Graham Stack in Berlin -

Moldova's first deputy speaker, Vladimir Plahotniuc, reputedly the country's richest man and a political kingmaker, could face criminal prosecution in UK on contempt of court charges, according to lawyer Patrick Boylan of Simmons & Simmons, "if a London court finds he is behind the transfer of shares frozen under court order."

According to Boylan, shares in UK company Tomdal Ltd. are believed to have been transferred to a Russian company, despite a London court having ordered an assets freeze during litigation. Plahotniuc features as the economic owner of the company, according to documents obtained by a court discovery order and seen by bne.

Tomdal is only one of several UK companies to which share packets in Moldovan banks and insurance companies were ultimately transferred without knowledge of their owners following apparently crooked court decisions in what is Europe's poorest country in 2010-2011. Plahotniuc was revealed to be the beneficiary owner of all the UK companies, following the discovery order in England and Scotland. Lawyer Boylan is representing Moldovan businessmen Victor and Viorel Topa, who claim that the UK companies now own share packets rightly belonging to them and expropriated in 2010 and 2011 by Plahotniuc.

According to Boylan, Plahotniuc has already attempted to claim diplomatic immunity as deputy speaker of parliament in the framework of a Cyprus court case also relating to breach of a court-imposed asset freeze. "The claim was laughable, and the Cypriot court ruled that under international law he would not enjoy sovereign immunity," Boylan said, who warned that, "English courts take contempt of court very seriously."

In February 2012, a London high court judge handed down a 22-month prison sentence to the former owner of Kazakhstan's BTA bank, Mukhtar Ablyazov, on contempt of court charges relating to breach of an asset freeze.

Plahotniuc has vigorously denied all the Topas' allegations about his role in the Moldovan "raider attacks". According to his press secretary Diana Danu, "the topic of the raider attacks was made a subject of a political campaign in Moldova, a smear campaign originating in Moldova, and coordinated by a criminal group led by Mssrs Topa, two business people that have been convicted by a court of law." Danu says that any documents compromising Plahotniuc were forgeries.

Bank robbery

The waves of dodgy asset transfers labelled "raider attacks" in Moldova started in 2010 and peaked in 2011. "We had held a stake in Victoriabank since 2005 via companies," Victor Topa tells bne, "but when we attended the shareholders' meeting in July 2010, we suddenly found out that we no longer owned the shares."

The Topas then discovered a whole series of court decisions had been secretly set in motion in the preceding months that had transferred most of their stake to non-resident companies. And hardly they got their breath back than further court decisions in 2011 disappeared the remainder of their shares in Victoriabank, an 18% stake in Moldovan savings bank Banca de Economii, and a controlling stake in Moldova's second largest insurance company Asito. In all cases, the stakes were shifted to shell companies across the globe; ultimately they were parked with UK companies.

The Moldovan court decisions all involved alleged million-dollar debts owed by the Topas' ownership vehicles to previously unknown offshores, which it was claimed were collateralised by the bank shares. They also involved the same court and group of judges, and crudely tampered paperwork including judgments entered post hoc on the bottom lines of the court ledgers for those dates. "On the one hand it was sophisticated, on the other hand it was unbelievably brutal and transparent, and easy to convince an English judge that these court decisions had been fraudulently obtained," lawyer Boylan says.

Bizarrely, for all the shenanigans in Moldova, court discovery orders obtained in England and Scotland as well as Cyprus revealed that Plahotniuc was down in black and white as economic owner of all the companies that now control the disputed share packets - without any smokescreen use of strawmen or relatives. Since Plahotniuc's outing as owner of the stakes, moves have apparently been made by at least one of the UK companies, Tomdal Ltd., to sell on the stakes despite the assets freeze. The moves could yet spell trouble for Plahotniuc if he is judged to be their initiator.

All change

The Topas are not the only ones hurting. Altogether the "raider waves" and linked transactions saw large stakes in Moldova's three largest banks, a controlling stake in a smaller bank, and controlling stakes in the two largest insurance companies mysteriously change hands 2010-2012, with no clarity over the new owners. The country's reformist prime minister, Vlad Filat, called the raiding spree "an attack not only on our banking system, but on our country itself."

Bogdan Tirdea, Moldova's leading oligarch watcher, says the amounts could be as much as $100m. "There has never been anything like this in Moldovan history."

