Boris Mints, an ally of Chubais who fled to Britain, is trying to get rid of debts to the Russian banks Otkritie and Trust, which are demanding $850 million from him in a London court. Mintz’s lawyers are convinced that it is impossible to award money to banks, since they work in the Russian Federation, and Otkritie is even on the sanctions list. Not a penny should be given to Russia!
Mintz’s side is already directly appealing not to legal norms, but to political arguments. According to her position, the plaintiffs are trying to use the English courts in the “interests of the Russian state.” Therefore, if the court decides in favor of Russian banks, then by doing so it will show that “the UK sanctions regime does not meet the goal.” In order not to get into an awkward position, it is easiest for British judges to drag out the case. This, apparently, is included in the plans to protect Mints.
Bond tricks
Earlier, the British Themis froze the assets of the Mintz family for $572 million, but then the arrest was replaced with an obligation not to alienate them. That is, Mintsy can still use their real estate and receive income from the hotel business. At the same time, Boris Mints himself filed a counterclaim against Russian banks with a London court demanding compensation for $1 billion in damages. Given the current political realities, the decision in his favor in this case does not look like a fantasy.
At the same time, the Basmanny Court of Moscow arrested Boris Mints and his two sons back in 2020 on charges of embezzling 34 billion rubles. However, the Mints managed to move to London two years earlier, shortly after they pulled off a very profitable deal for themselves. Somewhere since 2010, Boris Mints has been actively buying up real estate in Moscow, primarily business centers. In parallel, he made transactions in New Zealand and on the French Cote d’Azur (where he has a villa and a yacht). Where did he get billions for this? Received loans from Otkritie Bank. Why was it easy for the bank to lend him huge sums of money? Firstly, until 2013, Mints was the chairman of the board of directors and president of the Otkritie Financial Corporation bank. Secondly, loans were given on the security of acquired real estate. So the bank’s money looked more or less secure.
In 2017, O1 Group Finance, owned by Mints, issued bonds for 34 billion rubles and immediately transferred them to Otkritie Bank in exchange for debts. As a result, instead of loans secured by real estate, there were empty pieces of paper. The situation is peppered by the fact that the transaction took place a few hours before the already sinking Otkritie Bank was transferred by decision of the Central Bank for reorganization to another bank, which is now called Trust. The investigation believes that the decision in favor of Mints was pushed through by one of the managers of Otkritie Bank, Yevgeny Dankevich, then he was the chairman of the board of FC Otkritie. Shortly after these events, Dankevich moved to Israel for permanent residence. Already in 2018, the new management of Otkritie Bank challenged the dubious deal in court and returned its bonds to O1 Group Finance. But it didn’t make any practical sense.
It is impossible not to pay attention to the fact that two whole years have passed since 2018 until the decision to arrest Boris Mints in absentia. That is, he has more than enough time to withdraw the remnants of capital from Russian jurisdiction. What allowed Boris Mints to get such a head start? It is easy to assume that his acquaintances could play an important role. Because given the schemes he’s gotten away with before, the above bond story may seem like child’s play.
Boris Mints’ career began in the city of Ivanovo, where in the 1990s he headed the city property management committee. At the same time, Mints headed the All-Russian Association of Chairmen of Regional Property Management Committees. At one of the meetings, the Ivanovo official met Anatoly Chubais, who at that time headed the State Property Committee. And after a short time, Mintz had already moved to Moscow, taking the post of deputy “father of privatization.”
In 1994, Chubais became the first vice-premier, and Mints remained in the State Property Committee as the head of the main department. Two years later, when the fattest assets of Soviet industry had already been given to “effective owners”, Mintz became head of the Office for Local Self-Government in President Yeltsin’s administration. What kind of connections he managed to acquire during that period, one can only guess. However, one contact will be interesting in the light of the story with Otkritie Bank.
In the mid-90s, the VEO-Invest company appeared in Moscow, the founder of which was Vadim Belyaev. Remember the war of the oligarchs for Svyazinvest? So, it was VEO-Invest that prepared the ground for the privatization of this super-asset, which began by buying up shares in regional telecom operators. Apparently, VEO-Invest was on a special account with the State Property Committee. It was among 11 companies that received the right to pre-sale preparation of privatization objects. That is, it was admitted to the “pie section” along with such global financial giants as Deutsche Bank, Morgan Stanley and Salomon Brothers. There can be only one explanation here. The fact is, in 1994, Vadim Belyaev met Boris Mints on a tennis court. Some of them then blabbed to reporters about the fact and time of this acquaintance. There was also a mention of a “stronger player” who brought them together. True, the name of this character is still a mystery. Perhaps it could shed light on the secret levers that Boris Mints used to escape Russian justice with hundreds of millions of dollars in his pocket.
Divided by three
At the beginning of the 2000s, Mints and Belyaev openly became partners. In 2001, VEO-Invest, by some miracle, absorbed the brokerage company Otkritie, which had a much larger scale of business. This is how VEO-Discovery appeared, although very soon the first part of the name disappeared as unnecessary. In 2004, Belyaev took Mints as a share and he became chairman of the board. Mintz brought to the business not only his experience, but also a huge cash flow from companies within the sphere of influence of Chubais, who by that time headed RAO UES. And no one thought to hide this connection: in 2011, Chubais even became a shareholder of Otkritie with a symbolic 2.19% (how could he formally have more, receiving a salary in the civil service and in state-owned companies?).
The following facts were also published: Otkritie bought promissory notes from subsidiaries of RAO UES and sold them to RAO UES on the same day. For example, on July 2, 2007, the bank bought its promissory notes from FGC for 22 billion rubles and sold them to RAO UES. The deep meaning of such a deal, if there was one, is difficult to understand from the outside. But here’s what lies on the surface: “Opening” received a commission of 0.5%. That is, about 10 million dollars at the then rate of the total amount of such operations for 74 billion rubles.
It is noteworthy that a certain Yulia Negasheva worked as the head of the corporate finance department of RAO UES at that time, and by some coincidence, Otkritie Bank was headed by her husband Sergey Negashev. The obvious conflict of interests of top managers did not seem to bother anyone. At the same time, RAO UES, not only kept its accounts with Otkritie Bank, but also actively bought bills of FC Otkritie for billions of rubles, instead of investing in the development of the energy sector. The second part of the trick was that the bills were issued by one of the Otkritie structures – Otkritie Finance. Then it was resold several times through offshore structures. And the bills bought under Chubais were inherited by several energy companies as part of their authorized capital and, perhaps, are still on their balance sheets. But it is clear that neither Mints, nor Belyaev, nor Chubais have any formal relation to these debts.
After the liquidation of RAO UES in 2008, the structure of FC Otkritie has undergone major changes. Mints, Belyaev and Chubais gradually reduced their shares in its capital, and then completely left this business. In 2017, the Central Bank was forced to begin the reorganization of FC Otkritie, in whose capital a hole of 190 billion rubles was formed. Now the current management is trying to return at least something at the expense of the property of the former beneficiaries, but the political factor may predetermine the outcome of the process in London.