Top officials invited to The Hague Tribunal to testify in $12 bln case “Sergei Pugachev VS Russia”

President Putin and Senator Pugachev

Audit Chamber head Aleksei Kudrin ( Deputy Prime Minister of Russia from May 2000 to March 2004 and from September 2007 to September 2011 ) , chairman of Gazprom’s board of directors Viktor Zubkov ( Prime Minister of Russia, Vice Prime Minister from May 2008 to May 2012 ) and investment banker Oksana Reinhardt have been invited to testify in a case filed by former billionaire Sergei Pugachev, once a member of President Vladimir Putin’s inner circle, against the Russian Federation in Paris. The legal battle began when ex-senator Pugachev, who left Russian in 2011, demanded $12 billion from Russia for allegedly expropriating his assets. The lengthy proceedings have finally reached the decisive phase.

Mr Pugachev is represented by “Betto Perben Pradel Filhol

  • The hearing will take place between 12 and 17 November. Kudrin, Zubkov and Reinhardt have been asked to testify in person; and they may be cross-examined by the judge, as well as both the prosecution and the defense, according to two sources who spoke with The Bell. Pugachev and those invited to testify either declined to comment or didn’t respond to The Bell’s requests for comment.
  • Kudrin and Zubkov have been asked to testify in relation to plans from the early 2000s to build an elite hotel on Red Square. Companies close to Pugachev signed $300 worth of contracts with a firm created specially for the project and, in return, Pugachev was supposed to get a stake in the finished complex. Instead, in 2007, construction was frozen, and ownership of the site transferred to the Federal Security Service. Pugachev successfully sued the Ministry of Finance for $26.2 million in 2011, but this did not cover all of his losses.
Sergei Pugachev and Vladimir Putin
  • It seems likely that Reinhardt has been invited to talk about Mezhprombank, which was founded by Pugachev but lost its license in 2010 (when Pugachev no longer owned the bank). Reinhardt, who was an executive at Japanese bank Nomura at the time, has once before provided written legal testimony — in 2012 — relating to Pugachev and Mezhprombank’s loss of its banking license, and she might have a lot of interesting things to say, one source told The Bell.
  • Kudrin, Zubkov and Reinhardt received invitations rather than a formal summons, so they will not face any sanction should they chose not to comply. But if they are no-shows this could also influence the court’s decision, according to a lawyer at a European law firm who spoke with The Bell.
  • Lawsuits have flown between Russia and Pugachev for almost a decade, and have led to legal battles in several different countries. In the Hague, Pugachev is accusing Russia of expropriating four groups of assets that used to belong to him: shipbuilding companies, Yenisei Industrial Company, the Red Square development project, and land near Moscow. A criminal case has been filed in Russia against Pugachev in which he is accused of embezzlement. Finally, Russia’s Deposit Insurance Agency is using a London court to helpy it locate and seize Pugachev’s global assets. One former top executive from the Deposit Insurance Agency, who has a long-standing disagreement with Pugachev, was the subject of The Bell’s recent investigation into the FSB and money-laundering.

Why the world should care. The story of Pugachev is one of the most significant corporate conflicts in recent Russian history. While lawsuits heard abroad like this often shed fascinating light on how business is really done in Russia, unfortunately this will not be the case with Pugachev as the Russian Federation’s defense team has succeeded in ensuring proceedings take place behind closed doors. Any information that does emerge, however, will be worth watching.

Anastasia Stognei

21/10/2019 The Bell

The Rise and Fall of an FSB-Run Money Laundering Empire

The Bell and investigative website The Project looked into an FSB backed financial empire, and why it all fell apart.

As the head of the banking oversight department at Russia’s domestic intelligence agency, Colonel Kyrill Cherkalin wielded immense power: With a click of his fingers, he could cause bankruptcy or give a zombie bank a new lease of life. But then it all went wrong: earlier this year he was arrested on fraud charges and 12 billion rubles ($180 million) in cash and jewelry was found in his apartment and other places linked with him and his colleagues. The Bell and investigative website The Project looked into how Cherkalin became a key figure in the money laundering business, how he ran his financial empire, and why it all fell apart.

