In the city of Kitzbuhel, Austrian court has refused Victor Baturin the claim against his sister Elena Baturina, a billionairess, Forbes-listed entrepreneur and philanthropist. The two of them co-established Russian company INTECO in 1991 with each holding a 50% stake in the company for the first decade of its operation.
Viktor Baturin filed an anti-defamation claim against his sister to Austrian court in 2017, shortly after his release from Russian prison in 2016. According to the claimant, the content of a press statement issued back in 2010 by company INTECO where he had previously been employed, damaged his business reputation, since it included the word “stealing” to describe the reasons for his dismissal from the company: “embezzlement to the point where it could be called stealing”, to be exact.
After he left the company, Viktor Baturin has been convicted and jailed for financial crimes, in particular for forging promissory notes with a total face value of more than EUR 110 million in the name of INTECO, and property fraud. He was sentenced to seven years in prison in respect of these crimes. Viktor Baturin was released on parole in 2016, and over the past five years has made multiple attempts at suing his sister and her business entities for money by initiating legal proceedings on various grounds.
The Kitzbuhel proceedings are but a minor part of this complicated legal battle Viktor and his allies have been leading since 2017 across two jurisdictions: Russia and Austria. The big haul they are after is 13.8 billion rubles (around £173 mln) – the estimated market price for a 25% stake in INTECO Viktor insists he is still entitled to. In 2001 though, Victor Baturin passed 25% of his 50% stake to his wife as a divorce settlement – and his sister bought those shares out shortly. He transferred the remaining 25% to his sister, and after his dismissal from INTECO received a bundle of assets that he himself estimated at more than $500 mln. This separation was legitimated by the company paperwork, an agreement between the siblings, as well as a number of court decisions; and was notarized in 2008 alongside Viktor Baturin’s declaration that he would no longer demand anything from his sister.
This last 25% stake has become the reason for today’s turmoil. By 2018, Viktor Baturin was twice convicted of financial crimes, spent several years in jail, and was proclaimed bankrupt with a 3.3 bln rubles of debt to several creditors. And this is the moment he meets his fairy godfather – Mikhail Fridman, #128 in the global Forbes list, who controls A1 Group and LetterOne.
As one of the few survivors of the post-Soviet oligarchic era, Fridman is notoriously known for his love of controversial business methods, including hostile takeovers. His A1 Group features in dozens of ‘aggressive acquisitions’ stories: food and beverage producing, pharmaceutical, metallurgical and mining enterprises, oil and gas companies. The amount of publications linking and even levelling Fridman’s business practices to criminal ones are countless.
The most recent international scandal linked to Fridman was caused by the cases of Zed and Dia: in 2019, Spanish prosecutors accused Fridman of raider attacks, market manipulation, fraudulent insolvency, business corruption and misuse of company assets in regard to these two Spanish businesses. Fridman was accused of having led “a series of actions that led to the insolvency of the Spanish company Zed Worldwide SA… in order to buy it at a ridiculously low price, much lower than that of the market,” the court documents said. In regard to Dia, the Reuters wrote that Spain’s High too Court was investigating allegations that Russian tycoon acted to depress the share price of Dia when trying to take control of the supermarket chain. The investigation is not exhausted at the time.
Out of Viktor Baturin’s 3.3 billion roubles debt, Fridman’s A1 acquired the claims for 3.25 billion, and announced that “Elena Baturina has a debt to her brother for a 25% stake in Inteco”, as well as their intention to sue her in court for it.
The optimism of Mikhail Fridman’s structures in that regard may be confusing, since the history of the dispute between Elena Baturina and her brother regarding the sale of his interest in Inteco shows that Russian justice system have rejected his allegations 5 times in 5 separate court cases in 2011, 2012, 2013, 2015 and 2017.
After more than 4 years of proceedings on the case, same happened in Kitzbühel: the Land Court refused to satisfy the claims laid by Viktor against Elena Baturina, having found them unsubstantiated.
Elena Baturina’s lawyers noted, “The court came to the conclusion that the evidence and testimony submitted by Elena Baturina clearly showed that Elena Baturina was under the applicable Russian law not liable at all. Obviously, no single argument presented by Viktor Baturin seemed to be convincing to the judge.”
Weirdly, Mr Baturin’s legal representative issued a statement, claiming that Austrian Court have admitted that the dismissal statement was untruthful, while that was never mentioned in the Court’s judgement.
Elena Baturina’s spokesperson added, “From the very start, we reported that this claim as well as the series of others filed against Elena Baturina by Viktor Baturin and his representatives, was unfounded; his claims against her in Russia and other jurisdictions, along with the ones voiced by Viktor Baturin in media are insolvent.
“We are satisfied with the verdict of Austrian court, which just as well as the previous verdicts in similar proceedings, has proved and supported the validity and legitimacy of Elena Baturina’s position in this dispute.”
In May this year, despite the support from Mikhail Fridman’s structures, Viktor Baturin and his representatives have lost their final case in a series of litigations in the Tverskoy District Court of Moscow. As of today, Viktor Baturin is in a detention facility in Moscow, he was detained on July 2 for a suspected attempt at fraud.