A well-known Russian businessman who caused the bankruptcy of an Eastern European bank: Why Julius Baer stands accused of having helped him and why it may have cause for worry.
Julius Baer seems haunted by the past: German authorities continue to pursue the Zurich-based private bank in a bid to recover missing cash from the times of the German Democratic Republic. And last week, it was served with a claim to the tune of 306 million euros.
The court proceedings against Julius Baer have been initiated in the plaintiff's country of domicile in the European Union (EU), the bank said in a statement a week ago. Without giving more detail, the bank referred to its annual reports, where the claims have been listed since 2013, giving some additional background on the case.
Baer Contests Claim
The foreign company claiming the money accuses the Swiss bank of having failed to prevent two of its customers from misappropriating assets of the claimant. Julius Baer contests the claim vigorously.
The management doesn't seem unduly concerned about the upcoming court case, sources close to the bank said.
But Julius Baer may still have cause for worry. The claimant is Bank Snoras, a Lithuanian company.
At Stake: National Pride
The government of the Baltic state in 2011 nationalized the bank and sent it into liquidation, following the suspicion of fraud at the institute. In other words: The origin of the claim against Julius Baer in truth is the state of Lithuania and the place of jurisdiction is its home turf.
Dalia Grybauskaite, the president of Lithuania, bluntly described what had happened at Snoras following the nationalization: «Snoras activity can be regarded as an attack not only on the banking system of Lithuania, but also on the interests of the Lithuanian society.»
A Bank Run
The national pride evoked by the president was directed against one man: Russian citizen Vladimir Antonov, who owned 68 percent of Snoras Bank. Raymond Baranauskas, a Lithuanian, held a further 25 percent.
On the day after the nationalization of Snoras – customers had plundered their accounts in a classic «bank run» – Lithuania issued an international arrest warrant against Antonov.
The charge: Misappropriation of 565 million euros, document forgery and embezzlement.
Missing Money Found in Switzerland
The liquidator of Snoras went on the hunt for the missing assets and struck gold in Switzerland – at Julius Baer and HSBC private banks.
Antonov and Baranauskas had transferred hundreds of millions into Swiss accounts. Julius Baer initially received a claim amounting to 422 million euros.
From 2008 to 2011, the two owners executed 33 transactions to offshore accounts in Switzerland, on the Cayman Islands, Cyprus and Belize, according to media reports in Lithuania.
British Decision
Why Julius Baer accepted the money from Antonov, even if the origin of the money had been disguised, remains open to questions. A background check on Antonov would have revealed quite a lot.
Britain's FSA financial market authority in 2009 for instance refused Snoras a banking license because of its main shareholder and president Antonov.
FSA explained that he had withheld important information and that this wasn't an isolated incident but an example of a pattern at companies controlled by the Russian. In other words: Antonov is notorious for shady business deals.
The Son of a Rich Father
Antonov, 34 at the time, also controlled Conversbank, an Eastern European banking institute also active in the U.K. Furthermore, he owned Russia's Investbank.
Antonov owed his business empire to his father Aleksandr, one of the choice few who amassed riches when the Soviet Union crumbled. The billionaire businessman in 2009 survived an attempt on his life.
Lucrative Risk
Julius Baer accepted Antonov as a customer in the years from 2008 through 2011. A risk for the bank, but a lucrative one based on the claim of the Snoras liquidator.
finews.ch hasn't been able to ascertain where the assets transferred to Julius Baer are today. The liquidator hasn't yet responded to our request for information. Antonov meanwhile has been said to be close to the Russian Mafia – that's at least what several media reports and bloggers suggested.
Stylish Cars and Mediocre Football Clubs
Antonov also resurfaced in the car industry and in motorsports. He first acquired Dutch car manufacturer Spyker and then assumed a stake in Saab, the crumbling Swedish maker of cars for the design elite. The Swedish authorities took their time to vet the deal because Antonov had acquired such a bad reputation.
Following the example of Chelsea FC owner Roman Abramovich, Antonov bought Portsmouth FC in 2011. The authorities in the U.K. however arrested Antonov a short while later based on the warrant issued by Lithuania. The Russian eventually lost his fight against extradition to the Baltic state in 2015, but managed to escape to Moscow.
Claim and Counterclaim
Meanwhile, Antonov filed his own claim against Lithuania, demanding 622 million euros be returned to him, arguing that all accusations were wrong.
Julius Baer is stuck in the middle of this case of claims and court cases, embezzlement and fraud, football and stylish cars – and an uneasy relationship between Russia, the giant, and Lithuania, the small independent democratic republic along the Baltic sea. Only the bank and Antonov know whether he is still their client.
