Black Eagle Litigation Fund announces its agreement with a group of minority shareholders of Togliattiazot (Russian abbreviation – TOAZ) to pursue asset tracing and recovery efforts with respect to funds and assets embezzled from Togliattiazot over the past 10 years.
We disclose that an entity controlled by our fund owns a minority stake in Togliattiazot. We further disclose that Uralchem, a major Russian fertilizer producer and a significant minority shareholder of Togliattiazot, is not among the Togliattiazot shareholders represented by our fund.
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Togliattiazot (TOAZ) is a major exporter of ammonia, based in Russia. Its shares are traded at MMVB-RTS stock exchange in Moscow (www.moex.com) under the symbol TLAZ, ISIN RU007661104.
Russian police is currently completing its investigation of a series of multi-million dollar frauds perpetrated against Togliattiazot. It has been disclosed that the frauds were committed by way of asset-stripping (major industrial assets sold to a company affiliated with majority shareholders at a staggering undervalue) and transfer mispricing (profits illegally shifted to a low-tax entity and distributed to the benefit of majority shareholders).
Our objective is to ensure that the stolen money is returned to Togliattiazot to restore shareholder value.
We are making the following announcement in connection with the above.
Russian courts established that a transfer mispricing scheme existed to shift profits from Togliattiazot to a low-tax entity affiliated with the majority shareholders of Togliattiazot. Tax evasion is a crime under Russian law, and current FATF standards recognize it as a predicate offense to money laundering. Further, it has been revealed by the police investigation that through such transfer mispricing allegedly hundreds of millions of dollars were fraudulently transferred from Togliattiazot to the benefit of offshore structures affiliated with majority shareholders of the company. It has been further revealed by the police investigation that major industrial assets were allegedly sold by Togliattiazot to an entity affiliated with majority shareholders at a significant undervalue. Those episodes are now being investigated under “Fraud” and “Embezzlement” articles of the Criminal Code of Russia. Fraud and embezzlement are universally accepted to be predicate offenses to money laundering.
In this regard, we advise any person (especially if acting in professional capacity and subject to AML reporting duties) who provides services to any of the individuals being investigated in Togliattiazot frauds and / or their appointees (“Investigated Togliattiazot Principals”) and/or those handling their assets, financial and otherwise (“Potential Recovery Assets”) and/or assisting other persons in handling, keeping, managing or otherwise dealing with Potential Recovery Assets:
We put you on notice that, given the facts above, assistance to Investigated Togliattiazot Principals within the context explained above may amount to a crime under the criminal statutes of Russia and your country. In particular we draw your attention to statutory provisions forbidding assistance in retaining the benefit of criminal conduct, concealing or transferring proceeds of criminal conduct and tipping-off.
You are hereby requested to cease, and desist from, any action which may assist the Investigated Togliattiazot Principals in (1) concealment of evidence of any events which relate to Togliattiazot, its management and trading practices, and/or (2) concealment of any assets which are Potential Recovery Assets.
Please be aware that, given the graveness of the charges against the perpetrators of the fraud and the importance of the amounts to be recovered, civil plaintiffs as well as Russian judicial authorities may pursue legal action against not only corporate entities, but also private individuals who played their part in the criminal schemes, including by way of wilful assistance.
By this announcement, you and your client(s) are hereby given notice not to destroy, conceal, or alter any paper or electronic files and other data generated by and/or stored on your or your client’s computers and storage media (e.g., hard disks, flash drives, backup devices), or any other electronic data, such as voice-mail, as well as any other evidence (in whatever form) which may contain any information relating to Togliattiazot and/or Investigated Togliattiazot Principals and/or Potential Recovery Assets. Any act in contravention with the above may amount to spoliation of evidence or potential evidence, for which legal sanctions may be imposed.
If and when you receive initial interrogatories and requests for documents and things, please render the requesting body / person all legally possible assistance in their discovery.
Electronic documents and the storage media on which they reside contain relevant, discoverable information beyond that which may be found in printed documents. Therefore, even where a paper copy exists, all documents in their electronic form may also re required. Paper printouts of those documents that contain unique information after they were printed out (such as paper documents containing handwriting, signatures, annotations, highlighting, and redactions) along with any paper documents for which no corresponding electronic files exist may as well be subject to discovery.
Please be aware that any transactions with property derived from the criminal acts described above may amount to the crime of money laundering under Russian law and, potentially, the laws of the countries where such acts are perpetrated.