For all of Filat's outrage, only in one case has the outcome of a raid been reversed: in August 2011, a Moldovan court transferred a blocking stake of just under 27% in Moldova's largest bank Agroindbank from ownership by a pool of Slovenian financial investors to two Seychelles companies, on the basis of a forged ruling from a Russian court. Agroindbank took a €20m loan from the European Bank for Reconstruction and Development (EBRD) in 2009, with further funding under consideration. The panic among the European diplomatic community in Chisinau was great, and pressure piled on behind-the-scenes. A quick Supreme Court decision in September 2011 resulted in the Agroindbank stake being returned to the Slovenian owners. The EBRD refused to comment on the situation in Moldova despite holding a blocking stake in Victoriabank and being the main creditor to Agroindbank.

Domestic investors have been less lucky than the quick response the EBRD got. Russian banker German Gorbuntsov was worst hit - literally. His 80% stake in small Moldovan bank Universalbank was also transferred by Moldovan court order to a Seychelles company in August 2011. The bank had its license withdrawn in February 2012. Gorbuntsov, who has been accused of money-laundering in Russia, was then shot and badly wounded in London in April this year. Gorbuntsov has said he believes Russian interests were behind the shooting.

The change of owners in Moldovan companies is still going on, although with less brutal methods. In July, five recently registered Moldovan companies bought 80% of the country's largest insurance company on the open market from Russia's Rosgosstrakh, for around $16m. According to information obtained by the Topas, for which there is no independent confirmation, two of these companies raised funds for the acquisitions using as collateral the bank shares parked with the UK shell companies.

Another Moldovan company that apparently raised funds by collateralizing the disputed stakes, GSER Grup, appears involved in Payza, a global e-payment company that is a successor to Alertpay. Payza CEO Alastair Graham declined to comment on Moldova plans.

And following the transfer of the Topas' 18% stake in state-controlled savings bank Banca de Economii - slated for full privatisation by the government - war broke out between the new unidentified minorities and the state's interest in the bank, leading to two competing boards elected in April 2011, and an interim solution only reached in August, with the unknown minorities getting two representatives on the board - but still no clarity about their identity.

Democracy hijacked by oligarchs

Moldova's democratic breakthrough of 2009, which saw a pro-European coalition replace a conservative Communist regime, stirred hope that Moldova could be a bridgehead for reform in the former Soviet Union. Some progress has been made, but it seems powerful businessmen such as Plahotniuc, behind the scenes during the Communist administration, adroitly jumped ships in 2009 to achieve direct power via democracy. Plahotniuc, who made his money in fuel trading under Communist president Vladimir Voronin, is now first deputy president of Moldova's Democratic Party, a key member of a ruling Alliance for European Integration coalition that enjoys only a slim parliamentary majority vis-a-vis the Communist opposition. He is regarded as the party's main financial backer.

The "bank robberies" pose obvious questions about the rule of law in Moldova, and not about bent judges at commercial courts, but of politicisation or commercialisation of the country's top legal offices.

Two weeks after the Topas went public in August 2010 with their accusations against Plahotniuc, Moldova's Prosecutor General, Valeriu Zubco, after consulting with the Anti-Corruption Prosecutor, duly launched criminal proceedings - against the Topas. In October 2011 Victor Topa was sentenced in absentia to 10 years in jail on blackmail charges; Viorel Topa was sentenced in absentia in January 2010 to eight years in jail on fraud charges. Both men, now resident in Germany, say the charges are politically motivated. "The Topas may not have been angels but the timing of the charges makes it clear they were political," says Tirdea.

PM Filat has acknowledged as much. In an interview on October 16, 2011 in newspaper Timpul, Filat indicated that Zubco was Plahotniuc's man. "Then there was the vote for the candidate for the post of general prosecutor - Valeriu Zubco. I invited all my colleagues from the Alliance for European Integration to the meeting, looked them in the eyes and asked: 'Whose man is he?' I wanted to know what they would tell me, although I already knew then that the post was assigned by quota to the Alliance Moldova Nuestra, but they had given it to the Democratic Party in exchange for getting their man as head of the security service. So the Democratic Party got the post of Prosecutor General."

Filat in the interview further recalled how during negotiations on the renewed Alliance for European Integration, Plahotniuc made the prime minister wait in the lobby of his hotel Codru while he finished with a girl. "We then discussed the creation of the alliance. They (Democratic Party) tried to make me give them as much as possible, and I hoped that after this they would have satisfied their hunger for state institutions and would be governed by common sense in their work. Unfortunately this has not happened."

"None of this would have been possible without protection from the very top," says oligarch-watcher Tirdea. "Plahotniuc controls both the Prosecutor General and the Anti-Corruption Prosecutor, and this has been the root of all the evil."