The District Court of Nicosia, the capital of Cyprus, has summoned Verkhovna Rada member Oleksandr Granovskyi to testify at the request of Arricano Real Estate. The Cypriot court wants to question the member of parliament in the SkyMall shopping center case.
"To issue a ruling to summon Alexander Granovsky to court to provide an explanation as to why he should not be subject to imprisonment, a fine, or confiscation of his property due to his failure to comply with the court's order of August 21, 2014," states the document, which Arricano provided to INSIDER (see translation).
Arricano is owned by Estonian Hillar Teder, who was a co-owner of SkyMall, theinsider.ua writes.
In addition to Granovsky, the following companies have been summoned to court in a similar case: Assofit Holdings (Cyprus), Stockman Interhold (British Virgin Islands), Omniserve Ltd (Cyprus), and Althor Property (Seychelles). All parties are scheduled to appear in court on March 27.
In August 2014, the Nicosia District Court temporarily injunctiond Stockman's transfer of its stake in Assofit Holdings, the owner of SkyMall, to Althor Property. The court ordered Assofit to reinstate Stockman as its registered owner.
In addition, the court prohibited all four offshore defendants from alienating, selling or buying Stockman's stake in Assofit.
At the time of the court's ruling, Granovsky was the director of Assofit. He also represented Stockman. The Seychelles-based company, Althor, was owned by Stockman.
“I am therefore convinced that Granovsky was a person of influence over Althor, and it is for this reason that his name is mentioned in this statement,” writes lawyer Nicholas Koursaris, who represents Arricano.
According to the statement, the defendants failed to comply with the court's order and did not transfer Assofit's share to Stockman.
This action was necessary to implement the London Arbitration Court's August 17, 2014, award to restore Arricano's legal right to exercise the call option for its majority stake in Sky Mall, according to a statement on the company's website. "The defendant's failure to comply with the Cypriot court's decision constitutes contempt of court and is subject to criminal penalties. Arricano's application compels the defendants to appear in court to testify. If the defendants are found guilty, they face a substantial fine or imprisonment," Arricano stated.
The conflict between SkyMall shareholders has been ongoing for several years, with each side accusing the other of attempting a corporate takeover of the Kyiv shopping center.
Reconstruction of the conflict
In August 2014, Estonian Prime Minister Taavi Rõivas wrote a letter to Ukrainian President Petro Poroshenko. The Estonian politician asked the Ukrainian president to intercede for a foreign investor and fellow Estonian.
"I would like to draw your attention to the problems facing the largest Estonian investor, Hillar Teder, in Ukraine... His SkyMall shopping center in Kyiv was the target of a corporate raid, and the Estonian investor informed me that he has lost control of his investment and all profits... The raiders are using the legal system and law enforcement agencies to prevent the investor from controlling his resources," the statement, which is available to the editorial staff, stated.
Poroshenko's administration has instructed the Prosecutor General's Office to respond to the Estonian Prime Minister. "The Ministry of Internal Affairs is currently investigating a criminal case regarding the illegal seizure of the SkyMall shopping center," wrote First Deputy Prosecutor General Mykola Gerasimyuk.
A couple of months later, just before the parliamentary elections, Teder's partner and Tomas Fiala, the founder of the investment company Dragon Capital, mentioned the conflict surrounding SkyMall at a meeting between Prime Minister Arseniy Yatsenyuk and President Poroshenko with investors.
Fiala informed the head of state that the conflict involved Oleksandr Granovsky, the 58th candidate on the BPP parliamentary list. The aforementioned candidate was a business partner. Andrey Adamovsky, who owned a controlling stake in Skymall.
According to Slidsvo.Info, Adamovsky is a well-known businessman of Russian origin. He was a long-time business partner of Ihor Filipenko, who sued Adamovsky for embezzling $36 million. Filipenko headed the company Khlib Investbud. This company, thanks to the patronage of former MP Yuriy Ivanyushchenko and former Minister of Agriculture Mykola Prysyazhnyuk, earned nearly 11 billion hryvnias in the agricultural market.
