RBC learned the details of the dispute between the structures of Boris Mints, who controlled the largest NPFs, and the main owner of PIK, Sergei Gordeev. Offshore Mints borrowed $ 2.8 billion, while negotiations on the return discussed the use of NPF money.
In 2016–2017, Boris Mints O1 Group agreed with PIK group owner Sergey Gordeev on a deal in which Mints non-government pension funds (NPFs) bought PIK shares for almost 19 billion rubles, and then the Cypriot businessman’s structure borrowed some of this money Gordeev’s company, affidavit (testimony) of the former member of the PIK board of directors George Figin testifies to the Cyprus court.
The scheme of the transaction is disclosed in the materials of the District Court of Nicosia, which RBC familiarized with.
According to lawyers, this scheme allowed NPFs to circumvent legislative restrictions on the management of pension money. A ban on concluding loan agreements at the expense of pension savings funds is contained in the Federal Law on the Activities of NPFs.
Mints structures tried to pay off the debt (again using pension money), but could not do it, follows from affidavit.
What was required
Figin’s testimony was sent to court in support of the claim for the arrest of Mints’s assets. The plaintiff in the case is the Cyprus company Rokiana. The testimony indicates that it belongs to the Liechtenstein HREF Foundation with ultimate beneficiary Sergei Gordeev. Rokiana has the same director and registration address with other Cypriot structures through which Gordeev controls PIK. The defendants are O1 and its Cypriot structure, Katalama Holdings.
The plaintiff asked to block the assets of Mints no less than 2.4 billion rubles. (damage from transactions with Mintsev companies was estimated at a similar amount). According to Vedomosti sources, as a result, Rokiana secured the arrest of the building of the former Bolshevik confectionery factory. The details of the dispute between the structures of Mints and Gordeev, as well as the fact of attracting pension money to transactions, were not previously disclosed. RBC sent a request to Simmons & Simmons, representing the interests of the Mintsev family in a London court.
The press service of PIK RBC said that the group “did not conclude agreements with the O1 group and did not provide them with funding,” and also did not file lawsuits against the Mintsev companies and did not initiate the arrest of their assets. Rokiana is not a member of PIK, the press service emphasized, the group is not related to shareholder transactions with third parties.
“NPFs and other institutional investors invest in PIK securities because it is a highly profitable market instrument with a low level of risk and high ratings. Judging by the quotes, within the specified time periods, NPFs could make a profit from a deal with shares of about 40%, and bonds bring a high and regular coupon income, ”PIK added.
Rokiana is on the perimeter of Gordeev’s business, according to an extract from the Cypriot registry. The company through the Plaza Holding is owned by the HREF Foundation, and, as follows from PIK data for 2017 (.pdf), it was indicated as one of the controlling persons of the group, slightly less than 60% of which is controlled by Gordeev.
A representative of Gordeev himself told RBC that in this case, his structures, not related to PIK, are a bona fide creditor who defends his legitimate interests in the courts. “We cannot comment on the progress of a private trial until its completion and are disappointed with the gross violation of the confidentiality of the trial,” he added.
What assets did Mints have
The main assets of Boris Mints’s O1 Group were Future Financial Group (owned by Future, Education, Social Development and Telecom-Union pension funds) and O1 Properties (owned Class A business centers in Moscow). O1 participated in transactions of the Moscow Banking Ring (Otkrytie FC, Binbank and Promsvyazbank, which were rehabilitated, as well as the IBC) and used the money of NPF Future, one of the largest Russian pension funds with 239 billion rubles. pension savings according to the data for the first half of 2019.
Recent years of work under the leadership of Mintsev have caused financial group losses. The net loss of FG Future for 2018 amounted to more than 34 billion rubles. NPFs for the same year posted 12.6% of losses on customer accounts. The financial difficulties for Mints’s business began the next year after the reorganization of three banks from the Moscow Ring, which, according to Vedomosti, Central Bank Chairman Elvira Nabiullina, was characterized by cross-transactions between banks, pension funds and other financial institutions.
Now the Future and O1 Properties are already beyond Mints’s control - assets were pledged under loans from the IBC and last year came under the control of the Cypriot Riverstretch Trading & Investment (final beneficiaries are unknown; RBC and Vedomosti wrote that it is associated with Region Region) .
Mints and his family left Russia in 2018. Courts with Gordeev’s structure are not the only proceedings in which O1 Group is involved. In the summer, at the suit of FC Otkrytie and Trust, the High Court of London blocked the assets of businessmen for $ 572 million.
