Quinns now face a triumvirate of Russian oligarchs with links to President Putin
ANALYSIS:Seán Quinn and his family are now up against an adversary in Russia that has direct links to the Kremlin and President Vladimir Putin.
The Alfa Group, a subsidiary of which has been selected by IBRC to act as its partner in frustrating the Quinn family’s efforts at putting valuable property beyond the bank’s reach, is owned by three of Russia’s wealthiest oligarchs, men who continue to prosper in Putin’s Russia and who have links to the formidable president.
State-owned IBRC has repeatedly claimed that the efforts of the Quinns to frustrate it seizing property in Russia and the Ukraine include odd and possibly corrupt decisions in local courts.
The deal with A1, the asset recovery arm of the Alfa Group, includes stipulations that the group must at all times act with probity and respect for the law.
However, the reputation of the group and the extent to which it is part of the Russian system will work against local involvement in seeking to frustrate IBRC-A1’s efforts.
“Any individual or organisation will be wary about being in conflict with such an influential player in the market,” IBRC executive Richard Woodhouse told Mr Justice Peter Kelly in the High Court on Friday.
Alfa is one of Russia’s largest privately owned conglomerates with interests in natural resources, telecommunications, retail, finance and leisure.
Its three main shareholders are Mikhail Fridman (48), German Khan (51) and Alexei Kuzmichov (50).
According to Forbes, Fridman is worth $15 billion (€11.68 billion), Khan is worth $10.3 billion and Kuzmichov $8 billion. Khan is a native of Kiev, where the Ukrania shopping mall is one of the assets IBRC is trying to seize.
The three billionaires are old college friends. Their wealth took a jump just last month when they benefited from a deal that saw a massive oil venture, TNK-BP, sold to Kremlin-controlled Rosneft for $26.8 billion. The deal saw Fridman’s estimated net worth rise higher than that of Roman Abramovich, the owner of Chelsea FC.
According to a paper published by the Oxford Institute for Energy Studies in November 2011, called BP, Russian Billionaires and the Kremlin, Fridman has always been careful not to be seen to challenge the power of the Kremlin.
One of his key partners in the Alfa Group, Peter Aven, has known Putin since 1991.
A former deputy chairman of Alfa Bank, Vladislav Surkov, is said to be a key ideologist and political manager in the Putin Kremlin.
US diplomatic cables released by WikiLeaks last year revealed details of Khan’s meetings with senior BP executives working with the TNK-BP oil venture.
In a description of a trip to a hunting lodge, BP executive Tim Summers was quoted as saying it was more like a “Four Seasons hotel in the middle of nowhere” and that the married Khan travelled accompanied by “seven glamorous women” and came to dinner “armed with a chrome-plated pistol”.
Khan is reported to be very fond of firearms and to have told senior BP executives that he regularly watches The Godfather, which he considers “a manual for life”.
Part of the deal with A1 involves the formation of a joint venture which will seek to assert control over certain debts associated with property formerly owned by the Quinns. A1 will also seek to seize other assets.
Set-up costs and other costs are to be met by A1, which will have the right to the first $35 million from the proceeds of any recovered assets. IBRC will be entitled to 80 per cent of the following $100 million, and 70 per cent of the following $100 million.
All proceeds are to be split 50-50 thereafter.
The Russians will go after not just the properties but the estimated $45 million in rental income that the properties produced over the past year and which IBRC believes is under Quinn family control.
The deal involves a large number of provisions aimed at ensuring the Quinn family cannot come to any arrangement with A1 in relation to the assets.
The decision to get involved with the Russian group is the result of the bank’s decision that the Quinn family is never going to co-operate with it, irrespective of any orders of the Irish High Court.