For a meeting at Moscow’s Vogue cafe with banker Alexander Zheleznyak in summer 2014, Cherkalin arrived in a chauffeured Range Rover wearing an expensive Rolex watch. At that moment, Zheleznyak was co-owner of Life, a large financial holding. Cherkalin immediately got down to business, suggesting that a retired officer from the Federal Security Services (FSB) be made vice-president at Probiznesbank (one of Life’s main assets) with an annual salary of $120,000, a private office, personal driver and assistant.

But this was a mere detail. Zheleznyak had already received the main demand: cede a large stake in Life to a company that will share its income with senior officials from the FSB and the Prosecutor General’s Office.

These details come from a statement from Zheleznyak, acquired by The Bell and The Project, which he gave under oath this year in the United States. His testimony is set to be used in legal proceedings that Life’s former owners have launched in the U.S. and Europe.

For the co-owners of Life, childhood friends Zheleznyak and Sergei Leontiev, dealings with Cherkalin ended very badly. After the meeting, the partners agreed to take part in the protection racket involving Probiznesbank, but they did not hand over shares in all their businesses. Later, their banking license were revoked by the regulator, criminal cases were started against them, and both fled Russia. The Central Bank believes that Life was engaged in illegal financial activity, while Zheleznyak insists they went bankrupt because of pressure from the authorities.

The tale of Life is just one in which Cherkalin, 38, and his FSB colleagues played starring roles. Cherkalin’s department at the FSB oversees the financial sector (banks, pension funds and insurance companies) and is one of the most powerful branches of the notorious Department K, which is responsible for economic security.

The two men arrested at the same time as Cherkalin were his former boss, Dmitry Frolov, and the more junior Andrei Vasiliev. While Cherkalin was still in his post when he was detained, Frolov and Vasiliev were dismissed several years earlier, after newspaper Novaya Gazeta published details of real estate allegedly owned by them on the shore of Lake Maggiore in Switzerland and Italy.

Protection racket

“Brilliant, very smart, well-versed in the field” is how Cherkalin was described by one major Russian banker. “But these are business guys, that’s what their [whole] generation is like.”

These sorts of commercially-minded FSB officers rose to power in the early 2000s at the same time as Russia’s money laundering business was booming, according to a source close to the FSB familiar with Cherkalin and his colleagues. “You know the principle: If you realize it’s useless to fight something, you have to lead it,” he explained.

Department K at the FSB had two main ways of interacting with banks: either they demanded a percentage of all withdrawals into cash (up to 0.2% of the transaction), or they took bribes and payoffs for specific violations, said a source close to the FSB.

To ensure the percentage was paid, whole protection rackets were established. This usually took the form of a retired FSB officer being given a position at the bank’s security team from where he could monitor cash flows. The ex-officer was also responsible for collecting information about the market. This scheme exactly matches what Zheleznyak said in his testimony about the ex-FSB officer that Cherkalin suggested employing at Probiznesbank.

The FSB did not respond to a request for comment.

At the end of May 2019, Cherkalin was visited in prison by prison monitors, who were surprised to see him wearing an expensive Givenchy tracksuit. Cherkalin’s cell was decorated with so many icons that some newspapers compared it to an Orthodox chapel.

Milking the money launderers

The system over which Cherkalin ruled was built up over several years, and was familiar to many bankers, particularly those involved in the money laundering business.

Mikhail Zavertyaev, a former со-owner and deputy chairman of Intelfinance bank, which collapsed in 2008, is one of those bankers. His relationship with Department K began in 2007 when he met Yevgeny Dvoskin, a mysterious figure described as a key player in the money laundering market with close ties to both the FSB and criminal gangs.

In an interview, Zavertyaev recalled how, in December 2007, he caught his chief accountant trying to arrange a credit line to a front company supposedly linked to Dvoskin. The following day, Dvoskin and his bodyguard, who spoke like a mafia enforcer, arrived at his offices in an ambulance. “Dvoskin came up to me, hit me in the ear, and I struck him with my elbow,” Zavertyaev said of the encounter. “He dropped to the floor and my first thought was that he had fallen on top of my suitcase with documents and that he would grab the suitcase and flee. I bent down to move the suitcase, he hit me with a pistol and I lost consciousness.”

