AG dismisses request to drop €1.1bn case against Russia’s PhosAgro, Guryev, claimant says

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By Stelios Orphanides

Attorney general Costas Clerides declined to dismiss proceedings against fertiliser maker PhosAgro, its principal owner, Russian entrepreneur and company director Andrei Guryev, and 12 other co-defenders in a more than €1bn fraud case, a spokesperson of the claimants said.

Phosagro2Following Clerides’s decision, the trial at the Limassol district court will go ahead, the spokesperson said on Thursday in an emailed statement. Nicosia-based lawyer Achilles Emilianides and London-based lawyer James Lewis filed the application to the attorney general to dismiss the case on behalf of nine of the defendants.

“The 14 accused are charged with using fraudulent means to deprive businessman Alexander Gorbachev, a former chairman of PhosAgro, of a 24 per cent stake in the business worth around US$1.2 billion at current market prices,” the spokesperson, who works for the London-based public relation company Powersourt, said.

In 2014, PhosAgro generated a total of 123.1bn Russian roubles (€1.8bn) in revenue and posted a net loss of 8bn Russian roubles (€114.6m).

Gorbachev, represented in the case against PhosAgro by former European Court of Human Rights judge Loukis Loukaides and Panikos Onoufriou, a Limassol-based lawyer, “has brought the criminal action on a private basis, under Cypriot law,” as several offshore companies holding PhosAgro shares, also accused for perpetrating the alleged fraud, are based in Cyprus and included in the 14 defendants, the spokesperson said. The Limassol district court issued the criminal indictment on May 21.

“Despite attempts to dismiss my complaint, the highest legal officer of the Republic of Cyprus has reviewed the proceedings and directed that Andrei Guryev, and the others, have a case to answer and should face a trial there,” Gorbachev is quoted as saying in the statement. “I was instrumental in building PhosAgro. I oversaw the formation, development and eventually the global success of the group. We had an agreement he would hold my shareholding in trust for me which he breached.”

PhosagroAccording to the New Yorker magazine, Guryev is owner of the Witanhurst house residence, London’s second largest house after the Buckingham palace. Gorbachev left Russia after authorities turned against former Yukos owner Mikhail Khodorkovsky who was also owner in PhosAgro until 2004 before being forced to sell his stake in the fertiliser producer at a very low price, according to the New Yorker. Khodorkorsky spent 10 years in prison in Russia for tax fraud, embezzlement and money laundering, after he criticised the Vladimir Putin government of corruption. Putin pardoned him in December 2013.

“The attorney-general’s rejection this week of the application to have the case dismissed means that all the accused will have to answer the charges in the Cypriot court,” Gorbachev’s spokesperson said. “Although PhosAgro and Guryev were not among the defendants whose bid to have the case dismissed was rejected this week, the Attorney-General’s decision is a dramatic setback for both Guryev and the company”.

Gorbachev’s spokesperson said that Areti Charidemou, a lawyer of the Limassol-based Areti Charidemou & Associates law firm, who acts as administrator and trustee of the eight companies. Charidemou who is together with the eight companies among the defenders, filed the application for the proceedings to be dropped, the spokes person said and added that all nine pleaded not guilty at a court hearing early this week and “were ordered to appear before the court on December 16, 2015”.

Also included among the defendants is Russian lawyer Evgeniy Mariashin, also shareholder in PhosAgro and advisor to both Guryev and the fertiliser maker. “The Limassol district court has fixed a hearing on October 12 to verify that the indictment has been served on Mariashin, who is understood to be a Cypriot citizen,” the Gorbachev spokesperson said. “To date, in the absence of being able to serve the summons directly, the indictment has been served indirectly to a member of Mariashin’s family at his residence on the outskirts of Limassol”.

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Stelios Orphanides is a journalist at CyprusBusinessMail.com. To contact Stelios Orphanides: stelios@cyprus-mail.com