The Rome-based ASRIE Analytica policy bureau has published a report on the Center for Business Transparency and Countering Corporate Raids in Russia and its upcoming meetings with Members of the European Parliament and other EU and U.S. political stakeholders.

In the report, ASRIE Analytica outlines the center's planned and prospective activities, which will include meetings with Members of the European Parliament in Brussels and the German Parliament (Bundestag) in Berlin, followed by similar meetings with U.S. Congressmen in Washington, D.C.

A number of meetings have already been scheduled.

The first meeting in the European Parliament will be held with MEP Attila Ara-Kovács, a human-rights champion from Hungary.

Ara-Kovács is a respected politician, philosopher and journalist. He is also a member of the EU Parliament’s Delegation to the EU-Russia Parliamentary Cooperation Committee and its Subcommittee on Security and Defense. He is an alternate member of the EU Parliament’s Committee on Foreign Affairs.

The center's directors, Ilgar Hajiyev and Igor Bitkov, will speak with Ara-Kovács by teleconference about reiderstvo in Russia and their individual cases. A representative of Berlin-based Alcon Development GmbH, whose business was impacted by the raid on Hajyev’s Russia operation, will take part in the discussion at Ara-Kovács’ office in Brussels.

Read the entire report from Italy's ASRIE Analytica here.

LONDON, United Kingdom — A torrent of defamatory fake news about Ilgar Hajiyev, who lost his real estate business in the Moscow area to armed raiders, began circulating in Russian media and social media last week.

The smear campaign started after Igor Bitkov, another high-profile victim of Russian corporate raiding, agreed to join Hajiyev’s anti-raiding efforts and after news surfaced that members of the European Parliament and U.S. senators had become interested in the issue.

Hajiyev lost his Russian business, SDI Group, in January 2019 when his partner, God Nisanov, sent armed guards to seize high-rises that Hajiyev was building in the Moscow area. The two had disagreed over the mix of residential and commercial property in the complexes.

Hajiyev, who fled in the face of death threats, said the smear campaign is aimed at falsely painting him as a criminal to try to divert attention from the fact that he is a victim of illegal corporate raiding, or reiderstvo. “It shows the raiders fear repercussions from the international community for what they did,” said Hajiyev, who is now living in Germany, where he has a business.

Bitkov, whose own corporate raiding story includes violence against his family and death threats, has become a poster boy of reiderstvo worldwide. Several weeks ago he agreed to join Hajiyev’s anti-raiding campaign by becoming director-in-absentia of Hajiyev’s London-based Center for Business Transparency and Countering Corporate Raids in Russia.

Bitkov lost his successful paper and pulp business in Russia to a raid orchestrated by well-connected bankers and others in the 2000s. His family fled to Guatemala, where Russian government pressure for their extradition to face trumped-up charges back home led to the Guatemalans putting them under house arrest.

The human rights violations against the Bitkovs were so appalling that several U.S. senators, including Florida’s Marco Rubio, have issued public statements of support for them. Bill Browder, who persuaded Congress to pass the anti-raiding-focused Magnitsky Act after losing his own business – Hermitage Capital – in a raid in Russia, has helped galvanize American political support for Bitkov.

The smear campaign against Hajiyev originated in blogs written by the discredited journalist Oleg Lure, who was convicted in the late 2000s of fraud and of extorting money from then-Russian Senator Vladimir Sloutsker and his wife, Olga. Unscrupulous journalists in Russia often take money to attack people in print, online, or radio or television.

One of Lure’s accusations was that Russian law enforcement agencies have several outstanding criminal cases against Hajiyev, including one for assault in mid-2018 that prompted him to flee the country. In fact, Hajiyev has never been questioned by Russian law enforcement officials on any matter, and lived in Russia until January 2019.

Another allegation was that Hajiyev swindled dozens of Russians who paid for, but had yet to receive, apartments in the Moscow-area high-rises he was building. In fact, reputable Russian news organizations have written investigative stories saying that people associated with Nisanov stole millions of dollars of the apartment owners’ escrow money from an SDI Group account that the associates seized during the raid against Hajiyev.

One of the conspiracy-theory claims in Lure’s blogs is that Hajiyev, Bitkov and Browder are part of a criminal syndicate behind the launch of the anti-raiding center.

Another is that stories in reputable Russian media that have supported Hajiyev were paid for by former Yukos CEO Mikhail Khodorkovsky, whose multibillion-dollar oil business was raided, and his Open Russia foundation. Western human-rights organizations maintain that Khodorkovsky’s eight-year imprisonment in the 2000s was on trumped-up charges. They contend that Khodorkovsky, who was released in 2013 and now lives in London, was actually a victim of political persecution.

