{"id":8522,"date":"2024-11-25T10:11:02","date_gmt":"2024-11-25T10:11:02","guid":{"rendered":"https:\/\/finderica.com\/czech-property-tycoon-braces-for-hit-from-e500mn-freezing-order\/"},"modified":"2024-11-25T10:11:02","modified_gmt":"2024-11-25T10:11:02","slug":"czech-property-tycoon-braces-for-hit-from-e500mn-freezing-order","status":"publish","type":"post","link":"https:\/\/finderica.com\/?p=8522","title":{"rendered":"Czech property tycoon braces for hit from \u20ac500mn freezing order"},"content":{"rendered":"
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Unlock the Editor\u2019s Digest for free<\/p>\n<\/div>\n

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One of Europe\u2019s largest property groups is bracing for the impact of a complex legal dispute between its billionaire owner and two convicted money launderers who say they privately bankrolled him.\u00a0<\/p>\n

Senior executives at CPIPG, the Frankfurt-listed group run by Czech billionaire Radovan V\u00edtek, are preparing plans to segregate \u20ac537mn of assets following a freezing order from a Cypriot court.<\/p>\n

The court made the order in favour of the two litigants, Czech investors Marek \u010cmejla and Ji\u0159\u00ed Divi\u0161, earlier this year. But legal wrangling has until now meant that it has not been enforced. <\/p>\n

The investors\u2019 victory increases the likelihood that the central claims at the heart of the dispute \u2014 which has bounced from jurisdiction to jurisdiction due to technical legal challenges over the past few years \u2014 could finally be heard.<\/p>\n

\u010cmejla and Divi\u0161 have been unsuccessfully pursuing CPIPG and V\u00edtek through the courts for several years, alleging the billionaire developer cheated them out of a huge early investment in his group. V\u00edtek has denied the claims and cases in the Czech Republic, Luxembourg and US have all been thrown out. <\/p>\n

V\u00edtek, CPIPG\u2019s Swiss-resident majority shareholder, built his property empire through a series of audacious and sometimes aggressive takeovers, swooping on underpriced property companies \u2014 often using complex financial structures to secure control.<\/p>\n

In their application for the asset freeze seen by the FT, \u010cmejla and Divi\u0161 claimed that a complex series of corporate shells and trust arrangements were manipulated to lock them out of access to property assets to which they had legal title.<\/p>\n

V\u00edtek denies that he had any clandestine arrangement with the pair. <\/p>\n

At the centre of the investors\u2019 case is the accusation that a\u00a0\u201cparity partnership\u201d with V\u00edtek was established in secret because, as convicted money launderers, it was felt by both themselves and the property tycoon that any publicly-known investment might have had a detrimental effect on the group\u2019s access to future sources of capital and banking services. <\/p>\n

In 2013 Switzerland\u2019s central criminal court found the pair guilty of a \u201cmassive\u201d criminal scheme to plunder Czech coal company Mosteck\u00e1 uheln\u00e1 spole\u010dnost, or MUS, in which money was laundered through a network of more than 100 Swiss bank accounts. <\/p>\n

CPIPG and V\u00edtek\u2019s legal advisers argue the conviction should have significant bearing on the legal dispute. <\/p>\n

Although CPIPG executives dispute the allegations, the group has been forced to develop legal contingency plans to comply with a notice expected from the court in Cyprus, people familiar with the matter told the Financial Times. <\/p>\n

The group believes it can easily pledge unencumbered liquid assets from its \u20ac20bn portfolio to meet the court order\u2019s requirements, the people said, and will not have to pledge cash.<\/p>\n

But the lawyer for the investors, Marek Stubley, has cast doubt on whether \u201cring-fenced\u201d property assets pledged by legal means from CPIPG would fulfil the Cypriot court\u2019s asset freezing order. He said his clients expected cash to be held in segregated bank accounts.<\/p>\n

Many large European commercial property investors are still facing a liquidity squeeze after portfolio values nosedived due to rising interest rates over the past two years.<\/p>\n

Executives at CPIPG, which has \u20ac4.9bn of bonds outstanding, say they have ready access to capital and liquidity, and have been completely transparent with creditors over the legal challenge to the company.<\/p>\n

\u201cThe plaintiffs have repeatedly tried, and failed, to \u2018forum shop\u2019 these allegations across courts in various jurisdictions,\u201d CPIPG said in a statement. <\/p>\n

\u201cThe ruling in Cyprus, which CPIPG has appealed, has had no practical impact on the Group or any bank accounts or assets belonging to CPIPG or V\u00edtek. CPIPG\u2019s real estate portfolio continues to perform well and we remain focused on executing our strategy.\u201d<\/p>\n

The appeal process could take up to two years to complete. The Cypriot courts have held that a full complaint must be filed by \u010cmejla and Divi\u0161 by the first week of December. <\/p>\n

The 53-year-old V\u00edtek is a combative figure, who, in a 2018 dispute with the local municipality for the luxury Swiss resort of Crans-Montana, turned off the ski lifts which he then owned. The move choked the town of the winter sports enthusiasts that were its most valuable source of money. <\/p>\n

V\u00edtek sold his investment in Crans-Montana\u2019s ski lift operator last year.<\/p>\n

CPIPG has also been targeted by the prominent short seller Muddy Waters, which in November 2023 accused V\u00edtek of overvaluing assets and \u201casset stripping\u201d companies in the group. <\/p>\n

An independent review<\/a> into the group\u2019s financial affairs by law firm White and Case, commissioned in response by CPIPG\u2019s board, concluded in September that the allegations were unfounded. <\/p>\n<\/div>\n

Source link <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Unlock the Editor\u2019s Digest for free One of Europe\u2019s largest property groups is bracing for the impact of a complex legal dispute between its billionaire owner and two convicted money launderers who say they privately bankrolled him.\u00a0 Senior executives at CPIPG, the Frankfurt-listed group run by Czech billionaire Radovan V\u00edtek, are preparing plans to segregate<\/p>\n","protected":false},"author":2,"featured_media":8523,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"rank_math_lock_modified_date":false,"footnotes":""},"categories":[206],"tags":[2988,2987,2986,2369,927,813,1405,708],"class_list":{"0":"post-8522","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-financial-crime","8":"tag-500mn","9":"tag-braces","10":"tag-czech","11":"tag-freezing","12":"tag-hit","13":"tag-order","14":"tag-property","15":"tag-tycoon"},"_links":{"self":[{"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/posts\/8522","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=8522"}],"version-history":[{"count":0,"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/posts\/8522\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/media\/8523"}],"wp:attachment":[{"href":"https:\/\/finderica.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=8522"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=8522"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=8522"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}