Lithuania suspends Snoras bank: Russian Saab candidate owner face prison

Lithuania’s banking regulator has suspended operations of Snoras bank, the 5th largest in the country, appointed a temporary state administrator and announced its plans to takeover 100% of the lender’s shares. Vladimir Antonov was arrested in the UK on 24 November 2011.

The Lithuanian government discussed the situation surrounding the bank, and the president made a statement. The Lithuanian central bank acted

Vladimir Antonov

after it emerged that some of the bank’s assets were of worse quality than it had been expected. The bank declared some foreign securities, worth of 290 million euros, as assets, which the investigation showed did not exist.

Antonov has swapped bad assets of Snoras for Sergei Polonsky’s former Mirax (now Nazvanie.net) frozen development projects in Moscow that have high liquidity. The move enabled Polonsky to siphon off most of the money of defrauded shareholders and creditors into his foreign accounts. It is now a headache of Russian and Lithuanian authorities to fix the problem. The debt, which Nazvanie.Net has declared, is $45 million, but in fact it exceeds this figure and amounts to hundred millions of dollars.

Antonov has been involved in a number of financial scams before. He has always had problems with banking regulators. His Conversbank and Conversbank-Moscow were barred from participating in deposit insurance scheme, run by the Russian government, and the U.K. Financial Services Authority denied Snoras permission to operate in Britain, because “the bank would be unable to cooperate with the FSA in open and constructive manner”.

The scam was very simple. Antonov bought or set up banks – for instance, he acquired Lithuanian Snoras and Russian Investbank. The banks borrowed money from individuals and private companies for high interest. Antonov moved accumulated money into various projects of his own. He owned a lot of financial institution that enabled him to keep afloat, moving funds from one institution to another in order to fill in financial holes, if the problems occurred.

The scam worked until 2010, when it became obvious that Snoras and Investbank were on the verge of insolvency and even minor economic instability could have defrauded tens of thousands of people. The situation was even more dangerous in Lithuania. The hole in the bank’s balance sheet amounted to $100 million. The money was moved to the accounts of front companies in the form of unsecured loans. Antonov found no other way out, than to bring notorious Sergei Polonsky into his business.

By 2010 Polonsky and his Mirax Group had already gone bankrupt. The debt of his companies was estimated from $600 million to $1 billion. Former oligarch dreamt about saving at list part of his wealth and moving the assets abroad. He was open to any proposals, including that of most suspicious nature. This was common ground for talks between Antonov and Polonsky. They discussed the scam first in London, than in Antonov’s private chalet in Switzerland. The sides discussed the details of large-scale fraud.

Under the agreements reached by Polonsky and Antonov, Snoras swapped the securities of front companies for the ownership rights over developments, run by Mirax Group in Moscow (Dubrovskaya Sloboda, Mirax Park and Kutuzovskays Milya residential complexes, and Federation tower in Moscow-City business centre). Through his connections in the Staff of the Russian Federation President Polonsky received permission to strike share pledge agreements with the third party – the front companies, which Antonov had used to move money from his bank. After all, Polonsky sold his developments and got money, which had been siphoned off from Snoras.

The money of defrauded shareholders and creditors of Polonsky’s Mirax filled in the financial hole in Snoras. Now the bank owns a few objects in Moscow, which are despite being under construction are above all real and liquid, unlike the securities of the front companies.

Polonsky has also benefited from the scam. Antonov committed himself to move large sums of money to offshore companies controlled by Polonsky. Antonov planned to resell Saab and other assets. He negotiated with the Chinese about the deal, according to the inside information. In the end, Polonsky has moved his most profitable assets abroad and they are under control of Snoras’ shareholders and depositors, who lent money to Mirax Group on the security of the Mirax Moscow’s developments. If Moscow authorities, or Russian creditors of Nazvanie.net decide to take over the developments of Polonsky, they will have to infringe upon the reights of the EU citizens. After all, Mirax got loans at unpresidentally low rate – just 7% a year. In 2010 reliable lenders gave loans to Polonsky at the rate of 20-30%. If Mirax Group owner decided to bail out his objects in Moscow he would do it easily. Such option is a part of the agreement between Antonov and Polonsky.