In fact, Hajiyev does not know Browder or Khodorkovsky. The only thing that unites them is that they all lost their businesses to corporate raiding.

“To be mentioned in the same breath as Mr. Browder and Mr. Khodorkosvky actually lends credibility to my cause,” Hajiyev said. “Everyone in the world knows what happened to them.”

Using a typical disinformation strategy, those behind the false allegations against Hajiyev gravitated them step by step from Lure’s blogs to low-reputation Russian media and then to higher-reputation media. All of these disseminators ran the accusations and conspiracy theories, but offered no evidence that the allegations were true, and did not attempt to contact Hajiyev for commentary.

Hajiyev said his campaign to abolish Russian corporate raiding is just getting started. One of his SDI Group business partners will meet with a prominent member of the European Parliament in Brussels in April, with Hajiyev and Bitkov participating by teleconference. Meetings with four other MEPs have also been agreed to, although the exact date will be scheduled sometime next month due to the coronavirus situation.

Meetings with members of the U.S. Congress are also being arranged, with dates to be announced soon.

Raid Summary

One way that unscrupulous people in Russia lay the groundwork for seizing a publicly held company is acquiring a minority stake in it, then filing bogus grievances against management with regulators or asking police to investigate it for alleged criminal violations.

Regulators, courts and government officials — who have been paid off — then issue rulings that take the company from its owners without compensation.

This happened with Pavlovskgranit, Europe’s largest producer of crushed rock for construction.

In the late 2000s, its majority owner, Sergei Poymanov, borrowed 5.1 billion rubles — or $80 million — from state-owned Sberbank to buy the 45 percent of the company he didn’t own. He wanted to prevent anyone with designs on the company from acquiring a sizable minority stake that could be used to start a series of dirty tricks that took it from him.

The timing of his loan was awful, however. The global financial crisis that started in 2008 hammered Pavlovskgranit’s business, and Poymanov was unable to make his loan payments.

Sberbank’s chairman, Herman Gref, told Poymanov that he would restructure the debt for a 51 percent stake in Pavlovskgranit. This meant Poymanov would lose the company, so he refused.

Gref then obtained a court order that Poymanov repay the loan in full — immediately. Poymanov, of course, could not do so.

Gref then asked an outside appraiser to provide Sberbank with a current valuation for  Pavlovskgranit. It came in way below what Poymanov knew the company was worth.

Using the lowball valuation, Sberbank got a court to give it 51 percent of Pavlovskgranit’s shares as compensation for non-payment of the loan.

It later surfaced that Gref’s son, Oleg, and a friend, Yuri Zhukov, owned the appraisal company, Neo Center.

Poymanov has gone to court in Russia and the United States numerous times to try to recover Pavlovskgranit — to no avail.

LONDON, United Kingdom — One of the world’s most high-profile victims of illegal corporate asset grabbing has become co-director of the London-based Center for Business Transparency and Countering Corporate Raids in Russia.

Igor Bitkov, who lost his paper-making companies in St. Petersburg and Kaliningrad, Russia, to a bank-loan scam engineered by ruthless, well-connected business and political figures, is joining center founder Ilgar Hajiyev in spreading the word about illegal asset grabbing, or reiderstvo.

Hajiyev, who lost $50 million of his own to asset grabbing, not only wants to let the world know about the practice, but also help victims recover their losses through court proceedings, diplomacy and other measures.

“Igor Bitkov and his family have endured so much suffering from reiderstvo that the Bitkovs became a symbol of the harm that the practice wreaks on its victims,” Hajiyev said. “I am truly honored that Igor Bitkov is joining in the center’s efforts to counter this scourge.”

Bitkov will become co-director of the center in absentia because he is under house arrest in Guatemala. He, his wife and daughter fled there in 2008 after the loss of their company — North West Timber Company — to the bank-loan scam and after facing assaults, death threats and trumped-up fraud charges in Russia.

The Bitkovs lived under the radar in Guatemala until 2013, when Russian authorities connected to the bank-loan scam figures learned where they were. Although Guatemala refused to extradite them to their homeland, it first sentenced Igor to 19 years in prison and his wife and daughter to 14 years on trumped-up charges, all under coordination from the Kremlin. Later Guatemala placed them under house arrest.

Because the Bitkovs’ persecution has been particularly cruel, and their suffering prolonged, human-rights organizations have taken up their case. In addition, in 2018 various U.S. senators — Marco Rubio of Florida, Roger Wicker of Mississippi, Chris Smith of New Jersey and others — began championing their cause, starting with putting pressure on Guatemala to release them.

