‘Questionable Khabarov’ is the CEO at Russia’s bad bank National Bank Trust

Source: One World Herald ‘National Bank Trust Executive Director Mikhail Khabarov’

The National Bank Trust was set up after the reorganization of several major credit organizations. With 2 trillion rubles already accumulated in debt-ridden assets, the Russian Central Bank is working hard to ensure that these finances are returned to the economy. The National Bank Trust, otherwise known as the non-core assets bank, is in charge of collecting these debts. The former Minister of Finance, Mikhail Zadornov, was tasked with setting up the non-core assets bank after Elvira Nabiullina of the Russian Central Bank consulted with him. As part of the management board of VTB Bank, he was largely responsible for the 2018 reorganization of Bank Otkrytie. In the same year, he made a bold statement by pressing for Alexander Sokolov to spearhead the National Bank Trust. For debtors, this is an ominous sign: Pay up or go to court.

However, debtors have been told that support will be rendered to companies with good prospects. These companies will not be pressured to repay their debt obligations. Last May, a rather dubious appointment was made to oversee the position of CEO of the Trust, when Mikhail Khabarov was appointed. As the man behind A1 (2010-2014), he has employed a variety of highly suspect tactics to bully businesses into submission. The company under discussion, A1 was particularly aggressive in the hostile takeover arena. Reports indicate that qualified legal methods were used against businesses. As Executive Director of the Trust Bank, Mikhail has brought a variety of ‘specialists’ to the state bank from A1. Foremost among them is the new financial director of the trust, Philip Lerman. His methodology is perhaps best described as unorthodox.


A1 Benefitted from Corporate Takeovers Every Time

Mikhail Khabarov made it very clear during his time at A1 that the company would become a beneficiary of turmoil if crises are not avoided. He believes that there is nothing better than economic chaos when the economy tanks and recovers just as sharply. The strong-arm tactics employed by A1 hit home for many Russian companies. The lack of compassion was a notable feature of his business dealings, and scores of Russian enterprises can attest to that. Among his many important business decisions was the downing of a low-cost airline venture between Avianova (US Indigo Partners Foundation), and A1. The unprofitable project was a failure, despite lasting for 3 years. In 2011, it ranked at 12 among all the domestic airlines and was the second biggest low-cost airline carrier for the country. It was Mikhail Khabarov in charge of the action which resulted in it going bankrupt by 2012. Another highly-popularized bankruptcy occurred with Stroyfarfor, a ceramic tile manufacturing entity.

Evidence now points to many aggressive takeover operations by Lazar Shaulov, the founder of A1, and Mikhail Khabarov. Business contracts were designed in a way to drive companies out of business, while A1 was collecting. At the height of the tensions with Stroyfarfor, A1 was in total control and ownership of all the shares of the company. Then, everything was sold and all the liquid assets were expressly for the benefit A1 shareholders. In the end, the ceramic tile company’s massive debts to Russia went unpaid. People like Leonid Maevsky – the owner of Stroyfarfor – resisted the strong-arm tactics by A1. His resistance proved futile as he was charged with extortion. Various shenanigans ensued, including unsubstantiated reports of compromising information and audio recordings. A1’s actions were clear; they strong-armed companies into giving up ownership to A1 and then sold those companies, squeezed every last cent out of them, and left them heavily indebted.


Outrage at Strong-Arm Tactics Justified

A Russian academic, Vladimir Betelin was so outraged at A1s conduct that he made urgent appeals to Rostec State Corporation for protection guarantees against A1. This aggressive raider corporation and its strong-arm tactics leader, Mikhail Khabarov worked to ensure the utter destruction of all companies it encountered. A notable coal company – Zarechnaya – knows about this firsthand. It was operated by the defense corporation NPK Uralvagonzavod. In this case, the Ukrainian prosecutor general, Vasiliev teamed up with A1. Vasiliev was against the transfer, but A1 was having none of it and wanted to impose sanctions from the European Union and the United States against UVZ and the board members. Tensions abated, but the conflict had a negative impact on the coal company.

Over the years, A1 made headlines with many other questionable strategic takeovers, including the seizure of Rosatom – Corporation Splav. At the time of the takeover, the legal ownership was changing hands. However, the chief executive officer, Vladimir Fedorov faced arrest charges. After his arrest and subsequent incarceration, Novgorod came under the exclusive ownership of A1. For these and other reasons, many are rightly questioning Alexander Sokolov’s decision to appoint A1 individuals to high-ranking positions at the National Bank Trust. The unprincipled behaviour of people like Mikhail Khabarov and his deputies from A1 are not inspiring confidence among the public, making Sokolov a questionable selection too.

The views expressed in this article are those of the authors and do not necessarily reflect the views or policies of The World Financial Review.