Dvoskin has always maintained that Zavertyaev is a liar and, in court, argued that he couldn’t have assaulted Zavertyaev as he had been giving evidence in another criminal case at the moment the attack was supposed to have occurred.

Zavertyaev said the encounter did not end with his hospitalization after the fight. His wife’s car was torched shortly after and, over the next two months, about 11.7 billion rubles was extracted from Intelfinance. Still trying to get the money back, half a year later, Zavertyaev said he met Frolov, Cherkalin and Sergei Smirnov, deputy head of the FSB, at the Palazzo Ducale, a plush restaurant in downtown Moscow.

According to Zavertyaev, his dining partners were courteous, insisting he try the salad. From the conversation, he said he realized they were well acquainted with Dvoskin and were trying to understand what evidence he had of Dvoskin’s visit. They also wanted to convince him to stop trying to retrieve Intelfinance’s lost money. Eventually, he was offered financial compensation, which he said he refused. All Zavertyaev’s subsequent efforts to use the courts to get the money back have come to nothing.

Dvoskin was under the protection of the FSB, according to two sources close to Russian security agencies. When asked about his connections to the FSB, Dvoskin hung up the phone.

Cooperation between the FSB and banks carrying out money laundering was apparently extensive. The FSB “took the money launderers under its wing and made them its informers,” one source close to the security agency told The Bell and The Project. One of these informers he named as Aleksei Kulikov, the former co-owner of a small bank, Kreditimpeksbank, who is currently serving a 9-year prison sentence for fraud.

A source close to the FSB recalled that, at first glance, Kreditimpeksbank’s offices in the mid 2000s never looked like much: a half-empty banking hall, about 20 shabby rooms for staff and a gloomy looking security guard. But, according to the source, the bank was a big player on the money laundering market and the company’s security team was headed by a former Department K officer who received up to 3% commission on all financial transactions. Kreditimpeksbank had several run-ins with the Central Bank, but, each time, the FSB was able to help resolve the problem. According to the source, Kreditimpeksbank had several large clients with access to state funds and used fake contracts to move large amounts to construction firms in Turkey and Malta.

When Kreditimpeksbank was shut down by the regulator, it was estimated it had a 229-million-ruble black hole in its balance sheet and was conducting 13.5 billion rubles ($200 million) worth of suspicious deals every year. About 2 million rubles in cash was found in Kulikov’s apartment during a police search.

Mysterious disappearance

Cherkalin’s influence was not restricted to banks in the money laundering game. He was also in contact with both the heads of the major Russian banks and the senior officials running the state’s financial regulatory bodies.

Valery Miroshnikov, the former head of Russia’s Deposit Insurance Agency (DIA), which guarantees deposits in the case of bankruptcy, is currently a witness in the case against Cherkalin. Immediately after Cherkalin’s arrest, Miroshnikov left Russia (according to friends he first went to Australia, and then to Germany for healthcare reasons) — and has never returned. Two and a half months later, the DIA announced his resignation without giving a reason.

There are few details about the link between Cherkalin and Miroshnikov, but one source called them “good friends” and news outlet RBC has reported that investigators are looking into messages the two men exchanged. Miroshnikov is also alleged to have been involved in extortion. The former owner of Mezhprombank, Sergei Pugachev, was allegedly approached in 2011 by two men, one of whom worked for Miroshnikov, with a simple message: hand over $350 million or risk your own life and that of your family.

Pugachev’s lawyers have been telling this story in court since 2014 when the DIA began a legal drive to track down his assets and hold him liable for Mezhprombank’s debts. The Bell and The Project were unable to contact Miroshnikov, but he has previously denied authorizing the intimidation of Pugachev.

The DIA’s task is to manage the assets of banks that have collapsed or been shut down by the regulator, paying out deposits and seeking to recover assets. Over the 15 years of its existence, it has received more than 1 trillion rubles ($30 billion) from the Central Bank.

FSB infighting?