Poroshenko promised to look into the SkyMall situation. In October, Granovskyi was elected to parliament as a member of the presidential bloc. He is currently a member of the Verkhovna Rada Committee on Legal Policy and Justice.
From what it all began
According to Forbes, the SkyMall shopping center's annual rental income in 2014 was UAH 130 million. Teder began construction in 2005 on a purchased 17 hectares of land on Kyiv's left bank. The first section of the shopping center opened in 2007, and the Estonian planned to complete the second section in 2009.
However, due to the crisis and the debt burden, Teder was forced to seek an investor for the project, combining his assets into the company Arricano.
After negotiations with the EBRD, Horizon Capital, headed by current Finance Minister Natalia Yaresko, and Dragon Capital, the Estonian settled on an offer from businessman Andrei Adamovsky.
The parties reached an agreement: Adamovsky would give Teder $40 million for a controlling stake in SkyMall (50,03%) and his CFO for the project. In exchange, Teder retained the right to appoint the general director of the shopping center and also received the right to repurchase these shares for $40 million plus 40% annual interest by March 2011.
To formalize the deal, a Cypriot company, Assofit, was established, and the shopping center and land plot were registered to it. Adamovsky's company, Stockman, received 50,03% of the Cypriot company, while Teder's Arricano held 49,97%.
Before being elected to the Rada on the BPP list, Granovsky headed the Assofit company.
The second phase of Skymall was completed in August 2010. In September, it became known that the DUPD fund (owned by Dragon Capital) had acquired a stake in Arricano.
In addition, Arricano reached an agreement with Stockman to buy out 50% + 1 share of SkyMall for $51–56 million, depending on the time, between November 2010 and March 2011, Forbes wrote.
In November, Teder offered to buy Adamovsky's control of the shopping center for $51,4 million (according to a previously signed call option). Adamovsky refused and informed his Estonian partner that he was terminating the agreement and the share buyback agreement due to the sale of DUPD's stake and the disclosure of the terms of the deal.
Corporate war
In June 2011, Teder lost his case against Adamovsky in the London Arbitration Court. Adamovsky thus gained control of the management and funds, while Teder lost the right to buy out his partner's stake.
"Despite the arbitration court's ruling in favor of Stockman (Adamovsky's company), which confirmed that the shareholder agreement with Arricano was legally terminated and ordered it to transfer $100 million in Filgate loans issued to Prisma Beta LLC (the direct owner of the shopping center) and the land plot for Skymall under joint control, Arricano failed to fulfill its obligations," Adamovsky says. "Arricano used Filgate loans to establish control over the shopping center."
Teder was previously a shareholder in the company "Filgate", through which he financed his projects in Ukraine, in particular SkyMall.
Currently, Filgate is owned by a foreign construction company – a financial investor and general contractor for the Skymall construction, Arricano explains.
"In 2009, Filgate took out loans from Swedbank and the Estonian state to build SkyMall, which were then stolen in Ukraine through corruption in commercial courts. Our opponents, through 'creative' court decisions, 'received' all of Filgate's loans to their controlled company, Assofit, and then, within days, transferred them to their own company, Torsem Co Limited, controlled by Stockman, without any involvement from Arricano. This effectively amounts to the theft of loans worth over $70 million from Arricano," says Teder.
The Estonian accuses Adamovsky of siphoning money from the shopping center. "We believe that between 2012 and 2014, representatives of our partners created a fictitious debt of $102 million to Prizma Beta LLC and siphoned off at least $60 million from Prizma Beta LLC through fictitious companies," says Hillar Teder.
Moreover, the Estonian's managers claim that Adamovsky used corporate raiding to take over the shopping center from them.
According to complaints filed by Arricano with the head of the State Registration Service, Anna Onishchenko (copies available to INSIDER), in August 2012, the Kyiv Commercial Court and in February 2013, the Dniprovsky District Court of Kyiv seized the shopping center's property.
