Akhmetov’s SCM has $820m Cypriot asset freeze court order lifted


By Stelios Orphanides

The Nicosia District Court ruled in favour of unfreezing assets of up to US$820 (€702m) of System Capital Management (SCM), an energy, finance, mining and industrial group, linked to Ukrainian oligarch Rinat Akhmetov, an ally of former Ukrainian president Viktor Yanukovych, the company said.

With the ruling, court lifted a December temporary asset freeze order requested by Raga Establishment Ltd in a dispute over the privatisation of Ukrtelecom, Ukraine’s fixed-line, mobile and Internet communications services provider, after Raga, a Cyprus-registered company owned by Ukrainian former banker Denis Gorbunenko, had won an arbitration case against SCM three months before, SCM said in an email on Wednesday.

Raga failed to honour the “strict legal terms of its sale of Ukrtelecom to SCM in 2013,” SCM said. “In the agreement, Raga claimed to have adhered to a 2011 privatisation agreement with Ukraine’s privatisation authorities which bound it to heavily invest in Ukrtelecom’s infrastructure in the country. This was not fulfilled”.

The company said that after Raga had failed to honour the agreement, Akmetov’s company sought to reverse the purchase agreement and demanded the return of a $100m prepayment, SCM said.

“This sparked a lawsuit on the part of Raga, demanding that SCM pay them the full $760 for an asset that will likely be taken back into state ownership shortly,” it said adding that Ukrainian authorities had initiated more than a year ago the renationalisation of the telecom company after Raga failed to adhere to the provisions of the privatisation agreement.

Jock Mendoza-Wilson, SCM’s director of international and investor relations said that today’s court ruling discharges Akhmetov, who Forbes estimates to be worth $5.8bn, and several other of the company’s units.

“All restrictions imposed by that freezing order in dealing with their respective assets have been removed,” Mendoza-Wilson was cited as saying. “The court also issued an order awarding the legal costs in favour of the SCM Group and against Raga”.

“The court stated in its judgement that the December 2017 Cypriot freezing order was obtained by Raga inappropriately and unjustifiably,” he continued. “This is illustrative of Raga’s behaviour in this dispute and a reflection of the true nature of its claim filed against SCM Group and Akhmetov in Cyprus. We maintain that such claim is baseless, just as the now discharged freezing order had been baseless”.

Mendoza-Wilson vowed to continue challenging Raga’s claims both in Cyprus and abroad.


About Author

Stelios Orphanides is a journalist at CyprusBusinessMail.com. To contact Stelios Orphanides: [email protected]

  • desres

    He gained much of his wealth during an era of crony capitalism, rent seeking and rigged privatizations. He owns some of the most expensive real estate in London, buying a luxury building at One Hyde Park for more than $210 million in 2011

  • Eye on Cyprus

    I love the maths: if only it were true. “US$820 (€702m)”. I’m rich! I’m rich!