How Mints turned out to be due to Gordeev
Figin’s testimony gives an idea of how O1's relationship with PIK was built and how Mintz was due to Gordeev’s structures. It follows from the document that the parties negotiated not only in person or through representatives, but also in messengers: through Telegram or WhatsApp they exchanged offers on the terms of the agreements. One of the most controversial issues of the case is related to the work of Telegram and the disappearance from the messenger of the important details of the negotiations.
The first agreement between the parties was signed in October 2016, “it was supposed to be the starting point for future transactions between the two groups,” said Figin. The agreement implied that PIK would receive temporary funding from O1 Group: the company would sell its shares to O1 with an obligation to repurchase them in the fall of 2019.
The shares were sold on the Moscow Exchange to “certain pension funds” (specific names are not mentioned in the testimony) of Mintsev at a market price from November 2, 2016 to September 12, 2017, follows from the document. As of December 31, 2017, Concord Asset Management Asset Management Company, which managed the money of the Future, accumulated 60 million shares (18.9 billion rubles, as can be estimated based on evidence). In the PIK group reporting for 2017, it was noted that EG Capital Partners (the old name of Concord) owns 8.5% of the shares.
In the spring of 2017, two holdings entered into a new agreement - this time on a loan for O1. On May 10, Rokiana issued a loan of 15% of the proceeds from the sale of shares, or 2.83 billion rubles, to the Cyprus structure of O1 Group - Katalama Holding. Katalama, as follows from the evidence, was supposed to pay this amount until November 1, 2019. Rokiana could initiate an early repayment, and O1 Group guaranteed the fulfillment of obligations.
The essence of the transaction could be to finance O1 at the expense of NPFs, covering this operation with the purchase of PIK shares on the balance of NPFs, believes Ivan Tertychny, partner of TA Legal Consulting. Money, in fact, was driven out through Gordeev’s structures, he notes: “And if the NPF, by law, could not lend to O1 directly, then the ban was bypassed with this scheme.”
How events developed
In accordance with the evidence submitted to the Cyprus court, on January 17, 2018 Dmitry Mints (the eldest son of Boris Mints) met with Gordeev in the office of the PIK group. He warned of the worsening financial position of the O1 Group. From this moment, almost two months of negotiations between the parties on the restructuring of obligations began, it follows from the words of Figin. He led them mainly with Dmitry and Alexander (middle son) Mints, as well as O1 lawyer Sergei Kazakov.
Under the terms of the agreement, the repurchase of shares from the NPF balance sheet would have necessitated the repayment of the entire debt of Mints structures to Gordeev’s structures. But Alexander Mints told Figin that O1 Group had problems with cash flows: he asked to reduce the amount of upcoming payments in cash and suggested that the plaintiff redeem shares at a lower price than they were purchased on the balance of the funds. The parties exchanged offers.
Gordeev’s structures first offered to pay in cash 1 billion rubles. and repayment of the remaining debt through the purchase of PIK bonds by the pension fund. Mintz proposed reducing cash payments to 280 million rubles. Figin in response asked to pay 500 million rubles.
As a result, Alexander Mintz proposed a non-cash option for repaying the debt - redeeming bonds by the fund and transferring the Nebo shopping center (estimated at 500 million rubles).
At the end of February, Figin, Gordeev, Dmitry and Alexander Mintsy met at the PIK office to discuss again the volume of cash payments. Two weeks later, the structures of Mintz and Gordeev agreed on the following conditions:
PIK Group will repurchase its own shares in three tranches in an accelerated time frame;
O1 Group in three tranches will redeem PIK group bonds for 21 billion rubles .;
after each purchase of bonds, O1 will pay one third of 350 million rubles.
As part of this option, Alexander Mintz proposed a formula in accordance with which PIK would receive an additional 2.5 billion rubles. net discounted income through redemption of bonds by Mints structures - this is how Mints intended to pay off most of their debt. 350 million rubles - remaining amount.
At the request of Dmitry Mints, the new agreement was confirmed by a message on Telegram or WhatsApp. On March 15, he sent a chat message to Telegram with Gordeev, which he confirmed the agreement, Figin claims, but it was sent in a secret chat - and subsequently destroyed (the messenger has the function of automatically deleting messages after the time set by the sender). Gordeev testified to the court, the document says. It is possible to prove that such a message was sent without confirmations at the technical level, says the partner of A2 Lawyers Mikhail Alexandrov: “In arbitration proceedings, when it comes to establishing facts, the most important thing is whether the court believes the testimony of a particular witness.”
