The controversial Russian businessman Viktor Baturin, well-known for his years-long counterstanding with his wealthy sister Elena, widow of Moscow ex-mayor Yuri Luzhkov, is likely to face legal prosecution related to his hidden property in the UK, according to the documents in possession of London Globe.
After a thorough legal investigation it appears that Mr. Baturin acquired the asset while serving as a Russian official, so being politically exposed person (PEP).
On his behalf, his family controls one of profitable plants in Suffolk (England) – Shelbourne Reynolds Engineering Ltd. – specializing on manufacturing farm machinery for the U.S. and Canada markets. In 2006, having completed his public service, Mr. Baturin became an owner of the company.
Given Mr. Baturin’s career in the Russian state authorities and his political connections in Russia, financial sources for purchase Shelbourne Reynolds Engineering are likely to become subject to police investigation.
In 1998-1999, Mr. Baturin was a prime minister of one of the Russian regions (the Republic of Kalmykia) and was an advisor to the head of this region. Therefore, Mr.Baturin was a PEP as defined by the Financial Action Task Force on Money Laundering (FATF).
As of 18 May 2006, Mr. Viktor Baturin held 100% shares in Stanton and was the ultimate controlling party of Shelbourne.
But in 2010, he transferred 100% shares in Stanton to the following company/persons:
4,990,068 shares (~95%) to Inter Agro Tech Ltd (BVI);
262,365 shares (~5%) to Mr. Alexander Kuznetsov (who was a director of Stanton until November 2021);
1 share to Mr. William Thomas Stockler (according to the documents in possession of London Globe).
Nevertheless Mr. Baturin remained the ultimate controlling party in the Company by virtue of his majority shareholding in Inter Agro Tech Ltd. until 24 February 2014 (according to the documents in possession of London Globe).
Somewhere between October 2017 – September 2018, the shares held by Inter Agro Tech Ltd. (95%) were legally transferred to PRP Ltd, a company incorporated in the offshore zone of the Marshall Islands.
Mr. Daniel Greenburg was the ultimate controlling party of Stanton and Shelbourne by virtue of being the sole trustee of the discretionary trust, which held the shares in the former and present parent companies – Inter Agro Tech Ltd. and PRP Ltd. Mr. Kuznetsov held the remaining 5% shares in Stanton (according to the documents in possession of London Globe).
It is important to note that in June 2011 Mr. Baturin was found guilty of the large scale fraud for selling real properties in the Moscow city centre, and was sentenced to 3 years in prison (https://tass.com/russia/697797
In November 2011, he was arrested again by the Russian police in relation to two attempted embezzlement of large sums of money under fake promissory notes of two Russian companies. After a long investigation in July 2013, the court in Moscow sentenced Mr. Baturin to 7 years on fraud charges (https://tass.com/russia/697797
Therefore, all transactions related to change of the shareholders’ structure of the UK company were carried out by Mr. Baturin when he was in prison. In order to complete, the transactions Mr. Baturin had recourse to his mother-in-law Ms. Liudmila Obraztsova.
It seems the transactions had a single aim to hide the UK asset from the numerous creditors of Mr. Baturin and from the Russian public authorities, and to retain control over the asset (as evidenced by the below chronology). It is worth mentioning that Ms. Obraztsova played a key role in these transactions: first, as a direct ultimate controlling party, and later through the trust.
In the beginning of 2015, Mr. Baturin legally divorced with his wife Ilona Obraztsova. In fact, the divorce was fictitious, and, according to Instagram (https://www.instagram.com/motorashka/
), Ms. Ilona Obraztsova together with her mother, Ms. Liudmila Obraztsova, are living a luxurious lifestyle, allegedly using the profits from the UK factory.
In January 2016, the Supreme Court of the Republic of Kalmykia (a region, where Mr. Baturin has political connections) provisionally released Mr. Baturin from the prison (2 years 10 months before the end of his sentence). In August 2016, a Russian court, once again in Kalmykia, initiated bankruptcy proceedings of Mr. Baturin following an application of one of his creditors. The bankruptcy proceedings are still ongoing.
The total amount of claims of the creditors, including claims of the major Russian bank, Russian Tax Service and others, is more than RUB 3.3 billion (GBP 32.8 million as of 10/02/2022).
Mr. Baturin was misleading his creditors for a long time, stating that he would repay all his debts within a 7-year period (https://realty.ria.ru/20190118/1549565858.html
). However, to date his creditors have not received a penny.
Mr. Baturin persuaded his bankruptcy administrator to file a claim against his sister Ms. Elena Baturina, a widow of a former mayor of Moscow Mr. Yuri Luzhkov, claiming USD 250 million for the assets allegedly stolen from him. However, in May 2021, Tverskoy district court in Moscow (a Russian first instance court) dismissed the claim (https://tass.ru/obschestvo/12959087
In July 2021, Mr. Baturin became a subject of a criminal case of attempted fraud on an especially large scale following an application of his sister Ms. Elena Baturina and was taken into custody, where he remains to date.
Given Mr. Baturin’s and Ms. Obraztsova’s strong reluctance to share Shelbourne’s funds with anyone but their family, it appears that the only way for the creditors to receive redress is a recovery of Shelbourne’s shares and its further sale in the framework of the Russian bankruptcy proceedings of Mr. Baturin.
In order to get recovery, the Russian bankruptcy proceedings should be recognized in the UK. Following that step, little needs to be done, as the complete factual background confirming the sham nature of the transactions and the nominal nature of the current owners of Shelbourne, including Ms. Liudmila Obraztsova and the others, is in the public domain.
At the same time, Russian law enforcement authorities can separately assess the actions of all the parties involved in the process of hiding of Mr. Baturin’s assets from his creditors.
The actions of the above mentioned individuals could be qualified as a crime of illegal actions in case of bankruptcy (the sanction for this crime is imprisonment up to 4 years) or fraud on a large scale committed by a group of persons in a preliminary conspiracy (the sanction for this crime is imprisonment up to 10 years).
In parallel, one of the consequences of the transactions involving Ms. Liudmila Obraztsova, Mr. Greenburg, Mr. Kuznetsov and the others in the UK could be recognition of the factory as an unexplained wealth and its further confiscation by the UK authorities.
All options are now available and could be applied against Mr.Baturin and his associates. Taking into account the current tension around Ukraine and sanctions being elaborated by the British Government against wealthy persons and businesses men of Russian descent there are some additional legal tools that are looming along the criminal path of Mr. Baturin in the UK.