, the group was convicted of money muling. It turned out that IPOC is affiliated with three Bermudas investment funds which shareholders, including the offshore Albany Invest, Mercury Import and Lapal registered on BVO, have opaque financing. According to the provided IPOC documents, funds of the "St. Petersburg" group earned tens of millions of dollars due to consulting transactions, or borrowed them. However during listenings it became clear that the firms which were allegedly cooperating with the "St. Petersburg" funds or do not exist, or their owners know nothing about transactions with IPOC. For example, the Lemex company which, according to IPOC, paid structures of fund $2 million for consultations on merge of two banks actually is the Hungarian producer of kitchens. Individuals, allegedly signed agreements with structures, affiliated with IPOC, also declared counterfeit of the signatures.

As a result in the spring of 2008 representatives of the "St. Petersburg" offshore in courts Virginia and Bermuda (a claim for liquidation of IPOC was submitted here) admitted the fact of participation in money muling. In compliance with prisoners between local authorities and structures, affiliated with IPOC, settlement agreements, the "St. Petersburg" operators agreed to liquidate all the 12 Caribbean offshore, to compensate costs for conducting investigations and judicial listenings and to pay a penalty in the amount of $45.45 million. Total amount of expenses "St. Petersburg" was $49.1 million, the truth the most part of this amount was already entered by them to court as pledge. As during liquidation of the Caribbean offshore none of creditors raised the claim to their property registered on this offshore assets (including stocks of MegaFon, Sky Link, etc. companies) "St. Petersburg" it was succeeded to reserve.

It agrees to the agreement between the authorities of both British colonies signed even during judicial listenings, the penalty paid "St. Petersburg" is halved between the Bermudas and BVO. For Bermud the received amount of $22.73 million – only 2.3% of revenues of the budget for 2009, however, budget deficit of the republic is expected at the level of $131 million. The penalty from "St. Petersburg" is in percentage terms more significant for BVO - it is 8.3% of an account part of the budget for the current year. But, on the other hand, the republic and so has spare cash – the budget surplus this year should be $26.1 million.

In compliance with O'Neill's proposals, money of "St. Petersburg" will be spent as follows: up to 35% of $22.7 million it will be directed to health care, up to 20% the fund, up to 20% - on support of law enforcement agencies will leave in reserve, as much – to education and up to 15% will direct to needs of the judicial system. How many it will be precisely selected for each of the directions, will solve in addition the Ministry of Finance. Creation of funds for distribution of the confiscated money was provided by the Criminal code of BVO, accepted in 1997. "When we accepted this of the law, knew that day when we catch "big royal fish" will come, - O'Neill rejoices.

The Russian experts note that activity of the offshore of "the St. Petersburg operators" caused a serious loss to both Caribbean republics which will be hardly compensated by the paid penalty. "The investigation lasting several years and judicial proceedings around IPOC became the reason of a political crisis: to the authorities serious charges from the leader of opposition of BVO Orlando Smith and the shadow minister Bermud Grant Gibbons were brought, - the CEO of the analytical agency "Rustelekom" Yury Bryukvin notes. - Besides, scandal over "the St. Petersburg operators" received extended coverage in the international media, in particular, American that, eventually, has an adverse effect on reputation of both British colonies".

Links

The Caribbean police officers earned $22 million in practice MegaFon