“These transactions and arrangements are decisions of the former shareholder and management that have not been relevant to the activities of the fund since the end of 2018,” said RBC in the future press service, adding that the new management adheres to an “investment policy that excludes the participation of the fund in risky assets and transactions that do not meet all the requirements of the law. ”
What ended the negotiations
On March 19, 2018, PIK began the repurchase of its own shares. In parallel, on April 6, the developer placed the first issue of bonds for 7 billion rubles. It was bought by the Mintz NPF, it follows from the document. Three days later, Alexander Mints told Figin that the O1 Group could lose control of its pension funds in the next two weeks. “Alexander Mints asked PIK to buy back the remaining shares as soon as possible,” Figin said, although the buyback was originally planned for April 22 and May 14. PIK completed the repurchase of securities in May, affidavit said.
In 2016–2017, Boris Mints O1 Group agreed with PIK group owner Sergey Gordeev on a deal in which Mints non-government pension funds (NPFs) bought PIK shares for almost 19 billion rubles, and then the Cypriot businessman’s structure borrowed some of this money Gordeev’s company, affidavit (testimony) of the former member of the PIK board of directors George Figin testifies to the Cyprus court.
The scheme of the transaction is disclosed in the materials of the District Court of Nicosia, which RBC familiarized with.
According to lawyers, this scheme allowed NPFs to circumvent legislative restrictions on the management of pension money. A ban on concluding loan agreements at the expense of pension savings funds is contained in the Federal Law on the Activities of NPFs.
Mints structures tried to pay off the debt (again using pension money), but could not do it, follows from affidavit.
What was required
Figin’s testimony was sent to court in support of the claim for the arrest of Mints’s assets. The plaintiff in the case is the Cyprus company Rokiana. The testimony indicates that it belongs to the Liechtenstein HREF Foundation with ultimate beneficiary Sergei Gordeev. Rokiana has the same director and registration address with other Cypriot structures through which Gordeev controls PIK. The defendants are O1 and its Cypriot structure, Katalama Holdings.
The plaintiff asked to block the assets of Mints no less than 2.4 billion rubles. (damage from transactions with Mintsev companies was estimated at a similar amount). According to Vedomosti sources, as a result, Rokiana secured the arrest of the building of the former Bolshevik confectionery factory. The details of the dispute between the structures of Mints and Gordeev, as well as the fact of attracting pension money to transactions, were not previously disclosed. RBC sent a request to Simmons & Simmons, representing the interests of the Mintsev family in a London court.
The press service of PIK RBC said that the group “did not conclude agreements with the O1 group and did not provide them with funding,” and also did not file lawsuits against the Mintsev companies and did not initiate the arrest of their assets. Rokiana is not a member of PIK, the press service emphasized, the group is not related to shareholder transactions with third parties.
“NPFs and other institutional investors invest in PIK securities because it is a highly profitable market instrument with a low level of risk and high ratings. Judging by the quotes, within the specified time periods, NPFs could make a profit from a deal with shares of about 40%, and bonds bring a high and regular coupon income, ”PIK added.
Rokiana is on the perimeter of Gordeev’s business, according to an extract from the Cypriot registry. The company through the Plaza Holding is owned by the HREF Foundation, and, as follows from PIK data for 2017 (.pdf), it was indicated as one of the controlling persons of the group, slightly less than 60% of which is controlled by Gordeev.
A representative of Gordeev himself told RBC that in this case, his structures, not related to PIK, are a bona fide creditor who defends his legitimate interests in the courts. “We cannot comment on the progress of a private trial until its completion and are disappointed with the gross violation of the confidentiality of the trial,” he added.
What assets did Mints have
The main assets of Boris Mints’s O1 Group were Future Financial Group (owned by Future, Education, Social Development and Telecom-Union pension funds) and O1 Properties (owned Class A business centers in Moscow). O1 participated in transactions of the Moscow Banking Ring (Otkrytie FC, Binbank and Promsvyazbank, which were rehabilitated, as well as the IBC) and used the money of NPF Future, one of the largest Russian pension funds with 239 billion rubles. pension savings according to the data for the first half of 2019.
Recent years of work under the leadership of Mintsev have caused financial group losses. The net loss of FG Future for 2018 amounted to more than 34 billion rubles. NPFs for the same year posted 12.6% of losses on customer accounts. The financial difficulties for Mints’s business began the next year after the reorganization of three banks from the Moscow Ring, which, according to Vedomosti, Central Bank Chairman Elvira Nabiullina, was characterized by cross-transactions between banks, pension funds and other financial institutions.
