IBRC effort to seize mall must clear murky world of politics in Ukraine

The Irish Bank Resolution Corporation’s (IBRC) effort to seize the Ukraina shopping mall in Kiev has involved some of the most powerful political figures in the huge eastern European country, but as yet to no avail.

The property was formerly owned by the Seán Quinn’s family and was part of the international portfolio it set out to put beyond the bank’s reach last year after it concluded the bank was about to seize it.

The series of bizarre developments since then, concerning control of the mall, have received widespread coverage in Ukraine where they are recognised as being part of a common type of fraud called corporate raiding.

The government has an anti-raiding committee which has twice reviewed the Ukrainian case. The existence of corporate raiding, where shareholders are stripped of their assets, is seen as a disincentive to foreign investment in Ukraine, one of the most corrupt countries in Europe.

Frustrated

In May the first vice-prime minister of Ukraine, Valeriy Khoroshkovsky, instructed the local judicial council to investigate judgments by the Kiev courts that have frustrated the IBRC’s efforts to assert control over the mall.

Khoroshkovsky is a former head of the Ukrainian intelligence service and one of the country’s richest business figures. He heads the Interdepartmental Commission on Countering Illegal Mergers and Takeovers of Companies and is charged with heading Ukraine’s integration with the European Union.

A senior source in Kiev who has had dealings over the Ukraina matter at the highest levels, said figures such as Khoroshkovsky would have avoided getting involved if they had not wanted to resolve the situation.

“He has described it as a scandalous situation which he is determined to sort out. Senior political figures such as he do not make such statements unless they intend to take action. I believe that he tried. It is a matter for him of his standing,” said the Kiev source, who did not want to be named.

The fact that such a powerful figure has failed to ensure control of the mall was wrested from the current management, has led some to conclude that players of even greater power in Ukraine are supporting those who have retained control of the asset.

Univermag, the operating company that runs the mall, is still believed to be controlled by Larysa Yanez Puga, who ran the mall when it belonged to the Quinn family.

Double-crossed

A meeting in a Kiev restaurant in January this year between Yanez Puga, Seán Quinn jnr, Peter Darragh Quinn and some Russian speaking men, was secretly filmed and the footage leaked to the media. In the video the two Quinns appear unhappy that they are not getting amounts of money they believe are due. They also discuss $100,000 in cash being offered and how they might store the cash in a bank safe deposit box.

Some parties involved believe the video supports the view expressed by the Quinns in the Irish courts that Yanez Puga, while having initially worked for them, may now have different backers.

The Quinn family has told the Irish courts it believes Yanez Puga has double-crossed them. The Kiev source says such a scenario is logical and fits with the fact of the video and its content.