Despite the lockdown, on August 29, 2013, officials from the State Registration Service removed information about the seizure of SkyMall's property from the real estate rights register.
The shopping center property (shopping gallery), owned by Prizma Beta LLC, was then mortgaged from UniCredit to Pivdenny Bank. After the mortgage agreement was concluded, the seizure of the shopping center was returned to the registry.
Adamovsky dismisses Arricano's accusations and, in turn, also accuses the Estonian's managers of attempting a corporate takeover of the shopping center. In May, at his initiative, nine members of parliament appealed to former Prosecutor General Oleg Mokhnitsky and the authorities of Estonia and Cyprus, asking them to protect the shopping center's majority owner from his partner. The letter can be found here.
"When the mortgage agreement with Pivdenny was concluded, all actions were conducted in accordance with Ukrainian law. Arricano, acting through Filgate (Cyprus), filed lawsuits to invalidate the mortgage agreements. Filgate lost all these lawsuits, which once again demonstrates the groundlessness of their claims," Adamovsky asserts.
In August 2014, Arricano won an appeal in the London Arbitration Court and received the right to buy Adamovsky's shares for $51,3 million. The Estonian's company had until January 2015 to do so.
A month later, on September 3, the property rights registry changed ownership of the shopping center: the SkyMall shopping arcade was transferred from Prizma Beta LLC to Pivdenny Bank as payment for a $20 million debt, according to another complaint from Arricano to the State Registration Service.
"Despite the fact that Prizma Beta desperately needed to refinance its debt to UniCredit, Arricano obstructed all possible agreements with banks that could have provided such refinancing. All these actions led to the only bank willing to provide refinancing being Pivdenny, which now owns the project," says Adamovsky.
According to the Registration Service's response, it conducted an audit of the shopping center's ownership change, which revealed violations of the law. Following this, the State Register of Ukraine sent a letter to the Prosecutor General's Office regarding the violations.
The owner and registration address of Prisma Beta LLC similarly changed: instead of the Cypriot-based Assofit of Adamovsky and Teder, the Dutch company Financing and Invest Solutions was registered as the new owner. Prisma Beta changed its Kyiv registration to Luhansk.
A few days later, on September 15, 2014, the Kyiv District Administrative Court issued a ruling prohibiting registrars from entering changes to the ownership of Prisma Beta LLC into the Register of Legal Entities. A few days earlier, the Dniprovskyi District Court of Kyiv issued a ruling prohibiting the owners from disposing of 100% of Prisma Beta LLC.
In the second half of December, the state registrar of the Boryspil City Justice Department changed the ownership of 100% of Prisma Beta and its registered address. The Dutch company was replaced by Sky Holding LLC. The new registered address is Boryspil.
"Regarding further changes in ownership and location, I cannot comment in detail. After Pivdenny Bank acquired ownership of the parking lot and the second phase of SkyMall on September 3rd, and a Dutch company, which had provided a significant loan to the shopping center, acquired ownership of the first phase, I no longer have control over this property," Adamovsky told INSIDER.
Adamovsky is referring to the Dutch company FIS, which owns the Ukrainian firm Sky Holding. Sky Holding, in turn, owns a hypermarket through its company Prisma Beta.
"Sky Holding's director, Sergei Kolomiets, as far as we know, has been a long-standing partner of Adamovsky's since the 90s," Arricano's press service quotes Hillar Teder as saying.
Kolomiets is Adamovsky’s partner in the Avsen Agro-Industrial Complex LLC (Crimea).
"At Avsen, we are indeed co-founders with Serhiy Kolomiets, but the company is not currently operating. Kolomiets represents the interests of a foreign investor in Ukraine, not acting on his own behalf," says Adamovsky.
INSIDER sent a request to Granovsky, which outlined the essence of Arricano's accusations.
"These questions and the way they're asked certainly anger me. I'm ready to meet and discuss," Granovsky responded to the editorial staff's inquiry, but he couldn't find the time.
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