Now the Future and O1 Properties are already beyond Mints’s control - assets were pledged under loans from the IBC and last year came under the control of the Cypriot Riverstretch Trading & Investment (final beneficiaries are unknown; RBC and Vedomosti wrote that it is associated with Region Region) .
Mints and his family left Russia in 2018. Courts with Gordeev’s structure are not the only proceedings in which O1 Group is involved. In the summer, at the suit of FC Otkrytie and Trust, the High Court of London blocked the assets of businessmen for $ 572 million.
How Mints turned out to be due to Gordeev
Figin’s testimony gives an idea of how O1's relationship with PIK was built and how Mintz was due to Gordeev’s structures. It follows from the document that the parties negotiated not only in person or through representatives, but also in messengers: through Telegram or WhatsApp they exchanged offers on the terms of the agreements. One of the most controversial issues of the case is related to the work of Telegram and the disappearance from the messenger of the important details of the negotiations.
The first agreement between the parties was signed in October 2016, “it was supposed to be the starting point for future transactions between the two groups,” said Figin. The agreement implied that PIK would receive temporary funding from O1 Group: the company would sell its shares to O1 with an obligation to repurchase them in the fall of 2019.
The shares were sold on the Moscow Exchange to “certain pension funds” (specific names are not mentioned in the testimony) of Mintsev at a market price from November 2, 2016 to September 12, 2017, follows from the document. As of December 31, 2017, Concord Asset Management Asset Management Company, which managed the money of the Future, accumulated 60 million shares (18.9 billion rubles, as can be estimated based on evidence). In the PIK group reporting for 2017, it was noted that EG Capital Partners (the old name of Concord) owns 8.5% of the shares.
In the spring of 2017, two holdings entered into a new agreement - this time on a loan for O1. On May 10, Rokiana issued a loan of 15% of the proceeds from the sale of shares, or 2.83 billion rubles, to the Cyprus structure of O1 Group - Katalama Holding. Katalama, as follows from the evidence, was supposed to pay this amount until November 1, 2019. Rokiana could initiate an early repayment, and O1 Group guaranteed the fulfillment of obligations.
The essence of the transaction could be to finance O1 at the expense of NPFs, covering this operation with the purchase of PIK shares on the balance of NPFs, believes Ivan Tertychny, partner of TA Legal Consulting. Money, in fact, was driven out through Gordeev’s structures, he notes: “And if the NPF, by law, could not lend to O1 directly, then the ban was bypassed with this scheme.”
How events developed
In accordance with the evidence submitted to the Cyprus court, on January 17, 2018 Dmitry Mints (the eldest son of Boris Mints) met with Gordeev in the office of the PIK group. He warned of the worsening financial position of the O1 Group. From this moment, almost two months of negotiations between the parties on the restructuring of obligations began, it follows from the words of Figin. He led them mainly with Dmitry and Alexander (middle son) Mints, as well as O1 lawyer Sergei Kazakov.
Under the terms of the agreement, the repurchase of shares from the NPF balance sheet would have necessitated the repayment of the entire debt of Mints structures to Gordeev’s structures. But Alexander Mints told Figin that O1 Group had problems with cash flows: he asked to reduce the amount of upcoming payments in cash and suggested that the plaintiff redeem shares at a lower price than they were purchased on the balance of the funds. The parties exchanged offers.
Gordeev’s structures first offered to pay in cash 1 billion rubles. and repayment of the remaining debt through the purchase of PIK bonds by the pension fund. Mintz proposed reducing cash payments to 280 million rubles. Figin in response asked to pay 500 million rubles.
As a result, Alexander Mintz proposed a non-cash option for repaying the debt - redeeming bonds by the fund and transferring the Nebo shopping center (estimated at 500 million rubles).
At the end of February, Figin, Gordeev, Dmitry and Alexander Mintsy met at the PIK office to discuss again the volume of cash payments. Two weeks later, the structures of Mintz and Gordeev agreed on the following conditions:
PIK Group will repurchase its own shares in three tranches in an accelerated time frame;
O1 Group in three tranches will redeem PIK group bonds for 21 billion rubles .;
after each purchase of bonds, O1 will pay one third of 350 million rubles.
As part of this option, Alexander Mintz proposed a formula in accordance with which PIK would receive an additional 2.5 billion rubles. net discounted income through redemption of bonds by Mints structures - this is how Mints intended to pay off most of their debt. 350 million rubles - remaining amount.
