Two Russian brothers went up against the “values” of the EU, the pillars of society, corruption, lies, criminality — and despite all these odds and obstacles, were finally proved in the right by a court of Law in Cyprus
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Editor's note: We recently argued that dragging WADA to court to seek damages for exaggerated and false anti-doping allegations would be a waste of time — after all, Russia would "never get a fair day in court". We're not so sure anymore. As the story below shows, a determined Russian always gets justice. Paul Goncharoff is Chairman, Disciplinary Committee, National Association of Corporate Directors, Russia.
Voltaire’s Candide may be one of the most potent satires of all times. When Voltaire penned that our world is “the best of all possible worlds”, he was mocking the belief that the universe is in a state of unshakable harmony that only gives the impression of chaos. He felt this was just hypocritical self-delusion.
This brings me to the “Candide” of our story, the two Russian Zakharov brothers (Alexander & Vladimir) who went up against the “values” of the EU, the pillars of society, corruption, lies, criminality — and despite all these odds and obstacles, were finally proved in the right by a court of Law in Cyprus. This is good news; the bad news is through the lengthy and costly process, and to maintain the service integrity of their business they had to divest what was targeted to be stolen from them in the first place.
The story began in the perestroika era of the 1990’s in Russia. Vladimir and Alexander’s father founded the first secure gated residential community called “Rosinka” for foreigners and embassy families in Russia. Walking through it one could imagine it was in the suburbs of Connecticut. Success at that time in Russia’s re-emergence was a double-edged sword, it was both celebrated and it made you a target for criminals. The father decided that it would be wise to securely place ownership of his “Rosinka” business in an offshore trust on Cyprus where the laws were established and not still evolving (as they were in Russia at that time). This he felt would secure his legacy for his sons and protect the underlying assets. He hired the well known, and by all reports “reputable” international company Andreas Neocleous & Co., to act as lawyers, serving the fiduciary interests of the Zakharovs and in particular by providing the nominee directors for the trustee-company “Providencia Holding Limited”.
As an expat living in Moscow I was familiar with the gated community, and followed since July 2011 the drama of what was happening there in the Russian language media, and among expats who are no strangers to the vagaries of perception or hypocrisy. In short, the two brothers were targeted to be raided, taken over and their assets stolen. Some shady criminal cabal in Russia did not hatch this scheme; they were targeted by “reputable” politicians, bureaucrats and lawyers nestled on EU’s Cyprus. These pillars of responsible “values” took active measures to seize control of the board, bribe and recruit even police officials in Russia in their raiding and takeover attempts to steal their clients’ assets.
Throughout this dramatic process, which dragged on for over six costly years and many lawsuits in both Cyprus and Russia – where it was proven that the brothers were being taken to the cleaners – the western press was silent. It was only when the politically explosive Erotokritou affair exploded in Cyprus making news throughout the EU did the “Rosinka” (Providencia) matter get some attention. The fact that the aggrieved parties were in Russia had the knee-jerk response that they were automatically prejudged the guilty, unethical ones in any possible conflict with respected “western” persons or interests.
This was finally proven not to be the case when last week the court on Cyprus found that Erotokritou launched criminal prosecutions against Russian nationals who had been battling the Neocleous law firm in court over control of Providencia, a trust fund worth tens of millions of euros. Erotokritou was found guilty on six counts of bribery of a public official, corruption, conspiracy to subvert the course of justice, conspiracy to defraud, and abuse of power. Panayiotis Neocleous and the Andreas Neocleous law firm were pronounced guilty on five counts of bribery of a public official, corruption, conspiracy to subvert the course of justice, and conspiracy to defraud.
It amused me to read recently that the Andreas Neocleous & Co LLC law firm was the only Cyprus based firm selected to be included in Europe’s 100 top firms “Euro Elite” by a leading law magazine, Legal Business. It begs the question - to what standards of professional, fiduciary and ethical conduct or values is such membership measured?
The criminal case against the former Deputy Attorney General and his accomplices from Andreas Neocleous & Co. LLC – has become the most high-profile anti-corruption legal action in Cyprus in recent memory. The court session on February 8, 2017, where the defendants were found guilty of corruption, swindling, and exceeding of official powers, lasted for 9 hours and was broadcast live on Cyprus national TV.
The importance of Cypriot firm Andreas Neocleous & Co. LLC for the world offshore business (and especially for Russia) can be compared with the similarly useful Panama-based Mossack Fonseca & Co. prior to the Panama papers scandal. Andreas Neocleous & Co. LLC has nine branches in various European countries, including Russia, totaling 134 respected lawyers employed. The list of company’s clients includes major international corporations. In Russia, it used to work with Inter RAO United Energy Systems, Rusagro Group, ITERA International Group of Companies, Yukos, and Mechel.
Big stinks usually start with small whiffs, so I assume we shall be hearing more as the ripple effects become greater the further they get offshore from Cyprus and splash against the values of the continent.
This post first appeared on Russia Insider
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