In a nutshell, co-investors of Polonsky’s Mirax Group and Moscow authorities face a long struggle with the member of the EU, whereas Antonov and Polonsky are very happy with the success of their scheme.

Vladimir Antonov was arrested in the UK on 24 November 2011 after Lithuanian prosecutors issued extradition warrants against him. Antonov is accused of asset stripping of Snoras bank.

In recent times Antonov cooperated with Polonsky who helped him to cover the fraud up. Real estate tycoon Polonsky mortgaged his Moscow incomplete developments, transferring to Snoras the rights over the flats that belong to other people. At first Polonsky and Antonov thought they had orchestrated a perfect scam. A few years ago Antonov moved almost all Snoras’ liquid assets, $400-500 million worth, to foreign accounts. He disguised the fraud under a series of loans which the bank allocated to front companies with no real asset backing. For current banking operations Snoras solely used money from the deposits of legal and natural persons of Lithuania. The bank’s billion dollar worth assets existed only on paper. Snoras’ books stated the following assets as belonging to the bank:

- expensive securities (in fact worth nothing at all);

- money in the accounts of foreign banks (these banks are owned by Antonov and in truth have no money from Snoras in their accounts);

- money in the accounts of offshore companies to which Snoras gave loans (the companies are controlled by Antonov and have no assets).

When Lithuanian banking regulators got alarmed by Snoras’ activities, Vladimir Antonov’s father-in-law and former KGB officer Viktor Yampolsky introduced him to Moscow developer Sergei Polonsky. In Russia everyone knew that Polonsky was a bankrupt.

The talks between Polonsky and Antonov took place in England and Switzerland. The deal was mutually profitable. Polonsky pledged his Moscow developments, which are under constructions, to secure Snoras’ loans to offshore companies (i.e. to secure stripped assets). Antonov received more or less valuable assets for the banking operations, whereas Polonsky got rid of annoying co-investors in his developments and Moscow authorities who wanted the have the developments completed.

A source that took part in the negotiations told that Antonov and Polonsky had planned that Snoras would begin legal actions in Russia to seize Polonsky’s property. The process would be painful and take a long time, because the property was left as a pledge with the depositors of Snoras, citizens of Lithuania. According to the written commitments, if Snoras won the case, Polonsky would have a share from reselling the developments in Moscow and a share from selling Swedish car manufacturer Saab, which belongs to Antonov. Polonsky also had the option to get his property back if he cleared debt in time.

Polonsky and Antonov were happy. As he did it before, Polonsky dumped co-investors and partners and moved assets to Europe. Antonov filled in the financial hole in Snoras. But the plans of the couple of crooks were in tatters when the Lithuanian authorities decided to probe into the bank. Tired of Antonov’s scams, Lithuania put Snoras under involuntary state administration on 16 November.

Our source said that Polonsky was literally infuriated when he heard the news. He approached Antonov on the phone and told him that Antonov had “let him down” and “cheated” on him and urged Antonov to pay back.

The anger of Polonsky is quite understandable. Surely, he will get nothing from Snoras. What makes things worse he now faces legal prosecution.

On 22 November Polonsky met Antonov in London and demanded he give his money back, at least partially. But it was too late. On 23 November Scotland Yard arrested Antonov over Lithuanian extradition warrant. Lithuanian police began investigation into asset stripping of Snoras. The investigators have already seized paperwork concerning unsecured loans. They have also obtained documents pertaining to Polonsky. Their careful examination will show that Polonsky was paid by Antonov to cover up asset stripping scam. Polonsky deceived representatives of Snoras saying that the developments he left with the bank as a pledge were completed and not liable to any obligations from the third parties. In fact it was co-investors who funded the buildings works. The co-investors are true co-owners of the building.

In banking terms Polonsky is an unscrupulous pledgee and, thus, legible to legal prosecution in almost all countries. In legal terms Polonsky’s actions can be classified as unsecured loan scam and fraud.

Our source said that Polonsky was afraid of legal prosecution. Should he travel to a European country he might face Antonov’s fate, i.e. arrest and extradition to Lithuania. Polonsky can not enter Germany after the appeals of defrauded co-investors in his projects. Now, after Antonov’s arrest, the USA might levy sanctions against him. Polonsky expected to receive his share from Antonov’s selling his stake in carmaker Saab to a Chinese company. But Saab’s controlling owner American GM corporation blocked the deal. The Americans did not want to see the Chinese get Saab’s smart technologies. Antonov was barred from entering the US and blacklisted by the US security services. As a person interested in the deal, Polonsky could face the same sanctions.

