Georgy Logvinsky
MP Georgy Logvinsky continues his raid on European business property in Ukraine, this time armed with a ruling from an "incorruptible" Ukrainian court.
On June 24 of this year, the Darnitsky District Court of Kyiv ruled in favor of three publicly unknown individuals associated with People's Front MP Heorhiy Lohvinskyi against MBWS, a French company with a market capitalization of over €500 million.
The court's ruling further cemented Logvinsky's position in his corporate raid, which involved seizing a liquor production plant in Cherkasy owned by a European company. Many experts were surprised that Logvinsky could continue to seize European business property with complete impunity at a time when the country's future is so closely tied to the European Union.
MBWS is one of the largest producers and distributors of alcoholic beverages in Europe. The company is currently expanding its sales in emerging markets by investing in branding, production, and distribution. However, the company was forced to cancel its investment plan for the Ukrainian market after being informed that its multi-million-dollar Ukrainian plant had been "bought" by Logvinsky's allies at auction for less than 20 euros, in a manner reminiscent of the Yanukovych era.
European businesses found themselves virtually defenseless against the aggressiveness of Ukrainian raiders.
MBWS commented: “We are deeply disappointed with the decision of the Kyiv Court of Appeal, which, having considered Marie Brizard’s appeal, in fact refused to return our seized business to the ownership of our subsidiary.”
As previously widely discussed in the media, MBWS's business in Ukraine was illegally auctioned off during the bankruptcy proceedings of its Ukrainian subsidiary, Belvedere Ukraine, and then re-registered through further illegal transactions (this involved creating artificial debt by providing fictitious marketing services, which subsequently became the basis for initiating bankruptcy proceedings). The invalidity of the auction was established by the decision of the Supreme Commercial Court of Ukraine in bankruptcy case No. 44/227-b. This decision is final and must therefore be enforced on the merits; otherwise, any judicial act is simply a mockery of the justice system itself.
"Both the Ukrainian legal system and other jurisdictions have clear rules stipulating that if the first transaction in a chain is declared invalid, then all subsequent transactions are also invalid, regardless of their number and the parties involved. Therefore, such transactions cannot entail any legal consequences other than those associated with their invalidity, and they certainly cannot result in a transfer of ownership. However, at the same time, the decision of the Darnitsky District Court of Kyiv does not fit into any legal system and is not based on any legal norms. In fact, the court found the fraudsters who purchased our assets at a sham auction and then transferred them to their colluding accomplices to be bona fide purchasers. Essentially, the courts are returning to a system of feudal law, while the entire country is trumpeting about justice system reform," commented Marie Brizard.
Europeans are shocked by the situation, as any Ukrainian citizen or foreigner who owns property in Ukraine can have their apartment, car, or other property confiscated. Even if the plaintiff succeeds in invalidating the original and primary transaction, they will never be able to physically reclaim the asset.
It is worth mentioning separately that the assets of Belvedere Ukraine were pledged to the parent company, MBWS, as collateral for a loan of approximately 6 million euros, which was a direct foreign investment in the Ukrainian economy and was used to purchase a distillery in Cherkasy and modernize it (purchase of modern bottling lines, improvement of working conditions).
Given the existence of this obstacle for the raiders, they secured written consent from Belvedere Ukraine's liquidator, Oleksiy Shcherban, allegedly signed by Vladimir Pritulyak, the former director of the bankrupt company, who acted under a power of attorney from MBWS, stating that the latter did not object to the inclusion of the collateral property in the bankrupt company's liquidation estate.
Initially, Pritulyak told MBWS management that his signature on the consent letter was forged and that he had never sent such a letter to Shcherban. MBWS asked Pritulyak to file a criminal complaint with the Ministry of Internal Affairs, which he did. The Ministry of Internal Affairs opened criminal case No. 12015100060003349. In early October 2015, Pritulyak suddenly went on extended sick leave and told MBWS that he had given written permission to sell the collateral property in order to "save the company." Subsequently, on October 12, 2015, Pritulyak, when re-interrogated as a witness in the criminal case, recanted his initial testimony and stated that he had indeed signed the permission to sell the collateral property.
At that point, MBWS realized that Priutlyak had been working with Logvinsky for a long time. Simultaneously, Priutlyak "lost" all documents regarding Belvedere Ukraine LLC's business activities with Rafinad Media LLC—the company that had provided the former with "marketing services" worth UAH 9 million! No one in the market had heard of a company like Rafinad Media, and its ownership structure was highly opaque. According to the State Fiscal Service of Ukraine, Rafinad Media LLC worked with a number of fictitious counterparties to cash out and evade taxes.
"We may be a bit idealistic, but we're not naive. We've repeatedly provided evidence to both the media and law enforcement agencies (NABU is currently investigating a criminal case related to these facts) that:
— Verkhovna Rada of Ukraine member Georgiy Logvinsky, along with his wife Anna Yudkovskaya, who serves as a judge at the European Court of Human Rights, were the founders of Avigal LLC, a company that acquired our assets in the form of distilleries at an illegal auction of the bankrupt Belvedere Ukraine LLC for 20 euros, with a nominal value of over 4 million euros.
The so-called “bona fide purchasers” of the plant are individuals officially associated with Logvinsky,” the company reports.
According to MBWS representatives, in light of these facts, the illegal decision of the Darnitsky Court, mentioned at the beginning of the article, explains the behavior of the raiders and their accomplices. Seeing that they will not be able to retain ownership of the asset by controlling the bankruptcy proceedings, they are trying at any cost to cling to something, even such a shaky and shady court decision.
The company states that it will fight for its assets and defend its rights to the end.
"Our case is supported by both Ukrainian authorities tasked with protecting businesses from unfair attacks (for example, the Office of the Business Ombudsman, NABU) and the international community (the EU diplomatic corps)," note representatives of the European company.
European businesses in Ukraine, represented by Marie Brizard, hope to find adequate legal protection, especially since the President of Ukraine has repeatedly stated this.
"We also believe that the justice system is capable of delivering decisions that are based on the law and worth the paper they are printed on," MBWS representatives conclude.
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