Many have pointed out the big gap between the severity of the allegations levelled at Cherkalin, and the charges on which they were formally arrested. Officially, Cherkalin and his colleagues are accused of stealing assets worth 499 million rubles ($7.7 million) from Moscow developer Sergei Glyadelkin, and Cherkalin is accused of taking a bribe worth 50 million rubles ($770,000).

Glyadelkin, who appears successfully to have stood up to the FSB, is not widely known, but has had a long career in Moscow. Until 2005, he was employed by a state company that distributed plots in downtown Moscow to developers and builders. But he also worked with Igor Chaika, the son of Prosecutor-General Yuri Chaika, and in Fall 2013, they set-up Techno R-Region, a waste management company. The Prosecutor General’s Office did not answer questions from The Bell about its relationship with Glyadelkin.

One former senior security officer said that the 12 billion rubles found during the detention of Cherkalin and his colleagues indicated “someone inside the intelligence services knew such a payment was in the offing.” The raid was deliberately planned to catch them with the cash, he said. “To keep such a sum of money for a long time is pointless; it looks like they were stockpiling it before selling it or sending it abroad.”

When asked why Cherkalin was arrested now, a businessman with good connections in the security services replied simply: “infighting” A major Russian banker, who knew both Cherkalin and Frolov, agrees. FSB director Alexander Bortnikov is 68 and the prospect of his retirement is fueling bitter battles among possible successors, according to another source. With the FSB the most powerful institution in modern Russia, victory means nothing short of gaining total control over the country.

Sergei Pugachev, PhD., 56 years old: international investor, public person, politician, MP (senator from 2001 to 2011), citizen of France.

Sergei Pugachev, PhD., 56 years old: international investor, public person, politician, MP (senator from 2001 to 2011), citizen of France.

Born in the USSR. After the collapse of the Soviet Union Sergei Pugachev devoted himself to attracting investments to Russia. In the beginning of the 1990s he and his family settled in France.

He founded the very first private bank in Leningrad and was also the founder of one of the largest private investment companies in Russia: the United Industrial Corporation (“OPK”).

During the 1990s he was part of the inner circle of the first President of Russia, Boris Yeltsin, and in 1996 led Yeltsin’s electoral team to victory.

In 1999 Sergei Pugachev suggested that President Yeltsin appoint as Prime Minister one Vladimir Putin, a perfectly unknown character back then. Later on, when Vladimir Putin ran for president, Pugachev acted as director of Putin’s electoral campaign.

After Putin’s victory in the presidential election of 2000, Pugachev remained for many years President Putin’s chief advisor, while staying largely involved in the international investment business.

Pugachev was a member of the Senate from 2001 to 2011 and played a prominent part in Russian politics, adhering to ultra-liberal views on the economic and social organisation of the Russian State.

Acting as vice-chairman of the Russian Union of Industrialists and Entrepreneurs (RSPP) since the year 2000, he advised Vladimir Putin to reform the Union in view of establishing a dialogue between the President of Russia and the owners of Russia’s major private companies. Pugachev also organised the first official meetings between President Putin and the Russian oligarchs. Incidentally, it was after one such meeting that a conflict arose between Vladimir Putin and Mikhail Khodorkovsky (YUKOS).

In 2011, due to broadening political divergence with Vladimir Putin, Sergei Pugachev was compelled to resign from all State duties and took the decision to liquidate all his Russian assets.

Pugachev had been investing in the Russian economy from the early 1990s and by 2010 he was the sole owner of the investment company United Industrial Corporation (“OPK”), whose overall assets were worth 15 billion US dollars.

Sergei Pugachev practically succeeded in resurrecting the Russian shipbuilding industry, not least by building a mega-shipyard in Saint-Petersburg, which comprised dozens of high-tech shipbuilding and machine-building companies. Pugachev’s shipbuilding corporation built both civil and military vessels, including: ice-class ships used for the development of fossil fuel deposits in the Artic region and offshore; naval ships for India and China; supply vessels for Norway; the world’s largest nuclear icebreaker; the world’s first floating nuclear power plant. For the first time since the Soviet years (1970s) the building of icebreakers in Russia had reached an industrial scale.

