By Andrei Skvarsky.
Russia’s Alfa-Bank has been accused by Crimean Vodka Company (CVC) of a “corporate raiding” plot to take hold of the liquor firm, one of Ukraine’s largest producers of spirits.
{{{?}}}
CVC’s British owner, Neil Smith (pictured), says Alfa-Bank subsidiaries Empire and Eutilia have been fighting for control of the spirits company since October last year.
Empire this month lost a court case in which it claimed 1.8bn hryvni ($220m) off CVC as compensation for alleged missed incomes.
However, Smith fears the conflict is likely to go on. CVC argues that this endangers the future of its 2,500 employees and threatens to leave Crimea’s administration without some of its incomes – CVC says it provides about one quarter of the peninsula’s tax revenues, and that last year it paid about $125m in regional taxes and levies.
According to Smith, the formal source of the row is manufacturing equipment that CVC rented from Empire. The latter claims that CVC failed to give the equipment back to it immediately after the expiry of the lease contract and that this prevented Empire from earning an estimated 1.8bn hryvni.
However, Smith claims it was Empire’s own choice to leave the equipment at a CVC plant in Symferopil.
“We are talking about equipment not used since the expiry of a lease contract, which the Commercial Court of Crimea obliged Empire LLC to dismantle and remove from the territory of CVC plant in Simferopol in December 2012. But Empire itself complained about this decision and as a result the Commercial Court of Crimea’s decision was cancelled in the Court of Appeal! This is legal nonsense – they are trying to sue us for equipment they have consistently refused to remove, even when a court required them to,” Smith said.
Smith says, moreover, that 1.8bn is 1,000 times more than CVC, which has its headquarters in regional administrative centre Symferopil, paid for the equipment, and that the amount suggests that the rate of return on vodka production assets is 100,000%.
Smith claims that the whole point of Alfa-Bank’s behaviour is to seize hold of a key alcohol producer in Ukraine through “daylight robbery”.
“Don’t the managers of Ukrainian Alfa-Bank understand that such risky behaviour conjures an image of gangsters in the European public opinion of Alfa Group?” Smith says. “The trial is based on fake documents and fictitious advertisements on the web,” Smith said.
A request from EmergingMarkets.me for comments from Alfa-Bank has remained unanswered.
Sorry, comments are closed for this post.