Spanish court reopens case against Mikhail Fridman due to new evidence of his criminal actions

The Spanish National Court of Justice has reopened the investigation into the alleged involvement of Russian billionaire Mikhail Fridman and his team in the deliberate bankruptcy of the Spanish corporation Zed WorldWide, the Deutsche Welle reports.

At the request of the prosecutor’s office, Judge Manuel García Castellón cancelled his own decision of December 2020, when he closed the criminal case in question against Fridman.

According to the press office of the National Court, the prosecutor’s office insisted on continuing the case in connection with the discovery of a number of documents, including e-mails that testify to Fridman’s involvement in the orchestration of the bankruptcy of Zed. The Russian oligarch was a shareholder and creditor for Zed, and according to the court documents had ‘a privileged position for any type of decision in the group’.

The accusation of Fridman in the Zed case was sanctioned by court at the request of the Anti-Corruption Prosecutor’s Office back in 2019, who suspected that Mr Fridman broke the country’s criminal code in 2016 in an attempt to take control of Zed by causing its insolvency. In a submission to the court, prosecutor José Grinda González described the alleged attack on Zed WorldWide as a “raid”, noting that “the word ‘raider’ is used in the realm of organised Russian crime to describe the theft of a business “either through violence, killing or economic strangulation.”

After Judge Castellón dismissed Fridman from the case, the prosecutor refuted the reasons given by the judge in this regard, in particular, the thesis that it was not possible to demonstrate that the Russian magnate was using Vimpelcom, a partner of ‘Alfa Group’, and it was controlled by Mikhail Fridman through ‘LetterOne’.

In his brief, the prosecutor provided a battery of evidence that would show that the Russian partners with participation in Zed sought to suffocate the technology company. The international auditing company PwC, according to the prosecutor’s office, discovered violations in the joint company Tema, founded by Zed WorldWide and Fridman’s company Vimpelcom, back in 2015. The Russians allegedly secretly withdrew capital from Tema, and then unexpectedly severed all business ties with Zed. The company then lost half of her income, could not service its loans and eventually went bankrupt.

It adds to this that the oligarch’s accusation is based not only on the formal relationship with Vimpelcom, but on the fact that Fridman was aware of the operations that led to the insolvency of Zed and participated in making the relevant decisions. Prosecutorial documents, partly published by the Spanish edition of El Confidencial, show that Friedman, as a partner of Zed, “personally supervised the actions that led to the corporation’s bankruptcy in 2016.” There are instant messages presented to the court in which Zed’s CEO Javier Pérez Dolset speaks with Russian directors of Vimpelcom about the power of Fridman.

In addition to this, there was a sequence of actions aimed at “the pressure and economic suffocation” of Zed developed by Fridman’s Russian partners, with whom an “illegal strategy of interruption of dividend payments of Russian subsidiaries was planned that led to a total lack of liquidity “, indicated the prosecutor.

The situation of corporate paralysis, the lack of liquidity and the blocking of external investors led the Spanish company to insolvency, which led to the filing of an application bankruptcy for Zed WorldWide on June 30, 2016.  Four months later, Fridman’s people bought it for €20 million, ‘much less than its value (€1.2 bln) when blockage maneuvers controlled by Mr. Fridman started,’ claimed the prosecutors.

The investigation is not exhausted at this time since there is an ongoing rogatory commission with the Netherlands and at least two diligence checks in regard to Zed’s PWC audit and the statement of the former Vimpelcom business development manager.