It was also on Sergei Pugachev’s personal initiative that his shipyards began to build the French Mistral class helicopter carriers. It was planned to have twenty ships of that class built.

In 2010, following increased pressure on the part of Vladimir Putin, Sergei Pugachev had to sell 100 percent of his share in the shipbuilding assets to the State, at a notably devalued price. At that moment, according to different valuations, Pugachev’s shipbuilding assets were worth c. 7 billion dollars.

Russia, however, failed to stand by its contractual obligations and expropriated the above-mentioned assets with no compensation.

Later Vladimir Putin entrusted the management of the corporation to his close aide, Vice Prime Minister Igor Sechin (who had previously conducted the expropriation of YUKOS).

A large share of Pugachev’s investment activities in Russia pertained to property development (acquiring land and building luxury real estate in Moscow and suburbs as well as in the centre of Petersburg). Several billion dollars were thus invested by Pugachev into purchasing land, in view of carrying out development projects.

The central jewel in this crown of luxury property in the Russian Federation was meant to be a 76.000 sq.m. 5-star hotel on Moscow’s Red Square, opposite the Kremlin. The architectural project was authored by French architect Jean-Michel Wilmotte. President Putin had personally asked Pugachev to undertake the building of a top-luxury hotel on the Red Square.

In the historical centre of Saint-Petersburg, some five minutes away from the Ermitage, about 70 hectares of land were reserved on the bank of the Neva for the building of luxury real estate properties totalling over 4 million sq.m. of floor space.

In order to free the land for this project, Pugachev transferred most of the shipbuilding workshops from the territory of the Baltiysky shipyard to the new mega-shipyard he build in the suburbs of Petersburg, on the former location of Putilov’s historic plants. The entire project was supervised by the then governor of Petersburg Valentina Matvienko (currently speaker of the Russian Parliament), who officially approved a municipal programme aimed at transferring industrial sites from the historical centre of the city to the outskirts. The project was named “New Venice” and the city council even built a metro station next to the former Baltiysky shipyard territory.

Pugachev was also the biggest landowner in the unique and elite district of the Moscow area, on the banks of the Moskva river, where many of the wealthiest people in Russia had some property. This is also the area where Novo-Ogarevo, Vladimir Putin’s residence, is located.

After Pugachev’s conflict with Putin began, all of these projects were either cancelled, or expropriated.

During the 90s Pugachev had invested into the prospection and development of a coal deposit in South Siberia.

By the mid-2000, he had become the owner of the world’s largest deposit of coking coal, a type of fossil fuel widely used in metallurgy.

It was subsequently decided to build a 402 km railroad in the area. This was the biggest railway construction project since the “BAM”, the Baikal-Amur railway. Boris Gryzlov, president of “United Russia”, the party of power, volunteered to supervise the construction.

Pugachev signed a contract with the Japanese corporation Mitsui in order to attract investments and jointly develop the project. Mitsui was thus able to acquire 49% of the Enissei Industrial Company (EPK), which was running the coke production.

By 2010 the capitalisation of EPK reached 5 billion US dollars.

At the end of 2012, however, upon an express order of President Putin, the coal production licence granted to the Enissei Industrial Company was illegally withdrawn. The company was plundered and destroyed, and one and a half billion dollars, earmarked for the development of the coal deposit, were stolen from the company’s bank account.

This is how most of Sergei Pugachev’s assets in the territory of the Russian Federation were expropriated to the benefit of Putin’s inner circle.

For several years Pugachev attempted to challenge in court the illegal actions of the Russian government, and was eventually drawn into an endless judicial intrigue in Russia. The outcome of these legal claims was of course predetermined: Putin had personally supervised the expropriation of Pugachev’s assets and had repeatedly warned Pugachev in public pronouncements of the risks the latter was taking if he continued to fight for his stolen assets.

After Pugachev had announced to Putin that he had no choice but to file a claim before The Hague International Court, the pressure upon him increased manyfold. Some of the top managers of Pugachev’s former companies were illegally sentenced to prison.