At the request of Dmitry Mints, the new agreement was confirmed by a message on Telegram or WhatsApp. On March 15, he sent a chat message to Telegram with Gordeev, which he confirmed the agreement, Figin claims, but it was sent in a secret chat - and subsequently destroyed (the messenger has the function of automatically deleting messages after the time set by the sender). Gordeev testified to the court, the document says. It is possible to prove that such a message was sent without confirmations at the technical level, says the partner of A2 Lawyers Mikhail Alexandrov: “In arbitration proceedings, when it comes to establishing facts, the most important thing is whether the court believes the testimony of a particular witness.”
“These transactions and arrangements are decisions of the former shareholder and management that have not been relevant to the activities of the fund since the end of 2018,” said RBC in the future press service, adding that the new management adheres to an “investment policy that excludes the participation of the fund in risky assets and transactions that do not meet all the requirements of the law. ”
What ended the negotiations
On March 19, 2018, PIK began the repurchase of its own shares. In parallel, on April 6, the developer placed the first issue of bonds for 7 billion rubles. It was bought by the Mintz NPF, it follows from the document. Three days later, Alexander Mints told Figin that the O1 Group could lose control of its pension funds in the next two weeks. “Alexander Mints asked PIK to buy back the remaining shares as soon as possible,” Figin said, although the buyback was originally planned for April 22 and May 14. PIK completed the repurchase of securities in May, affidavit said.
The repurchase of PIK shares from the NPF balance sheet in the second tranche would have obliged Mintsev to transfer two-thirds of 350 million rubles, but their plan was to pay 350 million rubles. in one tranche after the completion of the repurchase of all shares - that’s how Dmitry Mints interpreted the contract, passed it to his younger brother Figin. And on April 17, he said that Mints’s structures could not buy out the remaining issues of PIK bonds, the testimony says. PIK nevertheless placed its last two bond issues at the end of June, but to a lesser extent (a total of 10 billion rubles). AP Mints, as follows from the evidence, did not buy the paper.
At a meeting in Milan on April 22, Gordeev and Dmitry Mints agreed on new conditions for repaying debt, which, thanks to the fact that NPFs bought out one tranche of bonds, fell to 1.7 billion rubles. Mints were supposed to pay them quarterly at 431 million rubles, but the first payment - in July - did not take place, as did payments in October. In September, Gordeev and Mintz met in London, but did not agree on a new scheme, it follows from Figin’s testimony. Gordeev’s structure appealed to the Cyprus court.
Was there a conflict of interest
Lawyers see signs of conflict of interest in O1 actions. “Assets came to the balance of APFs, but they were bought in a conflict of interest with the intention of circumventing the law and lending to O1,” says Tertychny. - Could NPFs buy assets better in this situation, with greater profitability and lower risk level? Of course he could. But he could be mistaken and buy assets worse. "
The possibility of a conflict of interest, if we consider the entire process as a set of related transactions, does not exclude Aleksandrov. “To do this, you need to understand personally who made the decisions,” he says.
Secret Court
As follows from Figin’s testimony, filed with a Cyprus court in November 2018, the plaintiff was going to appeal to the International Commercial Arbitration at the Russian Chamber of Commerce and Industry (ICAC). Information on the consideration of cases in it is not available.
At a meeting in Milan on April 22, Gordeev and Dmitry Mints agreed on new conditions for repaying debt, which, thanks to the fact that NPFs bought out one tranche of bonds, fell to 1.7 billion rubles. Mints were supposed to pay them quarterly at 431 million rubles, but the first payment - in July - did not take place, as did payments in October. In September, Gordeev and Mintz met in London, but did not agree on a new scheme, it follows from Figin’s testimony. Gordeev’s structure appealed to the Cyprus court.
Was there a conflict of interest
Lawyers see signs of conflict of interest in O1 actions. “Assets came to the balance of APFs, but they were bought in a conflict of interest with the intention of circumventing the law and lending to O1,” says Tertychny. - Could NPFs buy assets better in this situation, with greater profitability and lower risk level? Of course he could. But he could be mistaken and buy assets worse. "
The possibility of a conflict of interest, if we consider the entire process as a set of related transactions, does not exclude Aleksandrov. “To do this, you need to understand personally who made the decisions,” he says.
Secret Court
As follows from Figin’s testimony, filed with a Cyprus court in November 2018, the plaintiff was going to appeal to the International Commercial Arbitration at the Russian Chamber of Commerce and Industry (ICAC). Information on the consideration of cases in it is not available.
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