Irish firm Eurotoaz alleged to be central to ammonia group fraud case

Four Caribbean investors in world’s largest maker of trade ammonia claim they were defrauded of 70% stake in Russian business

An Irish-registered firm was allegedly at the centre of an alleged conspiracy to defraud the world's largest producer of ammonia of a $2 billion shareholding, the Commercial Court heard.

Four firms, registered in the Caribbean, are suing Eurotoaz Ltd, with registered offices at the Earlsfort Centre, Earlsfort Terrace, Dublin.

They claim they were defrauded, through illegal and corrupt actions, of their 70 per cent interest in a Russian firm Togliattiazot (ToAZ), a $3 billion company which is the world's largest producer of trade ammonia used in fertiliser.

Eurotoaz denies conspiracy or that there was a political motivation behind efforts to prosecute and sue ToAZ in Russia.

The four firms – Trafalgar Developments, Instantania Holdings, Kamara and Bairiki Inc – have also sued other companies and individuals claiming they conspired together in the alleged fraud scheme.

It is claimed the four were subjected to part of an internationally recognised phenomenon known as "raider attacks", which is prevalent in the Russian Federation. It involves a so-called raider acquiring a minority shareholding in a target company and afterwards a series of improper civil and criminal lawsuits are repeatedly brought to devalue a company's stocks.

Along with improper pressure on judicial authorities to bring regulatory and tax prosecutions against the company’s principals, the raider procures freezing of shares and cash and the business collapses with effective control wrested from its owners.

It is claimed Eurotoaz was central to an alleged scheme of conducting vexatious litigation based on false and sham evidence against ToAZ. Among the other defendants are Russian billionaire Dmitry Mazepin, a former member of the Kirov regional duma in Russia as a representative of the United Russia Party led by Russian president Vladimir Putin.

It is claimed Mr Mazepin led the alleged scheme to defraud the four companies of their interest in ToAZ. Mr Mazepin owns a minority interest in ToAZ and controls one of the defendant firms, United Chemical Company Uralchem (UCCU), the plaintiff companies allege.

The claims brought against all defendants include that the conspiracy scheme involved putting undue and unlawful pressure on judges, criminal investigators, court-appointed experts and judicial officers in Russia to make improper and adverse orders against ToAZ, its officers and shareholders.

It is claimed the conspiracy involved procuring improper arrest warrants and Interpol "red" notices (international arrest warrants) against ToAZ officers and those perceived to be connected with it.

Seeking to have the case admitted to the Commercial Court, Paul Gallagher SC said Ireland was the appropriate jurisdiction and the case involved in excess of €2 billion, was a complex case and his clients had been subjected to an Interpol investigation which was politically motivated.

Paul Gardiner SC, for Eurotoaz and one of its directors, Andrey Gennadyevich Babichev, of Veronez, Russia, said his clients reject the allegations or the notion of a political motivation behind the Russia proceedings. Counsel sought an adjournment of the application to enter the case in the commercial list, saying it was not urgent and was about decisions in 2013 and 2015.

Mr Gallagher opposed an adjournment as a “delaying tactic” and said an earlier affidavit of the plaintiffs’ solicitor, Karyn Harty, had outlined the enormous nature of the case and difficulties in bringing it on.

Mr Justice McGovern adjourned the entry application to January.

The other defendants are: Uralchem Holding plc, Yulia Bolotnikova (a lawyer in UCCU); Belport Investments (a Cyprus-based company); Milko Emilov Minkovski (a Bulgarian resident and beneficial owner of Belport); Androula Charilaou (another Belport director); Dmitry Konyaev (chief executive of UCCU); and Yevgeniy Yakovlevich Sedykin (a Russian who, it is claimed, acted with power of attorney on behalf of Eurotoaz in the litigation in Russia).

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