A criminal case was fabricated against Pugachev and an international arrest warrant was issued by Interpol. Interpol eventually recognised, however, that the case launched against Pugachev was politically motivated, and officially rejected Russia’s request.

By personal order of President Putin the Deposit Insurance Agency (DIA) was appointed to represent the interests of the Russian Federation in the numerous lawsuits against Pugachev worldwide, so as to divert Pugachev’s attention and financial means from The Hague claim.

But Putin did not stop at destroying Pugachev’s economic empire in Russia. He also tried to reach Pugachev’s foreign assets, turning to his advantage Russia’s international connections, having recourse to international organisations, treaties and agreements, and abusing the law.

Specifically, by invoking the agreement on mutual legal assistance signed between Switzerland and the Russian Federation, Russia succeeded in 2013 in freezing Pugachev’s funds deposited in Swiss banks. These funds being set aside for the development of Pugachev’s foreign-based assets, this led to the bankruptcy of a number of Pugachev’s companies outside Russia (among which OPK Biotech, a high-tech American company manufacturing artificial blood of a universal kind, one that did not need any special storage conditions and was suitable for all blood groups; the company had a capitalisation worth 3,5 billion dollars and had patented over 600 inventions.)

The French delicatessen brand Hédiard, also owned by Pugachev, went bankrupt for the same reasons. Hédiard was established in 1854 and, having 320 boutiques worldwide, has been recognised as part of the French heritage: it belonged the Comité Colbert, on the same footing with the Opéra National de Paris, Chanel, Christian Dior or Givenchy.

This also caused the bankruptcy of the Swiss watch-making company owned by Pugachev, which was manufacturing unique watch movements under the Polet brand. Back in Soviet times this legendary Soviet brand (also owned by Pugachev) rivalled Rolex in terms of sales volume. It had become as recognisable a symbol of the USSR as the Bolshoi Theatre, Palekh boxes or caviar.

The Russian State has persecuted Pugachev and is still using disgraceful methods to do so, from legal abuse in foreign courts to assassination attempts. Several attempts on Sergei Pugachev’s life have been made since 2010, and in 2015 SO15, the anti-terrorist section of Scotland Yard, found an explosive device under one of his cars. Thank to efficient collaboration the British and the French special services were able to thwart this attempt.

In 2013, Pugachev had a personal meeting with Vladimir Putin and was able to discuss a potential amicable settlement between the parties, conditional upon the Russian Federation’s paying a compensation for Pugachev’s expropriated assets.

Putin agreed to compensate the losses; lengthy negotiations began, for which Vladimir Putin appointed one of his close aides, a general in the special services, as his official representative.

After one year and a half of talks Vladimir Putin said: “Let him go to court. If he wins, we’ll pay up” (sic).

On 21 September 2015 Sergei Pugachev filed a 12 billion-dollar claim before the Hague International Court against the Russian Federation, based on the international Agreement on Mutual Encouragement and Protection of Investments signed between France and Russia on 4 July 1989.

In 2016 the President of the Hague Court appointed the arbitral tribunal, composed of Eduardo Zuleta Jaramillo (Presiding Arbitrator) and Prof. Thomas Clay and Bernardo Cremades (Arbitrators).

On 10 November 2016 the arbitration tribunal ordered that for reasons of Sergei Pugachev’s personal safety the hearings take place in Paris, instead of The Hague.

The Arbitration tribunal’s first public hearing took place on 13 February 2017 in Paris, on ICC premises.

Pugachev’s struggle against Putin and the Russian state to recover his stolen assets is a unique example of one man’s fortitude in single-handedly resisting an entire state.

According to Pugachev this has already become a full-time job for him. Yet he has trust in his “business model”. He is managing dozens of lawyers worldwide and regularly wins in court against the Russian state, which motivates him to keep on fighting.

In the course of those past years he has faced betrayal, duplicity and baseness from people who once were close to him. He is convinced that Putin holds nothing sacred. The Russians have suborned the mother of his three minor children (aged ten, nine and six), who currently lives in his luxury mansion in Chelsea, London’s most select area. Alexandra Tolstoy-Miloslavsky, Pugachev’s former partner and mother of his children, is kept by the Russian state and, in line with her ensuing obligations, was prepared to provide a false testimony in Pugachev’s case against Russia. When she left France she took the children with her, never to return. Sergei Pugachev has not seen his children, however briefly, for over three years. All these years the children practically have been kept hostage.

