A returning nightmare – Mriya (Dream). A conclusion on the horizon?

It is several years since an entry appeared regarding a notorious scam that involved numerous foreign creditors in Ukraine – some with foreign Government issued guarantees (Germany for example).  The company at the centre of the scandal is Mriya, then owned and run by the Guta family, and which seems to have gone into the realms of serious criminality when Mykola Guta assumed control of the firm from his father.

The above link outlines some of the issues and modus operandi. as they were then apparent.

Full disclosure, the blog has kept an eye on this matter as a London-based friend represents one of the investors now trying to turn around the company after they legally forced control when the Guta family fled to Switzerland – allegedly with $ hundreds of millions.  As the above entry briefly identifies, their rapid departure from Ukraine did not end the corrosive influence of the Guta family over Mriya and its remaining assets – which have been systemically “removed” with little overt action or intervention by the Ukrainian authorities.

That said, the Ukrainian authorities have had quite a lot to deal with since 2014 when the Guta’s fled, but they were not however ignorant of this particular crime.  Whilst Mykola Guta was placed on the international wanted list, as stated little was done to defend the remnants of the company or its assets despite the enforced forced creditor control.

Indeed, the usual “suspect/peculiar” court decisions were made that hardly benefited the creditors.  Needless to say, the creditors suspected some serious “influence/bribery” being employed by the Guta family, or their associates, within Ukraine upon the courts.  All of this despite the “Mriya” issued regularly being raised by several ambassadors on behalf of the domestic investors and/or governments (where State guarantees had been given).

To be fair to the German government, with investors such as BNP Paribas SA, Credit Agricole SA and UniCredit SpA, and bondholders including Argentem Creek Partners, CarVal Investors, DuPont Capital Management, Pioneer Investment Management and T. Rowe Price Group Inc (and others) all involved, those guarantees probably sailed through the risk management process – particularly as Mr Guta was cooking the Mriya books to show profit where there was none.  Quite what the KPMG auditors saw, who knows?  (In fact the total debt portfolio exceeded $1.2 billion across more than 20 lenders when the Guta’s fled Ukraine.)

It is now also possible to add more company names to the Guta corporate network.  Having several years ago mentioned Mriya Agro Holdings, HF Asset Management Limited, FID Global Ltd, Global Health FID, FID Global LLC, Dream Leasing, OOO Bud M Haulage, OOO Bud M ATP, Global Feed Ltd, now to be added to that list are MFG Management Ltd, Zapatoustra Holdings Limited, Oihro Ventures Limited, and Castleblack Management Limited.

It now appears that there is some movement in these matters that may ultimately indicate the possible return of Mr Guta to Ukraine and the theatre of the Ukrainian judicial system.

According to a decent piece of DW investigative journalism (that has a whiff of being given some “insider assistance”) the Guta’s, or more precisely Mrs Viktoria Guta, wife of the wanted Mykola, is trying to fire-sale their very splendid mansion in southern Germany – the asking price suddenly reduced from Euro 18 million to Euro 13 million.  A matter of making assets liquid it appears.  This no doubt due to the fact that applications by Mykola Guta for asylum in Switzerland have been denied and the possibility of extradition to Ukraine may become a reality.

How welcome that would be among the Ukrainian elite remains to be seen.

Nevertheless, perhaps the German authorities may have the legal instruments to try and recover some of the Euro 46 million the German taxpayer is on the hook for via this grandiose German property belonging to the Guta family.  Whether or not the German authorities will step in regarding the sale of the mansion is unclear via German State guarantees on loans and/or German corporate contracts with Mriya whilst under Mykola Guta’s stewardship.

Should Mr Guta be extradited to Ukraine it will be very interesting to witness the judicial machinery in action, for there is certainly strong indication that somebody in Ukraine has been “looking after” Mr Guta (and his “interests”) since he fled.  Such an individual would have to wield some rather significant clout considering the calibre and influence of the victims of his thievery.

Quite who that “roof” atop the system is has been particularly difficult to identify, so perhaps his extradition to Ukraine, if it occurs, may provoke a response in which that individual comes into focus somehow.

Whatever the case it would appear that the Guta’s feel the need to turn some rather splendid (even if nefariously acquired) assets into cash that can once again “disappear”, or perhaps be used to grease the corrupt wheels of the Ukrainian judiciary if the need arises.  This is perhaps an interesting question as a reader may recall the cancellation of Mr Guta’s arrest warrant in 2016 by the court in the first instance in absolute defiance of a ruling by the appeal court, forcing the SAP to get the arrest warrant reinstated by the cassation court.

In the meantime it is rumoured that the debt restructuring is almost complete and that a strategic investor will by Mriya (Salic of Saudi Arabia via its recently acquired Continental Farmers Group).  Naturally the Guta family are still creating disputes over land, equipment and attempting to pry leaseholders from the land-bank, together with the expected black PR relating to the current western management of the company.