Ukraine’s largest financial investor, European Bank for Reconstruction and Development, says a court victory against fugitive ex-Defense Minister Pavlo Lebedev and his associates is a sign of an improving investment climate, although the losing parties are continuing to battle for lost assets.
The financial lender in December gained ownership of a fleet of 2,387 railcars as collateral for a $90 million loan that private railway carriage operator Interleaseinvest defaulted on.
Lebedev, Ukraine’s minister of defense in 2012-2014, was a major shareholder of Interleaseinvest, according to EBRD. He fled Ukraine with ex-President Viktor Yanukovych in February 2014 amid the EuroMaidan Revolution.
EBRD sued Interleaseinvest and won in appeal, cassation and Supreme Court.
EBRD’s country director Sevki Acuner, at a press conference in Kyiv on March 24, said the case was an important demonstration of how the investment climate in Ukraine was “slowly but surely” improving.
“For EBRD and all other financiers and investors, it is important to feel confident if things don’t go to the original plan, that you have the remedies available to you to exercise your contractual rights,” he said.
However, now the bank says Interleaseinvest’s former owners, including Lebedev, are continuing to battle with the EBRD for control of the company and its assets.
The EBRD issued Interleaseinvest- whose major shareholder was then Party of Regions deputy Lebedev- the loan in 2011 to purchase some 2,400 railcars.
But the company defaulted on its repayments in 2013 and 2014 while issuing hundreds of thousands of dollars in loans to another company linked to Lebedev.
After defaulting on its payment in September 2014, Interleaseinvest was also allegedly raided by Vesta Services, which the EBRD believes to have included Interleaseinvest shareholders.
EBRD Corporate Recovery Department Director Kamen Zahariev said what caused further problems was Lebedev’s appointment as defense minister in 2012 by then-President Yanukovych.
The EBRD launched what would become a two-year court battle to seize its collateral.
In December the fleet of 2,387 railcars was transferred into bank’s hands.
The bank then created a company CREA I UA to own and manage the fleet on behalf of EBRD.
However, given CREA had no fleet management experience, it handed over the job to Ukrainian railcar operator Spetswagon Transleasing, who were already registered as operators with Ukrainian Railways.
Since December Spetswagon Transleasing has transferred more than $3 million to EBRD.
Whether the bank will sell the fleet in the future remains in questions.
The EBRD says as part of its battle against the lender, Lebedev and his cronies are dragging their name through the mud.
Ukrainian media, earlier in March, reported Spetswagon Transleasing transferred the wagons to a subsidiary linked to Russian business tycoon Ziyavudin Magomedov.
The bank labeled the reports as black PR.
