Turkish telecoms-to-construction group Cukurova Holding, which controls Turkcell, last week won a case in the court of the British Virgin Islands against Russia’s Alpha Group that sought to seize 14 percent of the shares of Turkcell, which was put by Cukurova as security for a loan.
In November 2005, the Alfa Group finished a multi-agreement deal with Cukurova, acquiring a 13.2 percent of Turkcell and lending to the Group $1.71 billion secured against a further 13.8% stake in the operator. In a year, Çukurova repaid $357 million of the total loan to Alfa and paid $217 million in interest. Alfa said that Cukurova did not pay the remaining sums on time, and demanded it to repay US$1.35 by Turkcell shares. The BVI court was asked to seize Cukurova’s 13.8 percent stake in Turkcell.
On Thursday, May 27, 2010, the BVI court ruled that the loan agreement was violated, and Alfa Group had no right to receive the shares for an alleged US$1.35mln debt. Altimo, a unit of the Alfa Group, is going to appeal the decision and wait for the final resolution of the dispute in the higher courts.
Turkcell is the largest mobile-phone company in the country. According to Cukurova, Alfa Group specializes in telecommunications investments in Russia, and some neighbour countries. The Russian group is currently holding 44 percent stake in VimpelCom, one of Russia’s two biggest mobile-phone companies, which was in the centre of the dispute between Altimo and the Norwegian Telenor. It is also the holder of 25.1 percent of Megafon, 43.5 percent of Kyivstar, and 4.99 percent of Turkcell.
The investors in the ARP Growth fund formally received a nil valuation of their investments, and now the losses from the fund’s manager Trio Capital Limited are to exceed US$180mln.
The administrators of Trio Capital Limited, the accounting group PPB, were investigating company’s managed investment schemes, and in a meeting in Sydney on May 23 informed that they were unable to value the main investment vehicle of the ARP fund, British Virgin Islands-registered Professional Pensions ARP Ltd (PPARP), through which more than US$52mln were invested. By words of unit holder, Mr. Terry Gammell, the delay in finding any value in PPARP meant the ASIC should examine the disappearance of the money.
The nil valuation of PPARP adds to the disappearance of US$123mln invested by another fund managed by Trio Capital, Astarra Strategic. This investment, made through another BVI company EMA International, brought likely losses from Trio Capital to more than US$180mln. By order of NSW Supreme Court, five Trio Capital funds, including ARP Growth and Astarra Strategic, were winded up. The judge found that Astarra Strategic had signs of a “fraudulent scam”, and he also said there were “inherent vices” in Trio Capital’s business model.
The administrators are awaiting the appointment of a liquidator in the British Virgin Islands, PricewaterhouseCoopers, to attempt to recover some value from the PPARP investment, which was held through a complicated structure, using also a HK-based Empyreal Holdings as funds manager.
Fuqi International, Inc., a Chinese designer of precious metal jewelry, selling a wide range of products in the Chinese luxury goods market, and having a British Virgin Islands-registered subsidiary Fuqi International Holdings Co., Ltd., has been filed additional lawsuit. Murray, Frank & Sailer LLP is now investigating federal securities claims against Fuqi International, on behalf of all investors who purchased Fuqi common stock in connection with the company’s second public offering on or about July 22, 2009 through early August 2009. In this offering, Fuqi International sold over 5 million shares at US$21.50 per share.
The investigation concerns violations of certain sections under the Securities Act of 1933 through the issuance of materially false and misleading registration statements, prospectus, and other documents which failed to disclose that the company’s wholesale business was slowing. As a result of company’s actions, its financial statements were materially false and misleading at all relevant times.
Murray, Frank & Sailer LLP has already filed the class action against Fuqi International, Inc. in the US District Court for the Southern District of New York, on behalf of all individuals and institutions who purchased publicly traded securities during the period between May 15, 2009 and March 16, 2010, alleging violations of the Securities Exchange Act of 1934.
The head of Tajikistan’s Antimonopoly Committee announced that the Innovative Road Solutions (IRS), incorporated in the British Virgin Islands, has no more right to operate the toll road on the 350-kilometer-long Dushanbe-Chanak highway. According to Amonulloh Ashur, the BVI company was permitted to operate the toll road at previously agreed prices for one month, in April, so its operation since May 1 is illegal. The agreement between the IRS and the government stated that after April the company had to co-ordinate its pricing policy with the Antimonopoly Committee.
Ashur said this was not done, and then the Committee sent a letter to IRS, the Communication and Transport Ministry, and the administration of one of the districts in Dushanbe to request that drivers not be charged for using any part of the highway.
Recently, the highway was upgraded for a US$280 million loan from China. The Tajik government announced that in order to repay the loan the highway would become a toll road. In April, small cars and microbuses have paid about 7 cents for every kilometer of this highway, since May 1 they have started to pay three times less. Nevertheless, drivers and those who had to use the road protest against the toll road, they have even sent a petition to the President of Tajikistan for its abolition.
It is considered by some analysts that the way in which the BVI company received the tender for work was not fair enough. However, Tajik Communication and Transport Minister rejected this. Technical Director of IRS said that no tender was held to gain the contract to operate the toll road, but the government of Tajikistan gave the concession to IRS and after several years the highway will be returned to the government.
It became known that the Premier League has used corporate investigators to unravel the ownership and control structure of the Portsmouth City Football club. In particular, the League tried to reveal the inside of the transactions in the course of which the Saudi businessman Ali Al Farai purchased the controlling stake of the club through the BVI company Falcondrone Ltd., and later on lost his ownership over the club.
According to some sources, to investigate the processes in the club, the League used Kroll, which is the world’s leading global corporate investigative, screening and intelligence firm.
The Portsmouth club was put for sale last summer. In February the club was repurchased from the BVI company, and Hong Kong businessman Balram Chainrai became its owner. Because of the sad financial situation in the club, the new owners entered administration. Andrew Andronikou, Michael Kiely and Peter Kubik were appointed joint administrators on February 26, 2010, acting as agents, managing affairs, business and property of the company.
Now Andronikou is to meet Portsmouth’s creditors and within a week to 10 days he will make a formal offer to them, connected with the plans for taking the club out of administration. Within 28 days of that offer, creditors will vote on this offer.