Pugachev insists that this legal cause is not his alone; it is neither a personal revenge taken on Putin, nor an attempt to gain money and to get back to the life he once had. He is convinced that this case is to be fought between France and Russia, and that it is about forcing Russia to fulfil its international obligations. All of the foreign companies present in Russia are closely following this case. Pugachev further believes that this is one more area in which the recently elected President Macron can deploy diplomatic action, given that he is currently trying to construct a relationship with the authoritarian leader of Russia.

This is one more opportunity to put an end to Putin’s aggression and impunity on the international arena, not only relatively to Ukraine and other Russian-occupied territories, but more largely by bringing Vladimir Putin before the UN International Court of Justice in The Hague.

This is one more opportunity to remind the world of the validity of international law.

Furthermore, it is a unique opportunity for President Macron to show the citizens of France that they can feel safe and protected wherever they be, in whatever situation, and that they can reasonably be proud of being citizens of the French Republic.

In one of his interviews Pugachev once said that had he been a citizen of the United States, and not of France, Trump would have long ago forced Putin to pay him a compensation for the expropriated assets.

When asked how he intends to use the 12 billion that the Russian Federation is going to pay him, Sergei Pugachev answers that he intends to allocate the major part to charity projects in the field of education, new medical technologies, and also to establish funds to help children deprived of parents.

On 17 March 2017 the Russian Federation requested from the arbitration tribunal that the hearings in the Pugachev case be confidential. This is contrary to the Rules of The Hague Court, yet the Tribunal issued a Procedural Order ordering partial restriction of information disclosure.

 

The next hearing is due to take place from 12 to 17 November 2019 in Paris.

Till Putin Do Us Part: Oligarch’s Ex-Wife Is Taking On Russia

The ex-wife of an exiled oligarch is at the center of his court battle with the Russian state, with each side accusing her of working for the other.

Galina Arkhipova is the former spouse of Sergei Pugachev, once an ally of Russian President Vladimir Putin. Pugachev is accused of siphoning more than $1 billion from a bailout of International Industrial Bank, which he co-founded. The ex-senator denies the allegations, which he calls part of a politically motivated campaign to confiscate his wealth.

The Deposit Insurance Agency, a Russian agency in charge of liquidating the bank, was in a London court this month to try to force Arkhipova to turn over paperwork in the case. The DIA accuses the divorcees of working together to protect Pugachev’s assets, an allegation he said was “an exceptional lie” in an email sent to Bloomberg.

In its filing to the London High Court, the DIA accuses Pugachev of asking her to make claims to frustrate confiscation orders. Pugachev, who now lives in France, makes his own allegation: that Arkhipova is acting in “collusion” with the DIA to “distract” his attention from his own lawsuit in Russia over its seizure of his assets. A legal representative for Pugachev repeated the allegation in email to Bloomberg.

Neither Pugachev nor his wife, Galina Arkhipova, were in the London court or had attorneys there.

The DIA and its attorneys at Hogan Lovells declined to comment on the case. Representatives for Arkhipova didn’t respond to emails requesting comment.

The London case — set for trial in early 2020 — revolves around a mansion in London’s upscale Chelsea neighborhood that he bought for 7.9 million pounds ($10 million) in 2011.

Five years ago, a London court froze his assets, beginning a global battle by the Russian state to claim what it says it’s owed. Arkhipova filed for divorce that same year, and started claiming her interests in some of their possessions.

The DIA is questioning whether the house was purchased while the couple was still married, and last week, its attorneys got an order forcing Arkhipova to hand over documents that could prove the timing of the end of the marriage.

The agency points to a July 2014 statement in a Moscow divorce court where Arkhipova said that she hadn’t had lived with Pugachev since 2002.

The DIA says Arkhipova is making only “desultory” attempts to disclose documents, which she says were lost when laptops were seized by Russian authorities in 2016.

Eddie Spence