Belfast Telegraph

Friday 25 July 2014

Pair to challenge contempt of court ruling by defying prohibition on disposal of property linked to Sean Quinn

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A Ukrainian lawyer and an economist are set to challenge a ruling that they were in contempt of court by defying a prohibition on the disposal of eastern European property linked to bankrupt ex-billionaire Sean Quinn.

Earlier this year Oleksandr Serpokrylov and Dmytro Zaitsev were fined £15,000 each by a judge in Belfast.

The pair were warned in February that they would be sentenced to four weeks in jail if they did not pay the financial penalty within six months.

But it emerged today that they are seeking to appeal the findings reached by the Northern Ireland High Court.

Their previous legal representatives are also expected to apply to come off record in the case.

Punishments were imposed on the two men for acting in contempt of an injunction over a $45 million US dollars shopping centre in Kiev.

The pair, as representatives of a mysterious offshore companysean q, were held to have flagrantly and deliberately ignored an order against any transfer of debts surrounding the mall.

Lawyers for the Irish Bank Resolution Corporation issued contempt proceedings against Mr Serpokrylov and Mr Zaitsez, and the British Virgin Islands-registered Lyndhurst Development Trading SA, for allegedly flouting the injunction imposed at the Northern Ireland High Court in December 2011.

IBRC, the former Anglo Irish Bank, has been seeking control of Mr Quinn's international empire in an attempt to recoup more than £2bn.

As part of the wider legal battle Lyndhurst Development Trading was prohibited from enforcing any loan agreement.

It was alleged that the injunction was ignored later the same day at a hearing in Kiev.

Lyndhurst secured judgment from the Ukrainian court that it was entitled to enforce a $45m debt against the firm which owns the mall, Univermag.

In a previous judgment Mr Justice McCloskey found the property debt was transferred from one of Mr Quinn's companies to put it beyond the reach of IRBC.

All disputed transactions were declared null and void, with control returned to the former Anglo Irish Bank.

A chain of assignments scrutinised in the case set out how Fermanagh-based firm Demesne Investments, of which Mr Quinn is a former director, was owed $45m by Univermag.

But in April 2011 Demesne transferred its rights to the debt to Innishmore Consultancy, another Northern Ireland company run by Mr Quinn's nephew Peter Quinn.

From there the loan was moved on to Lyndhurst.

Lawyers for IBRC argued that the assignment was a sham, part of an asset-stripping exercise carried out at a massive undervalue and not worth the paper it was written on.

Despite securing judgment, they have pressed ahead with contempt of court proceedings against Lyndhurst, Mr Serpokrylov, a lawyer, and Mr Zaitsez, an economist.

The two men appeared before the High Court by video-link from Kiev to defend the action.

In a scathing judgment Mr Justice McCloskey found both them and Lyndhurst in contempt of court.

Although he described the two men as "relatively minor players in the overall scheme" who had acted on their client's instructions, the judge said they had continued to withhold information.

A challenge to his findings could now go before the Court of Appeal later this year.

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