Russian billionaire Mikhail Fridman is facing questioning in Spain over allegations he illegally laid “economic siege” to an acquisition target while camouflaging his true role, according to court documents seen by the Financial Times.
An anti-corruption prosecutor suspects Mr Fridman broke the country’s criminal code in 2016 in an attempt to take control of Zed World Wide, a Spanish mobile content and services business that later declared insolvency.
In a submission to the court, prosecutor José Grinda González described the alleged attack on ZWW as a “raid”, noting that “the word ‘raider’ is used in the realm of organised Russian crime to describe the theft of a business. Either through violence, killing or economic strangulation.”
Mr Fridman strongly denies the allegations, maintaining he neither sought to acquire ZWW nor controlled the companies the prosecutor claims have engaged in illegal conduct.
But Mr Grinda said in his August court submission that “the allegation is based precisely on Mr Fridman camouflaging his control of the criminal conduct through subordinates”.
The billionaire is known for fierce corporate battles, both in Russia and the west, as his Alfa Group has acquired extensive interests in banking, oil, retail and telecoms – sometimes through labyrinthine ownership structures.
This year he took control through his holding company LetterOne of Spanish supermarket chain Dia after a bitter dispute with its previous management as its share price slumped.
Mr Fridman is set to appear at a preliminary hearing in the ZWW case this month.
Manuel García Castellón, the judge in the case, ruled in September that there were indications Mr Fridman exercised control over people and entities that damaged ZWW. As a result, he turned down Mr Fridman’s request to give evidence as a witness, rather than a person under investigation.
“We are confident there will be a dismissal after the judge has the opportunity to consider Mr Fridman’s testimony and certain related evidence in this matter,” said a spokesperson for the billionaire, adding that the court had acknowledged that “the facts are yet to be gathered and assessed”.
Mr Grinda maintains that Mr Fridman sought to acquire ZWW in 2016 at the “ridiculous price” of €20m, “far below the market price”.
His court submissions say the billionaire embarked on “an illegal strategy” of laying “economic siege” to ZWW and its holding company Zed+, largely by terminating contracts with VimpelCom, a Dutch telecoms group that had provided ZWW with more than 40 per cent of its income.
LetterOne holds 47.85 per cent of voting rights in VimpelCom, now known as Veon.
The prosecutor also suspects Mr Fridman played a “fundamental” role in ZWW’s insolvency “through having control of events as one of Zed group’s creditors”.
Amsterdam Trade Bank, in which Mr Fridman says he has indirect interest of 33.3 per cent, was a minority participant in a syndicate of lenders that called in a loan to ZWW in 2016.
In a document sent to the court Mr Fridman’s lawyers insisted “he is not nor has ever been a director neither legally nor in fact” of Veon or ATB, and that he was unaware of ATB’s role in the syndicated loan.
They said “he is only a shareholder of an entity that is a shareholder of another entity that is a shareholder of these companies, and not a controlling shareholder”.
ATB said last week month that, “as a minority participant in the Zed loan facility . . . ATB lacked the ability to make unilateral decisions regarding the loan or to influence the majority decisions”, that its shareholders had not been involved in the process and that it had not been contacted by Spanish authorities regarding the matter.
While the prosecutor says Mr Fridman used “violence, intimidation or deceit” to illegally drive down ZWW’s price, Mr Fridman says much of the case depends on testimony by ZWW founder Javier Pérez Dolset, whom he says lacks credibility.
In his August submission Mr Grinda cited allegations by Mr Pérez Dolset “that he had received intimidating messages pushing him to . . . cede the company to LetterOne, [and] that someone had left a note on the windscreen of his vehicle in which they threatened his children directly.”
LetterOne said it had “investigated these allegations thoroughly”, and that neither Mr Fridman nor LetterOne had anything to do with them, “nor did they have any knowledge of these allegations”.
Mr Pérez Dolset – also under investigation in the case – was held in prison for 21 days in 2017 on suspicion of fraud but has argued his detention was based on fake documents. He was also suspended as managing director of Zed+ by a Dutch court, which said he had “deliberately submitted falsified documents” in arbitration hearings. Mr Pérez Dolset has said he was not responsible for the falsification.