Shnaider sued in Russian dispute

So much criminal activity comes into Canada ... surprise! surprise! .. because so many people get the idea it's Countrygentleman living at half the price of American gentrifcation. One can simply find a nice pack of buddies to "run" with and take advantage of the lawlessness of vast open spaces.

But once in awhile they get caught.

I used to live very close to Newmarket - it was the nearest "market town" to my home. We all knew about and talked about the "Russian mob" as we had all encountered it in one way or another - in my case, it was paying for gas at a Yukos oil allied gas station - they ran through my ca$h card twice when paying for a full tank of gas. Not so awful you think: but in fact I live on a fixed income and it was a big deal. The russians up there in York region that rip you off are always always surly as could be. No one really expected that the police would do anything about these guys - they would rip people off in fly by night mechanic shops - things like that. It would co$t you more to take them to court than to just let it go. And we knew that someone big was at the top of the pyramid, never expecting that anything would happen to them - they'd just take flight if things got "hot" for them

So this comes as rather a surprise - as it deals with crime at those upper levels one never sees but is always lurking around. The common person just a wallet to pilfer by a greedso by these new Czars in the New World ....

One can (sigh) expect more of this kind of russki politik showing up in Alberta (sigh).

Psst .. it's been whispered about the Iway that the SocGen scandal was manipulated by Russian "banking" interests .. seems that some of them know a great deal about how to "sock it to" the system ..

Virginia

Shnaider sued in Russian dispute

Defence denies allegations

Jim Middlemiss, Financial Post Published: Thursday, February 07, 2008

CORRECTION: A court order was obtained to examine Anthony Groag under oath. Mr. Groag, a plaintiff in a lawsuit involving Canadian billionaire Alex Shnaider, passed away before his testimony could be recorded. Incorrect information appeared in yesterday's Financial Post.

A group of businessmen are suing Canadian billionaire Alex Shnaider and companies he controls for $750-million, claiming the men were squeezed out of a joint venture involving Russian oil and gas fields.

In the lawsuit -- which includes allegations of illegal bribes to Russian police, strong-armed tactics and millions of dollars in missing Tbills -- oil and gas expert Michael Shtaif, lawyer Gregory Roberts, engineer Ilya Entin and businessman Eugene Bokserman claim that Mr. Shnaider and his companies Midland Resources Holding Ltd. and Koll Resources Ltd. breached their contract.

The suit also alleges the defendants interfered with contractual relations and breached their fiduciary duty in relation to a deal the men claim they had to be shareholders in Koll, a British Virgin Islands-incorporated company.

The allegations have yet to be proved in court, and Mr. Shnaider and his companies have not yet filed a statement of defence.

His spokesman Ron Fine said "the allegations are false." He called the claims "frivolous, vexatious and an abuse of process. Mr. Shnaider is completely innocent and will prove this through the courts."

Mr. Fine said that Mr. Shnaider and his companies have filed a motion to have the main action moved out of Ontario because it is not the proper forum for hearing the dispute.

Another plaintiff, Anthony Groag, a former British Petroleum general auditor and a controller at Yukos Oil, has since died of illness, though his testimony was taken prior to his death last year. The plaintiffs are seeking an additional $10-million in damages against Mr. Shnaider, one of Canada's weathiest citizens, for punitive damages.

The men are also calling on the court to grant an injunction preventing Mr. Shnaider from disposing of the assets in Koll, which owns properties

in the Perm region of Russia that are currently worth $216-million, but could be worth as much as $1.25-billion, with a further investment of $110-million according to the claim.

Mr. Shtaif and Mr. Roberts have filed additional actions against Mr. Shnaider and his London business partner Eduard Shyfrin. Mr. Shtaif is claiming $10-million for conspiracy, defamation, injurious falsehood and malicious prosecution.

Mr. Roberts is claiming $25-million for conspiracy and unlawful interference with legitimate business expectancy. Both men are also asking the Ontario court for $10-million each in punitive damages.

The claim alleges that in November, 2005, Mr. Bokserman and Mr. Shtaif met with Mr. Shnaider in Toronto and he expressed an interest in investing in the Russian oil and gas industry. It also alleges they entered into a joint venture around January, 2006, where Mr. Shnaider and his companies invested US$50-million for a 32% interest in Magellan Energy Limited. A second investor, International Energy Limited, agreed to invest $70-million. Mr. Shtaif would provide his know-how and Mssrs Groag and Roberts were brought in to assist.

The claim alleges that deal was later rescinded, and the plaintiffs claimed that in June, 2006, there was an agreement to start a stand-alone company, Koll. The share structure would see Mr. Shnaider and his partner Mr. Shyfrin holding 33.6% each, while Mr. Shtaif would hold 29.3%. The balance would be held by the remaining plaintiffs.

Mssrs. Groag, Shtaif and Roberts also claim that they were hired as employees of Koll.

The claim alleges the men proceeded to carry out their duties, paving the way to take Koll public on the TSX and acquiring interests in properties, including shares of a company called Reef, purchased for US$18.5-million.

However, the claim alleges that Mr. Shnaider "started to conduct himself as though the venture was his personal property." They claim he unilaterally tried to amend the share structure and wanted his $50-million to be subject to a loan agreement to the company, rather than as an investment. The deal didn't work out as planned and the company became deadlocked, according to the claim.

It alleges that the deadlock was resolved after a meeting on July 27, 2006, and the investment would become a convertible loan, the shareholders would be issued their shares and Midland would continue to advance funds to the firm.

However, the claim alleges relations continued to sour, due in part to previous attempts to recover $12-million in T-bills that had been put into a safety deposit box when the parties operated as Magellan. It was money that was allegedly meant to be used to purchase an interest in another company, which in turn planned to buy another Russian company, SibinTEK. The claim alleges that Mr. Shnaider killed that deal because he felt it was a scam and that Mr. Shtaif was complicit, which Mr. Shtaif denies in the claim as false and malicious. Part of the proceeds were eventually regained by Midland, after the alleged bribe-induced intervention of Russian police.

The claim alleges that relations continued to decline and on March 12, 2007, "armed men stormed the offices of Reef and forcibly removed the managing director and demanded all documents and keys," effectively taking over the company.

The men then launched their lawsuit in May 2007, in Newmarket, Ont.

(can you say .. hardly surprising. It was bound to happen one day!!)