Hajiyev became a victim of reiderstvo in the Moscow area in early 2019. What triggered it was a disagreement he had with a partner in late 2018 over the mix of residential versus commercial property in three high-rise complexes that Hajiyev was building and paying for. The partner wanted more commercial property on grounds it would generate more profit.

As the dispute lingered, the partner sent in armed guards to seize the still-under-construction complexes by force, without compensating Hajiyev.

While the partner had arranged for the land and permits for the high-rises, he had put no money into them, so Hajiyev shouldered the entire loss.

Death threats prompted him to flee to Germany, where he was also doing business. There he decided he needed to do something to try to stop reiderstvo. The option he came up with was a center that could unite victims of reiderstvo, publicize the practice and help victims try to recoup their losses.

An appeals court in the Netherlands has ordered Russia to pay $50 billion to the victims of the largest case of uncompensated corporate-assets-grabbing ever — the Kremlin’s seizure of the now-defunct Yukos oil company in 2003.

It was the third ruling in Dutch judicial proceedings addressing Russia’s use of reiderstvo — or asset raiding — to abolish Yukos and transfer its property to other oil companies.

In the first ruling, an arbitration panel awarded the money to Yukos shareholders. In the second, a district court overruled the arbitration decision, saying the panel did not have jurisdiction because the case was based on an energy treaty the Russia never ratified. In the new ruling, the appeals court reinstated the arbitration panel’s decision.

The Kremlin said it will appeal the latest judgment to Holland’s supreme court.

The appeals court decision on February 18 could  prompt Yukos shareholders to launch a new round of attempts to seize Russian government assets worldwide to obtain the $50 billion, which the Kremlin has said it will not pay.

Until 2003, Yukos was Russia’s biggest oil company. When its founder, Mikhail Khodorkovsky, objected to President Vladimir Putin’s efforts to establish tighter state control over the country’s business sector and funded opposition parties, the Kremlin ordered Khodorkovsky arrested on trumped-up allegations that Yukos had dodged billions of dollars in taxes. After Russian courts ruled that Yukos owed the taxes, the government seized the company as payment. Rosneft, a state-owned Yukos competitor, snapped up most of its assets.

Putin pardoned Khodorkovsky — who was once Russia’s richest man — in 2013 after he spent a decade in prison. The London resident now campaigns in exile for an end to the system of greater state control that Putin has put in place.

Khodorkovsky sold his claims to Yukos’ assets to his ex-partners, including Nevzlin, who contend that the Kremlin illegally expropriated their property.

Russia maintains it isn’t bound by the Dutch judgment, which equates to a whopping 3 percent of its gross domestic product.

Putin has talked about amending the country’s constitution to have Russian law supersede international obligations.

After the first Dutch court ruling against the Kremlin in 2014, Yukos shareholders took legal steps to seize Russian government assets in France, Belgium, the United States and India. Pressure from the Kremlin led to France and Belgium unfreezing Russian assets they had frozen.

Photo: Mikhail Khodorkovsky, the founder of Yukos, on Independence Square in Kyiv, Ukraine on March 9, 2014. (CC BY 3.0)

Raid Summary

For almost a decade the Russian Internet giant Rambler paid scant attention to Nginx, a web-server software company that one of its former computer techs, Igor Sysoev, co-founded in 2011.

That changed when America’s F5 Networks bought Nginx in 2019 for $670 million — a price that exceeded Rambler’s value.

Rambler and its main financial backer, Sberbank, suddenly saw Nginx as a gold mine that could be raided.

Rambler asked Russian prosecutors to file criminal charges against Nginx. The allegation was that Sysoev developed the source code for Nginx while a Rambler employee two decades before — so the code was Rambler’s property. Sysoev has denied that, saying he developed the code in his spare time, not at work.

In December 2019, police raided Nginx’s Moscow office, seizing documents and property and detaining Sysoev and Maxim Konovalov, the other Nginx co-founder.

Konovalov called the criminal charges a blatant attempt to take over Nginx, or strip it of much of its assets, without compensation. In other words, a classic example of reiderstvo.

Konovalov noted that Rambler never brought up the source-code issue with Nginx until the F5 Networks acquisition bolstered Nginx’s value to the point that it became a prime raiding target. “Then we see the desire to grab a piece of it themselves,” Konovalov said. “It’s a typical racket. Simple as that.”

One thing Rambler didn’t count on was Russia’s tech community screaming about the Nginx raid. Its reaction was so swift, and so angry, that the company held an emergency board meeting and quickly dropped the criminal case against Nginx.

But Nginx is still not out of the woods. Rambler now plans to try to get a massive civil judgment against Nginx. Given how susceptible Russian judges are to bribery, intimidation and influence-peddling, it could succeed.

External Links

Official Nginx Website

www.nginx.com