Before adding and sharing your Fraud Alert please check to see if a similar alert has already been posted, thank you:


American Banker and Putin Ally Dealt in Access and Assets, Emails Reveal

Post a Fraud Alert:

But documents in the email cache and depositions of consortium members indicate that Rosneft was closely involved with the consortium in the deal. Foresman described in his deposition in November 2018 how Warnig channeled the consortium’s proposal for participating in the auction to the top of Rosneft.

In the hours before the sale of the Yukos unit, the consortium reached two legal agreements with Rosneft.

In the first of those agreements, reviewed by Reuters and dated Aug. 15, 2007, Rosneft agreed to lift any legal claims the Russian oil giant had against the Dutch firm’s assets.

In the second, also reviewed by Reuters and dated Aug. 15, 2007, the state oil champion agreed to delay repayment of a $60 million loan it had extended to Promneftstroy, the bidding vehicle, until the consortium arranged to sell Yukos’s Slovak pipeline to a company nominated by Rosneft. A month later, the consortium agreed to sell the pipeline stake to a Cyprus-registered firm for $105 million – less than half the price it fetched two years later. An email chain leading up to the sale agreement indicates the buyer was designated by Rosneft.

In the hours after the auction, another investor in the consortium, Benjamin Heller, then a managing director at U.S. fund HBK Investments, wrote to an associate saying: “Rosneft basically controlled the auction and decided it would clear at a certain price.” Heller, who isn’t named as a defendant in the lawsuit, declined to comment. Rosneft didn’t respond to Reuters’ questions about the auction. At the time of the sale, the state oil giant denied any involvement in it.

The person familiar with the consortium said there were mistakes in Heller’s email. “Rosneft didn’t set the price, and there were two bidders,” said this person. “The whole premise that Rosneft controlled the consortium, controlled the price and controlled the auction is not correct.”

He added that at the time of the auction the consortium didn’t have access to data valuing the Transpetrol stake above $103 million — a sale price that had been discussed a year earlier. He said the consortium had reached out to both sides of the Yukos divide, agreeing to pay back outstanding loans to Yukos’ former owner.

Two months later, in late 2007, the consortium’s hopes of making profits began to unravel when an Amsterdam court ruled that the auction violated Dutch law, and therefore the consortium owners didn’t have title to any of the assets of Yukos Finance BV.

Phantom shares

In emails dated Oct. 11, 2007, a few months after the consortium won the auction, Foresman and his colleagues at Renaissance Capital began discussing the drafting of a secret “phantom share agreement” for an unnamed “prospective new shareholder.” Phantom share deals are a common arrangement under which a company promises the holder a future cash payment that is tied to the value of a notional share of stock. Among the executives discussing the award of these shares was the bank’s founder, Jennings, who was the main owner at the time. He declined to comment about the transaction.

An agreement identifying Warnig as the recipient of “40,034 phantom shares” in Renaissance Capital’s parent company, Renaissance Holdings Management Limited, was drawn up by the investment bank’s legal counsel and sent to Foresman in an email dated Nov. 27, 2007.

An additional consultancy agreement drawn up by the legal counsel and sent to Foresman on Dec. 17, 2007, provided for paying $700,000 to an unnamed recipient for advice on “certain investment banking transactions and business development opportunities.” In his November 2018 deposition for the UK civil suit, Foresman said Renaissance Capital paid consultancy fees to Warnig. He didn’t specify the amount.

Foresman and the other Renaissance Capital executives sought to keep these arrangements secret, the emails show. When a RenCap employee mistakenly sent a message to Warnig’s official company email address in 2007 about the shareholding, Foresman fired off an angry reply to three senior Renaissance Capital executives. “This is clearly unacceptable and I cannot believe this could happen,” he said in the message, dated Dec.18, 2007. He said Warnig had immediately destroyed the message.

In a later email to the same colleagues, dated Feb. 12, 2008, Foresman stressed how Warnig had insisted the agreements remain absolutely confidential: They were to be known only by the executives at Renaissance who drew up the agreements. The email says: “Our man has signed his phantom share agreement, in his name, and also the consultancy agreement in the name of a legal entity.” It went on, “He stressed the absolute confidentiality of this.”

Warnig’s relationships with Foresman and Renaissance Capital’s founder and chairman, Jennings, were cemented over dinners and “banya” steam-bath sessions in Moscow, the emails show. And Foresman helped open doors for Warnig with U.S. ambassadors to Russia and U.S. government officials in Washington during the administrations of George W. Bush and Barack Obama.

The email cache shows, for instance, that Foresman helped set up meetings in 2009, early in Obama’s presidency, for Warnig with the U.S. government’s then national intelligence officer for Russia and Eurasia, Fiona Hill, as well as with Mary Warlick, then the acting deputy assistant secretary of defense for Russia, Ukraine and Eurasia. He also brokered meetings for Warnig with officials in the Department of Energy and separately in Houston with Ross Perot Jr, the U.S. billionaire. Perot declined to comment for this article. Hill and Warlick didn’t respond to requests for comment.

The emails reviewed by Reuters didn’t reveal what came of the meetings.

After one such visit in March 2009, Foresman indicated these meetings were to become a back channel for Putin into Washington. In one email, he wrote, “my friend briefed his Big friend on the meetings” — an apparent reference to Warnig speaking with Putin. “That person was extremely satisfied with the messages that were received and absolutely committed to improving things. He asks for a repeat performance in Q2 for which he will have my friend deliver specific messages,” Foresman wrote.

Article source: https://www.themoscowtimes.com/2019/06/10/american-banker-and-putin-ally-dealt-in-access-and-assets-emails-reveal-a65937