The "Putin's Banker" protagonist, Sergei Pugachev, who co-founded the Mezhprombank, has had his decision to remove New Zealand lawyers from his trusts supported in a High Court decision.
Auckland lawyers Ben Lenihan, who had worked in Eastern Europe, had served as director on companies
Bill Patterson
associated with Pugachev, andParnell-based trust lawyers Bill Patterson and Robyn Hopkins of Patterson Hopkins represented the Pugachev trusts.
Mr Lenihan, formerly with Simpson Grierson, had faced liquidators representing Russian state organisations tasked with tracking down assets controlled by Mr Pugachev, who has fallen foul of Putin.
Meanwhile, Mr Pugachev denies the allegations made against him and claims the Russian government has seized US$15 billion of his assets. He is suing the Russian government for almost US$20 billion.
A decision from Justice Heath in the past week has supported the billionaire's removal of New
Zealand trustees. Mezhpromobank was declared insolvent by a Russian court in 2010 and criminal
investigations followed. Mr Pugachev currently lives in France but five trusts were set up in New Zealand.
The New Zealand trustees sought court orders as to whether they had been validly removed by Mr
Pugachev or his interests and seeking clarification regarding the transfer of trust assets in the face
of the global freezing order over Pugachev assets.
The Herald reported that the removal from the trusts of one of Pugachev's associates, Natalia Dozortseva, was seen as "unwarranted and impulsive course of action" by Patterson and as a result he had lost confidence in the lawyer's ability to act appropriately as a director of the original trustees.
Justice Heath said exercising the power to removal trustees and appoint others, in circumstances where there has been a lost of trust and confidence in those responsible for directing the original trustees, cannot be regarded as having been done for an improper purposes.
There was no reason to suggest, based on the uncontested evidence of Pugachev and his son, that the power to remove the original trustees was exercised improperly, the judge said.
"As a result, I am prepared to make directions that the original trustees have been validly removed," Justice Heath said in his decision on 2 October.
The judge said the original trustees shall transfer assets to their replacements once London courts had made an order varying freezing orders to allow that to happen.
Since August, the New Zealand trusts have been caught by the worldwide freezing orders when the UK Court of Appeal's Lord Justice David Bean said "a good arguable case that the assets held by the trusts are in reality assets of, or under the control of, Mr Pugachev".
See the full decision here
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