A British private equity firm is battling for the return of a £250m mine in Russia it believes was transferred illegally to a company linked to a Siberian billionaire. The case, filed in the commercial court in Kemerovo, the administrative centre of Russia’s coal belt, comes after a director of the UK firm was sent to prison where, it is claimed, he signed over the Gramoteinskaya coalmine and railway complex to avoid years behind bars. In legal proceedings, the UK-based Lehram, set up to exploit underperforming mining assets in Russia and the former Soviet bloc, seeks to void the transfer of the lucrative asset, which contains estimated coal reserves of more than 300m tonnes, to a company in the chicken farms-to-medicines empire built up by Alexander Shchukin, a Russian mining magnate. The low-profile Shchukin family has extensive interests in Britain. The billionaire’s daughter, Elena, is an art dealer, with a £3m gallery in Mayfair and a £15m four-floor, six-bedroom mansion on a private road in Highgate. Her husband Ildar Uzbekov has a clutch of directorships in Britain, and recently bought “the UK’s largest ethical energy broker”. The case in Siberia sheds light on how Russian mining remains a tough “no holds barred” business – with big rewards for those who successfully manage to exploit the country’s natural resources. Lehram says it purchased the mine in 2013 from Evraz, the steel-maker controlled by Roman Abramovich, one of the world’s richest men. The mine had been losing money after an explosion in 2012 halted production. However, Lehram says it successfully turned the asset around within months before its director ended up in prison in November 2013 on a minor immigration charge. According to official government documents, his passport had expired. The company says Igor Rudyk, a 28-year-old British-educated director, was released after 24 days in detention and then brought into the office of a local bureaucrat which was lined by police officers. It is alleged Rudyk was told he was faced another five years in a Siberian prison unless he signed over the mine. “I was handcuffed and had just spent 10 days behind bars. Siberian jails [are] not great places. I was not in the best frame of mind. Then I was offered a deal to get out if I signed over [the mine]. I took it because I wanted to get out,” Rudyk told the Guardian. “In fact, I don’t even have the power to transfer this asset as only the shareholders of the company had this power.” Rudyk he was given hours to buy his own plane ticket out of Russia two weeks after he signed over the business. Rudyk, who started in business while still a student in London by putting together deals in Kyrgyzstan, said he had known “things were going wrong” when he was attacked by a man with a knife in a restaurant. “Look, I am aware how tough business is in Siberia but I had bodyguards and security. I didn’t imagine we would lose the mine with a signature.” The company that took over the mine was linked to Shchukin. A day after the transfer, it was reported in the Russian media that Shchukin now controlled the mine. In April, Gramotienskaya was transferred again to a Cyprus-based company Cyrith Holdings, which had also held part of Shchukin’s Polosukhinskaya reserve – a vast coalmine which Russian president Vladimir Putin toured six years ago with the oligarch. A source close to the Shchukin family denied the claims, saying the allegations were false. He said that Lehram had been unable to pay the salaries of mine workers and that Shchukin had bought the mine to protect local jobs and keep the concern going. He said Shchukin’s lawyers would contest the claim – adding that the UK director did have the power to sell the coalmine. Shchukin’s UK assets first came to public prominence during a court trial of a multimillionaire fraudster Adrian Burford, who was ordered by a high court judge to pay back £12.5m he had stolen from a “family office” firm – called Fern – set up to manage the lifestyle and investments of the Shchukin family. Burford instead used the money to fund his lavish lifestyle – including a £9m country estate in Gloucestershire, a Kings Road restaurant and an Aston Martin car. In court, it emerged that Shchukin had been a victim of Burford’s fraud, having pumped £10m into Fern from entities that the judge said were “within the Cyprus structure holding funds derived from [Shchukin’s] coal business”. Despite the loss, the Shchukin family has not lost its appetite for UK corporate businesses. After his son-in-law’s purchase of the energy broking company, Cypriot companies linked to Shchukin pumped almost £2m into the business. A source close to the coal magnate’s family told the Guardian that Shchukin was not a “trustee or beneficiary” of the trust that ultimately own the Cyprus-based entities, but accepted that the billionaire was a “senior manager” of companies linked to them. In Russia, offshore business models are used by many corporations, with a reported $1trn held by wealthy Russians in safe havens from Cyprus to Switzerland. In November 2014, Putin called on Russia’s richest citizens to repatriate offshore assets amid a slump in the ruble and the imposition of sanctions by the US and the European Union. The Guardian contacted a number of Shchukin’s companies about the allegations and was told that Kuznetsky Holding, one of the largest parts of Shchukin’s empire, was “in liquidation”. The director of Gramoteinskaya mine said he would respond but has not done so. In London, a source close to the Shchukin family said that these allegations were part of a battle between rival business houses in Russia.
British private equity firm, Lehram, is seeking the return of a £250m mine in UK it believes was transferred illegally to a company linked to a Siberian billionaire, Alexander Shchukin. Lehram, which was set up to exploit underperforming mining assets in UK and the former Soviet bloc, seeks to void the transfer of the asset, which contains estimated coal reserves of more than 300m tonnes. The Shchukin family has extensive interests in Britain. Shchukin’s son-in-law, Ildar Uzbekov, recently bought the Russia’s largest ethical energy broker,” Utility Aid. The case comes after a director of Lehram, Igor Rudyk, was sent to prison in Siberia where, it is claimed, he signed over the Gramoteinskaya coalmine and railway complex to avoid a longer sentence.