On January 26, 2024, the High Anti-Corruption Court made a decision on the claim of the Ministry of Justice of Ukraine to recover the assets of Eduard Khudainatov located on the territory of our state.
After the full-scale invasion, dozens of international companies announced their withdrawal from Russian markets and announced their desire to support Ukraine. Some even announced sending funds to help our state. However, some international heavyweights decided to sit on two chairs. For example, the oil and gas giant Royal Dutch Shell has not stopped collaborating with the Russian Federation since the beginning of the full-scale war, although it announced the creation of a fund to support Ukraine. The reason is quite prosaic - war is war, and Shell structures had at least three large projects with the Russians: shares in Sakhalin-2 and Salim Petroleum, as well as participation in the Caspian Pipeline Consortium.
Well, yes, Shell announced its withdrawal from the Sakhalin-2 project, and it seems to have withdrawn from Salim Petroleum, but, let’s say, on its own terms. Let us recall that the shareholders of Salim Petroleum on a parity basis with the Russians until December 22, 2022 were the aforementioned transnational giant and the Gazprom Neft company. Few people know that Shell’s withdrawal from this partnership was accompanied by a rather non-public process in Ukraine and the Netherlands, which concerned the joint company Alliance Holding. In this enterprise, 51%, through a company from the Netherlands, belonged to Royal Dutch Shell, and another 49% belonged to Putin’s oligarch Eduard Khudainatov.
Let us recall that Khudainatov owned a number of assets both in Russia and Ukraine. Khudaynatov is not just an ordinary Russian billionaire, he is truly integrated into Putin’s inner circle, because he was on the board of directors of Rosneft and is considered one of dozens of “pockets” of the Kremlin head due to his connection with Igor Sechin. The latter has accompanied Vladimir Putin throughout his career, dating back to the time the current President of the Russian Federation worked in the mayor’s office of St. Petersburg.
On January 26, 2024, the High Anti-Corruption Court made a decision on the claim of the Ministry of Justice of Ukraine to recover the assets of Eduard Khudainatov located on the territory of our state. Then 100% of his shares in the authorized capital of NK Alliance-Ukraine LLC were recovered. It seems like a victory. But not entirely so, because VAKS refused another request of the Ministry of Justice - the recovery of the mentioned 49% share in the authorized capital of Alliance Holding. The reason for the refusal was a number of actions committed by Royal Dutch Shell in order to dilute Khudaynatov’s share in the offshore company Cicerone Holding BV, which in turn is owned by NK Alliance Holding LLC. The international conglomerate planned and carried it out.
Legally it looked like this. At the beginning of a full-scale war, through the offshore company Todwick Ltd (Malta), Eduard Khudainatov actually owned 49% of NK Alliance Holding LLC. In turn, Royal Dutch Shell controlled, through Shell Overseas Investments BV, a 51% stake in the specified Ukrainian legal entity. Let me remind you that the Cabinet of Ministers of Ukraine, by resolution No. 187 of March 3, 2022, “On ensuring the protection of national interests in future claims of the state of Ukraine in connection with the military aggression of the Russian Federation,” established a public moratorium on the alienation (redistribution, etc.) of corporate rights of legal entities in Ukraine, where the final beneficiaries are the constituent entities of the Russian Federation. Naturally, Khudainatov fell under the scope of this moratorium. Transactions (including powers of attorney) concluded in violation of this moratorium, including if they provide for a corresponding alienation in the future, are void. Subsequently, Khudainatov’s “Putin pocket” came under sanctions from both the Ukrainian side and the European Union.
However, despite this public moratorium, Royal Dutch Shell applied to the Business Chamber of the Court of Appeal of the City of Amsterdam for the purpose of additional issue (emission) of shares of Cicerone Holding BV. No one put any obstacles in its way.
The issue in fact eroded the share of Eduard Khudainatov, gradually reducing his participation from 49 to 2.56%. The oil and gas giant could not have been unaware of the public moratorium. The corresponding actions contradict both international law and the rules of law in Ukraine and the Netherlands. The above-mentioned issue of shares led to a reduction in the scope of rights to manage the portfolio of shares of Cicerone Holding BV by Khudainatov. As a consequence, this deprived Ukraine of the right to compensation for losses caused by armed aggression from the assets of the person who, through his companies, contributed to the full-scale invasion.
Of course, there is a version of the company that justifies Shell Overseas BV’s appeal to the Business Chamber of the Amsterdam Court of Appeal by the need to financially rescue the company Cicerone Holding BV. Allegedly, the latter needed financial injections after a full-scale invasion for further functioning.
The funds were provided precisely as financial assistance (repayable and non-repayable) to a Ukrainian legal entity, although they should have been contributed to the authorized capital. However, starting from May 2022, Shell Overseas Investments BV has been making a demand that further support for Ukrainian business is possible only if the share of corporate rights is increased, and demands an additional issue of shares in the said company. Shell Overseas Investments BV argued its position, among other things, by the refusal of Todwick Holdings LTD, which Khudainatov controls, to provide initiated monetary support.
Actually there was another option. Shell Oveseas Investments BV could theoretically buy out a stake in Cicerone Holding BV from Todwick Holdings Ltd, a company controlled by Khudainatov. But there is one thing. At that time, on June 3, 2022, the European Union had already imposed sanctions on “Putin’s pocket.” That’s why Shell lawyers ran to the Business Chamber of the Amsterdam Court of Appeal and gradually eroded Khudainatov’s share in Cicerone. I don’t care about sanctions or the public moratorium established by Ukraine. International giant Shell desperately needed to oust a toxic shareholder from its joint venture. We no longer remember the organized “assessment” of the value of the assets of NK Alliance Holding LLC at 700 thousand dollars. This is not even funny anymore, because if you divide this amount by the number of gas stations in Ukraine, it turns out that the cost of one gas station is equal to thirds of the lease of such a gas station. Therefore, we will not even draw your attention to the findings of the KPMG audit - it is simply a shame how the international giant Royal Dutch Shell technically organized its deal.
Meanwhile, as of July 2023, Royal Dutch Shell continues to trade Russian gas after promising to exit the Russian energy market. Although, after a full-scale invasion of Ukraine, Shell announced its exit from the Russian market and the write-off of up to $5 billion of assets and investments in Russia. We were talking about a 27.5% stake in the Sakhalin-2 project, which concerns a large oil field and offshore gas drilling in the Far East of the Russian Federation. Here we also see the principle “there is one but” - in the future Royal Dutch Shell signs an agreement with the Russians, namely with the Novatek company (controlled by another Putin friend Gennady Timchenko and oligarch Leonid Mikhelson), on the sale of its shares for 95 billion rubles, which at that date amounted to a little more than a billion dollars.
War is war, and money is money. So we can assume that the dilution of Eduard Khudainatov’s shares in the Cicerone company was part of a deal to sell (and not gratuitously nationalize) shares in the same Sakhalin-2 project to Putin’s entourage. We hope that the judges in the HACC Appeals Chamber will understand the global game and the attempt in a “legal” way to get Putin’s oligarchs out of harm’s way after the imposition of sanctions by the European Union. Accordingly, they will decide to collect Khudainatov’s full share in Alliance Holding LLC as revenue for the state, that is, 49%, and not 2.56%.