About these ads

Comments

4 Comments so far. Leave a comment below.
  1. drandreagalli,

    How Kroll did a bad job:

    just-auto global news April 30, 2011 Saturday 3:29 PM GMTSWEDEN: Debt Office private investigator clears Antonov to be Saab part-owner

    Vladimir Antonov’s holding company director Lars Carlstrom has warmly welcomed today’s (28 April) Swedish National Debt Office (SNDO) decision to vindicate the Russian businessman’s application to own up to 30% of struggling Saab.The SNDO approved Antonov’s application to underwrite EUR30m that would give him up to 29.9% – a process that has been dogged by controversy that has included rumours of money laundering and organised crime.”Finally, we have got some really, really good news in this process – he [Antonov] is totally, totally clear now,” Carlstrom told just-auto. “For Antonov, this has been devastating, living with these kind of rumours and it has affected his business.”Luckily, we never doubted that this day would come. [Spyker chairman] Victor Muller has been working for 11 months and so we have all been a part of this tremendous scrutiny directed towards Antonov.”It appears the SNDO was so concerned about rumours surrounding Antonov that it hired a battery of private investigators and legal teams in order to reassure itself of the Russian’s credentials to become a part-Saab owner.”We heard the rumours from Russia concerning money laundering and organised crime,” SNDO project leader Saab guarantee Daniel Barr told just-auto from Stockholm.”However, it is not uncommon that business people in Russia use internet type of newspapers to buy articles. We have tried to establish if anything like those reports has been true and we have not found anything”Barr said the SNDO had used a private investigation firm Kroll, to establish Antonov’s integrity as well as a legal firm in Moscow. Antonov had also carried out his own study.Carlstrom remains convinced now that SNDO approval of Antonov’s ownership application should make Swedish government ratification of the deal “a formality.””I can’t see any other way forward,” he added.General Motors, which has preference shares in Saab, said it had reached “tentative agreement” to allow Antonov’s application subject to “consents, approvals and waivers.

  2. drandreagalli,

    Independent (UK)
    30/11/2011

    Pompey fear 10-point deduction The Football League board will decide whether Portsmouth will be penalised 10 points after it was announced yesterday that the parent company of the troubled South Coast club has been placed in administration. The Championship club disclosed yesterday that Convers Sports Initiatives (CSI), the company owned by Vladimir Antonov, had gone into administration. The Russian businessman who bought the club in the summer has resigned as chairman and director of Portsmouth. The club assured fans that it had “funding in place for the short term”. The news left the long-suffering supporters fearing a similar meltdown to the one that took place when Portsmouth were in the Premier League two years ago. In February 2010, Pompey were placed in administration and deducted nine points. They finished bottom, 11 points adrift. Because it is CSI and not Portsmouth who have been placed in administration, it is at the discretion of the Football League board as to whether the club suffer a 10-point deduction, which would mean them dropping to last place in the Championship. The worrying precedent for Portsmouth is that their local rivals Southampton were relegated from the Championship in May 2009 with a 10-point deduction after their parent company, Southampton Leisure Holdings (SLH), went into administration. On that occasion, the Football League board was advised that Southampton football club and SLH were “inextricably linked as one economic entity”. Crucial to the decision by the board in the case of Portsmouth will be whether the club is judged to have gained any advantage from off-loading debts during the administration period. It is that which is likely to incur a 10-point deduction because the league’s regulators will regard it as handing Portsmouth an unfair advantage over clubs who have managed their finances more sensibly. Antonov and his business partner Raimondas Baranauskas were arrested in London on Thursday over an alleged asset-stripping operation at the Lithuanian Snoras Bank. They were released on conditional bail. Both men deny the charges. vladimir antonov The Russian businessman has resigned as chairman of Portsmouth Copyright © 2011 Independent News and Media Limited

  3. Highly descriptive post, I enjoyed that bit.
    Will there be a part 2?

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

Follow

Get every new post delivered to your Inbox.

Join 64 other followers

%d bloggers like this: