Day 13

(1) Bank St Petersburg PJSC (2) Alexander Savelyev v (1) Vitaly Arkhangelsky (2) Julia Arkhangelskaya (3) Oslo Marine Group Ports
LLC

Day 13

February 19, 2016

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February 19, 2016 Day 13

1 Friday, 19 February 2016

2 (9.45 am)

3 MR JUSTICE HILDYARD: Good morning.

4 MR LORD: May it please your Lordship.

5 MR JUSTICE HILDYARD: Good morning.

6 MR ARKHANGELSKY: Good morning.

7 MR LORD: May I thank your Lordship for sitting early today.

8 It is much appreciated.

9 MR JUSTICE HILDYARD: Not at all. Thank you.

10 MR LORD: Your Lordship asked me yesterday why I was putting

11 some questions, or so many questions, perhaps, about

12 some financial matters and your Lordship will appreciate

13 that the defendants’ counterclaim is that there was

14 a conspiracy to steal two valuable businesses, so the

15 question of whether they were valuable businesses

16 obviously goes to the credibility and liability on that

17 counterclaim. It would go to issues of causation and it

18 would go to issues of quantification.

19 MR JUSTICE HILDYARD: Yes. I don’t doubt that for a moment,

20 Mr Lord. I can see the relevance of the accounts and

21 I can see the relevance of constituent elements of

22 the accounts, including the projected advantages of

23 purchasing businesses previously not mentioned.

24 MR LORD: Yes.

25 MR JUSTICE HILDYARD: I can understand all that, and you

1 asset, you have to sell the business to realise that

2 gain in order to release it, on the face of it, to meet

3 expenses or expenditure. That was the point.

4 MR JUSTICE HILDYARD: The accounting rules as to when you

5 take things into profit and loss are mysterious, but

6 let’s keep that for another day.

7 MR LORD: I will, my Lord, I’ll —

8 MR ARKHANGELSKY: Yes, I think it is too technical and, for

9 sure it’s —

10 MR JUSTICE HILDYARD: I’m not saying that, Mr Arkhangelsky,

11 and you must answer, to the best of your abilities, the

12 questions that are put to you. I don’t want to invite

13 your conclusions, just as I don’t want to make any

14 myself at the present moment.

15 MR ARKHANGELSKY: I agree, thank you.

16 Your Lordship, may I just ask one question?

17 MR JUSTICE HILDYARD: Sure.

18 MR ARKHANGELSKY: Yesterday it was a big article published

19 by the famous Russian politician, Gary Kasparov, on his

20 website about these proceedings. And as far as

21 I understood, quite a number of politicians, especially

22 opposition politicians, they are very much interested in

23 these proceedings, and they are eager to get their own

24 opinion of what is going on here.

25 So, I just want to stress on your attention that the

1 3
1 must take your own course, because I do not wish to 1 question of transcripts has not been solved yet, and it
2 block off an avenue for want of understanding on my 2 is three whole weeks of the proceedings, and I think
3 part. 3 it’s done on purpose by the Bank of St Petersburg that
4 The only thing I was wanting to raise with you is 4 they don’t want to disclose these, and we believe that
5 the extent to which one can draw conclusions with this 5 it should be made public, especially for the public —
6 witness from certain accounting entries, as opposed to 6 the Russian public community.
7 the premises on which the entries was done. 7 MR JUSTICE HILDYARD: Well, Mr Arkhangelsky, obviously it is
8 MR LORD: I understand, my Lord, and I will bear that very 8 right that as soon as possible, the transcripts, which
9 much in mind. 9 are the most obvious means of ensuring that these
10 MR JUSTICE HILDYARD: Yes, I had a quick look at IFRS, 10 proceedings are public — that that should be arranged
11 especially with regard to negative goodwill, and I am 11 as soon as possible; but I have absolutely no reason to
12 sure that we will be educated by the experts in it, but 12 believe that the Bank of St Petersburg and their
13 the usual standard is for inclusion, subject to 13 advisers are not making their best efforts to ensure
14 impairment and valuation of negative goodwill, and, as 14 that it is available, and I think you should not leap to
15 I say, I am sure it will be elucidated as to its effect. 15 the conclusion that in some way they are working against
16 MR LORD: Yes. It was really, my Lord, that that is 16 it. I don’t say that they are not, I don’t say that
17 a non-operational item; in other words it is not really, 17 they are, but I know their advisers and I know they
18 or certainly on the face of it, a recurring business 18 would not.
19 income. It may be, but it is — 19 MR ARKHANGELSKY: But it’s three weeks and still it has not
20 MR JUSTICE HILDYARD: No, it has to be taken in all ordinary 20 been solved at all.
21 circumstances to profit and loss, but it will only be 21 MR LORD: My Lord, may I help? I think we may be able to
22 generated in one year. 22 give some positive update at lunchtime. I think things
23 MR LORD: Exactly, and there are questions of its — it is 23 have been cleared away and I think there will be
24 obviously not, on the face of it, available as a source 24 positive — I can’t guarantee and I don’t want to
25 of revenue to finance the business: you have to sell the 25 interrupt this, but I don’t want Dr Arkhangelsky to be
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1 needlessly concerned, or your Lordship to be concerned,

2 if, in fact, this problem may be ironed out.

3 MR JUSTICE HILDYARD: Good. I think we should try and

4 ensure certainty by lunchtime, and I also just want to

5 be reassured that if people do take the time and trouble

6 to come here, that they can, subject to the constraints

7 of space, gain access to watch the proceedings if that’s

8 what they want to do.

9 MR LORD: My Lord, I am told that we have talked to

10 the people on reception to make sure that that happens.

11 There’s a limit to what we can do with someone else’s

12 building.

13 MR JUSTICE HILDYARD: Yes, of course. I think I raised two

14 points: one was the ICC access, the other was that it

15 should be in conformity with any French rules.

16 MR LORD: Yes.

17 MR JUSTICE HILDYARD: Okay, let’s return to that and get on

18 with the cross-examination.

19 MR VITALY DMITRIEVICH ARKHANGELSKY (continued)

20 Cross-examination by MR LORD (continued)

21 MR LORD: Dr Arkhangelsky, I asked you yesterday some

22 questions about the OMG accounts.

23 A. Yes.

24 Q. And I wonder, please, could you be shown your 16th

25 witness statement at {C1/1/9}. Do you want it in hard

1 A. 25?

2 Q. Yes, sorry, Dr Arkhangelsky. You discuss accounts, and

3 I think in paragraph 25 you are referring to

4 the Scandinavia Insurance accounts for 2007?

5 A. Yes.

6 Q. And then in 26, you are exhibiting the combined

7 accounts —

8 A. Yes.

9 Q. — which I took you to yesterday, for the OMG group?

10 A. Yes.

11 Q. And you go on to give a bit more evidence about them;

12 can you see that?

13 A. Yes.

14 Q. So would it follow from that affidavit that there was

15 a time when you were reasonably familiar with the OMG

16 accounts?

17 A. No, I’ve just taken the major figures when discussed it

18 with Bristows.

19 Q. I understand. So should his Lordship take your evidence

20 to be that you can’t really read —

21 A. No, I always been taking care about general management

22 and global management of the group, and I never been and

23 I couldn’t be inside the accounting, and I never been

24 studying either IFRS or Russian standard accounting. So

25 it’s not my topic of experience.

5 7

1 copy, or are you all right —

2 A. No, I think it’s better.

3 Q. Please say if you would.

4 A. Yes, okay.

5 Q. Paragraph 29, please, Dr Arkhangelsky.

6 A. Yes.

7 Q. And you can see that what you said in the top line there

8 is:

9 «I therefore worked hard on ensuring that Scan

10 adopted western accounting, underwriting and especially

11 reinsurance practices, so far as possible, and on

12 obtaining a rating from a rating agency.»

13 A. Yes.

14 Q. Then you refer to a rating for Scan Insurance from

15 AM Best?

16 A. Yes.

17 Q. Would it not follow from that piece of evidence that you

18 must be reasonably — reasonably — adept at reading

19 accounts?

20 A. No.

21 Q. No. I wonder, could you be shown {M1/20/11}, please.

22 This, Dr Arkhangelsky, is your first BVI affidavit.

23 A. Yes.

24 Q. Can you see at paragraphs 26 and onwards — sorry,

25 25 and onwards, my fault.

1 Q. You were at all times, weren’t you, the owner and

2 controller of the OMG group?

3 A. Yes, of course.

4 Q. And you have said it was a family business, in effect?

5 A. Yes, of course.

6 Q. And your evidence is that you ran the operations side

7 but you weren’t really familiar with its accounting?

8 A. No, because I —

9 Q. Is that right?

10 A. — been employing proper people whom I believed and who

11 I think had proper knowledge and been responsible for

12 that.

13 Q. So I think you are agreeing with me that you didn’t

14 really — that you weren’t really familiar with the OMG

15 accounts; is that right?

16 A. I’ve been aware that everything based on the quality

17 standards, everything is running profitably and

18 successfully, and I’ve been discussing it with

19 the bankers and with auditors, so I got an opinion not

20 only from my in-house employees, but also from quality

21 experts, external experts, whom I believed.

22 Q. But when, in your capacity as the owner and head of

23 the business, you decide to embark on some particular

24 investment project or activity, do you not have to

25 review the accounts involved, the accounts that might

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1 relate to all that?

2 A. You mean for new acquisitions, or?

3 Q. No, really for acquisitions or any new bit of business,

4 or how the business is going?

5 A. Yes, I had quite a successful business of the group from

6 2001, 2002, 2003, and then we found out that we have

7 solid reserves of insurance operations, and based on the

8 Russian requirements, regulatory requirements, the

9 reserves have to be invested; they could not be just

10 kept on the account.

11 So then I used a lot of consultants, advisers, to

12 check the status of the group, as well as the new

13 acquisitions. Normally for new acquisitions I was

14 employing top international auditors to take care about

15 due diligence and consultants and so on, so I’ve always

16 been using first class professional advice on

17 understanding the current status of the group, as well

18 as on the new acquisitions.

19 Q. I wasn’t really asking, Dr Arkhangelsky, whether

20 the accounts were unreliable and how they were compiled;

21 I’m really asking a question about, from your

22 perspective, as the man in charge of the business,

23 really, whether you wouldn’t have had to understand the

24 accounts, just so you can keep a proper eye on this

25 group of companies?

1 get proper advice and I’ve been using many different

2 people to make a valuation of the business, including

3 Bank of St Petersburg. They’ve been deeply in

4 the accounts, so they’ve always been happy with the

5 accounts, especially Mrs Volodina and Guz and Belykh, so

6 they’ve been familiar with each and every document.

7 Madame Shabalina, she’s also been quite deep, so we

8 discussed all these investment memorandums and

9 investment notes and accounts in detail, so they told me

10 that they started that. They were happy that we get

11 that, because if the clients having IFRS accounts and

12 the projecting and business plans, it’s considered to be

13 really good and reliable from Russian point of view

14 so — as I said, really none of the market players

15 having IFRS accounts and ISO certification as well as

16 the rating.

17 Q. So, Dr Arkhangelsky, we can take from that last answer,

18 can’t we, that you were really relying upon other people

19 to check on the accounts position of —

20 A. I’ve been relying on the top class specialists.

21 Q. So it’s a yes to that question?

22 A. I’ve been relying to the top class specialists, yes.

23 Q. I understand.

24 A. I’ve never been discussing this with the English

25 lawyers, considering that I don’t think they are

9 11

1 A. I always had people in the group who have been familiar

2 with accounting, as well as with the financial

3 management, and they were always briefing me on the

4 current status on a daily basis, or at least on a weekly

5 basis.

6 Q. And who would they be?

7 A. They were different people, changing all the time, so at

8 the last moment we had a general accountant of

9 the group, Natalya Saltykova, of most of the companies;

10 Alexey Berezin, who has been a witness on your behalf.

11 Before it was Igor Sazonov, who had been before

12 Alexey Berezin. I think Olga Lukina, she always been

13 quite familiar with at least insurance operations, so

14 quite a number of people at different times. We were

15 changing people, we were expanding and so on.

16 Q. I think I’m still unsure, Dr Arkhangelsky, it is my

17 fault, as to whether you ever reviewed the accounts, in

18 the sense of sitting down and opening up the pages that

19 I showed you yesterday and reading them and thinking to

20 yourself: well, are they right, what do they mean, where

21 is the company going, what should we be doing —

22 A. I was running companies of more than 600 people and

23 I had a lot of other obligations, so I never had the

24 chance to look into the deep details of any particular

25 business or accounting but, as I said, I had a chance to

1 specialists in any respect of this.

2 Q. Yes, you made that very clear yesterday afternoon.

3 A. Yes.

4 Q. I wonder if you could be shown {D68/1059/2}, please.

5 This was an extract from the KIT Finance model for

6 OMG Ports in September 2008; do you remember that,

7 Dr Arkhangelsky? I asked you about it yesterday.

8 A. Yes.

9 Q. I wonder, would you be kind enough to look again at

10 {D68/1059/2}. I asked you about the KIT Finance

11 modelling that they carried out at that time for OMGP.

12 I asked you some questions about that. I just want to

13 ask you, I think, two points, really.

14 First, if you would be kind enough to look at the

15 interest line, which is about halfway up, roughly the

16 middle of the page, can you see that after the gross

17 profit, which comes —

18 A. Interest paid or interest received?

19 Q. Interest paid, really.

20 A. Yes.

21 Q. And can you see that after the shaded area, which has

22 the gross profit for the year —

23 A. Yes.

24 Q. — can you see, then, various other matters are then

25 taken into account in this model; can you see?

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1 A. I see quite a number of figures. I don’t understand

2 what they really mean.

3 Q. No, I understand. If you just look at the «Interest

4 paid» line, can you see that that is an expense of

5 the business, isn’t it?

6 A. I don’t know what do they mean. It’s interest paid.

7 Q. Sorry. Do you accept that that reference to «Interest

8 paid», with brackets round to connote a negative

9 figure —

10 A. I don’t know.

11 Q. Right. I suggest, Dr Arkhangelsky, that you do know the

12 answer to that, and that you do know, today, on oath,

13 that «Interest paid» with round brackets means

14 an expense of the business.

15 A. Maybe. I don’t know this table, I don’t know this

16 model, and I don’t want to be deep inside this model as

17 long as it’s not my speciality.

18 Q. Sorry, Dr Arkhangelsky, that wasn’t really the question.

19 It’s not — it’s really whether — it doesn’t matter

20 that it’s not your model. I’m really asking you

21 whether, when you look at this model, you understand

22 that that line is referring to an expense —

23 A. No, I don’t understand that because I don’t know the

24 model. So to discuss with you this table I have to

25 study carefully all this model, see all the assumptions,

1 of the aggregate amount of interest paid or to be paid?

2 A. Yes.

3 MR JUSTICE HILDYARD: That’s point one. Point two, that the

4 brackets signify that it is money going out, but you

5 wish to reserve the position as to how that aggregate

6 figure is made up?

7 A. Absolutely, I agree with you.

8 MR JUSTICE HILDYARD: Yes.

9 A. Because what I assume, that it might be more complex, as

10 I said; it might be payments to the companies involved

11 or third party companies, or whatever.

12 MR JUSTICE HILDYARD: All right.

13 A. So it is rather complicated.

14 MR LORD: Dr Arkhangelsky, I wonder if you could just —

15 could we keep that on screen, please, and could we have

16 {C1/1/28}, which is your witness statement, your 16th

17 witness statement.

18 Can you see in paragraph 111 you refer to

19 a financing initiative with KIT Finance, which the OMG

20 group was involved in in 2008?

21 A. Yes.

22 Q. Can you see that?

23 A. Yes.

24 Q. And then you exhibit a number of documents relating to

25 that KIT Finance work; can you see that down the margin?

13 15

1 and understand how it has been created.

2 MR JUSTICE HILDYARD: Mr Arkhangelsky, is that really right?

3 I mean, we are not looking at anything with any IFRS

4 complexity; all we are looking at is a figure in

5 brackets with the description, «Interest paid». Are you

6 telling me that you do not appreciate that that is

7 a figure stating the aggregate amount of interest paid

8 or to be paid, the brackets signifying that it’s going

9 out, rather than coming in?

10 A. Yes, your Lordship, I agree that it’s rather complex, so

11 if you also —

12 MR JUSTICE HILDYARD: Is that really very complex?

13 A. Yes, I think it’s complex, yes, because —

14 MR JUSTICE HILDYARD: Why is it complex?

15 A. Because — I can explain you, because interest paid, we

16 have to see the assumptions of the model, because in

17 the group, sometimes interest paid from one company to

18 another, or it could be interest paid to the banks, it

19 could be interest paid on any equity or securities, so

20 while not coming deep in the details of that, I cannot

21 really — I don’t want to give a chance to Mr Lord to

22 manipulate with my words afterwards, so —

23 MR JUSTICE HILDYARD: Is it your evidence — is this a fair

24 description of your evidence — that you accept that you

25 understand that the figure there given is the statement

1 A. Yes.

2 Q. And one of the documents you seem to exhibit is

3 {D68/1059/1}; can you see that?

4 A. If you can show it on the account — on the screen, what

5 document you are referring to.

6 Q. Well, if we click onto {D68/1059/1}, we will see what

7 document I think you were probably exhibiting in this

8 witness statement.

9 Can you see, Dr Arkhangelsky, that you seem to have

10 exhibited to your witness statement the very KIT Finance

11 model that I have been asking you a few questions about?

12 A. I have exhibited all the documents which I was able to

13 find, so I used — I done all my disclosure obligations

14 and I disclosed everything I had, absolutely.

15 Q. And do you want to reconsider your answers —

16 A. No, I don’t.

17 Q. Because I suggest, Dr Arkhangelsky, that you are able to

18 understand questions based upon this KIT Finance model.

19 A. Some of them yes, some of them not, but I’m absolutely

20 sure that you are not able to understand what you’re

21 asking about.

22 Q. And if we go back to the KIT Finance model, please, at

23 {D68/1059/2}, I suggest that you do appreciate that the

24 «Interest paid» line shows the interest expense for OMGP

25 companies, as estimated for those calendar years. I am

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1 putting to you that that is what it is showing, first,

2 and secondly that you understand.

3 A. Are you referring to any particular line in —

4 Q. Yes, the interest paid —

5 A. — {D68/1059/1}?

6 Q. No, it is the one on screen; is it not on your screen

7 still, page 2, the one I have been asking about?

8 A. Yes, it’s also there, I have {D68/1059/2} on the screen.

9 Q. So it is the «Interest paid» line on page 2?

10 A. Yes.

11 Q. So I am putting to you —

12 A. I just explained to his Lordship what and how

13 I understand that.

14 Q. If you could just answer the question. I am putting to

15 you that what that line is showing is the interest cost,

16 or expense, to OMGP for those calendar years as

17 an estimated by KIT Finance. Do you —

18 A. Subject to understanding whom interest to be paid to.

19 Q. Why would that affect matters?

20 A. It’s quite important, because in the group, one

21 companies, for example, could be financing other

22 companies.

23 Q. Oh, I see.

24 A. And expense inside the group, it’s absolutely different

25 from accounting and a profit point of view.

1 about Bank of St Petersburg. This is a question about

2 this statement and your evidence on oath to his

3 Lordship, only about three minutes ago, that the

4 identity of the recipient of interest paid by OMGP would

5 be a relevant factor to deciding whether that interest

6 was genuinely an expense of the business; do you

7 understand the question?

8 A. Absolutely, yes.

9 Q. Can you tell his Lordship, please, on oath, why you gave

10 that answer and what you meant by it?

11 A. Because it’s important. Because it depends on the

12 assumptions of the model. So, as long as I have not

13 been deep in the model, there are different

14 possibilities. So that’s why it’s important.

15 Q. No, Dr Arkhangelsky, you had something in mind there.

16 I suggest what you had in mind, I think what was behind

17 that answer, which you are now reluctant to explain, is

18 that — what you really had in mind was that these

19 interest payments may actually have been made by an OMGP

20 company to another OMG or affiliated company or entity.

21 That’s what lay behind that answer, wasn’t it,

22 Dr Arkhangelsky?

23 A. It could be like this. It could be any other option.

24 So it depends on the assumptions on the model.

25 Q. So I think you are agreeing that that was what lay

17 19

1 Q. Can you expand upon that? That intra- or inter-OMG

2 group accounting, how would that work?

3 A. Sorry?

4 Q. Why would it make a difference to the reliability of

5 this model —

6 A. No, it doesn’t change the reliability of the model. It

7 is a model created by KIT Finance based on their

8 assumptions they had, and the requirements of investors,

9 potential investors.

10 Q. No, Dr Arkhangelsky, you are trying to retreat from that

11 last answer, I am afraid. Why did you identify the

12 recipient of the interest as being a relevant factor to

13 whether that was genuinely an expense, as shown in this

14 P&L statement?

15 A. Because in these proceedings we found out that your

16 clients, they were trying to use accounts of the group

17 to collect interest payments, as well as loans, from

18 each and every independent company. So that’s why, from

19 the point of view of your clients, you have been doing

20 this. For example, you have been collecting —

21 Q. Sorry, Dr Arkhangelsky, that is not an answer to

22 the question. The question is about the modelling, the

23 statement here.

24 A. Yes.

25 Q. It’s not about any allegation you are going to make

1 behind that answer?

2 A. No, I don’t agree.

3 Q. So can you explain what did lie behind the answer?

4 A. I don’t remember.

5 Q. You don’t remember?

6 A. No.

7 Q. It’s really that you refuse to answer that question,

8 isn’t it, Dr Arkhangelsky?

9 A. No, the reason is that, to discuss this model in deep

10 details, I have to study this model, maybe I have to

11 speak to KIT Finance, what and how they were creating

12 this model. So I cannot just looking on ten figures on

13 the screen, understand and try to think how it was

14 created, on which assumptions.

15 So it’s a very complicated mathematical — financial

16 mathematical model, and it depends how it has been

17 created, what for, and what are the basic assumptions on

18 that. So it could be different — many different

19 options which could be discussed and could be

20 considered.

21 Q. Because what seems to lie behind that answer is that as

22 part of your business with the OMG companies, you would

23 transfer monies and funds between the OMG companies;

24 that’s right, isn’t it?

25 A. Sorry?

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1 Q. The way you ran these businesses, Dr Arkhangelsky,

2 involved moving money around within the group, didn’t

3 it?

4 A. Oslo Marine Group was a quite good running and

5 financially managed company, so we had a centre for

6 financial decision-making, run by Mr Berezin, and he

7 was, on a daily basis, understanding the need of each

8 and every company, and he was running like a treasury,

9 where he was checking the status of each and every

10 company and distributing or redistributing funds within

11 the group. So it was kind of treasury organised, so

12 that’s why he had all the keys for bank accounts and he

13 could give a loan from one company to another, in case

14 it’s necessary, because the internal financing is the

15 key issue for efficiency of the group.

16 Q. Could you be shown, please, {Day11/14:1}. If you look,

17 please, Dr Arkhangelsky, I asked you at {Day11/14:12}

18 a question about whether you had gone back through the

19 documents you exhibited to the two witness statements

20 that you have confirmed for this trial, which is the

21 16th and 19th.

22 A. Yes.

23 Q. And you said, in lines 15 to 16: {Day11/14:15-16}

24 «Answer: No. If I exhibited them, I believe that

25 they are true and everything is correct there.»

1 that in 2007 the interest paid for OMG Ports was

2 US $10.5 million, and then the following year, 2008, it

3 was estimated — because obviously these were estimates

4 by KIT Finance — to US $26.8 million; can you see that?

5 A. 28, yes.

6 Q. 28. Sorry.

7 A. 28.

8 Q. Yes, 28. Then the next year, up to 51 million; can you

9 see that?

10 A. Yes.

11 Q. So KIT Finance — this model, which you have just

12 confirmed, I think, to be accurate, was estimating

13 OMG Ports interest payments for 2008 to be about

14 US $28 million, and going up to US $51 million in

15 the year 2009; would you agree with that?

16 A. Yes.

17 Q. And would you agree that that was a significant increase

18 in borrowing for OMG Ports?

19 A. Absolutely, because we were planning acquisitions and

20 actually this LPN was prepared for new acquisitions.

21 Q. And 2008 was the year when the credit crunch, or the

22 financial crisis, struck, wasn’t it?

23 A. This document has been, as far as I understood, created

24 before this credit crunch, yes.

25 Q. And KIT Finance, in this model, they are predicting

21 23

1 Can you see?

2 A. Absolutely.

3 Q. And that confirmation of yours would apply to this

4 KIT Finance model, wouldn’t it, because it seems as if

5 you have exhibited that to your witness statement?

6 A. Yes, of course.

7 Q. So if we go back to the KIT Finance model, {D68/1059/2}

8 it follows, I think, that you accept that everything in

9 this model is correct; is that right?

10 A. I don’t know, it’s their model. I’m not sure if it’s

11 correct or not, but as long as they are specialists, so

12 we may consider that it’s correct.

13 Q. Thank you. And you have no basis, have you, that you

14 can identify for his Lordship, as to why this model is

15 materially inaccurate?

16 A. Sorry?

17 Q. You have no basis, I am suggesting, Dr Arkhangelsky, for

18 suggesting that this KIT model, this KIT Finance

19 estimate, is materially inaccurate in any way.

20 A. KIT Finance people were quite professional, and I have

21 a strong confidence that everything they’ve done is done

22 professionally, yes.

23 Q. I understand. And if you look at what they modelled,

24 they modelled in that «Interest paid» line interest

25 going up quite significantly from 2007. Can you see

1 a net loss for OMG Ports in 2008, aren’t they? If you

2 look at the bottom line, can you see «Net profit» is

3 18.7 million, and it is in brackets, so it is a negative

4 number; can you see that?

5 A. Yes, I think so, but the reason for that is that we were

6 planning to get funds already in September 2008. So the

7 fund — in any business, the first year of new funding

8 would create a negative result. You cannot make

9 a profit over three months.

10 Q. No.

11 A. So that seems to be quite obvious.

12 Q. But you have no basis to criticise the reliability of

13 a KIT Finance projection that has a $18 million loss for

14 OMGP in 2008?

15 A. In case that all the assumptions of the model is done —

16 Q. Mm, I understand.

17 A. — so including the new borrowings and new acquisitions,

18 absolutely.

19 Q. And the same question for 2009: that KIT Finance were

20 predicting a loss of US $17 million?

21 A. Yes, it was the second year of borrowing, and that was

22 quite, quite clear, and it was quite attractive. These

23 financial results have been quite attractive for

24 international investors, on these international

25 investors. So they were considering that the

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1 profitability of the business is really very good.

2 Q. I wonder, could you be shown the 2007 accounts again,

3 please, {D33/523/1}. I am sorry, Dr Arkhangelsky, to

4 take you back to it.

5 A. No problem, just enjoy. Enjoy. I like this.

6 Q. All right.

7 A. I like that you are educated now in IFRS accounting.

8 Q. All right, thank you.

9 A. So you are learning by doing, I understand.

10 Q. All right. {D33/523/1} is the front page, and then if

11 you would be kind enough to go to {D33/523/5}, it’s that

12 page I’m afraid that I asked you rather a lot about

13 yesterday. I won’t take too long —

14 A. Yes, that’s my favourite page on this account, yes.

15 Q. All right, we will probably go quite quickly then.

16 I want to ask you some questions but, before I do,

17 I just want to raise a point with his Lordship.

18 My Lord, I want to ask some questions about the

19 payments that we heard evidence of on Wednesday, and

20 I intend to, with your Lordship’s permission, refer to

21 them as «payments to an official», and not to refer to

22 them, certainly for the majority of my questioning and

23 certainly without further notice — only to refer to

24 them in that way in order to keep the temperature down,

25 without prejudice to how I may choose to characterise

1 that I can —

2 MR JUSTICE HILDYARD: You are not abandoning your

3 characterisation of it by using words which are intended

4 not to inflame the matter.

5 MR LORD: Exactly, my Lord. Nor am I abandoning the

6 witness’s characterisation of it by using this

7 formulation.

8 MR JUSTICE HILDYARD: No.

9 MR LORD: Dr Arkhangelsky, if we look at the combined income

10 statement for the year ended 31 December 2007, could you

11 recollect the evidence you gave about making certain

12 payments to an official in relation to the Western

13 Terminal. And you said those were made in 2007 and

14 2008?

15 A. 2007, 2008, and 2009, yes, we’ve within running it

16 throughout the whole period of …

17 Q. And is it your evidence on oath that those payments

18 totalled US $160 million?

19 A. Yes, what we discussed on the first day.

20 Q. And you stand by that?

21 A. Yes.

22 Q. How much of that was paid in 2007?

23 A. Sorry?

24 Q. How much of the $160 million —

25 A. Oh, I don’t remember that, so it’s —

25 27
1 them at a later point in the trial and in closing. 1 Q. Roughly?
2 Does that make sense, my Lord? I am not anxious 2 A. No, I don’t know.
3 to — 3 Q. Could you identify, within these combined accounts,
4 MR JUSTICE HILDYARD: It does, but my impression, which 4 where his Lordship might find any entry that would
5 Dr Arkhangelsky can assist me on, is that they are not 5 include any of these payments to the official?
6 squeamish about the word. I do not know. 6 A. No, I don’t remember that. As I told you on the first
7 MR LORD: Sorry, my Lord. 7 day, that there has been quite a number of contracts,
8 MR JUSTICE HILDYARD: Mr Lord is proposing to me a formula 8 what they call, been called, consultancy contracts, with
9 to describe the payments made to the official, which 9 different parties, first of all.
10 caused my concerns, it’s about terminology, as 10 Second of all, that this combined statement, it
11 a delicate way of referring to their nature. I was 11 doesn’t include all the companies of the group, so that
12 simply noting that we may have moved on and you are not 12 was including only companies which were considered to be
13 squeamish, you are not anxious, about the use of any 13 public, and in the group we had much more companies, so
14 particular word, but if you are in doubt about that and 14 I don’t know how in IFRS accounts where this consultancy
15 would want advice, then I will encourage Mr Lord to use 15 service has been included. So it’s …
16 the description that he has given. 16 Q. Well, there are a number of —
17 A. I am completely in your hands. 17 A. I would better suggest you to try to see the Russian
18 MR LORD: My Lord, I intend to refer to it in the more 18 accounts in results.
19 neutral sense. 19 Q. First, Dr Arkhangelsky, what other OMG companies’
20 MR JUSTICE HILDYARD: Let’s do that. 20 financial position is not revealed by the statements we
21 MR LORD: I think I will only, always — 21 are now looking at?
22 MR JUSTICE HILDYARD: It is a matter entirely for you how 22 A. The group, we had about, I think — at least
23 you describe it, but I am grateful to you for your 23 50 companies, and here you mention just only four
24 consideration of it. 24 companies.
25 MR LORD: Thank you, my Lord. As long as it is understood 25 Q. I see. So your evidence is that the payments that you
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1 are referring to in relation to Western Terminal, are

2 you positively saying that those — although they were

3 made, they would not have been included in the combined

4 statement that —

5 A. No, I cannot say that. I simply don’t know because, as

6 I said, we had about 50 companies in the group and it

7 could be payments done by any of the company in

8 different timing. So I don’t know. I suggest you to —

9 for better understanding, you can better trace Russian

10 accounting documents for all these companies for ’07,

11 ’08 and ’09 year.

12 Q. So is it your evidence that you didn’t really mind which

13 OMG company you used for any —

14 A. I had a quite — I had quite a good financial director

15 at that time, Mr Berezin, and I had full confidence how

16 it is structured, because he had been speaking to

17 the banks, he had been speaking to the financial

18 advisers and auditors, and I believed that he would find

19 the best way how to do this.

20 Q. So is it your evidence that you didn’t really mind which

21 particular company you used as a vehicle for which

22 particular payment? Is that really your evidence?

23 A. Not really, but for each and every payment, we made

24 a consideration, and Mr Berezin was taking the final

25 decision.

1 A. Yes, I believe you.

2 Q. — and we established that Scandinavian Stevedoring

3 Company was actually a reference to OMG Ports; do you

4 remember?

5 A. Yes.

6 Q. And that OMG Ports has some subsidiaries, and one of

7 the subsidiaries that is accounted for, in

8 a consolidated way in these accounts, is Western

9 Terminal, isn’t it?

10 A. Yes.

11 Q. And, as I understand your evidence, the payments to

12 the official were in relation to Western Terminal?

13 A. Yes.

14 Q. Which was owned by OMGP, OMG Ports?

15 A. Yes.

16 Q. And these are the audited accounts for OMG Ports.

17 A. For year 2007, yes.

18 Q. Including Western Terminal.

19 A. Yes.

20 Q. So if there had been any related payments —

21 A. Yes.

22 Q. — to do with the acquisition of Western Terminal —

23 A. Yes.

24 Q. — shouldn’t they have appeared in these accounts

25 somewhere?

29 31

1 Q. You see, Dr Arkhangelsky, these were audited accounts,

2 as I understand it; is that right?

3 A. Sorry?

4 Q. These were audited accounts, weren’t they?

5 A. Yes.

6 Q. And they were filed in compliance with various

7 obligations to file accounts; is that right?

8 A. No. There were not any obligations to do any

9 IFRS accounts.

10 Q. Yes.

11 A. So we done it for the purpose of rating and ISO

12 certification.

13 Q. But these combined accounts include the accounts, don’t

14 they, from what we established was OMGP?

15 A. On the top it’s written: Scandinavia Insurance Company,

16 Oslo Marine Group, Scandinavian Forest Company,

17 YurInvest. So it’s —

18 Q. Yes, and if we go to {D33/523/9}, which is, I think,

19 a page from these accounts I took you to yesterday?

20 A. Yes.

21 Q. You can see, Dr Arkhangelsky, that the companies who

22 feature in these combined accounts are set out at the

23 beginning.

24 A. Yes, absolutely.

25 Q. And we went through this yesterday —

1 A. Maybe, maybe not. I don’t remember how it was done and,

2 as I said, it’s mentioned here, one, two, three, four,

3 whatever, eight, nine companies, but in the group

4 together, we had about 50 companies.

5 Q. But these are payments, if you are right, in relation to

6 Western Terminal, aren’t they?

7 A. Yes.

8 Q. And are they payments after Western Terminal has been

9 acquired, or before it has been acquired?

10 A. After.

11 Q. And so wouldn’t they be payments that would be made by

12 or on behalf of Western Terminal? Because Western

13 Terminal —

14 A. It’s not necessarily. It could be another company of

15 the group paying for that and then having any

16 compensation afterwards.

17 Q. And which company did you have in mind, then,

18 Dr Arkhangelsky?

19 A. I don’t know. As I said, we had about 50 companies,

20 trading timber, whatever. So any of them could do this.

21 It depends on the type of the consultancy contract and

22 the type of the payment we could do because, for

23 example, Western Terminal, they — based on Russian

24 accounting they could not, for example, pay for — there

25 were legal consultancy services, otherwise it would

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1 create some problems with the tax authorities, so it had 1 whatever I think they can —
2 to be discussed on each and every occasion. 2 MR LORD: My Lord, I really don’t accept that that was
3 Q. So your answer is that you can’t actually identify which 3 an appropriate answer, but I won’t — it goes without
4 particular OMG company — 4 saying that that shouldn’t have been said and would be
5 A. No — 5 flatly rejected, but I will move on. Unless
6 Q. — if any, made any of these payments? 6 your Lordship wishes me to say anything more about it.
7 A. No, because I have not been personally involved to that. 7 MR JUSTICE HILDYARD: Mr Arkhangelsky, I think you do spread
8 Q. So the answer is — you are agreeing with me that you 8 yourself, it might be said, which is a colloquialism, or
9 cannot identify any particular — 9 extend your concerns about the Bank to their advisers.
10 A. No, no, because I have not been personally involved in 10 There is no basis for you to state or insinuate that
11 that, so I had a financial department, the accountancy 11 their advisers have acted in any way improperly or have
12 department, who had been working with that. 12 facilitated people acting improperly, except in
13 Q. Could you be shown, please, {Day11/63:1}, 13 discharging properly their duties as lawyers. I think
14 Dr Arkhangelsky. I would just ask you to read, 14 that’s what it comes to.
15 please — 15 MR LORD: Thank you, my Lord.
16 A. Which line? 16 MR JUSTICE HILDYARD: So be careful, because it is unwise to
17 Q. If you start at {Day11/62:22}, you were asked when the 17 be offensive.
18 payments were made. If you just read on, please, can 18 MR LORD: Dr Arkhangelsky, if you could please be shown
19 you see the next few answers? 19 {D33/523/48}. This is the detail under the footnote
20 A. Yes. 20 relating to the acquisition of businesses, which, again,
21 Q. And down to {Day11/63:10-12}, where you said that nobody 21 I took you to yesterday, so I apologise for taking you
22 else within OMG knew about these payments; can you see 22 back to it.
23 that? 23 I took you to it yesterday because it seems to show
24 A. Nobody knew about the nature of these payments and whom 24 a very significant upwards valuation of the Western
25 it’s going to. What I said and what I’m still saying, 25 Terminal. And I took you to it yesterday; it went from
33 35

1 that these payments were done based on different

2 consultancy agreements. So each and every payment was

3 well documented, and been paid to different receivers

4 based on the different consultancy agreements.

5 Q. So, are you really saying that those were sham

6 consultancy agreements; that really they were just sort

7 of — they were bogus, really, because they were a cover

8 for making these payments; is that what you are saying?

9 A. No, no, not really, no. From Russian understanding of

10 that, each and every step — each and every step of

11 the development of the projects could be considered as

12 a consultancy, and in fact it was a consultancy. I had

13 a chance to go to, for example, the Russian office of

14 RPC and they would do this, but they charge much more,

15 or I would go directly to this official.

16 So that’s how could I do this, and —

17 Q. You are not suggesting that RPC could give you any

18 permissions to develop Western Terminal, are you,

19 Dr Arkhangelsky?

20 A. Sorry?

21 Q. You are not suggesting that RPC could give you any

22 permission to develop the Western Terminal, are you?

23 A. I don’t know, if they are advising

24 Bank of St Petersburg, I think they could — knowing the

25 criminal understanding of their client, they can do

1 just over 1 billion roubles, 1.069, which we saw in

2 the purchase contract on the first day of your

3 cross-examination. It went up to something like

4 2.25 billion. So it looks as if, within the same year

5 it was bought, it had more than doubled.

6 A. Yes.

7 Q. Yes, from some US $40 million to some US $100 million.

8 A. Yes.

9 Q. Was any of that upwards valuation, as recorded in these

10 audited accounts, based upon extra value derived from

11 the making of these payments to the official that you

12 have given evidence about?

13 A. No, I don’t think so.

14 Q. And what’s your basis for saying that?

15 A. Because PKF, who was doing these IFRS accounts, they

16 subcontracted valuation specialists for the purposes of

17 IFRS valuating. So IFRS valuating, having standards how

18 to evaluate assets for the accounting purposes of IFRS.

19 So there is a special code in IFRS accounting how to

20 make a valuation, and as far as I understood, as far as

21 I understood the technology, it doesn’t matter how much

22 has been paid, whom it has been paid, and when it has

23 been paid; they do a valuation based on their

24 understanding of the current value of the asset, for the

25 purpose of IFRS accounting.

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1 Q. But your evidence, I think, Dr Arkhangelsky, is that

2 during 2007, at least some of these payments were made

3 to this official?

4 A. Yes.

5 Q. And they had the effect of improving the development

6 potential for Western Terminal; that’s why the payments

7 were made, weren’t they?

8 A. Yes.

9 Q. So the increased valuation we see in the books, as it

10 were, why wouldn’t that be based, at least in part, on

11 that improvement in the developability of it, I suppose,

12 as a result of these payments to a Russian official?

13 A. Because IFRS accounting have rather strong standard

14 books. So a valuation for the purpose of IFRS

15 accounting have standards how to do that, so I think you

16 should better check these standards, and if you need

17 advice, discuss that with PKF, who I think are quite

18 helpful on that.

19 So I don’t know how they have been valuating and

20 I haven’t been in deep in that, so I cannot comment on

21 the way they made their valuation. And the key issue

22 for this valuation is their independent valuation and

23 their independent opinion, which they provide directly

24 to auditors.

25 So it’s the auditors who are ordering this

1 Q. Why did you say «of course not»? Why would it be

2 inappropriate for them to be told about these payments?

3 A. We have provided them with all the contracts and with

4 all the accounting we had for the required group

5 companies, and they were able to ask any questions and

6 they definitely seen consultancy agreements, but it’s

7 not normal to tell what I think what you want to hear

8 about who is the final receiver of that.

9 Q. No, I asked you simply whether you had made these

10 auditors that you are placing great weight on for their

11 verification process, whether these auditors were made

12 aware of the payments that you voluntarily told his

13 Lordship about on the first day of these proceedings?

14 A. We given them information on the contracts, all which

15 were related to the companies they were including in

16 their consolidated accounts, yes.

17 Q. But why did you say «of course not» in answer to my

18 question about two minutes ago?

19 A. As I said —

20 Q. «Of course not». What does that mean, «Of course not»?

21 What were you trying to convey there?

22 A. Because as I said on the first day, nobody except me was

23 aware who is the final receiver of these funds.

24 Q. I see.

25 MR JUSTICE HILDYARD: Mr Lord, you did go through this,

37 39

1 valuation, who are providing and supplying all the

2 information, and the valuation specialists, they return

3 the results to auditors and, based on these results,

4 auditors are combining all these accounts.

5 Q. Dr Arkhangelsky, you signed these accounts, didn’t you?

6 A. Yes, of course.

7 Q. Do you think there is anything improper about the way

8 that the Western Terminal and its acquisition was

9 explained in these accounts?

10 A. No, I don’t think so.

11 Q. Dr Arkhangelsky, I suggest to you —

12 A. I assume that first class English auditors made very

13 good their job and they’ve been asking all the necessary

14 questions, obtaining all the necessary information, so,

15 everything they asked to be provided, and I think they

16 made a good job that time.

17 Q. Is it your evidence on oath that you think that these

18 auditors you have just referred to, that they were made

19 aware of the payments to the Russian official that you

20 have given evidence of in these proceedings?

21 A. Of course not, but they seen consultancy agreements and

22 they — I think they use this information.

23 Q. And who are they again? I should know. Who are the

24 auditors?

25 A. PKF, you have as assigned company.

1 {Day11/72:1}.

2 MR LORD: Dr Arkhangelsky, I suggest that you are not

3 telling the truth about these payments, and that the

4 payments that you have given evidence of to an official

5 do not explain the discrepancy between the

6 US $220 million and the actual acquisition cost of

7 Western Terminal.

8 A. You are not correct. As we discussed for several days,

9 I risked myself with personal risk, and I decided that

10 I have to tell that to the court. How it was so.

11 Q. Because, Dr Arkhangelsky, I don’t accept that it is

12 credible, certainly on all the accounts material that

13 I have seen, that you would have US $160 million

14 available to make these payments. I can’t see where

15 that money could possibly have come from.

16 A. I suggest that you take — first of all, you have a look

17 not on IFRS accounts, but on the Russian standard

18 accounts for all the companies of the group, so you make

19 a proper analysis of about 50 companies during three

20 years, at least, and then you would find a reply to your

21 question.

22 Q. Dr Arkhangelsky, I am giving you the opportunity,

23 I suppose, to revise the answers.

24 A. No, I don’t need to revise, as long as I am telling all

25 the truth and only truth.

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1 Q. And you are sure —

2 A. Sure.

3 Q. — that you paid 160 million —

4 A. Yes, sure.

5 Q. Could I please turn to some questions about

6 Vyborg Shipping, please. Could you be shown, please,

7 {D38/660/6}.

8 I am going to move to Vyborg Shipping Company now,

9 if I may, Dr Arkhangelsky.

10 A. Sorry?

11 Q. I am going to ask you some questions now about Vyborg

12 Shipping Company, if that’s all right.

13 A. Okay. Maybe, should we continue after a small break

14 or — if we are changing subject?

15 Q. Could we keep going for a little bit to make a bit of

16 progress; would that be all right?

17 A. Up to you.

18 Q. {D38/660/6} is a business plan disclosed, I think, by

19 the defendants in this case, for the creation and

20 development of a cargo shipping fleet by the

21 Vyborg Shipping Company; can you see that,

22 Dr Arkhangelsky?

23 A. Can I see that in the Russian version, please?

24 Q. Yes, of course.

25 Has it come up for you? (Pause)

1 Q. Could you go, please, to {D38/660/6}, please, where you

2 will see a page called «The idea of the shipping company

3 project».

4 A. Yes.

5 Q. Sorry, could you first, Dr Arkhangelsky, be shown

6 {C1/1/29}, because your witness statement exhibited

7 this. Can you see paragraph 113? I hope that has come

8 up on the screen.

9 A. 13, yes.

10 Q. No, 113.

11 A. Yes.

12 Q. So you exhibited this plan.

13 A. Yes, yes, what I am telling, that it’s done by Lair

14 in April. Yes, what I told you.

15 Q. I see. But you are presumably happy that Lair, the plan

16 they came up with, or the document they produced, was

17 the plan that you had for Vyborg Shipping?

18 A. Yes, I think in April 2008 it was the first draft and

19 I think they expanded it and I think I seen, at least

20 remember, the versions of August to September, or

21 whatever. A more full version of that.

22 Q. Was the plan a three-stage plan for development, as set

23 out on —

24 A. Yes.

25 Q. And the first stage involved the acquisition and

41 43

1 I think that is {D38/660/64}, it might be.

2 Dr Arkhangelsky, the document that I was asking you

3 about came from your disclosure, so —

4 A. Okay, just tell me who — if it’s a Lair business plan,

5 or what is it, this about, because there is no name on

6 top, so …

7 Q. Yes, it looks like it is done by Oslo Marine Group.

8 Business plan. Can you see? It is a business plan,

9 I think, Dr Arkhangelsky, for the Vyborg Shipping

10 Company; in other words, I think this is the business

11 plan that was going to show how the shipping business

12 was going to be created and developed; do you see?

13 A. As far as I understood, we are now speaking about the

14 business plan produced by Lair company, but probably we

15 had better see the Russian version of that, because

16 I think some translation not a proper translation.

17 Q. It was disclosed in the defendants’ disclosure, and, for

18 the transcript, it is document number 264, and the file

19 name is:

20 «English version, VP Vyborg Shipping Company, KAP,

21 document description OMG — business plan — creation

22 and development of a cargo shipping fleet, April 2008.»

23 A. Okay, now I understand. I think it is a draft of

24 the business plan done by Lair for the

25 Bank of St Petersburg, yes.

1 commercial operations of ten second-hand vessels; is

2 that right?

3 A. Yes.

4 Q. And the second stage involved the building of ten

5 vessels at the Damen shipyard?

6 A. Yes.

7 Q. And then there was a third stage as well?

8 A. Yes.

9 Q. I understand.

10 The first Vyborg loan was in relation to making

11 payments in respect of a time charter for the vessel

12 Tosno?

13 A. Yes.

14 Q. And that was secured on the Gatchina; that’s right,

15 isn’t it?

16 A. Yes.

17 Q. And the second Vyborg loan was in respect of a time

18 charter for the vessel Kolpino, and that was secured on

19 the Tosno, wasn’t it?

20 A. I think so, yes.

21 Q. And the third Vyborg loan was to make payments in

22 respect of a time charter for the vessel Volkhov,

23 secured on the vessel Kolpino?

24 A. Yes, I think so.

25 Q. So for the first three Vyborg loans, what was happening

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1 was you were borrowing money in relation to

2 the acquisition or the hiring of a second-hand ship, and

3 you were giving, as collateral, rights over the

4 previously acquired second-hand ship; would that be

5 fair?

6 A. Yes, I think so, yes.

7 Q. I think that must be right.

8 A. Yes, it has been a very complicated scheme created by

9 the Bank of St Petersburg, so they were not allowed, on

10 their internal reserving requirements, to spend money on

11 purchase, so they said that we have to do it on a kind

12 of chartering basis.

13 Q. I wonder if you could be shown the fourth Vyborg loan,

14 please, {D55/947/1}.

15 If you would like it in Russian, Dr Arkhangelsky —

16 A. Please.

17 Q. — it is in {D55/947/8}. If you look on the fourth

18 Vyborg loan, you can see in paragraph 1.1 it was for

19 a credit line of just over 1 billion Russian roubles;

20 can you see that?

21 A. Yes.

22 Q. And then in paragraph 1.4, you can see what the purpose

23 of the loan was, it was:

24 «… for the purpose of rent payments under the time

25 charter agreements.»

1 advice from the company which was run by one of

2 the Bank’s executives, a legal company in St Petersburg,

3 and so all the documentation been created by this

4 company, considered that they been specialists in

5 international shipping. So for the Bank at that time it

6 was completely new. So we had to follow their advice

7 and the documentation they produced.

8 Q. In your witness statement at {C1/1/29}, paragraph 115,

9 it rather seems as if the suggestion to offer a pledge

10 over land rather than over ships for the fourth Vyborg

11 loan came from you. Can you see paragraph 115? You are

12 referring to the fourth Vyborg loan there; you can see

13 the date and the amount, 1 billion Russian roubles; can

14 you see that?

15 A. Yes.

16 Q. To fund the purchase of the additional ships?

17 A. Yes.

18 Q. You say:

19 «I originally offered the Bank a pledge over some

20 land at Solnechnoe near Sestroretsk owned by

21 Novy Gorod LLC.»

22 A. Yes.

23 Q. So it looks from that, doesn’t it, Dr Arkhangelsky, as

24 if the idea of offering a land pledge didn’t come from

25 the Bank; it came from you. Is that right?

45 47

1 Can you see that?

2 A. Yes.

3 Q. If you go, please, to clause 4.3 on {D55/947/4},

4 clause 4.3 says:

5 «To use the loan strictly in accordance with its

6 target purpose.»

7 Do you see that?

8 A. Yes.

9 Q. Now, I think that the idea was that the ships that were

10 going to be acquired were the Tikhvin and the Luga; is

11 that right?

12 A. Yes, maybe, you see — I am following you, yes.

13 Q. But two more ships?

14 A. Yes, we had a plan to buy ten of them, yes.

15 Q. I understand. Why was it that the security given under

16 the fourth Vyborg loan did not include a mortgage over

17 the vessels concerned that were being bought with the

18 proceeds?

19 A. You see, all these shipping loans, they were quite

20 unusual for the Bank at that time. I think it was their

21 first experience, and they employed a company in

22 St Petersburg, which has been run by one of the chief

23 executives of the Bank, so the Bank — I will try to

24 remember and name the names of the companies involved.

25 So the Bank said that we have to get paid legal

1 A. No. Actually, in fact, we had joint discussions,

2 because this registration of all these mortgages on

3 Marshall Islands Registry and so on, so it has been

4 a real mess.

5 Q. Right.

6 A. And it has been a lot of troubles for everybody, and we

7 thought that finally, the first three vessels, that was

8 okay, but then even for the purposes of their

9 reservation, they thought that the Russian — Russian

10 assets would be much more acceptable.

11 And, by the way, the general agreement with the Bank

12 was that the land which we mortgaged at Western

13 Terminal, they were evaluating it at much more, so we

14 agreed with them to do it in stages. So let’s say first

15 they issued a loan for 1.1 billion, and then under the

16 same mortgage, they would increase the limits. So that

17 was an agreement, initial agreement with them, which

18 they have not followed afterwards.

19 Q. Did OMG, or did Vyborg Shipping, actually go on to

20 acquire these additional vessels?

21 A. By that time, we got a new director, Olga Krygina, and

22 she had been heavily involved in all these new

23 negotiations, because the previous one, Sergei Erium, he

24 was quite old and really difficult.

25 So it’s a new person who came, so she

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1 had discussions with different sellers, with different

2 sale and purchase brokers, and I know that we made

3 repayments for several vessels which we never actually

4 finally bought.

5 So she had been really heavily involved in all these

6 transactions, and by that time I had not been personally

7 that much involved in all this.

8 Q. No. But if we look at {N1, N2, N3, N4, N5 & N6/3/1003},

9 you will see a letter from InvestrBank on

10 3 October 2008, I think to Ms Krygina.

11 A. A bit slowly, I cannot see that yet.

12 Q. Sorry, yes. {N6/3/1003}. We need the Russian.

13 That’s a letter from Bank of St Petersburg to

14 Mrs Krygina, General Director of Vyborg Shipping, asking

15 you for information on the state of affairs in relation

16 to three vessels that I have asked you about: that’s the

17 Volkhov, the Luga, and the Tikhvin; can you see that?

18 A. Yes.

19 Q. The Russian has come up.

20 A. Yes, I think the Russian version is better because you

21 have some comments.

22 Q. Those are some manuscript comments in Russian and

23 I think they have been translated in the English version

24 in italics at the foot of the page.

25 Does your Lordship see that?

1 had better ask her if you need any information on that.

2 Q. Well, I think we have some better evidence, so don’t

3 worry, I think I can help you with this,

4 Dr Arkhangelsky.

5 A. Very good.

6 Q. {D64/1010/1}, which I think is a document that came from

7 the defendants’ disclosure.

8 A. Yes.

9 Q. It is a presentation, I think, in relation to

10 Vyborg Shipping.

11 A. Yes.

12 Q. It’s a presentation, I think, to the Lloyd’s list, the

13 Russian Lloyd’s list.

14 A. Maybe.

15 Q. In August —

16 A. It’s not written here, but …

17 Q. Well, you can see the date, 23 September 2008.

18 A. Yes.

19 Q. And if you could be kind enough, please, to go to

20 {D64/1010/8}, there is a slide which says

21 «Vyborg Shipping Company today»; can you see the second

22 bullet point:

23 «Currently 3 feeder vessels.»

24 A. Yes.

25 Q. So that rather looks, doesn’t it, as if it is referring

49 51

1 MR JUSTICE HILDYARD: I do.

2 A. I can’t understand who made these comments —

3 MR LORD: Don’t worry about those for a minute; just look at

4 the question in the letter?

5 A. Yes.

6 Q. Do you see the question was coming in for information

7 about these three ships?

8 A. Yes.

9 Q. Because it is right, isn’t it, Dr Arkhangelsky, that the

10 Bank of St Petersburg would have assumed that

11 Vyborg Shipping Company had acquired these ships, or

12 certainly interests in these three ships, hadn’t they?

13 A. You see, by that time I hadn’t been personally that deep

14 involved in that, so I was quite happy with the fact

15 that a young and very energetic woman, Olga Krygina, you

16 know — she’s really a personality. So she’s 40 years

17 old, a female captain, which is quite unusual. So she

18 was quite energetic and quite motivated and I think she

19 given a lot of statements for the Bank in these

20 proceedings, I mean, provided a lot of documents in your

21 disclosure, so she’s been very heavily cooperating with

22 you. Actually it is quite surprising that you have not

23 brought her as a witness.

24 But I think by that time, she was completely

25 responsible for all these transactions and I think you

1 to the Gatchina and the Tosno and the Kolpino?

2 A. Yes, I think so, yes. By that time three vessels were

3 in operation already, yes.

4 Q. But it rather suggests, doesn’t it, Dr Arkhangelsky,

5 that Vyborg Shipping Company by this time had not

6 acquired any interests in the subsequent vessels, the

7 Volkhov, the Tikhvin and the Luga; do you agree?

8 A. I’m not sure, because these presentations have been done

9 by our marketing department and by that time, whatever

10 information they had, probably they have not updated or

11 whatever, so.

12 Q. Okay.

13 A. I’ve been making hundreds of presentations in different

14 international conferences, and my secretaries was

15 finalising such presentations.

16 Q. Yes, I understand. So you think that maybe this

17 presentation hadn’t caught up with events on the ground;

18 in other words those three further vessels were in

19 the Vyborg Shipping business —

20 A. I’m not sure, but normally for such type of —

21 especially if it is an international conferences, you

22 have to send presentations a couple of months in

23 advance, and so we were using more or less standards

24 drafts, not really changing much on a daily basis.

25 Q. I wonder, could you be shown, please, {D117/1756/1},

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1 please. {D117/1756/1} is the English and {D117/1756/2}

2 is the Russian. If they could both be on screen,

3 please.

4 This, I think, Dr Arkhangelsky, is a letter from you

5 to Mr Savelyev.

6 A. Yes.

7 Q. On about 3 April 2009, isn’t it?

8 A. Yes.

9 Q. Can you confirm that you did write to Mr Savelyev in

10 this way?

11 A. Yes, I think so, yes.

12 Q. And you are writing about the state of affairs of

13 Vyborg Shipping, aren’t you?

14 A. Yes, I think this document has been prepared to me by

15 Mrs Krygina, so I just signed based on probably what we

16 got from our in-house lawyers, as well as from Krygina.

17 Q. Can you see at the end of the first paragraph, when you

18 wrote to Mr Savelyev —

19 A. Yes.

20 Q. — you told him that Vyborg Shipping Company had been:

21 «… active on the sea shipping market since 2007 …»

22 A. Absolutely.

23 Q. «… and operates three vessels (OMG Gatchina,

24 OMG Kolpino, and OMG Tosno).»

25 A. Yes, yes, yes.

1 refer to these other three ships when you spoke, or you

2 wrote to Mr Savelyev —

3 A. Yes.

4 Q. — was that actually Vyborg Shipping hadn’t actually

5 gone on to enter into any arrangements in relation to

6 those vessels. I thought that was your answer; that was

7 all.

8 A. As I said, we signed the preliminary contracts and we

9 made some quite substantial prepayments, but as far as

10 I understood, we lost quite a lot of money out of that.

11 Q. But the payments — the shipowner was Land Breeze

12 Holdings, wasn’t it?

13 A. Maybe.

14 Q. And that was an affiliated company of yours, wasn’t it?

15 A. Yes, by that time, yes.

16 Q. So any payments would have been made to Land Breeze,

17 wouldn’t they?

18 A. Yes, I think so.

19 Q. So why would you have lost money making a payment to

20 an affiliated company of yours?

21 A. Because, based on the agreement with the Bank, that for

22 the purpose of currency control in the Bank, so it was

23 easy for the Bank that we transfer it to this Land

24 Breeze, and then Land Breeze make purchases from the —

25 either purchases or renting from the original producers

53 55

1 Q. There is no reference, is there, to any of the other

2 three vessels I have asked you about?

3 A. No.

4 Q. Can you explain why, when you described the state of

5 Vyborg Shipping Company in this way to Mr Savelyev, you

6 didn’t make any reference to the OMG Volkhov, Tikhvin or

7 Luga?

8 A. As far as I understood, these three vessels have never

9 been bought, so we made prepayments to different

10 sellers, and as far as I understood, due to the crisis

11 and so on, we never finalised these purchases.

12 We’ve been discussing it with Mr Savelyev, and he

13 knows that we lost quite a lot of money on ordering the

14 engines for new vessels and for prepayments of the new

15 vessels, but due to the crisis at the end of December,

16 or November, as far as I understood, all the

17 transactions have not been realised.

18 Q. Can we have {D34/545/1} on the screen, please. This is

19 a time charter, apparently for OMG Volkhov. Can you see

20 «Name of vessel», number 5, «OMG Volkhov»?

21 A. Yes.

22 Q. And it has been stamped; can you see?

23 A. So you want me to see the Russian version, or — yes.

24 Q. Dr Arkhangelsky, all I was wondering was, I think your

25 last answer suggested that maybe the reason you didn’t

1 of the vessels.

2 Q. The time charter for Tikhvin is at {D45/783/1} — sorry,

3 could we go back to {D34/545/1}, because there is

4 a delivery date down there. Number 16:

5 «Time of delivery … no later than 30 April 2008.»

6 So the OMG Volkhov was meant to be delivered by the

7 end of April 2008, wasn’t it, Dr Arkhangelsky?

8 A. Maybe, but in shipping, delay or postponing of delivery

9 is quite a normal thing, so I’m not sure if it is

10 a final document or preliminary.

11 Q. Is it your evidence that Land Breeze Holdings ever owned

12 this vessel?

13 A. I don’t know.

14 Q. And is —

15 A. I don’t think that Land Breeze Holdings ever owned this

16 vessel but Land Breeze Holdings could be involved in

17 purchases and preliminary purchases of this vessel.

18 Q. And if we could go to the time charter for the Tikhvin,

19 please, that’s {D45/783/1}, {D45/783/9}; can you see

20 Dr Arkhangelsky that this looks to be a time charter for

21 OMG Tikhvin, the owner is said to be Land Breeze, and in

22 point 16:

23 «Time of delivery … no later than 21 July 2008 …

24 Moscow time.»

25 A. Yes, yes.

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1 Q. Is it your evidence that Land Breeze ever owned the OMG

2 Tikhvin?

3 A. No, I don’t think so. I suggest that you better speak

4 to Mrs Krygina, because she’s been personally involved

5 in all these negotiations and on these contracts and the

6 dates and so on, and as far as I understood, the fact is

7 that Vyborg Shipping lost quite a lot of money out of

8 bad contracts she signed, especially with the time

9 charters.

10 Q. So to the best of your understanding, it seems to be the

11 case that, although loans had been entered into with

12 Bank of St Petersburg to finance the acquisition of

13 various ships, the three ships, the Volkhov, the Tikhvin

14 and the Luga, were not, in fact, acquired in the event?

15 To the best of your —

16 A. Finally not. Finally not. But I know that — what

17 I remember now, at least two vessels, we made

18 a prepayments to them, but we couldn’t finalise these

19 two vessels, and then, as far as I remember, the names

20 of the vessels were Norheim(?) and Nordheim(?) and it

21 was a plan to rename them to these names.

22 Q. But the payment records, Dr Arkhangelsky, in this case,

23 show payments to Land Breeze?

24 A. Yes.

25 Q. Does it surprise you that payments were made to Land

1 words the Volkhov, the Tikhvin and the Luga; it looks

2 that way, doesn’t it?

3 A. Sorry?

4 Q. It looks as if the OMG companies or OMG affiliated

5 companies never actually acquired interests in

6 the Volkhov and the —

7 A. As I said, what I know, that the shipping is a rather

8 complex thing and, as far as I understood, from the time

9 you make a prepayment for the vessels to the time of

10 delivery, it takes quite a lot of time.

11 And, as far as I remember, at least I remember two

12 names of the vessels, Norheim and Nordheim, if I’m

13 correct. The contract’s been done and the contract’s

14 been prepaid and these vessels at the day of delivery,

15 the names have had to be changed to the names of Tosno

16 and … sorry, to whatever, Tikhvin and whatever.

17 Q. If you go to your witness statement —

18 A. And, by the way, referring to 114, Tosno, Kolpino and

19 Volkhov, they were owned by Land Breeze, as far as

20 I understood. So it’s correct information.

21 Q. I think, Dr Arkhangelsky, we don’t accept that the

22 Volkhov was ever owned.

23 A. Okay, maybe, but Tosno and Kolpino, I think —

24 Q. Yes, that’s right, they were; yes, I accept that. I’ve

25 been asking you about the Volkhov, the Tikhvin and the

57

1 Breeze, if Land Breeze never owned the vessels?

2 A. No, it was an agreement of the Bank that when the Bank

3 advanced loan, that this comes to the Land Breeze and

4 some of the amount of money was coming back to the Bank,

5 more or less the same day, as a payment of interest on

6 initially purchased vessels.

7 Q. But you accept, don’t you, that the Bank did advance the

8 monies under the four Vyborg Shipping loans?

9 A. Yes, and the agreement was that part of the money comes

10 back to the Bank as a payment of interest for these

11 three vessels.

12 Q. So if we go to your witness statement, please, at

13 paragraph 114 at {C1/1/29}, if you look at

14 paragraph 114, I think you are giving evidence there in

15 relation to the Tosno, the Kolpino and the Volkhov,

16 aren’t you?

17 A. Yes.

18 Q. And I think your evidence now, isn’t it, is that the

19 Volkhov in the event probably was never acquired by

20 Vyborg Shipping?

21 A. You see, I don’t know all these details because it’s

22 Olga Krygina who’d been taking care about all these, so

23 I suggest you speak to her first.

24 Q. But do you agree it looks as if OMG companies never

25 acquired interests in these three vessels, in other

59

1 Luga.

2 A. You know, your Lordship, it is a bit complex because it

3 is referring to the names in the Leningrad region

4 cities, and it’s a bit …

5 Q. If you go to your witness statement, because the purpose

6 of those questions was really, if you like, to test some

7 evidence that you put in your witness statement

8 number 16.

9 A. I think most probably what we are referring here, it

10 might be, yes, instead of Volkhov, it have to be written

11 «Gatchina» here, so it might be my mistake, but — I may

12 accept that it might be Gatchina vessel.

13 Q. If you look, please, at paragraph 116.

14 A. Yes.

15 Q. You can see that you refer to some difficulties that

16 Vyborg Shipping allegedly encountered at the onset of

17 the financial crisis; can you see that?

18 A. Yes.

19 Q. Then over the page you say how: {C1/1/30}

20 «… the longer-term prospects for Vyborg Shipping

21 were more promising.»

22 Now, can you explain why it looks as if

23 Vyborg Shipping never — why these three vessels, the

24 Tikhvin, Luga, and the Volkhov, why it looks as if they

25 were never part of the Vyborg Shipping fleet; can you

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1 explain that, what happened?

2 A. Sorry?

3 Q. Well, the business plan had in mind as the first stage

4 the fleet acquiring ten second-hand vessels, didn’t it?

5 A. Yes.

6 Q. And it —

7 A. But actually, three stages, they were actually — were

8 planned to be run in parallel.

9 Q. Right, but can you then explain why, after the third

10 vessel, in other words the vessels four, five and six —

11 A. Yes.

12 Q. — why in the event it doesn’t look as if they ended up

13 becoming part of the fleet?

14 A. As I said to you right now, I remember that we signed

15 contracts of purchasing of these vessels. We made

16 prepayments, and delivery has been scheduled and the

17 vessels, I think Norheim and Nordheim, at least what

18 I remember, had to be renamed to these names of the

19 cities in the Leningrad region, but as far as

20 I understood, due to the crisis at

21 whatever, October, November, December, final delivery

22 have not been done and so we lost quite a lot of money,

23 I think.

24 And what I should say, that Vyborg Shipping made

25 quite a number of prepayments. For example, we made the

1 So we made — as a shipping company we made quite

2 a number of prepayments, considering the fact that all

3 these things would be financed.

4 Q. Dr Arkhangelsky, isn’t it the case that what happened

5 was that you used some of these Vyborg loans and the

6 money from the fourth Vyborg loan, you actually used it

7 for other purposes, other than buying the ships?

8 A. With agreement with the Bank of St Petersburg, as

9 I said, some funds from the fourth loan were spent on

10 financing the interest rate on the first three loans, as

11 well as the fourth loan, and from that money, again with

12 agreement with the Bank, we made prepayments to new

13 contracts.

14 Q. And was the agreement in writing, or was it an oral

15 agreement?

16 A. Agreement was like that. So that we consume funds

17 from — the Bank was — as you remember, Bank given

18 the letters —

19 Q. Sorry, was it oral or was it in writing, the agreement?

20 A. It was oral agreement with Mr Guz and Mr Savelyev. The

21 agreement was that they issued guarantee security

22 letters to the shipyards that they would finance the new

23 construction, and the agreement was that they advanced

24 us, whatever, 1 billion roubles as a fourth loan, which

25 we were allowed to use to start the realisation of these

61

1 prepayments for the engines for the vessels. For ten

2 vessels which had to be constructed in Russia we prepaid

3 engines, and engines are the, money-wise, key part of

4 the constructions. So we made prepayments to a company

5 called Mann BV in Germany, and we made quite a number of

6 prepayments and expenses. We paid, from the funding of

7 this fourth loan we paid — on agreement with the Bank,

8 we paid interest for the first three vessels.

9 So the fact that the crisis in October, November,

10 December 2008 occurred collapsed all the plans, and the

11 Bank was well aware of all these plans. For example, we

12 had an official signing of the contract with Damen in

13 St Petersburg. It was a general counsel of Holland at

14 the ceremony, it was the top executives of

15 the Bank of St Petersburg and V-Bank, so these contracts

16 were done in the presence of the bank executives.

17 Q. Sorry, Dr Arkhangelsky —

18 A. And — sorry, just I finish this sentence. And on the

19 signing of these documents — on the contract of

20 purchase of the vessels, Bank of St Petersburg delivered

21 official letter to Damen and Uljanik shipyard with

22 confirmation of financing of this new building, so you

23 have these English version documents, Mr Guz signed

24 these documents in English, just confirming to

25 the shipyard they would finance.

63

1 projects. And nobody at that time, at August 2008, was

2 aware that the collapse of Lehman Brothers may change

3 all the plans.

4 Q. Could I show you {D117/1756/1}, please. It is a letter

5 that Mr Savelyev wrote in April 2009.

6 A. Yes, please.

7 Q. Because I think you are there telling Mr Savelyev the

8 problems that have affected Vyborg Shipping Company,

9 aren’t you? You are explaining to

10 the Bank of St Petersburg in this letter the problems

11 that Vyborg Shipping has encountered, aren’t you?

12 A. If I can have a Russian —

13 Q. Yes, certainly. {D117/1756/2}.

14 A. So, as I said, this letter —

15 Q. Sorry. Please, because I’m going to take longer with

16 you in cross-examination, don’t just give a speech. I’m

17 asking you to confirm that in this letter you are

18 explaining the difficulties that you say Vyborg Shipping

19 Company has encountered to Mr Savelyev?

20 A. Yes, absolutely, yes.

21 Q. And then I will ask you some questions about it, all

22 right?

23 If you look through the letter you can see the sorts

24 of difficulties that you are explaining to him; can you

25 see the difficulties you are explaining?

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1 A. From which paragraph?

2 Q. All the paragraphs. You are explaining what’s happened

3 to all three ships. You are explaining why the three

4 ships in the fleet, so that’s the Gatchina, the Kolpino

5 and the Tosno, you are explaining, I think, why they

6 have all, I think, been arrested, aren’t you?

7 A. Yes. Yes.

8 Q. And they had all been arrested, hadn’t they, by the end

9 of March 2009?

10 A. Yes, something like that, yes.

11 Q. And that was as a result of non-payment of various

12 maritime expenses relating to those vessels, wasn’t it?

13 A. Yes.

14 Q. And that would include oil payment, fuel payments —

15 A. Yes.

16 Q. — to a bunkering company?

17 A. I should say that most of problems came from the

18 unproper management by Mrs Krygina. That’s for sure.

19 Q. Yes.

20 A. If you may notice, the figures are comparatively small.

21 The figures are small in comparison to the level of

22 troubles they got.

23 Q. I agree with that; the figures are in the low hundreds

24 of thousands of dollars, aren’t they?

25 A. Yes.

1 time, yes, before the collapse of Vyborg Shipping. And

2 the fact, by the way, that the Vyborg Shipping stopped

3 operation based on absolutely small and minor problems,

4 small figures, it only gives me understanding that by

5 that time, Olga Krygina she had been already cooperating

6 with the Bank of St Petersburg, and if you notice in

7 your client’s disclosure, she had been extremely active

8 cooperating with the Bank, and she had been definitely

9 working for the Bank.

10 Q. Have you alleged — have you made these allegations in

11 any of your pleadings, Dr Arkhangelsky? Have you

12 alleged that Mrs Krygina is somehow involved in

13 the alleged conspiracy?

14 A. No, we think that the case is already too big to include

15 any new players, especially if you have not brought them

16 as a witnesses.

17 Q. Can I ask you: you said that these were relatively small

18 amounts?

19 A. Yes.

20 Q. Can I ask you: given that other OMG companies are

21 obviously available to make payments to other OMG

22 companies, can you explain to his Lordship why, in

23 relation to the Vyborg Shipping Company, another OMG

24 company didn’t step in to the rescue and make what you

25 describe as these relatively small payments, to prevent

65

1 Q. And there was also a fair bit of pay for seamen’s wages,

2 weren’t there?

3 A. Yes, something like that. So it was Olga Krygina who

4 was taking full and complete care of all these

5 companies, and I think she was not really prepared to

6 run a quality international shipping company. So she

7 couldn’t even understand how much troubles could come

8 from small unpayments based on the shipping loan.

9 That’s what I understood finally.

10 Q. And as a result of the arrest of these three ships, the

11 Vyborg Shipping Company business effectively ceased,

12 didn’t it?

13 A. Effectively …?

14 Q. Ceased. Stopped.

15 A. Yes.

16 Q. And never started again?

17 A. Never.

18 Q. And that cessation of business by Vyborg Shipping

19 Company happened before there could be any effect on

20 that business of anything that you allege against the

21 Bank of St Petersburg; that’s right, isn’t it? It

22 predates any possible effect of what you allege against

23 the Bank of St Petersburg, doesn’t it, Dr Arkhangelsky?

24 A. As far as I understood, the idea of the fraud and

25 troubles for me been started by the Bank before that

67

1 the arrest of the three vessels that led to

2 the cessation of the Vyborg Shipping Company?

3 A. Because by that time it was already a difficult

4 financial time and my target was just to try to make

5 a crisis management and just to keep all the companies

6 afloat, not to risk any other businesses, not to create

7 any risk for any other businesses if we save other

8 companies. So that was my crisis strategy at that time,

9 so I thought that each and every company have to survive

10 based on their own resources by that time.

11 Q. So the answer is that money was not made available from

12 any of the other OMG companies in order to save

13 Vyborg Shipping Company; is that right?

14 A. So my target that time was to keep afloat all the

15 companies, and at that time, middle/end of 2008, just to

16 keep all the business running and prevent any other

17 troubles or problems.

18 Q. And if you look at this letter to Mr Savelyev, you can

19 see that the first ship was arrested on about

20 11 December 2008; can you see that, Dr Arkhangelsky?

21 A. Yes. Yes. Yes.

22 Q. That was the Tosno, and it was arrested in Estonia. It

23 was arrested for non-payment of a fuel — I think some

24 fuel or bunkering charges.

25 A. Yes.

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1 Q. US $235,000?

2 A. Yes.

3 Q. So can his Lordship take it that no OMG company stepped

4 in to make any finance available to stop this arrest at

5 that point; in other words, no OMG business financed or

6 helped Vyborg Shipping, to avoid the arrest of its ship

7 at the beginning of December 2008?

8 A. The fact is that by that time we’ve been just in

9 the middle of difficult restructuring and approaching

10 new year, and for me, that time, it was much more

11 important to keep all the group afloat, and if

12 your Lordship remembers, by the beginning

13 of December 2008, thousands of vessels, they had not had

14 any work.

15 So if you remember that all the vessels were staying

16 on rate and it was, for three or four months, a complete

17 stop of the business.

18 So my understanding at that time was that we could

19 finance, let’s say, waiving of arrest of the vessel, but

20 the fact was that the vessels hadn’t had any work. So

21 we could pay all this money and waive arrest on this

22 vessel, but as long as the vessels haven’t had any work

23 at that time, so it would create further and bigger

24 problems.

25 So I decided to cut the costs and keep the vessel

1 Vyborg Shipping, although there was money available from

2 OMG finances, or was it that you didn’t have any money

3 to put into Vyborg Shipping, and that’s why it went

4 under?

5 A. No, in shipping business it’s considered that — each

6 and every vessel considered to be an independent

7 company, so it’s having an income from chartering, and

8 expenses like daily expenses.

9 So in the time of crisis, then we understood that

10 suddenly, clients who were chartering vessels, they

11 suddenly stopped paying for the charter, so that’s why,

12 actually, we got this depth on bunkering, for example,

13 or salaries.

14 So by that time, clients stopped paying. We

15 understood that we don’t have any enquiries on new

16 charter contracts, so that time I made a decision that,

17 considering the volatility of shipping business at that

18 time, I considered that we better keep afloat all other

19 businesses and see what would happen with the shipping,

20 because it was a kind of a collapse that just overnight

21 all the vessels stopped, because of the Lehman Brothers

22 troubles.

23 Our region, in October/November — normally

24 considered that December, January, February in Russia,

25 vessels are not operating, generally not operating,

69 71

1 under these conditions, because I was fully

2 understanding the fact that the vessel is available for

3 the business, but there was not any business at that

4 time.

5 So it was thousands, or tens of thousands of vessels

6 worldwide just staying laid up because of the crisis;

7 that all the traffic been stopped.

8 Q. I have two more questions on this topic and then

9 I will finish. I see the time, my Lord, and I do

10 apologise.

11 If you could go back to your witness statement,

12 please, at {C1/1/30}, Dr Arkhangelsky, paragraph 117,

13 you said in the top line:

14 «However, the longer-term prospects for

15 Vyborg Shipping were more promising.»

16 A. Yes, absolutely.

17 Q. And I want to, I think, ask you this question: we have

18 seen when Vyborg Shipping Company started to have its

19 ships arrested, and we have seen the amounts of money

20 that caused those arrests, or rather the non-payment of

21 which caused the arrest.

22 A. Yes.

23 Q. And I want you to tell his Lordship: when

24 Vyborg Shipping’s ships were arrested, was it because

25 you didn’t want to put any more money into

1 because of the ice situation. So theoretically I could

2 waste several millions of dollars without any result,

3 and I decided that I was motivating Mrs Krygina to try

4 to save business, find new clients, maybe on less

5 attractive conditions, but to save the business and,

6 actually, at least what she was telling me, that she was

7 trying to do this, and we thought that Vyborg Shipping

8 could recover themself as soon as the new chartering

9 contracts could be signed.

10 Q. Dr Arkhangelsky, I’m going to suggest to you that the

11 longer term prospects of Vyborg Shipping were not

12 promising; that it had no real long term prospects?

13 A. No, it’s not true, because, as you are referring to

14 paragraph 117 of my witness statement, Vyborg Shipping

15 project had been considered as one of the priority

16 projects of reviving of what we called Baltic Shipping

17 Company, and it has been a huge market many, many years

18 ago, and my idea was just to recreate Baltic Shipping

19 Company in the nature of Vyborg Shipping Company, and

20 just to get all the businesses they had before.

21 So the Ministry of Transport, Mr Misharin,

22 considered that project — the Vice Minister of

23 Transport considered that project to be a key project

24 for development, and he’s written a letter to

25 the Russian Development Bank, which is called

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1 Vneshsconombank, that the Ministry of Transport 1 it and, therefore, you must take care in that regard.
2 considered that this project to be financed and it’s 2 A. No, no, for me, I understand that. I want to make clear
3 having strategic interests. So I assume that 3 that Mr Lord got proper instructions from the client.
4 Vyborg Shipping company with handysize vessels, 4 MR JUSTICE HILDYARD: Well, Mr Lord, do you need any time
5 ice class vessels, having big prospects for local 5 out, or …?
6 market, and it has been considered by international 6 MR LORD: No, my Lord, I’m going to ask —
7 shipping community as the key issue. 7 MR JUSTICE HILDYARD: You have the questions you have to
8 And, by the way, your Lordship, the reason why 8 ask?
9 TradeWinds, the English — one of the leading shipping 9 MR LORD: I have some proper questions. I wasn’t aware they
10 newspapers is following these proceedings, that they 10 had these ramifications, but I will go very carefully.
11 know that it has been a quite successful business and 11 If, in fact, there is any question that Dr Arkhangelsky
12 they’ve been following all this development during the 12 thinks that, were he to answer it, there would be some
13 last eight, nine years. 13 problem for him — for him — then I’m very happy for
14 MR LORD: Thank you, Dr Arkhangelsky. I’m sorry to have run 14 him … sorry, my Lord. (Pause)
15 on a bit, I wanted to finish that topic, which I have 15 I am going to keep asking my questions, my Lord, but
16 done. 16 I was only really — I don’t know what’s behind the
17 MR JUSTICE HILDYARD: Yes, well, I think that the transcript 17 cryptic signal from Dr Arkhangelsky, and I’m very
18 writers, if I may say so, have completed 71 pages and 18 anxious for it to be understood that it is no part of my
19 I congratulate them. I think we should have a break. 19 purpose to ask —
20 Ten minutes. 20 MR JUSTICE HILDYARD: Put him in a difficulty —
21 (11.31 am) 21 MR LORD: Completely.
22 (A short break) 22 MR JUSTICE HILDYARD: — with respect to matters outside
23 (11.45 am) 23 this case.
24 MR LORD: Dr Arkhangelsky, I’m going to ask you about the 24 MR LORD: Completely, my Lord.
25 Vyborg Fuel Company now. 25 MR JUSTICE HILDYARD: Well, Dr Arkhangelsky, I found it
73 75

1 A. Yes, please.

2 Q. And I wonder if you could have {D67/1042.7/1}, please.

3 And for Dr Arkhangelsky, if you want it, could we have

4 {D67/1042.7/21}, please.

5 A. Your Lordship, I think that just my comment, just to

6 avoid the situation we had on the first day, I just want

7 to get a clear understanding that Mr Lord is really

8 knowing what he is doing and if he got proper

9 instructions from his clients about discussion of Vyborg

10 Petroleum Company, and if he really understands the

11 level of client he is discussing and if he is exactly

12 sure that he wants this issue to be discussed by his

13 clients.

14 For me, it is only danger of the personal risk, but

15 for them, it’s the major danger of their business

16 reputation. So just, I strongly advise them to get

17 advice from their clients.

18 So for me, I can tell this story, it would be

19 a public story, I think it would be well accepted in

20 use, but I just want them to get the proper advice on

21 their clients.

22 MR JUSTICE HILDYARD: Well, for my part, I’m not quite sure

23 what the message is, Dr Arkhangelsky, but for your part,

24 if there is — I don’t know what risk, personal, there

25 is, but it seems to me that you have alerted yourself to

1 difficult to know which way the questions which caused

2 the upset last time were going, and I dare say that

3 I will suffer the same problem. But at least this time

4 we have the advantage that you are wary, and if there

5 comes a time when you feel that your own personal

6 position requires you to pause and take stock and ask me

7 whether the question is proper, then please do so.

8 My appreciation of what you said is that you have

9 thought about it carefully and it’s not your own

10 personal position that you are worried about, but you

11 feel that the questions will yield a story which will be

12 of interest to persons otherwise interested in this

13 case, to the detriment of the Bank, and that’s what you

14 were doing in warning.

15 A. Yes, absolutely. I just wanted to hear that it was the

16 Bank’s desire to discuss this particular company and

17 this particular client of the Bank.

18 MR JUSTICE HILDYARD: All right. Well, you have made your

19 point, and I take it that Mr Lord, as I would always

20 expect, has full authority to raise the questions that

21 he wishes answers for.

22 MR LORD: Yes, and it’s not — it’s questions I have

23 authority to ask in conduct of this case to establish

24 certain relevant matters in this case.

25 A. Absolutely.

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1 MR LORD: I’m not —

2 A. No, I would be happy to discuss that.

3 MR LORD: No, please don’t interrupt.

4 I’m not being set up here as if I am bringing

5 matters into this litigation for the sake of it. That

6 is not what is happening. That is not what has happened

7 and it is not what I would ever do, and I want that to

8 be very clearly understood.

9 MR JUSTICE HILDYARD: Very well.

10 A. Very well.

11 MR JUSTICE HILDYARD: Then proceed.

12 MR LORD: Dr Arkhangelsky, could you look at the documents

13 on screen, please. {D67/1042.7/1}

14 A. Yes.

15 Q. You have the Russian and the English. {D67/1042.7/21}

16 A. Yes.

17 Q. And it is a sale and purchase contract for a company

18 called Vyborg Fuel Company; can you see that?

19 A. Yes.

20 Q. And I think it was dated — if you go to {D67/1042.7/2},

21 you can see that the date is 27 August 2008. It’s above

22 the recital.

23 A. Yes.

24 Q. And this was a sale, wasn’t it, by the sellers of their

25 shares in Vyborg Fuel Company —

1 Q. — $35 million, $38 million, perhaps?

2 A. I think roughly at that time it was $30 million,

3 I think.

4 Q. Okay. And there were to be two stages to the payments,

5 according to this.

6 A. Yes, and the first part had been paid. $15 million been

7 paid.

8 Q. What, 450 —

9 A. $15 million dollars, which is 450 million roubles been

10 paid.

11 Q. I understand. Can you tell his Lordship where that

12 finance came from, where the money came from to make

13 that payment?

14 A. The money came from the group accounts, as well as from

15 the loans from the bank — V-Bank.

16 Q. V-Bank?

17 A. Yes.

18 Q. And who were your contacts at V-Bank?

19 A. Mr Novikov, as always. I’ve always been speaking to

20 the north-western director of the Bank.

21 Should I, in a few words, explain the business of

22 this company and the target of purchase and the reasons

23 of purchasing, or …?

24 Q. Yes.

25 A. Okay. Now, it’s you who wanted that.

77 79

1 A. Yes.

2 Q. — to Scandinavia Commercial Company; is that right?

3 A. Yes, absolutely.

4 Q. And was Scandinavia — should it be called Scandinavian

5 Trading Company; is that the right translation for it?

6 A. Yes, I think so.

7 Q. And was that an OMG group company?

8 A. Yes.

9 Q. And which OMG company, if any, owned the shares in that?

10 A. I don’t remember, just see the disclosure or the public

11 information.

12 Q. But this looks like it was an agreement under which

13 an OMG company would buy the Vyborg Fuel Company; is

14 that right?

15 A. Yes, absolutely.

16 Q. And you were instrumental in this agreement on behalf of

17 the OMG company, weren’t you?

18 A. Yes, we created a SPV, just for that particular reason.

19 Q. And the purchase price, or sale price, is on

20 {D67/1042.7/3}.

21 A. Yes.

22 Q. And it looks as if the price was 900 million roubles.

23 A. Roubles, yes.

24 Q. Which is, about, what, something under —

25 A. At that time it was about —

1 So —

2 Q. Sorry, sorry —

3 A. Vyborg Petroleum Company — no, I just want to tell you

4 because his Lordship needs to know the clients of

5 the Bank and what is behind any transactions of

6 the Bank.

7 MR JUSTICE HILDYARD: Well, you must answer the questions,

8 Mr Arkhangelsky —

9 A. But without understanding the nature of the company, you

10 cannot understand the rest.

11 MR LORD: Dr Arkhangelsky, I am not saying — I am not

12 asking you to give a speech that you obviously want to

13 give. I have questions as to what this Vyborg Fuel

14 Company transaction concerned and what became of it,

15 because you make no reference to it in your evidence.

16 So those were going to be my questions: how you financed

17 it, whether you went through with it, and why you don’t

18 refer to it. But I am not asking you to give a great

19 long pre-prepared speech that you want to give.

20 A. The speech is not prepared but the story is well known,

21 and it is of public record.

22 Q. On that basis, then you tell his Lordship.

23 A. Yes.

24 So Vyborg Shipping Company was still belonging to

25 the famous Russian person called Ilya Traber. He is

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1 considered to be one of the major Russian criminal

2 authorities, and he is one of the major clients of

3 the Bank of St Petersburg, so Bank of St Petersburg is

4 running special office; I think the name of the office

5 is Gavanski(?) office, and he is well known as

6 a previous owner of the port of St Petersburg, so he is

7 extremely famous. In all American books you can find

8 this name, Ilya Traber. His name is «Antiquar»,

9 nickname, criminal name, Antiquar, and his business

10 career started, together with Mr Putin, on illegal

11 export of Russian arts, when Putin was vice head of —

12 Mayor of St Petersburg. He spent quite a number of

13 years in prison.

14 And Vyborg Shipping — Vyborg Petroleum Company is

15 one of the historical assets belonging to this person,

16 and this company is a really good asset, but the person

17 of this nature would not be able to do any transactions

18 because it would not go through any due diligences.

19 So it’s one of the occasions I got from Mr Guz

20 suggestion, Guz who was at that time Vice-President of

21 the Bank of St Petersburg, to acquire and to come in

22 contact with this criminal person. He is well known

23 because, you know, if you log into the internet, he

24 killed quite a number of people and the history of this

25 Vyborg Petroleum Company is well known, that something

1 Oslo Marine Group, would be a real fortune, because

2 nobody would do that.

3 So I employed a person from British Petroleum of

4 St Petersburg office to make a due diligence on the real

5 status of this company, and I also employed, I think,

6 Deloitte at that time, to make a due diligence, to

7 understand if my group legally can make a clean

8 acquisition, so take aside the personal risks and so on.

9 And so we found out that it was a quite interesting

10 asset. So they made — even the fact that they bought

11 or acquired this asset was not clean and was completely

12 dirty, but the fact that they made all the necessary —

13 let’s put it this way — document laundering, and from

14 the international point of due diligence, that would be

15 considered to be an interesting asset.

16 And among the sellers, for example it is quite

17 funny, you can find Alexander Petrov, who is the father

18 of a well known Formula One player and so on and —

19 MR LORD: Sorry, my Lord, I am a little concerned.

20 A. So, this company having a huge history.

21 MR JUSTICE HILDYARD: The thing is, Mr Lord, you did ask the

22 question —

23 MR LORD: Very well. Very well.

24 MR JUSTICE HILDYARD: — and then ask him to answer it.

25 I don’t want detail as to — excessive detail as to

81 83

1 like 50 or 100 people, previous owners, either

2 disappeared or been killed. In this way, this person

3 became owner. And it relates to many, many assets like

4 BSMZ, like port of St Petersburg. So he was been the

5 person who had been controlling criminal privatisation

6 of the port of St Petersburg.

7 At that time, in the port of St Petersburg, the key

8 employees was Mr Medvedev, who is the Vice Prime

9 Minister of Russia, Mr Miller, who is the President of

10 Gazprom, and some other people.

11 So, Mr Guz suggested to me that I have a good chance

12 to buy this interesting asset, especially considering

13 that it was just neighbouring — we had the same border

14 with Vyborg Port.

15 So for me it was an expansion, on one side. On

16 another side, for me it was really very dangerous and

17 enormously difficult procedure to buy that, because

18 I really understood the personal risk and personal

19 threat, because anybody asked in St Petersburg if you

20 ever could make any transaction with this person, nobody

21 would do — nobody even would meet this person.

22 So it was widely discussed in the Russian media at

23 that time that the acquisition of this asset could be

24 considered like a money laundering, because for this

25 person, getting a clean money from a good company like

1 the accusations made against these various persons, but

2 I think Dr Arkhangelsky is trying to explain the context

3 in which the company was purchased, which I think

4 involved due diligence, as I understand it, from BP in

5 Russia, and some element of risk and care because of

6 the identity of the owners of the company.

7 MR LORD: I see.

8 A. Yes, and that’s why, you see, I was not considered that

9 this case was relevant and I didn’t really want to, you

10 know, come deep in all these details, because you cannot

11 tell just part of the story unless you tell the whole

12 story, so how dangerous all the consequences and all the

13 people involved are.

14 MR JUSTICE HILDYARD: Right.

15 Is that it?

16 A. Yes. Just a brief background.

17 MR LORD: But I asked you, Dr Arkhangelsky — I didn’t ask

18 you that question. I believe I asked you what this

19 particular transaction — why you were buying Vyborg

20 Fuel Company.

21 A. Yes.

22 Q. I didn’t ask for all that background.

23 A. No, but it’s necessary to know.

24 Q. All right, but could you answer —

25 A. Why?

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1 Q. Yes.

2 A. Yes.

3 Q. Why OMG wanted to buy Vyborg Fuel Company?

4 A. Yes, and I briefly explained it yesterday, but I can

5 confirm it again.

6 So Vyborg Petroleum Company consisted of two major

7 parts of the assets. One is the big oil terminal next

8 to the port of Vyborg. So actually, in fact, it was,

9 historically, when Vyborg Port was a finished port, it

10 was a historical part of the port. And also Vyborg

11 Petroleum Company had something like 15 petrol stations

12 on the way from St Petersburg to Vyborg.

13 So then I’ve been offered by Mr Guz to consider this

14 acquisition. I found out, even considering high

15 personal risk involved, that it’s quite an interesting

16 asset. So my target was to buy it as a complex, leave

17 the petroleum terminal in the port of Vyborg as a part

18 of the port of Vyborg, and to sell petrol stations

19 separately, because at that time it was a quite special

20 market, so it was much more profitable to sell each and

21 every petrol station, depending on the area it is

22 located, to different market players, like Statoil,

23 a Norwegian company, or BP or whatever, Neste Oil, or

24 whatever.

25 So that was considered to be quite an interesting

1 a good deal; is that right?

2 A. Yes, I was considering it’s a good deal, yes.

3 Q. So —

4 A. But you know, it was rather criminal conditions on this

5 contract, so I had to pay 50 per cent prepayment. If

6 I don’t pay the rest 50 per cent, I would lose my

7 50 per cent first, which in fact I lost, because of all

8 these events which was going on with me.

9 Q. And the agreement we’ve seen, dated 28 August 2008; is

10 that right?

11 A. Yes.

12 Q. And you thought, did you, at that point, that OMG should

13 be acquiring another business?

14 A. Absolutely. Yes.

15 Q. And were you not at that stage concerned about the

16 problems that OMG was then starting to experience?

17 A. No, no, no. Which date are you referring to? So that

18 time we had not had any difficulties. It was well

19 before the financial crunch and by the plan which, you

20 know, KIT Finance — speaking about, for example,

21 KIT Finance financing, KIT Finance was the biggest

22 Russian corporate finance bank, and they would not do

23 any deals, in case they don’t believe that they would be

24 realised.

25 So, they create an investment memorandum which

85

1 and liquid and fast transaction. So I thought that

2 I would buy at a comparatively low price, which was

3 900 million roubles for that asset. It was

4 a comparatively low price, considering the fact that

5 nobody would simply come into this transaction because

6 of the high personal risk involved.

7 And, you know, even some obvious things, even then

8 you meet these people, you’re really starting to be

9 afraid, like all these gangs and so on, with special

10 offices, fencing and so on. So they had an office next

11 to Smolny and next to the City Government, completely

12 armed. It’s really special, even for Russian person.

13 So I was considering I would buy it at

14 a comparatively low price. The asset was considered to

15 be quite interesting from the point of view of V-Bank,

16 from KIT Finance, from any other banks. I had

17 a discussion, for example, with Petrocommerce Bank,

18 which is run by Lukoil, one of the major Russian oil

19 companies. So all of them, they were considering it’s

20 quite interesting and that was an important — that

21 I could rather fast make all these M&A transactions,

22 make due diligence, get audit report, transfer IFRS

23 accounts, and sell it on a separate basis to quality

24 international or Russian players.

25 Q. So I think the upshot of that is you decided this was

87

1 included a purchase of Vyborg Petroleum Company and BSMZ

2 and two other objects. So we made this business plan.

3 In my passport at that time we created — I got,

4 whatever, 15 different visas, Hong Kong, Singapore,

5 London, New York and Germany. So we had to have

6 a roadshow by the middle/end of September/beginning

7 of October, and the market of corporate finance is that,

8 when you make a roadshow, it is kind of an underwriting,

9 and it was LPN, loan participation note, so it means

10 that the money could be advanced on very short notice.

11 So it’s a question of very fast financing, and

12 unless Lehman Brothers collapsed and KIT Finance

13 collapsed afterwards, so I would be able to have

14 a financing by, latest, middle of October 2008 in

15 the volume of 150 million, whatever, dollars.

16 MR JUSTICE HILDYARD: Did you tell me that Mr Guz suggested

17 this proposition?

18 A. Yes. Because this group of people, leaded by

19 Ilya Traber — he’s extremely known in American

20 literature on Russian crime, and I think he lives now in

21 Switzerland and under the criminal investigations there

22 from time to time, so —

23 MR JUSTICE HILDYARD: I wasn’t really asking you about that;

24 simply whether Mr Guz recommended the proposal.

25 A. Yes, because in the Bank there is a special office

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1 devoted to that particular group of clients, so it is

2 an enormous huge rich person and a group of people

3 around him, and he been sitting — it’s a special office

4 of the Bank who was taking care about his own

5 transactions.

6 MR JUSTICE HILDYARD: Right.

7 A. And I know that because when we were doing this

8 contract, we had to deal with that particular office of

9 the Bank.

10 MR LORD: Dr Arkhangelsky, I’m going to ask you some rather

11 more mundane questions about the Vyborg Fuel Company

12 deal if I may. It looks from the contract as if the

13 second stage, or the second instalment of 450 million

14 roubles was due on 24 October 2008; is that right?

15 A. 24 October 2008, maybe, yes.

16 Q. Yes, it was.

17 A. Yes, I believe you.

18 Q. It’s in the agreement.

19 A. Yes, yes, I agree.

20 Q. You said this was a very good deal, or you thought it

21 would be a very good deal, didn’t you?

22 A. Yes.

23 Q. And you don’t suggest, do you, that by 24 October 2008,

24 any acts of the Bank of St Petersburg had had any effect

25 upon the financial state of any OMG company, do you? By

1 So I approached by that time V-Bank and we had our

2 own resources, so we made this prepayment considering

3 that after LPN issue by KIT Finance we would have this

4 funding.

5 But I’ve always been told by Mr Guz — and, you

6 know, it looks very logic. If your client has paid

7 50 per cent, you know, it’s logic that 15 million, in

8 all the transactions with the Bank of St Petersburg, was

9 next to nothing.

10 So it was quite logic that they would be supporting

11 me, but, in fact, it turned a different way. I don’t

12 know how personally Mr Guz was involved in that

13 transaction himself, but the fact is that Ilya Traber,

14 as the owner of this company, got 50 per cent. I lost

15 $15 million, and we may consider it as a kind of joint

16 deal between Traber and Guz for sure. But I may assume

17 that it may be not connected to the general case here

18 because it’s absolutely — my understanding is that it’s

19 a different — a small, different business — private

20 business of Mr Guz and Mr Traber.

21 MR LORD: Back to the question, Mr Arkhangelsky. The second

22 instalment on this good deal that you had to pay was

23 US $15 million by 24 October 2008?

24 A. Yes.

25 Q. And your evidence, I think, is that you did not make

89 91

1 24 October 2008?

2 A. You see, I don’t know what’s been going on inside the

3 Bank.

4 Q. No, no, Dr Arkhangelsky. You know your case is that

5 in December 2008, the Bank of St Petersburg conspired to

6 steal Scan Insurance and Western Terminal. That’s your

7 case, isn’t it, Dr Arkhangelsky?

8 A. Yes.

9 Q. And you’ve never suggested that the

10 Bank of St Petersburg did anything — anything — to you

11 or your companies in October 2008, have you?

12 A. No. In this particular case it’s a different story, and

13 I think it’s anyway different case. So what was the

14 agreement with Mr Guz: that the initial agreement was

15 that I pay 50 per cent, which is $15 million, for this

16 transaction. It was really draconian conditions, so you

17 understand that, it’s quite unusual that you pay

18 50 per cent.

19 MR JUSTICE HILDYARD: Yes, you told me that; that you would

20 forfeit the rest if you didn’t —

21 A. And 50 per cent you pay it then in one month or you lose

22 everything.

23 MR JUSTICE HILDYARD: You would forfeit the payment if you

24 didn’t pay the rest.

25 A. Yes, you lose everything, yes.

1 that payment on that date?

2 A. Yes.

3 Q. And I suggest that the reason you didn’t make that

4 payment is because you couldn’t, by that stage, find

5 US $15 million to complete what was a good deal?

6 A. Yes, that’s what I’m telling. I didn’t have that time

7 15 million because my idea was to get this financing

8 from LPN notes, or from the friendly banks, like V-Bank,

9 and reply of V-Bank at that time was that they helped us

10 in prepayment because they were being quite flexible and

11 helped us on this first part, but this credit crunch

12 also influenced on V-Bank also, so at the level of

13 the office in St Petersburg, they were not able, in

14 short run, to create — to give additional $15 million.

15 Q. But it follows, doesn’t it, Dr Arkhangelsky, that as at

16 24 October 2008, the OMG group of companies was not in

17 a position sufficient to find $15 million to complete

18 the acquisition of this Vyborg Fuel Company?

19 A. Yes, that’s true. We haven’t had any cash, free cash,

20 because it was not planned in our financial plan.

21 Q. And that was the month when a Tekno loan, as it has been

22 called — when a loan was made to OMG by another client

23 of Bank of St Petersburg by the name, I think, of Tekno,

24 in order to help your group of companies meet

25 its October interest payments; isn’t that right?

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1 A. I have not been in this particular deal, so I don’t know 1 everybody at that time was that everybody was surprised.
2 details and how it was organised. I have not been even 2 I mean, any Russian bank or any international bank at
3 in discussions about this deal. 3 that time, they were surprised by the Lehman Brothers
4 Q. Well, it has never been challenged that there was 4 collapse and all the following collapses, because it was
5 a Tekno loan; none of that has been challenged. So, 5 quite number of events going on, so everybody were on
6 Dr Arkhangelsky, it seems as though — 6 standby, because, quite especially Russian banks, they
7 A. No, I’m not challenging that, I’m just telling that me 7 were very much exposed to international lendings, LPN,
8 personally never, ever been involved in this and never, 8 Eurobonds and so on, and suddenly everybody understood
9 ever been participating in any discussions, and I was 9 that not any, let’s say, fresh financing would be
10 not even aware of the existence of any Tekno or any 10 coming, so they had to repay their own obligations. And
11 other similar companies. 11 for the Russian bank, especially for St Petersburg,
12 Q. But it follows, doesn’t it, that in September 2008, 12 $15 million was a quite substantial amount of money.
13 Bank of St Petersburg, via this Tekno loan, they were 13 So for me, I had to go to big banks in Moscow if
14 helping OMG companies, weren’t they, with their finances 14 I would want to get that, but big banks in Moscow, they
15 at this point? 15 don’t do loans overnight. So that’s why we had all
16 A. I think it was discussions or negotiations with 16 these difficulties.
17 Mr Berezin, who was a financial director, and it was, as 17 By the last moment, I was absolutely aware that
18 far as I understood, so small a deal that he was not 18 either one of the banks, V-Bank or
19 even informing me about that. So it was kind of — 19 Bank of St Petersburg, would support this transaction.
20 Q. That wasn’t the question, Dr Arkhangelsky. The question 20 Q. Can I ask you, please, to be shown {D112/1264.1/1},
21 was: in October 2008, Bank of St Petersburg was 21 please, and {D112/1264.1/2} because I think,
22 assisting OMG by allowing another of BSP’s customers to 22 Dr Arkhangelsky, you have told his Lordship that this
23 make a loan to your group of companies to meet 23 was an unusual contract where, if you didn’t make the
24 your October interest payments? 24 second instalment, you forfeited the first —
25 A. As far as I understood, Bank of St Petersburg was 25 effectively you forfeited all your rights under the
93 95

1 assisting themself and made a sham transaction to

2 create — not to create reserves, so that’s what they

3 done. It was them who wanted not to increase the

4 reserves on our loans.

5 Q. Can I suggest that the reason you couldn’t find the

6 $15 million to complete the Vyborg Fuel Company purchase

7 was because by that stage, the OMG companies were in

8 very serious financial difficulty?

9 A. No, it’s not right.

10 Q. If I am wrong, can you explain why you couldn’t find

11 $15 million from any bit of the OMG empire or any

12 possible lender anywhere in the world to complete what

13 you say was this good deal?

14 A. Yes, I can easily explain that to you, because, as

15 I said, the major funding for this transaction had to

16 come from LPN, so it has been planned that the new

17 financing coming from the international market would

18 finance this transaction.

19 As I said, I had a visa in my passport in

20 the beginning of October, so actually by only something

21 like 5 or 10 October, we came to know that the

22 transaction with KIT Finance would not be realised.

23 So then I approached two banks with whom I’ve

24 normally been working, like V-Bank and the

25 Bank of St Petersburg, and the normal reply from

1 contract?

2 A. Absolutely.

3 Q. Is that right?

4 A. Yes, it’s what’s written in …

5 Q. No, don’t look at the screen. Listen to the question

6 first.

7 A. Yes.

8 Q. Is that right?

9 A. Yes.

10 Q. So that would mean that by the end of October 2008, you

11 would have lost all your rights under this Vyborg Fuel

12 Company purchase contract, wouldn’t you?

13 A. Yes.

14 Q. If you see what’s on screen now, you will see that it is

15 a letter from you, I think, to — I am sure you will

16 correct my pronunciation — is it Svyaz-Bank?

17 A. Yes.

18 Q. And it is dated 25 February —

19 A. Yes.

20 Q. Now, that’s four months later than October?

21 A. Yes.

22 Q. And isn’t it right, Dr Arkhangelsky, that the purchase

23 price was 900 million roubles, wasn’t it?

24 A. Yes.

25 Q. And the second instalment, the second half, was

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1 450 million roubles, wasn’t it? 1 to — on the words. But, you know, with the criminal
2 A. Yes. 2 people, speaking only words is a bit shaky.
3 Q. Can you read in your own words, in the Russian, the 3 What I should tell you more, Mr Lord, that the final
4 first paragraph of what you said to — 4 time I met Mr Traber, so he flew to me on his private
5 A. Yes. 5 jet in — I’m not sure — October or November 2010, so
6 Q. And you are writing to the Chairman of Svyaz-Bank, 6 he still was believing that I may finalise that, because
7 weren’t you? 7 he didn’t really needed this assets, so he needed the
8 A. Yes, I even met him twice. 8 cash money, so he still confirmed me that he would be
9 Q. I’ll paraphrase for you. It looks as if what you are 9 prepared to finalise that transaction in case I find
10 doing there is asking Svyaz-Bank — 10 $15 million for that.
11 A. Yes. 11 Unfortunately, from October/November 2010, any
12 Q. — to lend you some money in relation to half the 12 contacts with them lost, and I think either they found
13 purchase price to buy Vyborg Fuel Company, doesn’t it? 13 whom to sell to, or just decided to keep the asset due
14 A. Yes. 14 to the market.
15 Q. And you are asking for a credit limit, aren’t you, from 15 Q. But Dr —
16 him here for 1 billion roubles? 16 A. And the reason for asking 1 billion roubles here, it was
17 A. Yes. 17 your question, because I had to return the 50 per cent
18 Q. But we’ve seen from the purchase contract itself that 18 prepayment to V-Bank, because that was considered as a
19 the outstanding half — sort of 50 per cent instalment, 19 short term financing for the acquisition of Vyborg
20 was 450 million roubles, wasn’t it? 20 Petroleum Company.
21 A. Yes. 21 Q. So his Lordship can take it, can he, that you couldn’t
22 Q. And you had to pay that by the end of October 2008 or, 22 raise US $30 million as at the end of February 2009?
23 on your evidence today on oath, you would forfeit all 23 A. No.
24 your rights in relation to that deal? 24 Q. In other words, because you couldn’t raise the money by
25 A. Yes, that is what is written in the purchase contract, 25 then, you were going to lose rights under the Vyborg
97 99
1 yes. 1 Fuel Company deal?
2 Q. So can you explain to his Lordship in those 2 A. No, the major problem with this particular project was
3 circumstances — 3 that the transaction was not finalised, so unless I get
4 A. Yes. 4 the quality property right on that, none of the quality
5 Q. — if your evidence this morning is truthful, why you 5 banks would be allowing me to intervene in such type of
6 are writing in February 2009 to Svyaz-Bank — 6 transaction with the people who considered to be major
7 A. Yes. 7 Russian criminals. So it’s not a question of raising
8 Q. — seemingly asking them for 1 billion roubles to 8 a finance; it’s a question of reputation of the seller.
9 complete the purchase of the Vyborg Fuel Company? 9 Q. Why did you tell his Lordship this morning that if you
10 A. Yes, I can explain you. 10 didn’t make the second payment by 24 October 2008, you
11 Q. Explain to his Lordship, please. 11 would forfeit all your rights under —
12 A. Yes, of course. 12 A. Because it’s written like this in this contract, which
13 So for these people, from Vyborg Shipping — sorry, 13 has been signed officially with the presence of many
14 Vyborg Petroleum Company, they were not able to sell 14 people involved. So based on the contract, in case that
15 this asset to anybody else, so even, in fact, that 15 money not paid, whatever, 24 October, I lose all the
16 I lost this right on paper, so I still tried to continue 16 rights.
17 a discussion, because for me personally, $15 million was 17 Q. Dr Arkhangelsky, that explanation that you have just
18 quite a big amount, so I wanted to, at some stage maybe, 18 given accounts for the fact that you didn’t get back the
19 to finalise this transaction. 19 $15 million that you paid, doesn’t it?
20 So my target and — on the words, not on the paper, 20 A. Absolutely.
21 Mr Traber was agreeing that he still may be able to 21 Q. Are you sure that’s the honest explanation for —
22 finalise this transaction because he really needed this 22 A. Sure.
23 $15 million, because in December, November, January, 23 Q. And that money hasn’t gone somewhere else, the
24 February 2008/2009, there was not any cash money in 24 $15 million?
25 the market because of the crisis. So he was still open 25 A. This $15 million have been paid based on the contract to
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1 the private accounts of the sellers of the company, so

2 you have a record in the Bank of St Petersburg —

3 every — each of them got their money on the account of

4 the Bank of St Petersburg, so you can find it in

5 the records of the Bank of St Petersburg.

6 So whatever, four or five sellers, they had accounts

7 in the Bank of St Petersburg, and it was a strong

8 requirement that all the fund for these transactions

9 goes only to accounts of these private people, in

10 the Bank of St Petersburg.

11 Q. Dr Arkhangelsky, this first paragraph, I suggest to you,

12 is misleading of Svyaz-Bank.

13 A. What?

14 Q. Because it represents that 50 per cent of the purchase

15 price is 1 billion roubles; isn’t that the fair reading

16 of this first paragraph?

17 A. No, it’s not a fair reading.

18 Q. No?

19 A. Because, as I said, I got 50 per cent of the transaction

20 from V-Bank and it was a target to pay that to —

21 back — the rest to be paid to V-Bank —

22 Q. But if that’s right —

23 A. — and Mr Zhitnik, who was the chairman of the board of

24 Svyaz-Bank at that time, he had good personal

25 relations — so Svyaz-Bank at that time was one of

1 it and got the liability to repay it afterwards.

2 Q. Is it right that you never managed to complete the

3 purchase of the Vyborg Fuel Company?

4 A. Yes. As I told you, the last time I met sellers,

5 in October, whatever, November — September,

6 October 2010, and since that time unfortunately I lost

7 any contact to them.

8 Q. Thank you. I would like to ask you now about

9 Scandinavia Insurance. Could you be shown your witness

10 statement, please, at {C1/1/9}

11 In paragraph 29, Dr Arkhangelsky, you referred to

12 the rating that you achieved for Scandinavia Insurance

13 from AM Best; can you see that?

14 A. Yes, yes.

15 Q. I wonder if we could see that, please, at {D107/1550/1}

16 it’s one of the documents you exhibit.

17 A. Yes.

18 Q. If that could be shown on the screen, please.

19 You can see the rating that was assigned by AM Best

20 was B-, fair; is that right?

21 A. B- and bb-, yes. Two ratings, yes.

22 Q. This was June 2007.

23 A. I just want to stress to your Lordship that by that time

24 only two or three other insurance companies in Russia

25 have had any rating at all. So for us it was really

101 103

1 the key state-owned banks, and Mr Zhitnik was a well

2 known president of the bank. They had personal

3 relations with V-Bank, and V-Bank as a private bank,

4 they couldn’t have funds at that time, so they

5 introduced me to these people and suggested that this

6 could be a good transaction and they could finance and

7 refinance that.

8 Q. Yes, and Mr Arkhangelsky, to be fair to you, you did say

9 in this first paragraph that you wanted to refinance;

10 that that money was for refinancing of the current debts

11 of the group?

12 A. Sorry?

13 Q. In the first paragraph I think you do say that you want

14 the money in part to refinance current debts of

15 the group?

16 A. Yes, and the current debt of the group was the

17 450 million roubles already paid for this 50 per cent.

18 Q. Yes, but in brackets you have said:

19 «(At present moment, 50 per cent is already paid by

20 its own means.)»

21 A. Yes and «own means» means the means of the group, which

22 is considered to be including all other funds. Because,

23 as I said, we had all the treasuries, and we were

24 considering any loans which were coming to the group, it

25 was considered as group money, since the moment we got

1 fortune that we were able to prove to the leading rating

2 agency that we were having so high performance.

3 Q. Can you see the paragraph that begins:

4 «The company’s performance has been moderate …»

5 Can you see that, Dr Arkhangelsky?

6 A. Yes.

7 Q. AM Best say:

8 «The company’s performance has been moderate with

9 pre-tax profits of approximately 25 million roubles

10 (US $825,000) in 2006, mainly as a result of investment

11 income.»

12 Then it goes on:

13 «Underwriting performance has been volatile with

14 high loss ratios and significant reserve strengthening

15 in 2007. Going forward, underwriting will be more

16 critical as the company will incur higher expenses,

17 putting more pressure on performance.»

18 Can you see that?

19 A. Yes.

20 Q. Presumably you have no reason to question that that was

21 an accurate assessment of the —

22 A. Yes, of the top international rating agency, absolutely;

23 and we were happy that we got this independent opinion

24 from them.

25 Q. That paragraph is really saying, isn’t it, that most of

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1 the 2006 profits have come from investment income; isn’t

2 that right?

3 A. Yes, what is written there, yes.

4 Q. And the writer is distinguishing, isn’t he or she,

5 between revenue from insurance or reinsurance business,

6 in other words premia, on the one hand, and returns on

7 investments that Scandinavia Insurance may have made on

8 the other?

9 A. If you know the basic for insurance business, the most

10 international insurance companies worldwide, their major

11 income comes from the investment of their capital and

12 reserves. So the major task and the major basic of

13 insurance company, to keep a loss ratio on average

14 market level while earn most of the money on

15 investments. So that’s the key basic of any

16 insurance — international insurance business.

17 Q. So the answer is yes, isn’t it, I think, to that?

18 A. The answer is that we have been on top of international

19 practice of insurance business while showing very good

20 investment reserves, which is one of the major part of

21 any insurance business.

22 Q. And what was the main source of the investment returns

23 that Scandinavia Insurance was enjoying, let’s say, in

24 2007?

25 A. I don’t have any documentation here, but based on the

1 {D33/522/6}. Thank you very much. Sorry,

2 Dr Arkhangelsky, I’m sorry about that. This is a page

3 from the Scan Insurance accounts for 2007.

4 A. Yes.

5 Q. And, again, you can see that you have roubles and

6 US dollars.

7 A. Yes.

8 Q. Two columns.

9 A. Yes.

10 Q. And can you see that «Investing activity» is set out —

11 A. Which line?

12 Q. Towards the bottom; can you see?

13 A. Yes.

14 Q. And it looks, doesn’t it, as if the first two-thirds

15 of — well, if you look at the heading —

16 A. Yes.

17 Q. — you can see the first heading on the left is

18 «Insurance»; can you see that?

19 A. «Insurance activity result», this you mean?

20 Q. «Insurance» on the left-hand side. Can you see that

21 there are two sections to this statement: one is

22 «Insurance», and one seems to be «Investing activity»;

23 can you see that?

24 A. Yes.

25 Q. I think that reflects the point that you made a moment

105

1 Central Bank of Russia, which is called now, before it

2 was called —

3 Q. Sorry, Dr Arkhangelsky, can you not answer that

4 question?

5 A. I can answer that question.

6 Q. Because I can show you a document that gives the answer.

7 Would you like to see the document?

8 A. Yes, I will answer, don’t worry.

9 So based on the Russian insurance supervision

10 authorities, all the funds and the reserves of insurance

11 companies — reserves under capital, have to be invested

12 based on their regulation.

13 So the income — investment income was coming from

14 many different parts, including the equities, including

15 deposits, including investments, as far as I understood,

16 in the port assets which would produce an income and so

17 on. So it was coming from the multiple resources.

18 Q. Could you be shown, please, {D33/522/1}. This is

19 a document that you exhibited in your BVI affidavits.

20 A. Yes.

21 Q. And it is the Scandinavia Insurance accounts for the

22 year 2007; can you see that?

23 I am missing a page reference, but I think, could we

24 scroll on to a heading that will be «Income statement

25 for the year ended 31 December 2007». I do apologise.

107

1 ago that insurers not only underwrite things.

2 A. Absolutely, yes.

3 Q. But they invest the money to make sure they’ve got the

4 returns —

5 A. Yes.

6 Q. — to pay the claims and get the profit.

7 So can you see there’s «Insurance», about two-thirds

8 of this page, and you can see that for 2007 that looks

9 as if it generated a profit of about US $1.97 million.

10 Can you see «Insurance activity result»?

11 A. Yes, 15 million. This, you mean? Or …

12 Q. Yes.

13 A. Sorry, 1.9, yes?

14 Q. Yes.

15 A. Yes.

16 Q. Then you have «Investing activity»; can you see that?

17 A. Yes.

18 Q. And then «Investing activity result», can you see that

19 that seems to come out at US $12.894 million?

20 A. No, I can’t see that.

21 Q. It’s at the foot of the page. It is the last line and

22 it is under the US dollar column for 2007; can you see

23 that now?

24 A. Yes.

25 Q. If you look up a few entries, you can see an entry that

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1 reads «Changes in fair value of investment property»,

2 10.838 million.

3 A. I’m sorry, can I just ask a question? You were

4 referring to AM Best report dated middle of 2007, as far

5 as I understood?

6 Q. Yes.

7 A. So they were referring to the accounts, the Russian

8 accounts, for the year 2006. So how can you compare

9 what they done for 2006 with results for 2007? So

10 I cannot understand that.

11 Q. Well, all I’m really asking you to do is to confirm that

12 it looks as if the vast majority of the investment

13 income comes from a revaluation of profit.

14 A. Again, you are referring here to IFRS accounts, but they

15 are referring in AM Best record for Russian accounting,

16 and it’s a different ones.

17 So by the middle of 2007, we have not had any

18 accounting of IFRS standards, and we got — if you see

19 the date, I think it is October — or August 2008, so

20 I think it’s not correct to compare figures for 2007

21 with the figures for 2006.

22 MR JUSTICE HILDYARD: I’m not sure quite what you are

23 putting there, Mr Lord. Maybe I am being very slow.

24 MR LORD: Sorry, my Lord, I’m sure it’s my fault.

25 MR JUSTICE HILDYARD: No, there is the «Profit from/loss on

1 expert in this you have to see the basis on which they

2 have been doing it, so it have to be also valuation

3 reports attached, or considered.

4 Q. Then if you go over the page you can see the

5 continuation of this statement {D33/522/7}, you can see

6 those figures there and the net profit at the bottom.

7 A. Sorry, what should I see?

8 Q. I’m just showing you, for completeness, the second of

9 the two pages of this income statement.

10 A. Yes.

11 Q. I’ve asked you the questions I want to ask you.

12 MR JUSTICE HILDYARD: Do the notes help?

13 MR LORD: Yes, if you go to {D33/522/31}, it’s the same

14 note, 6.19.

15 Dr Arkhangelsky, as your Lordship helpfully —

16 A. Sorry, your Lordship, maybe we can have a small break or

17 maybe start a bit early afterwards?

18 MR JUSTICE HILDYARD: I’m so sorry?

19 A. If it’s possible to have a break?

20 MR LORD: I’ve nearly finished this topic.

21 MR JUSTICE HILDYARD: I’m so sorry, because I realise you

22 have a cold, but can we just try and finish this so

23 we don’t lose the thread of it?

24 MR LORD: Your Lordship is right, it is {D33/522/31}, 6.19:

25 «Investment property has been appraised by

109 111
1 transactions … carried through the results at fair 1 independent valuer Lair …».
2 value», that’s investments sold, is it? 2 One can see, Dr Arkhangelsky, on that page and the
3 Then «Income from investing activity», which is 3 next —
4 presumably dividends and returns. Then «Changes in fair 4 A. Sorry, which page are you referring to?
5 value of investment property» was what you were focusing 5 Q. {D33/522/31}.
6 on, as I understood it? 6 A. Yes.
7 MR LORD: Yes. 7 Q. Can you see at 6.19 «Investment property»?
8 MR JUSTICE HILDYARD: Maybe revaluations of investments over 8 A. 6.19, yes.
9 the portfolio, is it? 9 Q. And it refers to a valuation by Lair.
10 MR LORD: Yes. 10 A. Yes.
11 MR JUSTICE HILDYARD: And you are asking the witness whether 11 Q. And it describes the property that appears to have been
12 those revaluations is the biggest figure? And they are. 12 valued by Lair, the investment property?
13 MR LORD: Yes, and to see whether he can shed some light on 13 A. Yes.
14 what we are talking about, what that means in practice. 14 Q. And there are various bits of real estate and land
15 MR JUSTICE HILDYARD: Do you know what those revaluations, 15 plots. I think that probably answers the point.
16 or what other sources of change in fair value were, 16 MR JUSTICE HILDYARD: How are you doing, Mr Arkhangelsky?
17 Dr Arkhangelsky? 17 Are you all right and fit to continue or do you need
18 A. No, I’m not sure. 18 a break?
19 MR JUSTICE HILDYARD: Right. 19 A. Up to you. I am in your hands, so … I am a bit
20 MR LORD: If you go over the page to the next page, 20 tired.
21 page 7 — 21 MR JUSTICE HILDYARD: Well, you tell me. I can’t tell how
22 A. As far as I understood, in that accounts, it has to be 22 you are feeling.
23 a separate page on each and every point, and then 23 A. I am a bit tired so I would prefer to have a break, if
24 probably they should give an explanation. Normally it 24 possible.
25 have to be also — normally, if you are a specialist or 25 MR JUSTICE HILDYARD: Are we moving on to a new topic?
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1 MR LORD: Not really, but I am happy to break if — as long

2 as we don’t — if we could start, perhaps, maybe at

3 1.30 pm, even, to try and make sure we finish in good

4 time today?

5 MR JUSTICE HILDYARD: We will break now and start at

6 1.30 pm, and I do want to be finished by 4.00 pm.

7 Could I have D45, please? (Handed)

8 (12.45 pm)

9 (The Luncheon Adjournment)

10 (1.30 pm)

11 Housekeeping

12 MR BIRT: My Lord, I am sorry to interrupt and dive in. The

13 transcripts on the website, I think everything is in

14 place for those now to be uploaded, but RPC just wanted

15 me to check with your Lordship that the system they were

16 proposing was an acceptable and sensible one so that we

17 don’t go round the houses yet a further time.

18 RPC are proposing to host the daily transcripts in

19 a dedicated area of their RPC website, called

20 «Publications». So anybody going to the website will go

21 to «Publications» and there they will be.

22 It is a publicly available website. There is no

23 need to subscribe or to provide an e-mail address. If

24 they wish, people can subscribe to a publication, in

25 this case, the daily transcripts, and if they do, they

1 by the transcribers was marked at the top with a note

2 that:

3 «(Transcript sealed by the court … not to be

4 disseminated to anyone other than the parties’

5 representatives pending further consideration by the

6 court.)»

7 And in capital letters:

8 «Not for public circulation».

9 Now, to avoid any confusion to anybody finding that

10 on the website it seems, to me, sensible, but subject to

11 raising it with your Lordship, that the transcribers

12 recirculate that day’s transcript with that, if you

13 like, warning removed. But I obviously wanted to check

14 that with your Lordship first.

15 There were also a number of points during the course

16 of Wednesday and Thursday when we went into private

17 session — at least one point, I think, yesterday, maybe

18 it was only at the beginning of yesterday — and the

19 transcript is marked «In private», which has been

20 circulated. And, again, to avoid any confusion,

21 I wanted to check with your Lordship whether the

22 sections marked «In private» should either be taken out

23 of the transcript, or should remain in the transcript

24 marked «In private», or the «In private» marking should

25 be removed on the basis that my Lord had said, although

113 115
1 will then be notified when a new transcript is 1 in private at the time, it was now being removed back to
2 available, or, if they don’t wish to subscribe, they 2 open court.
3 simply check themselves the website for new or updated 3 I’m not suggesting any of those options, but
4 transcripts. So, in other words, both options are 4 I thought it was important that your Lordship made clear
5 available. 5 which of those it ought to be, so that it is done once
6 The website will have a unique URL web address, and 6 and it is done right.
7 it can be findable from the RPC website. 7 MR JUSTICE HILDYARD: How will people know that this
8 Assuming my Lord is happy with that, RPC will get 8 facility is available?
9 the person in London who maintains this part of their 9 MR BIRT: The web address, the unique URL, which is a web
10 website working on it this afternoon. It will take her 10 address, can certainly be circulated. It is on the RPC
11 an hour or two to put them up, because that is just the 11 website. Off the top of my head I don’t know what it
12 way it works. She will be doing them individually and 12 is, but I am sure it can be ascertained and RPC can tell
13 she is not a person whose job is dedicated to uploading 13 whoever wants to know. We can put it on the notice that
14 these particular transcripts to the RPC website. She is 14 is at the back of court 15 in London that sits there
15 the person who maintains this area of the website. But 15 telling people we have gone to Paris. The web address
16 it is certainly hoped that she will get them done during 16 can sit there as well.
17 the course of the working day, insofar as they are 17 MR JUSTICE HILDYARD: That would be quite sensible.
18 available. I can’t speak for when today’s transcript 18 So far as the points on the issues that arose as to
19 will become available and if that will get to her before 19 privacy and confidentiality, I think your suggestion,
20 she goes off for her weekend, but obviously if it is, 20 subject to anything that Mr Arkhangelsky wishes to alert
21 then it will be put up. 21 me to, that the transcript should be recirculated, is a
22 There is one slightly boring technical 22 good one, and in fact I can’t, myself, presently see
23 administrative point, if you want to describe it like 23 an alternative.
24 that, that I wanted to check with your Lordship, which 24 So far as matters that were in private session,
25 is that the transcript for Wednesday that was circulated 25 I should have thought they should remain in private
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1 session. I mean, they were, and that’s how they should 1 MR JUSTICE HILDYARD: This is a different point.
2 remain. 2 I understand why you raise it.
3 MR ARKHANGELSKY: It’s up to you to decide. 3 MR ARKHANGELSKY: No, I am just wondering about that.
4 MR JUSTICE HILDYARD: Do you have any points you wish to … 4 MR JUSTICE HILDYARD: I do not know whether there is a —
5 MR ARKHANGELSKY: No. 5 I know that there is a Russian oral translation; I do
6 MR JUSTICE HILDYARD: No. 6 not know whether there is a Russian written record.
7 MR BIRT: We are very happy with that and respectfully agree 7 MR BIRT: My understanding, subject to it being corrected
8 with your Lordship’s position. How that works on the 8 from those down the other end, is that there is an audio
9 transcripts, I suppose, is that those transcripts, where 9 recording of what takes place — your Lordship mentioned
10 there is an in private session, a second version of that 10 some time ago that there needs to be a record, and that
11 ought to be recirculated, and it says «In private» and 11 is recorded orally. There is no Russian transcript,
12 then a blank space. 12 because the transcribers are simply transcribing the
13 MR JUSTICE HILDYARD: I am afraid so. I think that that is 13 English.
14 how it is usually done, and it is the way it is done, 14 MR ARKHANGELSKY: But can we at least have — because
15 for example, if a judgment or ruling is given, pending 15 I think for her it would be interesting, at least to
16 its approval. I would have thought the same sort of 16 hear that, if possible, just to have a file or whatever,
17 thing ought to be adopted, unless — and those better 17 how it’s possible — if it’s in any way possible.
18 able to tell me are listening in — that causes problems 18 MR JUSTICE HILDYARD: I will make enquiries. My feeling
19 for the Magnum system or the operators. 19 is — I quite understand this, but I don’t think there
20 MR BIRT: Yes. It doesn’t look as though it will do. 20 is any sufficient warrant for requiring a Russian
21 I expect there will be a slight administrative burden on 21 written version, which would — after all, lots of cases
22 Magnum, for which we are very grateful to them for 22 happen in England which have to be translated, but the
23 bearing, and as and when the recirculated versions 23 record, being an English court, is in English; and to
24 become available, then they will be uploaded, and we 24 some extent it is the choice of parties whether to
25 won’t upload in the meantime, obviously, the versions 25 attend, but given Mrs Arkhangelskaya’s position, special

117

1 that have the in private sessions on them, my Lord.

2 MR JUSTICE HILDYARD: Yes, so, in short, we will receive the

3 full version, but the world at large will not, and some

4 definition ought to be given to who «we» is. I imagine

5 the people who were in court at that time, and

6 Mr Stroilov, and, I suppose, Mr Ameli, who was

7 consulted.

8 MR BIRT: Yes, it may be that he has already seen it.

9 I don’t know. And, I suppose, Mrs Arkhangelskaya,

10 although she was not in court, but she is a party.

11 MR JUSTICE HILDYARD: Yes, so if someone could jot down the

12 confidentiality club and then sign it between them, so

13 that we know who it was. Yes.

14 MR BIRT: Yes, and I don’t know whether it is the same group

15 of people on Wednesday and Thursday; there may have to

16 be two separate lists, my Lord.

17 I’m sorry to have taken that amount of —

18 MR ARKHANGELSKY: Your Lordship, I have two small questions,

19 just for my understanding.

20 MR JUSTICE HILDYARD: Sure.

21 MR ARKHANGELSKY: I understand that interpreters are working

22 here, so they do translations in Russian. I am just

23 wondering if there is a Russian transcript available or

24 not, just because my wife definitely would be interested

25 at least to go through that, just for my understanding.

119

1 position as a party, it may be that arrangements for her

2 to be able to —

3 MR ARKHANGELSKY: She is especially interested in

4 Wednesday’s document.

5 MR JUSTICE HILDYARD: I don’t know how difficult it is to

6 make available a feed, an oral —

7 MR BIRT: We did check, of course, before we came to Paris,

8 whether Mrs Arkhangelskaya wanted the videolink, still,

9 to Nice, which could have been provided, and that was

10 turned down.

11 I simply don’t know about the audio recording and

12 how that is kept, or what the technical facilities are

13 around it, but we can find out and report back. In

14 the way —

15 MR ARKHANGELSKY: I don’t think it’s a problem to have it on

16 file in the flesh.

17 MR BIRT: In the way that we always try to do, when we are

18 asked these technical questions at short notice, we will

19 do our best and we will report back. It may well be

20 easy. I don’t know.

21 MR JUSTICE HILDYARD: I think they will just have to enquire

22 as to the extent of any logistical difficulty.

23 MR ARKHANGELSKY: And a small issue there also. If we can

24 get link, URL, internet URL, if you can distribute at

25 least between us where the publications are located.

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1 MR BIRT: I am sure RPC will circulate the link during the

2 course of the afternoon. It’s off the RPC website; I’m

3 sure if somebody Googles RPC, they will find the RPC

4 website, but we can circulate the link as well.

5 MR ARKHANGELSKY: And maybe it would be good to have in

6 the RPC news section, just for search engines to be able

7 to trace this, just to put on the news that: since

8 today, the transcripts of this-and-this hearing is

9 placed over there; or something like that, so that

10 people can search on the internet and find it and so on.

11 MR JUSTICE HILDYARD: Well, Mr Arkhangelsky, I should have

12 thought that notification on the court listing for

13 anyone who pitches up and wants to find out — obviously

14 the parties must be notified, but I am not sure there is

15 any particular reason why someone who had gone to

16 the trouble of looking for RPC news wouldn’t thereby

17 have gone to the trouble of looking at the special

18 website.

19 MR ARKHANGELSKY: But for people in Russia it would be

20 rather difficult to find this source of information,

21 I think.

22 MR JUSTICE HILDYARD: Will it be that much easier? I’m

23 trying to understand why it would be that much easier.

24 I don’t know how difficult it is.

25 If, on the RPC website, it is as easy as pie to

1 Cross-examination by MR LORD (continued)

2 MR LORD: May it please your Lordship.

3 Dr Arkhangelsky, I was asking you about

4 Scandinavia Insurance before the lunch break.

5 A. Yes.

6 Q. And Scandinavia Insurance was really as much an OMG

7 treasury as it was an independent insurance company,

8 wasn’t it?

9 A. No, absolutely not. It was one of the leading in

10 Russia, and European leading Russian-backed insurance

11 company.

12 Q. And it didn’t really have any independent viability

13 outside the OMG group, did it?

14 A. Sorry, I don’t know —

15 Q. It couldn’t really survive as an independent entity, I’m

16 suggesting to you?

17 A. No, absolutely not. This is a very good running

18 insurance company, which have had one of the major in

19 Russia marine insurance portfolios, most of them being

20 underwritten from German, Scandinavian, Turkish, English

21 market, so it has been well performing and quality, from

22 international standards insurance company, and it was

23 one of — by the end of her activity, one of something

24 like fifth or seventh insurance companies in Russia

25 internationally rated, and that was the only one

121 123

1 redirect — I think in the Specsavers case, which

2 I hammer on about, the relevance of this is that it did

3 have a little note, saying — and I think they did it,

4 to be candid, partly as — I think it went out of a new

5 age law firm, or some such, so it was part of their own

6 efforts.

7 MR BIRT: I don’t think it will be that difficult, my Lord.

8 I have done a printout, which I only have one copy of

9 and I have scribbled on, so I don’t want to hand it

10 round, but on the RPC website there are tabs at the top,

11 the second of which is «Media Centre», which speaks for

12 itself, and if you click on that, you will see the

13 publications, news archive publications. They will be

14 listed in date order, there are various publications,

15 this will be one of them —

16 MR JUSTICE HILDYARD: It sounds as if it is probably all

17 right, Mr Arkhangelsky. Why don’t you have a look for

18 yourself once it is posted, and if you think it is

19 hidden in some way, it won’t be intentional, it will be

20 a matter of impression, you can let me know or let RPC

21 know and then they can sort it.

22 MR BIRT: Thank you, my Lord.

23 MR JUSTICE HILDYARD: I do want to — thank you very much

24 indeed. I realise that these are time-consuming issues,

25 and I’m very grateful to you for taking such trouble.

1 regional insurance company. So not located in Moscow,

2 not connected to any state organisations, so that was

3 one of the — that was the only one rated, quality

4 rated, rather higher rated, so the only one company

5 rated higher was Ingosstrakh, which had 75 years of

6 experience. So Insurance Company Scandinavia was really

7 unique and quality market player worldwide.

8 MR JUSTICE HILDYARD: Just to be sure, when Mr Lord put that

9 question, you said, «No, absolutely not», to

10 the question of whether it couldn’t really survive.

11 What you mean is it could —

12 A. It could survive, it was surviving, and it was one of —

13 I should say, considering that insurance business is my

14 personal, let’s say, hobby and my personal area of

15 experience, so that was one of my favourite ventures

16 where I taken quite a lot of my personal time, personal

17 connections and, as I said on the first day, I’ve been

18 well aware of the specific of the market; I was well

19 knowing all the major, especially English insurance

20 players, personally knowing heads of the syndicates at

21 Lloyd’s, so it was really a most successful venture, and

22 probably the only one venture privately, independently

23 owned, which could be considered as a very big

24 interesting investment project for any big international

25 player, like American companies or German companies or

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1 something like that. 1 Q. I’m going to tell you the point, Dr Arkhangelsky.
2 So that was my target: at some stage to sell it to 2 A. Okay.
3 the leading international insurance market players, and 3 Q. I think you know the point, so we can maybe save a bit
4 all this IFRS, ISO 9000 certification rating, that was 4 of time. I’m going to explain the point, and then if
5 devoted to that particular purpose. 5 you query it, we can go through the pages I have just
6 MR LORD: Dr Arkhangelsky, you say in your witness 6 shown you.
7 statement — I have taken you to it, I think, earlier in 7 A. Okay.
8 your evidence — that you worked hard to ensure that 8 Q. What Mr Steadman seems to identify is that in 2007 the
9 Scan adopted western accounting standards? 9 assets of Scan included —
10 A. Yes. 10 A. So it’s 4.6.8 or …?
11 Q. I wonder, could I ask you about the Scan accounts. 11 Q. Yes, if you could listen to the question,
12 I would like you, please, to look at Mr Steadman’s 12 Dr Arkhangelsky —
13 report, who is an expert that you have instructed in 13 A. Okay.
14 these proceedings? 14 Q. — because you sent an e-mail back recently about it so
15 A. Yes. 15 I think you must be fairly familiar with it, so if
16 Q. I wonder if you could please be shown {E6/19/59}, 16 I just explain the point and then —
17 please. This is a page from Mr Steadman’s expert 17 A. No problem.
18 report. 18 Q. — we will go more slowly if we need to.
19 A. Yes. 19 A. Yes, please.
20 Q. And you can see at 4.6.5 he has a heading, «Fair Value 20 Q. The point Mr Steadman is making here is that it seems to
21 of financial assets and investments», and he is dealing 21 be the case that in 2007, Scan had assets including
22 there with Scan Insurance; all right? 22 receivables, or discount notes, issued by 17 banks; and
23 A. Yes. 23 then when he looks at the accounts for the quarter
24 Q. And you go over the page to {E6/19/60}, for the 24 ending March 2009 for Scan Insurance, it appears that
25 transcript, you can see that he sets out Scan’s 25 those assets have largely gone and they appear to have

125

1 financial assets, and then at {E6/19/61}, he sets out

2 financial assets carried at fair value through, and he

3 lists various assets. Then 4.6.7 he says:

4 «Some limited information is found as regards

5 financial assets at 31 March 2009 (totalling

6 RUB 805.6 million) where notes to the financial

7 statements indicate that at that date, the company’s

8 financial assets includes …»

9 And over the page, {E6/19/62}, you see what he says

10 there:

11 «(a) 2 discount notes …

12 «(b) 13 discount notes …»

13 And so on.

14 Dr Arkhangelsky, I know you are familiar with this

15 passage because we have asked you about it before —

16 A. Just to be clear that I have a full confidence to report

17 of Mr Steadman. I believe that the court will be

18 carefully considering that. Me personally, I have not

19 been reading this report, just only from the point of

20 view of supplying information, so unfortunately

21 I haven’t had any sufficient time to do that, but

22 I fully believe that Mr Steadman made a proper research.

23 Q. You can see what Mr Steadman says in this section. Just

24 really paraphrasing, Mr Steadman —

25 A. Which point?

127

1 been replaced with 13 discount notes with City Centre;

2 can you see that?

3 A. Yes.

4 Q. And Mr Popov makes the same point, if I show you

5 Mr Popov’s report.

6 A. I have not been reading his report either.

7 Q. No, I understand. I understand.

8 Sorry, my Lord, I just lost my …

9 A. Sorry, your Lordship, can I just have a small technical

10 while Mr Lord is preparing?

11 If you already know or if you can already plan the

12 timing for travelling of my wife next week, because it’s

13 quite important to have early arrangements, and

14 especially from the tickets, because when you buy at the

15 last moment, it is enormous prices here.

16 MR JUSTICE HILDYARD: We will ask Mr Lord at the end of the

17 day.

18 A. Because it is quite an important issue for her, and for

19 me too.

20 MR LORD: If we could have {E5/16/14}, on the screen.

21 Sorry, Mr Arkhangelsky.

22 A. No problem.

23 Q. This is Mr Popov’s conclusions in one of his reports on

24 behalf of the Bank, and he picks up on the same point

25 and he observes in paragraph 3.2 that, seemingly,

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1 50 per cent of the assets from Scandinavia Insurance’s

2 balance sheet in the form of these receivables — can

3 you see what is said in 3.2?

4 A. 3.2, yes.

5 Q. So about half of Scan’s assets seem to comprise

6 receivables due from a company called City Centre by the

7 time of the 2009 quarter, whereas in 2007, City Centre,

8 I don’t think, appeared; you follow that point, don’t

9 you?

10 A. Yes.

11 Q. And the total value of these receivables is about 800,

12 850, 840 million roubles?

13 A. Yes.

14 Q. Which is about how much in dollars, would you say?

15 A. Divided by 30, or …

16 Q. 25 or 30, yes.

17 A. Okay.

18 Q. About 25 to 30?

19 A. Yes.

20 Q. So about $25 million to $30 million, and that value of

21 asset seems, by 2009, to be held in relation to

22 an entity called City Centre.

23 A. Yes.

24 Q. And the Bank couldn’t identify an entity called

25 City Centre, couldn’t identify what that was, and you

1 you?

2 MR LORD: If Dr Arkhangelsky would like you to.

3 A. Yes, please read that, because this e-mail is

4 explanatory to any questions arising here. (Pause)

5 MR JUSTICE HILDYARD: Right.

6 MR LORD: Dr Arkhangelsky, you signed the copy of the Scan

7 Insurance accounts, I think, didn’t you?

8 A. Yes.

9 Q. That we are talking about. If your Lordship goes behind

10 divider 13 in the core bundle, it is {E6/19.27/0.1} —

11 A. I’m sorry, your Lordship, just a small question. The

12 people there, they are always with mobile devices.

13 I just want to be sure that they are not recording or

14 not making pictures there. It’s a bit strange for me.

15 It’s always been like this yesterday.

16 MR JUSTICE HILDYARD: Well.

17 MR LORD: I apologise, I —

18 MR JUSTICE HILDYARD: I do think that mobile devices ought

19 not to be used during the court process. If you need to

20 go out and use them, go out and use them. Don’t use

21 them in here.

22 MR LORD: Sorry, my Lord.

23 Does your Lordship have divider 13?

24 MR JUSTICE HILDYARD: I have.

25 MR LORD: Dr Arkhangelsky, these are the Scan accounts,

129 131

1 were asked about it, and you gave evidence about it in

2 your witness statement, and you gave that evidence at

3 {C1/1/58}. Can you see that, Dr Arkhangelsky?

4 A. 227, or?

5 Q. Yes, 227.

6 A. Yes, everything is correct.

7 Q. And you say that you had:

8 «… no recollection or knowledge of City Centre and

9 therefore cannot comment on whether these debts would

10 have been recoverable by Scan.»

11 A. No, I don’t remember that, but in my letter which had

12 been sent to you on Monday, can you just, whatever, read

13 it yourself, and we can discuss the letter sent to you

14 as an official reply.

15 MR LORD: My Lord, there was an e-mail from Dr Arkhangelsky,

16 which I hope has been put into your Lordship’s core

17 bundle at the end of divider 2.

18 A. I’ve been forwarding this to your clerk also. I would

19 suggest your Lordship to read this e-mail. It’s rather

20 short, but it’s important. (Pause)

21 MR JUSTICE HILDYARD: At the end of 2, did you say?

22 MR LORD: The end of 1, my Lord, I’m sorry. I’ve got the

23 wrong tab, I do apologise. There should be an e-mail

24 just before divider 2.

25 MR JUSTICE HILDYARD: You would like me to read that, would

1 aren’t they, we are talking about?

2 A. Yes, I think so.

3 Q. And I think the signature, it’s a translation, but

4 I think you signed these, didn’t you; we can see that?

5 A. Yes, most probably, yes, I remember that.

6 Q. Yes, you did. The relevant entry for his Lordship’s

7 note is at {E6/19.27/0.22}.

8 It starts at that page, my Lord. Just to see the

9 total assets, halfway down the page: total assets at the

10 beginning of the reporting year, so that’s at the

11 beginning of 2009, or maybe March 2009, it’s not

12 entirely clear: 1.825 billion roubles. So that seems to

13 be Scan’s total assets at the beginning of this period.

14 Then if one goes on to page 24, so that’s

15 {E6/19.27/0.24}, one can see where the City Centre bills

16 come in. So it looks as if — and your Lordship has the

17 amount, 725 million roubles.

18 And Mr Popov identified another — on the next page,

19 {E6/19.27/0.25}. So your Lordship can see how one gets

20 up, with Mr Popov’s calculation, to about

21 840 million roubles, which is about half of Scan’s

22 assets, appear now to comprise, by this point,

23 receivables owed by City Centre.

24 So one would think that monies have gone from Scan

25 to City Centre, and in return, there is effectively some

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1 debt obligation owed back by City Centre to Scan.

2 Now, Dr Arkhangelsky, you said that you were anxious

3 that Scan Insurance adopt western accounting standards?

4 A. Yes.

5 Q. Would you agree that, looking at those accounts that you

6 signed —

7 A. Yes.

8 Q. — a very substantial proportion of

9 Scandinavia Insurance’s assets, about 50 per cent,

10 appear by this stage to be contained within receivables

11 owed by an entity called City Centre?

12 A. If you are referring to the page 25, I think they are

13 referring to 5 per cent, if it’s correct or not.

14 Q. No, it’s 725 million —

15 A. So here it’s written that City Centre is 116 million.

16 Q. Yes, and on the previous page it also says 725 million.

17 I think there’s some long term and short term bills.

18 A. Can I have the previous page, please?

19 Q. Yes, of course. {E6/19.27/0.24}

20 A. So it’s not correctly translated, but it’s letters of

21 exchange of City Centre, yes, so it’s for 725, yes.

22 Q. So the total for these, whatever they are, bills of

23 exchange, or whatever they are, is about 840 million?

24 A. Yes, yes, looks like, yes.

25 Q. And that’s about half of Scan’s assets?

1 So the Central Bank control where and how the

2 reserves and the capital of the company invested —

3 there is a special list which is changing from time to

4 time of the assets — where and how it could be

5 invested, and it is controlled, I think, at least on

6 a quarterly basis.

7 So in case anything done against that instruction,

8 what they call, or regulation, then the insurance

9 licence withdraw automatically, so it’s very heavily

10 controlled.

11 And I’m actually quite surprised, considering that

12 all the transactions came through the accounts of

13 Insurance Company Scandinavia in

14 the Bank of St Petersburg, how they could not trace in

15 their accounting, in the Bank payments and in the

16 accounts of the insurance company, how they could not

17 trace that company. That’s absolutely impossible,

18 because when any monies are paid, in Russia, it is much

19 more complicated money transfers than here, so when you

20 transfer the money, you have to — in the payment order,

21 when you pay — definitely it’s paid in Russian

22 roubles — it has to be the number of the account,

23 individual tax payment number of the receiver, and quite

24 a number of other information, including the address and

25 the purpose and what for.

133 135
1 A. Yes, if the expert is saying that like this. 1 So for me it’s a bit surprising that, actually, this
2 Q. No, it is in your accounts, you signed. 2 question arising after they close down — after they
3 A. Yes, yes. 3 finalised everything with the bank and self-insurance
4 Q. Do you agree? 4 company.
5 A. Yes, agree, agree, yes. 5 So first they finalised that, so they cleaned up
6 Q. You signed these accounts, didn’t you? 6 that, and only after that they decided to ask questions,
7 A. Yes. 7 which is quite unusual, considering that
8 Q. And you say now you have no recollection of City Centre 8 from March 2009, they had a first director of
9 or of the transactions that comprise the 50 per cent of 9 the company, employed by the Bank, then they changed it
10 the — 10 to another person, then it was a bankruptcy regulator —
11 A. That’s true. That’s true. I don’t remember that, 11 bankruptcy administration from, I think, November 2009,
12 because I have not been personally involved in all these 12 so they have done all the work in respect to
13 transactions. I had about, whatever, 50 companies 13 the bankruptcy, and what is surprising me, that they
14 together, 600 people and I was not deep on daily basis 14 have not collected this money, or they collected in
15 on any operations. 15 private.
16 Q. But it looks, on the face of it, doesn’t it, 16 So I think that the first step of any manager,
17 Dr Arkhangelsky, as if half of Scan Insurance’s assets 17 director or bankruptcy administrator would be to collect
18 are now held with an exposure to an entity called 18 this money — any money from the third parties. So for
19 City Centre, 50 per cent of Scan Insurance? 19 me it’s really surprising that having a full control of
20 A. No, it doesn’t look strange for me. After discussion in 20 the company, having a full control of two directors and
21 correspondence with you, I assume that it relates to 21 then bankruptcy administrator, then the fact that
22 the reserves, because in Russia, insurance companies are 22 Colonel Levitskaya taking all the company documents
23 under the very strong supervision by insurance 23 in July 2009, now they claim after seven years — and
24 supervision authority, which is now part of 24 this question actually appeared, I think, three, four,
25 the Central Bank. 25 five months ago, only after the expert has been
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1 employed. So we hadn’t heard these questions.

2 MR JUSTICE HILDYARD: But those matters may be surprising,

3 but it also may said to be surprising that in this, your

4 hobby company, the one you attach particular importance

5 to, which had had in the previous year a balanced

6 portfolio of receivables, which became a much less

7 balanced portfolio of receivables, that you are not able

8 to help me a little bit more as to what this company did

9 and why you placed such trust in it.

10 A. Yes. No, I cannot agree with this point. So, first of

11 all, my hobby is underwriting in insurance, so not

12 investments, for sure.

13 MR JUSTICE HILDYARD: You will never meet catastrophes you

14 may have to pay for unless you have the investment

15 backing with which to meet the liability.

16 A. Absolutely, absolutely.

17 MR JUSTICE HILDYARD: So it is crucial for the business that

18 you should have an available source of money.

19 A. Absolutely.

20 MR JUSTICE HILDYARD: And all I’m asking, really, is for

21 your help as to what City Centre was in which you placed

22 50 per cent of your eggs —

23 A. Yes.

24 MR JUSTICE HILDYARD: Do you see my slight surprise you

25 cannot assist me at all on that?

1 I don’t know by which reason they couldn’t identify this

2 company.

3 MR LORD: So if we look at the accounts that you signed at

4 {E15/19.27/0.24}, we can see, can’t we, Dr Arkhangelsky,

5 that these look to be bills of exchange of

6 City Centre LLC?

7 A. Yes.

8 Q. Not entered into via a broker, but City Centre LLC —

9 A. A professional financial player can issue the bills of

10 exchange and then invest it, based — and then invest

11 funds based on the regulation, because they are

12 controlled by their supervision authorities.

13 Q. But I think you said you thought this might be a company

14 that was managing investments for —

15 A. Yes.

16 Q. But that would be an OMG company, wouldn’t it?

17 A. Sorry?

18 Q. Wouldn’t that be an OMG company that was managing —

19 A. City Centre, no, absolutely not. We haven’t had such

20 a company in the group.

21 Q. What’s your answer to the point about why — if this is

22 all about an insurance requirement to safeguard the

23 investments of an insurance company, of a regulated

24 insurance company, what’s your answer to the fact that

25 we have gone from a spread of bills of exchange, or

137 139

1 A. Yes, yes, I understand. I understand. Yes, I’m nearly

2 sure — I am, let’s say, 100 per cent sure that this

3 City Centre, it was one of the management companies of

4 the assets, because based on the regulation, you cannot

5 invest money into any securities unless you are

6 considered to be a professional player.

7 So I’m nearly sure and — I should say I’m

8 absolutely sure that the City Centre was a professional

9 player on investment side, so either placement broker or

10 management company, which been placing and buying all

11 these securities.

12 And if you look on the balance sheet where they are

13 referring to the papers, which have been shown as —

14 let’s say when — I think it was at the end of the year,

15 then many, many bank papers been brought. So it has

16 always not been done on direct basis; it was done

17 through the professional intermediary. So what I should

18 say, and I’m absolutely sure, that the City Centre is

19 a professional player in financial markets, and that

20 point is strongly controlled by the Central Bank, or

21 insurance provision authorities.

22 So it could not be like this, that we just thrown

23 away half of the assets and it’s not controlled. So

24 it’s absolutely impossible. And I am really

25 disappointed that, having full control of the company,

1 receivables, with a variety of different banks and

2 counterparties, down to a concentrated risk in an entity

3 called City Centre that you have no recollection of?

4 A. No, I cannot agree with what you are saying. So, just,

5 the key issue there, that because of the credit crunch,

6 market of bank securities, which has been in previous

7 balance sheet, so it has not been existing any more,

8 because most of the securities of the banks that time,

9 they were sold with 90 per cent discount, or something

10 like that.

11 So the market completely changed by the end of

12 the year, and I just want to confirm that any step in

13 the investments of insurance companies been seriously

14 and strongly controlled, at least on a quarterly basis,

15 but I’m nearly sure on a monthly basis, by the insurance

16 supervision authorities.

17 Q. You see, Dr Arkhangelsky, the problem with this account

18 is that both the business experts here, Mr Steadman, who

19 is your expert from Alvarez & Marsal, and Mr Popov of

20 Deloittes in Russia, I don’t think either of them have

21 been able to track down an entity called City Centre LLC

22 that would match up to this in the accounts that you

23 signed, Dr Arkhangelsky?

24 A. Because I think you have not provided them with the

25 number of the company. So I think Mr Steadman, he

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1 simply doesn’t have any resources of tracing any Russian

2 companies, so it’s not wise to ask him about that.

3 Q. But when you —

4 A. I don’t have my own recollection, but your expert from

5 Deloitte, I think for them it would not be any trouble

6 to find this information. So I don’t think that it’s

7 millions of City Centre LLCs in Russia, so you can

8 easily trace at least some of them.

9 Q. Dr Arkhangelsky, isn’t it much more likely to be the

10 case that City Centre — that what we are talking about

11 now is a transfer of funds from Scan Insurance to some

12 other vehicle at your direction?

13 A. No.

14 Q. Isn’t that what we are talking about here?

15 A. No, no, no. I’m nearly sure that it is a professional

16 financial player. Either a placement broker or

17 investment broker or management company or something

18 like that.

19 Q. But it is to do with insurance; it is all to do with

20 insurance rules, as in regulation?

21 A. Absolutely. Absolutely.

22 Q. But so his Lordship can be clear, you, as the Director

23 General of Scandinavia Insurance, who signed these

24 accounts?

25 A. Yes.

1 Marine Consulting was an insurance broker, so it was

2 quite an important volume of operation from Scan Marine

3 Consulting as a broker towards insurance company, so

4 it’s always been quite — some outstanding amounts from

5 one company to another, because Scan Marine Consulting

6 as a broker was collecting premium, and then also

7 placing in reinsurance. So it was cash flows in between

8 Scan Marine Consulting and Insurance Company

9 Scandinavia.

10 So in this case, I assumed at the end of the period

11 it was created some debt from one company to another, so

12 it was Scan Marine Consulting who owed money to

13 Insurance Company Scandinavia.

14 Q. I wonder, could we please look at another entry to

15 City Centre that has appeared in the disclosure. Could

16 we please see {D116/1726.3/0.3}, please.

17 Your Lordship might be helped by a letter. Behind

18 divider 1 in the core bundle, in the same section as

19 Mr Arkhangelsky’s e-mail appears, there was a letter of

20 22 January 2016 which, at {I20/26/32}, raised a series

21 of points about which I am now going to ask

22 Dr Arkhangelsky. Does your Lordship have that letter?

23 MR JUSTICE HILDYARD: Forgive me; again?

24 MR LORD: Sorry, my Lord, it is 22 January.

25 MR JUSTICE HILDYARD: Yes, fourth letter?

141 143

1 Q. You can provide no explanation — explanation — for

2 these entries?

3 A. My explanation is that I assume —

4 Q. Not conjecture.

5 A. — from my memories that City Centre is a professional

6 player in financial markets whom we had a confidence by

7 that time; most of the things been done by Mr Perez and

8 Olga Lukina and the chief accountant, so their task was

9 to calculate insurance reserves and assets of insurance

10 company and place them, based on the requirements. So

11 I had full confidence to them in this respect.

12 Q. If we go, looking at that page, {E6/19.27/0.25}, the

13 other companies you identify, they are all OMG

14 companies, aren’t they? Scan Marine Consulting, Norwood

15 and Onega?

16 A. Yes.

17 Q. And yet you say that the one entry which seems to

18 account for half of the assets of this company, that’s

19 the one that you say isn’t connected with you or OMG and

20 you have no recollection of it; is that right, Doctor?

21 A. Sorry, I don’t understand your question; can you repeat?

22 Q. You are pointing to some other investments, aren’t you?

23 A. Yes.

24 Q. And I was just drawing to your attention —

25 A. I can just give you an example. For example, Scan

1 MR LORD: Yes, my Lord, and it is the second page,

2 paragraphs 2, 3, 4 and 5.

3 Do you have that Dr Arkhangelsky? Is that on the

4 screen?

5 A. Not yet.

6 Q. Sorry. {I20/26/32}.

7 Dr Arkhangelsky, you are also asked some other

8 questions about this City Centre entity.

9 A. Yes.

10 Q. And your attention was drawn to an entry in some

11 accounts of another OMG company.

12 A. Yes.

13 Q. LPK Scandinavia.

14 A. Yes.

15 Q. Also drawn up at about the same time, I think, as the

16 Scan Insurance ones that we have looked at?

17 A. Yes.

18 Q. Which also seemed to show a significant transfer or

19 transaction with City Centre?

20 A. Yes.

21 Q. Can you see that?

22 A. Yes.

23 Q. And it is right, isn’t it, that if we look at the

24 document concerned, {D116/1726.3/0.3}, {E116/1726.3/3},

25 you can see that these seem to be some accounts or

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1 balances for a company — can you see Scandinavia LPC; 1 Q. And I would like you to proceed on that assumption.
2 can you see that? 2 A. Okay.
3 A. You mean on top, or …? 3 Q. I know you don’t accept it. I know you don’t accept it.
4 Q. Yes. 4 Could you go, please, to {D116/1726.3/0.3}.
5 A. Yes. 5 A. Your Lordship, I just want to make a point that if it’s
6 Q. And they are signed by a Mrs Tarasova? 6 a real document, a Russian document, made for the
7 A. Yes. 7 purposes, it has to be a stamp here which is not …
8 Q. You see that at {D116/1726.3/0.9}. 8 Q. Sorry, Dr Arkhangelsky, there are stamps on this.
9 A. Yes. I’m not — I cannot really judge who has signed 9 A. Sorry?
10 that and how real are these documents, so I would doubt 10 Q. If you go in the Russian, there are stamps.
11 if it’s a good document. 11 A. No, no, I’ve seen the page you’ve shown me. On every
12 Q. All right, if we go to the Russian page, you can see 12 signature of each person, you have to have a stamp.
13 there are some examples, {D116/1726.3/7}, you get 13 It’s a must.
14 a better feel for it. {D116/1726.3/0.7}. 14 And by the way, it’s not even signed, then
15 A. Yes, it’s a bit strange. Normally, if it’s a normal 15 a director’s signature should be — your Lordship, I can
16 account, it has to be stamped there but it’s not even 16 show you here. There’s no signature here.
17 stamped. 17 Q. Can we scroll down, please, in the Russian. I think
18 Q. At 7, please; 0.7? 18 there are stamps here, it’s just they haven’t come out
19 A. 7, yes. So I’m not sure if it’s a real document; 19 very well in the document that has been —
20 I wouldn’t be really considering this a natural 20 A. If it is a real and original document it has to be
21 document. 21 stamped and signed on each and every page by the
22 Q. Well, just look at this page and then we’ll proceed on 22 director.
23 the basis that it is a real document. I know you don’t 23 Q. If we scroll down in the Russian, please, page by page,
24 accept — oh, I think you disclosed it. 24 I think we will see —
25 We are checking, but we think this is a document — 25 A. It’s not a signature of the director here, you may
145 147

1 A. No, I don’t think so.

2 Q. We think this was sent to the Bank.

3 A. Me? I sent it to the Bank?

4 Q. Can we have the page, please, {D116/1726.3/0.7},

5 {D116/1726.3/7}.

6 A. Can you please check where is it coming from?

7 Q. I want the Russian version, sorry; it’s the same

8 reference but the very final one is 7, not 0.7.

9 A. I have 7.

10 Q. You’ve got it. So you can see, Dr Arkhangelsky, that

11 there are some signatures there. Does that look like

12 Mrs Tarasova’s?

13 A. No, I think it looks like just a family name, so I very

14 much doubt if it’s a real document or it is created by

15 the Bank.

16 Q. Dr Arkhangelsky I suggest it is quite implausible to

17 suggest the Bank would go to the lengths of —

18 A. No, I think considering the events which are going on

19 here, I think it is quite possible.

20 Q. All right. If we assume it is a genuine document —

21 A. No, I would not assume this is a genuine document.

22 Q. No, if his Lordship finds it is a genuine document —

23 A. Okay.

24 Q. — then certain findings may result.

25 A. Yes.

1 notice.

2 Q. If we scroll on, you can see … I’m sorry, I think it

3 is faxed.

4 Can we go back to page 1. If we could just go

5 through this document page by page, I do apologise. The

6 Russian and the English, page by page, step by step, the

7 same equivalent, please, from number 1.

8 {D116/1726.3/1}, and then {D116/1726.3/2}. Does that

9 look like a stamp of LPK Scandinavia?

10 A. You cannot read what’s written there and it’s a bit

11 strange that the signature you can have is better

12 quality and the stamp you have it very bad quality, so

13 it looks like initially you scanned — you made a copy

14 of the signature and then you made a copy of the stamp,

15 so I don’t accept it is a real document.

16 Q. Then the next page.

17 MR JUSTICE HILDYARD: Please would you remind me who

18 Mrs Tarasova is?

19 A. My grandmother-in-law, it’s the mother of my wife. So

20 for sure, for sure —

21 MR JUSTICE HILDYARD: So is this the signature we were

22 looking at yesterday?

23 A. For sure, she haven’t seen these accounts and she never

24 signed that. That’s for sure.

25 MR LORD: Have you spoken to Mrs Tarasova about these

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1 matters?

2 A. No, because she was not aware about that. I haven’t

3 been asked to speak to her.

4 Q. So you haven’t enquired of her —

5 A. No.

6 Q. — about the questions that were raised —

7 A. No.

8 Q. — in relation to this particular entry?

9 A. No.

10 Q. Why not?

11 A. Because I don’t disturb her with these issues and she —

12 I am sure that she doesn’t know that.

13 Q. But you haven’t asked her?

14 A. Sorry?

15 Q. You haven’t asked her?

16 A. No.

17 Q. Although you had been asked to provide an explanation

18 for this LPK Scan entry, hadn’t you?

19 A. You mean, you asked it in the letter?

20 Q. Yes?

21 A. No, I don’t disturb her. She’s a very old person and

22 I would not disturb her.

23 Q. How old is she?

24 A. 60-something.

25 MR JUSTICE HILDYARD: Young.

1 you have all these documents, how couldn’t you trace

2 this company in these accounts and in these

3 transactions?

4 Q. We can’t.

5 A. Which is really surprising me.

6 Q. That’s the point, Dr Arkhangelsky. The point is we

7 can’t trace it and your expert can’t trace it and our

8 expert can’t trace it.

9 A. No, no, no. Our expert, they are not — they have not

10 been searching anything in Russia; they have not been

11 paid for search any information in Russia, but while you

12 are sitting on all these documents, which you tell it’s

13 original documents. So I cannot see why it’s impossible

14 for you to trace this information, so — which is —

15 I cannot understand that.

16 Q. Dr Arkhangelsky, you can give no explanation for why

17 LPK Scan might be putting a quarter of its receivables

18 with an entity called City Centre?

19 A. I think so far the only explanation I have, it’s you

20 produced this artificial document just for the purposes

21 of cross-examination. So that’s the only explanation

22 I have right now.

23 Q. Thank you. Because your insurance explanation for Scan

24 Insurance wouldn’t apply to a timber company, would it?

25 A. No, no, I said you that insurance company been investing

149 151

1 A. No, but in Russia it’s a different world, I should say.

2 MR LORD: If you could go, please —

3 A. My mother died at 62 under the big pressure of the Bank

4 and after regular searches and so on. So it has been

5 for me a big, big disaster during these proceedings.

6 MR LORD: Could we go, please, to page 3 and 0.3, 0.3 in

7 the English. {D116/1726.3/3} {D116/1726.3/0.3}.

8 Dr Arkhangelsky, you can see that below the lower

9 hole punch, towards the foot of the page, there is

10 an entry for City Centre LLC and it says «Goods», in

11 this page marked «Accounts receivable», and the date the

12 debt arose is said to be 14 May 2008, and the amount is

13 950 million roubles, which I think is the highest entry

14 in that column.

15 If you look on down to the bottom, it looks to be

16 about a quarter of that balance sheet, so about

17 a quarter of the accounts receivable for Scan LPK seemed

18 to be comprised in a transaction with City Centre; can

19 you see that?

20 A. Yes.

21 Q. So it’s another big transaction, isn’t it, because

22 that’s about US $40 million, isn’t it, at 25:1?

23 A. Maybe, but I don’t believe that it’s a real document.

24 Q. Right.

25 A. And it’s actually really surprising me if you say that

1 through the professional player in the investment

2 market.

3 Q. Could we have a look, please, at a third reference to

4 City Centre in accounts from your companies.

5 {D116/1727.1/0.1} which accounts for PetroLes.

6 PetroLes is a company that is affiliated with you or

7 OMG, isn’t it, Dr Arkhangelsky?

8 A. Yes, but it had an independent director, Mr Shevelev.

9 Q. And how was it affiliated with you, or what was the

10 affiliation?

11 A. They were working with the group and Mr Shevelev was one

12 of the employees in the group.

13 Q. But you owned PetroLes, did you?

14 A. No, I think we haven’t had any property rights in that

15 company.

16 Q. But it was unofficially affiliated, wasn’t it? We saw

17 in the KIT Finance that they said PetroLes wasn’t

18 officially affiliated?

19 A. Yes, it means that I haven’t had any property on that

20 and as long as it has been trading company, so it was

21 run by the independent director and I had a full

22 confidence to him without any property rights.

23 Q. What does «unofficial» — that implies that there is

24 an unofficial affiliation; what does that mean?

25 A. This company worked with the group, I don’t know how

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1 they positioned that, but this company was a trading

2 company without any assets, and it was involved in

3 the timber business and the director there was

4 a reliable director, and it was a requirement by the

5 Bank of St Petersburg not to have a formal affiliation

6 with the group because they have limitations on

7 reserves.

8 Q. If you go, please, to page {D116/1727.1/0.6},

9 {D116/1727.1/6}, you can see this entry in this PetroLes

10 document.

11 A. Yes.

12 Q. «The company granted its customers a gratuitous

13 commercial loan in excess of funds received in the form

14 of deferred payments for creditors.»

15 Then you can see some entries. Then you can see the

16 third big paragraph:

17 «For the period under review, the Company financial

18 investments have virtually remained unchanged…»

19 Then can you see:

20 «The short term financial investments reflect: Loan

21 of LPK Scandinavia … that of City Centre LLC

22 [225 million roubles]…»

23 Can you see that, Dr Arkhangelsky?

24 A. What is written here, when I read it in the Russian

25 language, that the investments in City Centre in

1 now enquiring into.

2 A. Yes.

3 Q. Can you not provide any help to his Lordship as to what

4 City Centre was?

5 A. No, what is written here, that this money been short

6 term financial investments, which is absolutely what

7 I mean, so that the City Centre is the professional

8 financial player, and it could provide a short term

9 return on available funding.

10 Q. Could we have page {D116/1727.1/0.26} and

11 {D116/1727.1/26}. The translation of the entry here for

12 City Centre is «bill of exchange». Is that not a

13 correct translation from the Russian?

14 A. Sorry?

15 Q. 0.26?

16 A. I think it is a different document.

17 Q. Yes.

18 A. I mean —

19 Q. I understand. I’m waiting for it to come up.

20 A. Sorry, can we have a short break, please?

21 Q. Probably two minutes more, is that all right?

22 A. Okay, two minutes.

23 MR LORD: Is your Lordship content with that?

24 MR JUSTICE HILDYARD: Yes.

25 MR LORD: And I will finish with this.

153 155
1 the amount of 225 million roubles was considered as 1 A. Just a final break before we finish.
2 a short term financial investments, so it means that it 2 MR LORD: Page 23, sorry. {D116/1727.1/23},
3 has been invested in financial assets. So it’s not 3 {D116/1727.1/0.23}.
4 written here that it’s any timber or whatever, any goods 4 The English is {D116/1727.1/0.26}, sorry.
5 or whatever. 5 You are not suggesting, are you, Dr Arkhangelsky,
6 Q. No, but do you agree — 6 that this is a forged document?
7 A. So what is written here exactly, that it was 7 A. I don’t know.
8 a financial — short term financial investments, which 8 Q. It looks like, doesn’t it, it is properly signed and
9 I may assume could be absolutely correct, that having 9 sealed?
10 some available assets, PetroLes could earn money on 10 A. I don’t know. It’s a third party who done that so I’m
11 short term financial markets. 11 not sure.
12 Q. But it is right, isn’t it, that the other two investment 12 Q. And isn’t it right that the City Centre entry is to
13 references to LPK Scandinavia and to Scan Marine 13 a bill of exchange, or bills of exchange?
14 Consulting, those companies are OMG companies, aren’t 14 A. Yes, so we just confirm my position that it has been
15 they? 15 an investment, a short term financial investment.
16 A. Sorry, first of all it’s a different translation, so in 16 Q. And could we have —
17 the Russian version it is not LPK, it is Insurance 17 A. And if you may see here that it’s also bills of exchange
18 Company Scandinavia, and Scan Marine Consulting. So 18 of other bank, for example Tatfondbank, which is
19 that was short term investments in the insurance 19 acceptable. So trading company had a short term cash
20 business, I think. Yes. 20 which decided to invest for short period of time, which
21 Q. So two of the three entries there are OMG companies, 21 looks quite logical.
22 aren’t they? 22 Q. Many of the other companies are OMG companies, aren’t
23 A. Two of the three, yes, and two of them relates to 23 they?
24 insurance business, yes. 24 A. Yes.
25 Q. And so it’s only the third one, City Centre, that we are 25 Q. Most of them are —
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1 A. I don’t know. 1 (A short break)
2 Q. Well, you do know Vyborg Shipping? 2 (2.55 pm)
3 A. Vyborg Shipping, yes. 3 MR LORD: Dr Arkhangelsky, I’m going to ask you now a bit
4 Q. Oslo Marine? 4 about Western Terminal.
5 A. Yes, yes, yes, yes. 5 A. Yes, please.
6 Q. Western Terminal, Novy Gorod, Onega? 6 Q. If we could have {D52/889/35} up, please.
7 A. Yes. 7 A. Yes.
8 Q. Baltdraga is a company you know about, isn’t it? 8 Q. This is an entry in the final version of the information
9 A. Baltdraga is a big client of the group, so it’s not 9 memorandum.
10 a group company, but it has been a company sitting in 10 A. Yes.
11 the same business centre as we were sitting. 11 Q. Would you look at the top section, please, which says
12 Q. Rusiv; I think you were the chief accountant of Rusiv, 12 that:
13 weren’t you? 13 «The Western Terminal was acquired in 2007, and was
14 A. Rusiv, yes, yes, at some stage, yes. 14 in a very run down condition.»
15 Q. Svir? 15 Can you see that?
16 A. Yes. 16 A. Yes.
17 Q. Svir is another of your businesses? 17 Q. That’s right, isn’t it: when you acquired the Western
18 A. Yes, yes, yes, yes. 18 Terminal, it was in a very run down condition?
19 Q. Alfa? 19 A. It was in a rather poor condition, especially from the
20 A. Alfa; I don’t remember Alfa but … most probably not, 20 point of view of European understanding of the ports.
21 but I am not sure. 21 So I should say it was not that bad: it was really dirty
22 Q. Would if be fair that every one of those companies you 22 and not any safety signs and so on, so I should say that
23 know about, except for City Centre? 23 from European understanding, it was rather unacceptable.
24 A. Except for City Centre, definitely Tatfondbank is one of 24 Q. Could we look at the photographs, the aerial photographs
25 the big Russian banks and I’m not sure about Alfa, what 25 of the site, please, and just track through how, if at
157 159
1 does it mean here. 1 all, the Western Terminal site altered in its condition
2 Q. Could you be shown {Day12/67:3}, which is the transcript 2 after you acquired it in 2007. They start at
3 of some evidence you gave. On {Day12/67:3}, I asked you 3 {D196/2931/1}.
4 whether it was normal for monies to go from OMG 4 My Lord, they are in the Western Terminal bundle
5 companies to you; can you see that? 5 behind divider 13, but I don’t know if they are as good
6 A. Yes. 6 copies as you get online, I am afraid. I think some of
7 Q. And you said yes. 7 the definition might be lost in the copying.
8 So isn’t the most likely explanation for the 8 Does your Lordship have copies in the …
9 City Centre entries that City Centre is a company that 9 Dr Arkhangelsky, do you want the hard copy?
10 you either own or controlled, and that that’s what 10 A. No, it’s okay. It’s very good quality here on the
11 explains — 11 monitor, on the screen.
12 A. No, absolutely not. 12 Q. That’s a photograph from the air of the Western
13 Q. And how can you be so sure? 13 Terminal, isn’t it?
14 A. Absolutely, because I haven’t had this money and I have 14 A. Yes.
15 never, ever had any control of this money personally, 15 Q. And you showed us the other day the patches of land or
16 and so that’s why — if it would go to me, I would 16 the plots of land that are included with it?
17 probably would have this money, and would employ a huge 17 A. Yes.
18 team of advocates representing me in these proceedings. 18 Q. There is almost like a white barrier, isn’t there,
19 Q. I suggest, Dr Arkhangelsky, that it is likely that you 19 around it?
20 have benefited from the City Centre entry. 20 A. Something like that, yes.
21 A. Absolutely not. Absolutely not. 21 Q. And could you — this is in May 2006.
22 MR LORD: Would that be a convenient time, my Lord? 22 A. Yes, it is a year-and-something before I bought it, yes.
23 MR JUSTICE HILDYARD: Yes, we will have ten minutes. 23 Q. And then if you could just go frame by frame, please,
24 Could I swap D45 for D116, please. 24 through the sequence, we can see — so this
25 (2.40 pm) 25 is August 2007, so it’s a few months after you bought
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1 it?

2 A. Yes.

3 Q. Have you carried out many improvements over those three

4 months?

5 A. I don’t remember which exactly date we bought it.

6 Q. It was May 2007.

7 A. Yes, I think the — we finalised most of the documents,

8 I think, by the end of the summer.

9 Q. Yes, but can you show his Lordship: as we go sort of

10 frame by frame, I want you to identify, if you can,

11 anything that you can see on these photographs of

12 the site that looks like it is a material improvement to

13 the site, because I can’t see any big changes between

14 the first two photographs, but obviously if I have

15 missed something, then you please tell his Lordship.

16 A. Yes, of course I can tell you.

17 Q. What are the improvements, if any, by August 2007?

18 A. No, generally we have not done much. The major

19 improvements, they concerned to the berth and the

20 mooring facilities, and fencing and so on. So you

21 cannot trace that from the space picture.

22 So it’s the question that the shipping authorities,

23 marine administration of the port of St Petersburg, they

24 were checking the conditions, first of all, of

25 the berths, safety requirements, fuelling, watering and

1 it with a pen, please, for the transcript, what

2 improvements you are now describing, Dr Arkhangelsky.

3 Can you be given a pen, please, Dr Arkhangelsky?

4 A. Your Lordship, if you can see on the screen, but what

5 I should say —

6 Q. Dr Arkhangelsky, I can’t see — I am sure it is my

7 fault. I can’t see from the photographs the plates you

8 are talking about.

9 A. Yes, because you cannot see it from the space. So what

10 I suggest — so it’s no value to discuss it here. What

11 I suggest to your Lordship is to see the photographs

12 which have been disclosed in these proceedings, and

13 I really asked Mr Stroilov, in the beginning of all

14 these cross-examinations — there were made, I think,

15 three or four really good movies from that time showing

16 all the improvements and how it was when we acquire it.

17 There are good movies in respect to Onega Terminal

18 and Western Terminal. So I think discussing that right

19 now with this, it’s just insinuation.

20 What I suggest, if you accept that, I am not able to

21 give an exact number and where the video is located, but

22 if it is possible by Monday, on Monday examination, to

23 go through the video, then it would be much better,

24 because it is a video from that time where we recorded

25 how it was done, what was done, and in which shape it

161

1 so on.

2 Q. It’s only improvements on the site I’m after. Can we

3 have the next photograph, please. That’s taken

4 in June 2009.

5 A. Yes.

6 Q. Again, can you point to any improvements in the site?

7 A. Yes. You cannot see it properly here, but in difference

8 to the previous picture, especially if you see the

9 picture 2007 —

10 Q. Yes.

11 A. — the land here is covered by the solid baton plates,

12 that’s for sure. And you may say — I don’t know if

13 your Lordship has seen the video presentations which

14 have been disclosed, and there you can really see quite

15 a number of improvements and developments, so I —

16 Q. Can you show us on the hard copy, Dr Arkhangelsky? I am

17 afraid I can’t see what you are pointing to. I’m sorry,

18 it’s my fault. Can you actually —

19 A. The land on the picture is covered by the baton plates

20 and you can trace that on the pictures which done by

21 that time, and by video, which are disclosed in these

22 proceedings.

23 Q. So there is a record, could you be shown the hard copy

24 and could you mark on it, please, for his Lordship’s

25 record, what improvements — I would like you to mark on

163

1 was.

2 And, by the way, we also disclosed in these

3 proceedings the video facts of when the Bank, together

4 with police, taking over Western Terminal, so it’s

5 probably not the best quality, but you can see it there.

6 Q. Dr Arkhangelsky, are you able to mark, just, please, for

7 the purposes —

8 A. I suggest — I suggest I would not be marking here,

9 because I suggest — I think that it’s rather bad

10 quality, and you cannot see it here. So I suggest that

11 by Monday we see the video and I will give a full

12 explanation. Actually, video is done in English

13 language, and that’s a very good video.

14 MR JUSTICE HILDYARD: Which is the bit of land where you

15 have done most of the work? Is it to the left of where

16 the boat was?

17 A. On the right-hand side, all this territory is covered by

18 quality aviation baton plates, so like this, all this

19 covered by baton plates.

20 MR JUSTICE HILDYARD: I can’t really see —

21 A. You cannot see it here, absolutely, but it’s covered.

22 Because, you see, when you handle the timber, you anyway

23 have the dust of the timber, how you call … birch, or

24 whatever covering, what is covered — timber, what is —

25 MR LORD: The bark?

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1 A. Bark, bark, sorry. Bark. When you handle the timber

2 and you can see that it’s timber all round, so it’s

3 always like this, garbage of the bark.

4 So, what I suggest, and I really think that it is

5 a must to see the videos, and it’s really quality done,

6 and I’ve been showing this video to all the banks and

7 all of the investors.

8 Q. Can you estimate how much you spent on these

9 improvements, would you say?

10 A. No, I cannot say that. It’s been quite — spent quite

11 a lot of money.

12 Q. How much, roughly?

13 A. No, I don’t have this figure in my memory.

14 Q. Can you show on the aerial photographs of August 2007

15 whether there were any railway tracks on the Western

16 Terminal plot that you —

17 A. Yes, the railway tracks, they were going, and they are

18 going like here (indicates).

19 Q. Sorry, Mr Arkhangelsky, you are going to have to — on

20 the hard copy, because I can’t see, and I do need to

21 see, I am afraid.

22 MR JUSTICE HILDYARD: Are these also shown on the video?

23 A. Yes. I suggest, you know, it’s all Mr Lord’s suggestion

24 right now, that it is very bad quality and it is just

25 insinuation. So I suggest to see the pictures. We made

1 MR LORD: Mr Arkhangelsky, if you could go to your witness

2 statement at {C1/1/20}, please, paragraph 16.

3 A. By the way, your Lordship, referring to what we just

4 discussed, we are very much surprised that when the Bank

5 made a valuation of the Western Terminal, which report

6 they produced for these proceedings, they have not done

7 any pictures there, so they said that they made

8 a valuation without visiting the project, so which is

9 quite strange for me.

10 Mrs Simonova, she was not allowed to come there, to

11 enter inside, she made the pictures from outside, but we

12 are quite surprised that the Bank’s experts had not done

13 that.

14 Q. Could you look at your witness statement, please. Could

15 you look, please, at paragraph 77 and onwards. You can

16 see in 77 you say: {C1/1/20}

17 «Western Terminal had a number of important

18 competitive advantages which we planned to exploit as

19 much as possible.»

20 A. Yes.

21 Q. Then at paragraph 78 you say that because:

22 «… Western Terminal owned its own berths gave it

23 significantly greater value: it meant that … the

24 company was much more free than its competitors to

25 undertake development, repairs and construction works,

165 167

1 a pictures of handling of high and heavy cargo, and so

2 on.

3 So what I would suggest, maybe, that Mr Stroilov

4 would write to somebody in Opus to prepare the pictures

5 and videos to be shown on Monday.

6 MR LORD: Well, my Lord, Mr Stroilov did show a photograph,

7 your Lordship may recollect, when asking Dr Belykh, so

8 I don’t want any criticism of the props I am using here,

9 the aerial photographs.

10 MR JUSTICE HILDYARD: No, I don’t suggest that, but if there

11 is this video, we might as well see it.

12 A. It is a very good video. Yes, it is just three,

13 five minutes or whatever, seven minutes.

14 MR JUSTICE HILDYARD: Well, if it can be obtained, I suggest

15 you liaise together to obtain it.

16 Are they containers, that are lined up on the land

17 right in the middle of the picture?

18 MR LORD: I think it’s timber.

19 MR JUSTICE HILDYARD: It is all timber, is it?

20 A. So, these are the containers, but these are the timber,

21 but you cannot trace that because it could be easily

22 containers also there.

23 MR JUSTICE HILDYARD: All right. We’ll look forward to

24 the video.

25 A. Yes.

1 by-passing the usual bureaucracy … there was (in

2 theory) a lower risk of expropriation; and … there was

3 no chance of the berths at the terminal being used to

4 berth state-owned vessels in priority to private …»

5 A. Yes, that’s absolutely correct. I just want to explain

6 to your Lordship —

7 Q. Sorry, can I ask the question, Dr Arkhangelsky?

8 A. Yes, please.

9 Q. You didn’t, in your description of the Western Terminal,

10 make any reference to the payments to the official, did

11 you?

12 A. Which document you are referring to? Which description?

13 Q. In your witness statement.

14 A. No.

15 Q. Why not?

16 A. Because I was not considering that’s important and

17 I told you all the details on yesterday and the day

18 before.

19 Q. And why wouldn’t these have been relevant things to say

20 in the statement, if it explained how you were planning

21 to develop Western Terminal?

22 A. Because any payments to any officials were not

23 influencing on the standard development of Western

24 Terminal. My relations with officials could seriously

25 speed up any development and increase profitability of

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1 the project.

2 Q. Was that as a result of the payments that you have

3 described?

4 A. Absolutely. But that was in addition, and that was not

5 connected to any results of the valuation or estimation

6 done in investment memorandum. So investment memorandum

7 of Western Terminal was done without consideration that

8 it could be that fast development and that big

9 improvements.

10 So we were putting on the basis, let’s say, regular

11 speed and regular wording, so we were not expecting to

12 have, for example, 14 metres draught, but it was enough

13 to have 6 metres draught, or something like that.

14 Q. If you go to paragraph 79, please, on {C1/1/21}.

15 A. Yes.

16 Q. You say that:

17 «… western Terminal was in the best location …»

18 And then paragraph 80 —

19 A. Yes.

20 Q. — you say it:

21 «… was not dependent on state customs facilities.»

22 A. Yes.

23 Q. Then in paragraph 85 over the page, {C1/1/22} you talk

24 about:

25 «The development plans entailed the removal of

1 feeling of the basic, initial, real value of the asset.

2 Q. And the purchase price that we saw was paid —

3 A. Yes.

4 Q. — was about US $40 million, wasn’t it?

5 A. Yes.

6 Q. So are you saying that Lair were right to value Western

7 Terminal —

8 A. Absolutely.

9 Q. — at over four times what you had paid for it?

10 A. Absolutely, and the key reason for that, that the

11 Ros-holding’, the previous owner, had so terrible

12 a reputation, and nobody would really make any

13 transactions with them.

14 Q. So it was, really, your good reputation —

15 A. My best reputation —

16 Q. Yes.

17 A. — and ability to go through the purchase contract and

18 go through due diligence. So for me it was really —

19 this price I paid, it was a price of — a high risk

20 price. So I had to pay in advance, but do the due

21 diligence and all the balance sheet work during next

22 several months.

23 Q. So —

24 A. So I have undertaken enormous risk on this transaction.

25 Q. So you are accounting for the increase in value,

169 171

1 a man-made island …»

2 A. Yes.

3 Q. That was a hangover, wasn’t it, from when it was

4 a military port? There was an anti-torpedo island

5 there, wasn’t there?

6 A. Something like that, yes.

7 Q. And without its removal you weren’t going to be able to

8 develop Western Terminal, were you?

9 A. No. No, Western Terminal, as we can see from today’s

10 pictures, except, I think, on your pictures from today,

11 it’s something like eight or ten vessels at the same

12 time.

13 So this small artificial island, it could simply

14 increase the turnover of cargo and so on, but it’s

15 not — it was not crucial and what we see on development

16 of the Bank right now, the existence of this island is

17 not influencing on their rather good development so far.

18 Q. I would like to show you the Lair valuations, please.

19 Could you be shown {D21/415/2}. This was a valuation by

20 Lair on 28 May 2007 of Western Terminal; can you see

21 that?

22 A. Yes.

23 Q. And they valued it at a market value of US $166 million

24 excluding VAT?

25 A. Yes, it was a pre-purchase valuation, just to get the

1 according to Lair — well, the fact that they valued it

2 at US $166 million the same month that it had been

3 acquired for $40 million, you are ascribing that to your

4 good reputation, are you?

5 A. Reputation and due diligence, because, as your Lordship

6 probably knows, that unless the project went through the

7 proper due diligence and all the aspects are clean on

8 the balance sheet and checked, and only then, project

9 having a real market value. If it’s just a Russian

10 standard balance sheet from the gangsters and suddenly

11 we know the fact that one director died or killed or

12 something like that, so then it’s absolutely a different

13 value of the project.

14 Q. So without that factor of your good reputation, the

15 terminal would have only been worth about

16 US $40 million?

17 A. No, I cannot say that. I say that the reputation of

18 the previous owners was not allowing them to sell at,

19 probably, at higher price.

20 People are simply afraid of doing any transaction,

21 first; and second, they haven’t had a proper and full

22 set of documents and permissions. When I came into the

23 project, we employed a big team of lawyers and

24 accountants, so we cleaned up all the accounts and got

25 necessary permissions, obtained permissions from the

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1 customs, for example. We made a bonded storage there

2 and so on.

3 So we really made, let’s say, pre-purchase work,

4 which cost an enormous amount of money, I mean, after

5 re-evaluation of that.

6 MR JUSTICE HILDYARD: Have I understood this right: you say

7 that the increase in value which Lair spotted when they

8 made the analysis, was partly its inherent worth, which

9 hadn’t been recognised in full in the purchase price,

10 and partly the enhanced value which your reputation and

11 ambition to develop it brought?

12 A. Yes, and plus one more thing. As I said, when we bought

13 the terminal, so we just got two or three bundles of

14 documents, and some documents were missing, some

15 documents have to be recreated, or collected from

16 somewhere, because when we approach any bank, they say:

17 okay, we don’t need just one bundle, we need a full set

18 of all the necessary documents. And these people, they

19 were not able to collect these documents. They were not

20 being able to create these documents. They were not

21 being aware what kind of documents required.

22 So we collected all the necessary things and then it

23 became not just one bundle of documents; we created

24 a set of documents for proper due diligence by any

25 potential first class banker or buyer or client, or

1 Q. So they were really basing their value — as you

2 understood it, they were basing their valuation upon the

3 fact that it was you now in charge; would that be

4 a fair …?

5 A. I think so, yes.

6 MR JUSTICE HILDYARD: This is a completely different

7 Mr Smirnov, is it, who does the value? Mr Smirnov,

8 a director of Lair, has signed?

9 A. Yes, what’s the question?

10 MR JUSTICE HILDYARD: He is not the same Mr Smirnov?

11 A. No, no, no, no, this is a reliable, compared to another

12 one — compared to the Bank’s gangster, he is one of

13 the major Russian specialists in this business, and this

14 company, as we discussed, one of the top Russian

15 companies and the biggest one located in St Petersburg.

16 MR LORD: Could you be shown {D52/889/7}, please,

17 Dr Arkhangelsky. This is an extract from the

18 information memorandum, the final version that was

19 dated July 2008, and was shown to the banks I think

20 around that time; I have asked you about already.

21 Can you see about halfway down the page, the

22 paragraph beginning:

23 «The necessary permits to undertake the development

24 have been applied for and an initial meeting with

25 Rosmorport, the relevant Russian authority, went very

173 175
1 something like that. 1 well.»
2 Because, you know — you know that when you buy or 2 A. Yes.
3 long term rent any real estate project, you have to 3 Q. «The necessary permits are expected to be granted by
4 trace carefully the previous ownership and risks and the 4 both the Ministry of Transport, of which Rosmorport is
5 balance sheet of the company and the risks arising out 5 part, the Port Authority of St Petersburg, and other
6 of the balance sheet. 6 regulatory authorities. A commitment to the channel
7 So we spent, as I said, at least three or four 7 dredging and reclamation is expected to be made by
8 months to do this, and we had to eliminate any risk of 8 Rosmorport, as part of the approval process.»
9 tax authorities claiming anything for previous years. 9 A. Yes.
10 So that’s been really an enormous volume of work, and 10 Q. Now, are those the permits and authorisations you are
11 it’s really difficult to understand how big a volume of 11 talking about here?
12 work it was. 12 A. I’m sorry?
13 MR LORD: And was that work that you began after you bought 13 Q. You have been talking about, in the last five or ten
14 the terminal? 14 minutes, a lot of permits and licences and so on that
15 A. Yes. 15 you were going to obtain as part of your «cleansing»,
16 Q. And are you saying that that work, all those permits and 16 I think you describe it —
17 things, they were all in place by the time Lair did 17 A. No, here we are speaking about a different thing. Here,
18 their May 2007 valuation? 18 this particular paragraph relates to what you just
19 A. No, no, I think we bought it in — I don’t remember — 19 discussed, the removal of the island, the recreation of
20 Q. May. 20 the territory in, whatever, the 4 hectares we discussed
21 A. — the exact date. No, Lair was valuating that. 21 on the first day, and the dredging of the channel. As
22 I think they have done some assumptions, but we have to 22 discussed, Rosmorport is a federal body which is
23 read them. But they believed that if this project 23 formally taking care about the aquatoria, so formally
24 belonged to me, then it would be this value by that 24 they are ordering works in the aquatoria and the
25 time. 25 state-owned berths. So that’s what we discussed about
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1 the cooperation with the official on Wednesday.

2 Q. So that cooperation you discussed was referable to

3 getting these various licences?

4 A. Yes. It’s not the licences. It’s the work which had to

5 be done —

6 Q. Permits.

7 A. — by the federal state from the federal budget on the

8 federal property, and these improvements would not only

9 improve our own terminal, but it would also help to

10 the nearest shipyard and the first container terminal,

11 which is one of the biggest players in the market.

12 Q. Could you be shown {D55/951/7}, please. Actually, could

13 we have page 1 so that Dr Arkhangelsky can see the

14 document? {D55/951/1}

15 Dr Arkhangelsky, this is the pledge agreement, or

16 mortgage agreement —

17 A. Can we have the Russian version, please?

18 Q. Yes, certainly. I will give you the reference. (Pause)

19 {D55/951/14}

20 Sorry, Dr Arkhangelsky, can you see it now?

21 A. Yes, yes.

22 Q. This is the mortgage, or pledge, that was given.

23 A. Yes.

24 Q. Can you see that?

25 A. Yes.

1 memorandum. Could you please be shown {C1/1/54},

2 paragraph 214 of your statement.

3 A. Sorry, which paragraph?

4 Q. 214, sorry.

5 A. Yes.

6 Q. You are suggesting, I think, you are referring there to

7 the development of Western Terminal and the investment

8 that has happened.

9 A. Yes.

10 Q. And I am going to suggest to you that you and OMG never

11 had any prospect of raising the finance necessary to

12 develop Western Terminal?

13 A. No, absolutely not. It’s not correct.

14 Q. Can you please be shown {D43/750/13}, which is a page

15 from the May 2008 draft of the information memorandum.

16 A. Yes.

17 Q. Which I think Mr Bromley-Martin, or his company, Oxus,

18 would have drafted.

19 A. Yes.

20 Q. Can you see that there is a reference to the capacity

21 per hectare? Can you see?

22 A. Where, in which line?

23 Q. About halfway down the page it says:

24 «Other statistics — 30k TEUs per hectare.»

25 Do you see that?

177

1 Q. And it was given by Western Terminal, wasn’t it, as

2 mortgagor in favour of Bank of St Petersburg; yes?

3 A. Yes. I think so, yes.

4 Q. And the value — the parties agreed a value, didn’t

5 they? If you go — a pledge value. If you go, please,

6 to {D55/951/7}, can you see 2.2? By all means have it

7 in the Russian as well. 2.2 reads:

8 «The parties have appraised the total value of

9 the mortgaged property at 1,286,805,920 [that’s about

10 1.286 billion Russian roubles] (hereinafter the ‘Total

11 Collateral Value of the Mortgaged Property’), of which

12 the Parties have evaluated …»

13 And then it breaks it down; can you see that?

14 A. Yes.

15 Q. So it’s right that Bank of St Petersburg agreed

16 in July 2008 that the value of the Western Terminal, the

17 pledged Western Terminal asset, was about 1.2 billion

18 roubles?

19 A. No, absolutely not. 1.2 billion roubles, it’s the

20 amount of loan plus interest for the period of the loan.

21 So that’s the amount which is done on their own in-house

22 calculations, but it’s based on the valuation report

23 done by Lair. So this is just the amount of the loan

24 plus interest for one year.

25 Q. I’m going to ask you now about the information

179

1 A. Yes.

2 Q. In this version of the draft, which I think Oxus were

3 responsible for —

4 A. Yes.

5 Q. — they were quoting statistics for capacity per hectare

6 of about 30,000 TEUs —

7 A. Yes.

8 Q. — weren’t they?

9 A. Yes.

10 Q. And the site was about 8 hectares, wasn’t it?

11 A. Yes.

12 Q. So that would have been, on this benchmark, about

13 240,000 TEUs per year.

14 A. Just once again — no, but it is not said that it’s per

15 year. It’s said — I don’t know where this figure

16 relates, but I am absolutely sure that, based on the —

17 it’s not written per year or whatever.

18 Q. Dr Arkhangelsky, it must be, mustn’t it, because TEU

19 is —

20 A. No, no, no —

21 Q. Sorry to interrupt.

22 A. — it’s not «must be», it’s not written here, so I think

23 it is an insinuation. So our calculation —

24 Q. Sorry, can I explain why?

25 A. Yes.

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1 Q. TEU, that’s a shorthand for «Twenty-foot equivalent

2 unit», isn’t it?

3 A. Yes.

4 Q. And that’s a shorthand for reference to the typical size

5 of a container, isn’t it?

6 A. Yes.

7 Q. So when you see 30,000 TEUs you can read 30,000

8 containers, can’t you?

9 A. Yes.

10 Q. And you couldn’t get 30,000 containers on a hectare at

11 the same time, could you?

12 A. I don’t know. It depends. Actually, I just want to

13 stress to your Lordship that in the calculations and in

14 any valuations, that’s actually a good point which

15 I really want to discuss; that in Lair, and I think in

16 business plans of Oxus, it’s normally considered,

17 your Lordship, that the containers are put at least two

18 or three levels, or in normal cases four or five levels

19 if it’s empty.

20 So it means — and all the valuations done by the

21 Bank, you may see that they consider that containers are

22 put just in one line. So you may understand, in what

23 they done in the valuation reports, the containers are

24 put one line, and on average in the market it is

25 considered to be two and a half lines, but normally then

1 Q. Do you see «Development: Plans & Perspectives?

2 A. Yes.

3 Q. Can you see that? And if you go back to the second

4 page — sorry, I should go to the second page first to

5 show you. There we are. It’s the second page; can you

6 see that? {D118/1808.1/2}

7 A. Yes.

8 Q. Was this when OMG were looking for a strategic, or

9 really equity partner, to come into —

10 A. I don’t remember. Can you give me at least a date when

11 this document has been produced?

12 Q. I just showed you it on the first page; it

13 was April 2009.

14 A. Okay, I don’t remember for that — for which particular

15 purpose this has been done.

16 Q. We are checking whether you exhibited it,

17 Dr Arkhangelsky, but we will come back.

18 A. Yes please.

19 Q. You can see this now anyway?

20 A. Yes, yes. Just ask your questions.

21 Q. Was this setting out plans for — was this document

22 setting out the possible plan for the port group in

23 order to see if it could attract some investor, some

24 equity investor? Can you see there is reference to

25 «A potential strategic investor»? Can you see that in

181 183

1 the containers enter up to six or eight levels. So it

2 means that depends on the assumption how many containers

3 you can put one by another, then it would increase or

4 decrease the turnover. So that’s the key issue.

5 And another important point in any assumptions, it’s

6 the timing, how long time each container stands on the

7 terminal. So the average standard time would be

8 14 days, or in case you reduce it to 10 or 7, for

9 example, then it is doubling or tripling, or whatever.

10 So it means that that are the key assumptions, so you

11 cannot just calculate the territory and divide it by the

12 size of the container, so you have to calculate levels

13 and the timing of containers.

14 Q. Could you be shown {D118/1808.1/1}, please. This is

15 a draft presentation on behalf of OMG in April 2009; can

16 you see that?

17 A. Yes.

18 Q. And if you go to the third page {D118/1808.1/3}, you can

19 see the development plans for the port are set out; can

20 you see that?

21 A. I’m not sure who prepared that, but yes, what should

22 I see?

23 Q. Well, it must be somebody at OMG, mustn’t it,

24 Dr Arkhangelsky?

25 A. I don’t remember that, but …

1 the second bullet on that page 2? It is your document,

2 Dr Arkhangelsky —

3 A. Sorry, where should I see that, sorry?

4 Q. It’s page 2, the second bullet point.

5 A. «The company has …» this one?

6 Q. Yes.

7 A. Yes.

8 Q. It looks as if this is some sort of memorandum or

9 investment circular produced on behalf of OMG, designed

10 to interest potential investors.

11 A. Maybe, but I don’t remember who and how and what

12 produced it. Maybe it’s further in the text.

13 Q. If you go to the third page, please, you can see

14 «Development: Plans & Perspectives»; can you see that at

15 the bottom?

16 A. Yes.

17 Q. And you can see on the right «Sea Port Group

18 assets/characteristics», and I think this page is

19 showing the three ports that OMG had. So that’s two in

20 St Petersburg, that’s Western Terminal and Onega, and

21 Vyborg up near the Finnish border; would that be right?

22 Is that what we see here? Terminal 1, 2, and Vyborg

23 Port?

24 A. Yes, I think so, yes.

25 Q. And terminal 1 is a reference to Onega, isn’t it?

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1 A. Yes.

2 Q. Because it is talking about roll-on/roll-off containers?

3 A. Yes. Yes, yes.

4 Q. And terminal 2, the 8-hectare site, is talking about

5 Western Terminal, isn’t it, Dr Arkhangelsky?

6 A. Yes.

7 Q. Can you see on the left-hand column towards the bottom

8 of the page, it says this, two entries from the bottom:

9 «Upon completion of development Terminal Two

10 (St Petersburg) [I think that is Western Terminal] will

11 be capable of handling 1 MTPY of general cargo and up to

12 100,000 TEU per annum.»

13 A. Yes.

14 Q. Can you see that?

15 A. Yes.

16 Q. So that’s 100,000 containers per year, isn’t it?

17 A. Plus 1 million metric tonnes of general cargo. So if

18 you are not distributing — if terminal is just created

19 for containers, it would be 500,000. But in case you

20 still want to have a general cargo, you can take

21 1 million tonnes and 100,000 containers.

22 Q. Right.

23 A. So which, in fact, it’s even more than 500,000 TEUs

24 separately.

25 Q. I think there is some double-counting in there, but

1 who is — he is resending an e-mail where I was on the

2 chain in 2008.

3 Q. But I think you are sending him the «Western Speed

4 Diameter», some attachment about the —

5 A. Back to 14 June 2008, yes.

6 Q. And can you see down in Mr Bromley-Martin’s e-mail, he

7 says this:

8 «As discussed with Keith, please find the list of

9 outstanding questions, so that I can complete the

10 overwhelming bulk of the IM.

11 «Can we all be aware that the ‘fundraising’ season

12 is drawing to a close and will not start again till

13 early September? The City in London starts closing down

14 in 4/5 weeks time for the summer.

15 «We must therefore plan to have the final draft done

16 by the end of next week, with me coming out circa

17 23 June to finalise the document and get Vitaly’s sign

18 off for us to start seeing the banks. So please can

19 I have the responses by close of business on Monday.»

20 A. Yes, and that’s — he’s writing to Daniil and Alexey.

21 Q. I see that, Dr Arkhangelsky, but it is right, isn’t it,

22 that this e-mail suggests that Mr Bromley-Martin thought

23 that he would need to get your sign-off on this document

24 before he took it off to show banks; that’s right, isn’t

25 it?

185 187

1 I will take this up with Mr Bromley-Martin so as not to

2 waste any more of your time. I think probably it is

3 right to take it up with him because he asks these

4 points.

5 A. Yes, I think so.

6 Q. I understand.

7 A. I’m not sure actually whom produced it and for which

8 particular purpose. I assume it was one of the drafts,

9 and I’m sure I never approached any investors with this

10 particular document. So I am not sure where and how it

11 comes from.

12 Q. Could you be shown {D48/829/1}, please. These are the

13 questions and answers that I took you to the other day.

14 A. Yes.

15 Q. If you could be shown {D48/818/1}, please, it is

16 an e-mail of 14 June 2008. You can see there is

17 an exchange of e-mails on that day.

18 A. 14 June, yes.

19 Q. 14 June 2008.

20 A. Yes.

21 Q. And variously on the chain is Mr Bromley-Martin, and

22 you’re on the chain as well, aren’t you?

23 A. No, I’m not on the chain.

24 Q. From Mr Arkhangelsky, can you see?

25 A. No, but it’s — I think it’s Mr Robin Bromley-Martin,

1 A. Yes, I think he was expecting me to sign the final

2 version of the investment memorandum, yes, I think so.

3 Q. And if we go to the questions and answers that I just

4 took you to — could we have the questions and answers,

5 and they are in the Western Terminal bundle. The

6 questions and answers are at {D48/829/1} and they are

7 behind divider 3A, my Lord.

8 A. I have it here.

9 Q. Do you have it?

10 A. Yes, yes, yes.

11 Q. Do you see the first question?

12 «What turnover and profit should be used in para 1?»

13 The answer that was given is:

14 «OMG turnover for 2007 it €500 million. Pre-tax

15 profit €4.5 million.»

16 Can you see that?

17 A. Yes.

18 Q. OMG’s turnover was not €500 million, was it, in 2007?

19 A. I’m not sure, I don’t know who put this question and how

20 it’s appeared afterwards.

21 Q. On those figures, there would be — the gross profit

22 margin would be about just under 1 per cent, wouldn’t

23 it, 4.5 over 500?

24 A. Yes.

25 Q. That wouldn’t look like a very profitable business for

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1 a bank considering lending to it, would it? 1 the initial mistake in the questions.
2 A. Sorry, you think that 4.5 million is a small margin to 2 Q. The final figures that were given were US $88 million,
3 turnover? 3 the profit pre-tax of 33 million.
4 Q. Yes. 4 A. Yes, so it means that the profitability of the business
5 A. No, it’s not like this because in the timber business, 5 increased 30 times in the final documents, so what is
6 and I think they are referring to generally our trading 6 not correct here?
7 of timber, it’s a very huge turnover and it’s 7 Q. What was the basis for those figures? I’m just asking
8 a comparatively small margin. So you cannot judge 8 if you can supply them?
9 profitability without considering from which type of 9 A. I don’t know, because it was a low level employees
10 business it comes from. And normally you would make 10 who — I think it might be what actually happened with
11 an estimation based on EBITDA and some other financial 11 you, some problems with the exchange rate and basic
12 statistics. 12 calculations. So in the final version I see that it
13 Q. It looks as if those figures then were taken into the 13 looks quite obvious and I cannot see what — so, very
14 draft of the information memorandum, because if you are 14 good profitability, 30 per cent from the turnover, which
15 shown the draft behind divider 8, at {D51/888/5}, you 15 is quite unusually high profitability for this type of
16 can see the top paragraph sets out in dollar figures, 16 business. So which shows that the group business has
17 the figures we have just seen. So if you have those two 17 been extremely profitable and successful. That’s what
18 up on screen, that’s very helpful. If you have the 18 you wanted to say; yes?
19 euros in the answers and the dollars in the draft. 19 Q. I asked you the basis, that’s all, and you said you
20 A. So I think the mistakes in the replies was adjusted in 20 didn’t have one. All right?
21 the memorandum, or in the draft memorandum, you mean? 21 I’m going to ask you now about Western Terminal
22 So you want to tell that the mistakes in the e-mail 22 financing and BNP Paribas, if I may.
23 been adjusted in the final memorandum — the draft 23 A. Yes.
24 memorandum? 24 Q. Could you be shown , please, paragraph 89 of
25 Q. Sorry, Dr Arkhangelsky, I’m not suggesting there are 25 this witness statement, where you refer to
189 191

1 mistakes. I’m showing you how the sequence of drafting,

2 it looks as if the figures that have been given by OMG

3 in these answers to Oxus, of €500 million, and

4 €4.5 million, have been converted. I’ve done the

5 calculation at the conversion rate that I think applied

6 then, and it comes out very close to US $320 million,

7 and $3 million; do you see?

8 A. Sorry, you transferred €500 million into $320 million?

9 Q. That’s right.

10 A. You do this? What is the exchange rate between — so

11 €500 million, it’s about $550 million. So you cannot —

12 so it is absolutely wrong, what you are saying.

13 Q. Well, can you — maybe you are right.

14 A. The euro is much more expensive; especially at that time

15 it was much more expensive than dollar. So what I see

16 from what you are saying is that mistakes done by the

17 low level specialists in the replying to the questions

18 of Bromley-Martin, in the memorandum been corrected

19 seriously. That’s what I see.

20 Q. Well, you may be right about that.

21 A. Yes, I am absolutely right about that.

22 Q. If we go to the final draft, to the equivalent, that’s

23 at behind divider 10.

24 A. And referring to your previous question that in this

25 case, profitability of business is tripling compared to

1 the fundraising efforts that Oxus and you made in

2 the summer of 2008; do you see that?

3 A. Yes.

4 Q. And you say:

5 «There was significant interest in the project…»

6 A. Yes.

7 Q. And you say many of the banks approached were

8 «enthusiastic»?

9 A. Absolutely, yes.

10 Q. I don’t think we have had any disclosure of any

11 documents evidencing those meetings; would that be

12 right?

13 A. All documents I had, been disclosed, so I am just

14 referring to what I had.

15 Q. Would it be fair to say that most of the potential

16 lenders you approached rejected the idea before they

17 even met you?

18 A. Absolutely not. Absolutely not.

19 Q. So you had lots of interest as a result of

20 the information memorandum, did you?

21 A. Yes, we had a lot of interest. I managed,

22 in December 2008, for example, to meet ex-President of

23 Germany, who had been, at that time, chairman of

24 the board of European Bank for Reconstruction and

25 Development, so I had meetings on most possible highest

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1 level and everybody at that time was interested in

2 Russian infrastructure projects, because there were not

3 any Russian ports or infrastructure projects privately

4 owned on the market for financing or development. And

5 as you know, the regulation for the major European

6 banks, their balance sheet, to have a stable and good

7 balance sheet, existence of the infrastructure projects

8 were considered to be a very good factor for the Bank’s

9 balance sheet.

10 So the international banks have been really hungry

11 for Russian infrastructure projects, because it’s been

12 considered to be a strategic investment for long term,

13 and new country, because none of the banks had any

14 serious, big, Russian infrastructure projects.

15 So, for example, for European Bank for

16 Reconstruction and Development, development of Vyborg

17 Port, it was considered as the biggest in their ever

18 history infrastructure project in Russia, for example.

19 And the same actually relates to other banks, and in

20 spite — despite of the crisis, they still were hungry

21 and very much interested in Russian infrastructure port

22 projects, and specially in Western Terminal, because

23 what we briefly discussed before, Western Terminal was

24 one of very few where we owned the berths, because

25 normally, and based on the Russian law, sea law, that

1 Rosmorport and the way they make decision.

2 So they definitely, while making a strategic

3 decision of investing in my projects, such banks like

4 EBRD, they had a discussions with Rosmorport, and I know

5 about that because I’ve been told about such discussions

6 by Mr Negodov, at that time, head of Rosmorport, which

7 name we discussed on cross-examination of Mr Guz.

8 Q. Dr Arkhangelsky, let’s take it in stages: did you tell

9 Mr Bromley-Martin, or anybody at Oxus, that you had

10 paid, or were planning to pay, US $160 million to an

11 official in Russia —

12 A. I am referring to —

13 Q. Sorry, can I finish the question, for the transcript.

14 A. Yes.

15 Q. — in order to develop the Western Terminal?

16 A. I’m referring to the transcript for Wednesday where

17 I said that I have not said to anybody at all about

18 this. So I only told to my employees about the

19 contracts which had to be signed and financed, but

20 nobody were aware what for and how it would work.

21 So I just want to confirm it for the third time that

22 I have not said that to anybody.

23 Q. Therefore, it follows, doesn’t it, that

24 Mr Bromley-Martin wouldn’t have any basis to inform any

25 of the banks of these payments? He would have no reason

193 195

1 all the berths in Russia belongs to the Russian State.

2 And only due to the fact that Western Terminal been

3 privatised before that particular law, so actually the

4 Western Terminal was one of very few in the former

5 Soviet Union which had been owned privately, and it

6 means that, in fact, Western Terminal and me, I’ve been

7 owning just a piece of the Russian border, which was

8 quite unusual, and for banks it was very attractive.

9 Q. Dr Arkhangelsky, I think it is right, isn’t it, that you

10 didn’t disclose to any of the banks that you approached

11 for potential funding of the development of the Western

12 Terminal — you didn’t inform any of the banks of

13 the payments you had made to the official, did you?

14 A. Sorry, investment memorandum been done by Oxus, so it

15 was Robin Bromley-Martin and two of his colleagues who

16 was speaking directly to the banks and who was

17 organising meetings, if necessary, because it is the

18 normal and compulsory part of any financing, bankers,

19 especially at the high level, they wanted to see the

20 owner of the business and the decision maker.

21 Such banks, like European Bank for Reconstruction

22 and Development, for example, they were already

23 financing, for example, some projects of Rosmorport, so

24 they were aware of the Russian practice and Russian

25 strategies, and they’ve been aware of the structure of

1 even to know about them, would he?

2 A. No, he just had the figures coming from the group as

3 a basis for his business plan and calculations.

4 Q. And wouldn’t you agree that if any of these banks had

5 been made aware that your development plan for Western

6 Terminal involved the payment by you of US $160 million

7 to a Russian official to procure the development, do you

8 not agree that there would be no chance that any of

9 those financiers would have touched that proposition

10 with a barge pole?

11 A. They would be never told about that.

12 Q. Do you agree if they had been told about it, they

13 would —

14 A. They would never be — they would never, ever have been

15 told about that. Unless we had these proceedings here,

16 nobody ever would be aware about anything like this.

17 Q. Do you agree that if they had become aware of it —

18 A. No, but they could not be aware about that, because it’s

19 against the corporate governance and the basic policy of

20 any lending bank.

21 Q. Yes. So you were happy, were you, or you were prepared,

22 to make presentations to lenders without disclosing

23 those payments, even though that would be against —

24 even though — I will stop there.

25 You were comfortable with that, were you?

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1 A. Yes, it’s a standard practice of doing business of that

2 size in Russia.

3 Q. And you saw nothing wrong in it, did you,

4 Dr Arkhangelsky?

5 A. I didn’t like that personally, but I thought that as

6 long as I am in so big project myself, I have to play

7 the rules of the Russian Government and the Russian

8 State.

9 Q. And why didn’t you like it?

10 A. Because I am educated in the European way. I spent most

11 of my life abroad and I know the rules and I want

12 European rules to be implemented in Russia, but the

13 longer I live abroad and seen what’s happened to me,

14 I think in Russia, it’s never possible.

15 Q. And why would it be contrary to a western approach?

16 What was wrong with it? What was wrong with the

17 payment?

18 A. Because I believe that all bureaucrats have to work and

19 behave in the interests of the State, and not that much

20 as in the feudal country of Russia, and they just

21 oriented on personal needs.

22 Q. Could you please look at , paragraph 90,

23 please. I want to ask you about BNP Paribas, please.

24 You said:

25 «The Bank which showed the greatest interest … was

1 A. No problem, take your time. I have a ticket in

2 six hours, so we can continue as much as you want.

3 Q. Yes, it is .

4 You can see in the middle of the page there is

5 a paragraph that talks about the acquisition of

6 the Western Terminal, and it says that:

7 «The Western Terminal was acquired for

8 US $220 million which was funded by OMG’s internal

9 resources —»

10 A. Sorry, to which of the documents are you referring?

11 Q. .

12 A. It’s in the middle of the page?

13 Q. Yes. Can you see that?

14 A. Yes.

15 Q. And we discussed that, I think, on Wednesday?

16 A. Yes.

17 Q. Can we go over the page, please, to . You

18 can see the heading, «Funding Requirement», and what was

19 said to potential funders in this information memorandum

20 was this:

21 «OMG are therefore seeking to raise up to

22 $300 million in long term debt to fund the upgrade of

23 the terminal and to repay $90 million of short term debt

24 used to acquire the terminal in 2007.»

25 A. Yes.

197 199

1 BNP Paribas in Paris…»

2 You said:

3 «On 12 September 2008 BNP Paribas in Paris wrote to

4 me to say that they believed the project had good

5 fundamentals and that they were willing in principle to

6 fund the project by making available a US $300 million

7 debt facility.»

8 Can you see that?

9 A. Number 90; yes?

10 Q. Yes.

11 A. Yes.

12 Q. You go on to say this:

13 «This would have been sufficient both to pay for the

14 redevelopment of Western Terminal and to restructure

15 around US $80 million of the Group’s debt.»

16 Can you see that?

17 A. Yes.

18 Q. The information memorandum said that the 300 million was

19 required to finance the acquisition of Western Terminal

20 and the short term debt taken out for that — sorry,

21 I am misquoting. Sorry, Dr Arkhangelsky, scrub that.

22 It has been a long day. Scrub that.

23 I just need to get the reference in the final

24 information memorandum.

25 Sorry, my Lord, I apologise.

1 Q. Can you see that?

2 A. Yes.

3 Q. And I was just querying your witness statement: where

4 you say that the $300 million was going to allow you to

5 develop Western Terminal for 220 and to refinance

6 general group debts of 80 —

7 A. Yes.

8 Q. — wasn’t it right that you were telling the banks that

9 you were approaching for finance — weren’t you telling

10 them that all the 300 million was going to be used

11 either to develop Western Terminal or to pay off a loan

12 that had been taken out specifically to buy Western

13 Terminal?

14 A. I should say this: that we made an investment memorandum

15 in, whatever, summer, autumn, 2008, and then

16 Mr Bromley-Martin’s colleagues started to speak to

17 the banks. The major condition of all the international

18 banks, they were prepared to finance, subject to return

19 any debt to the Russian banks. So it was their major

20 condition.

21 So international banks, and actually we were

22 discussing syndication, that BNP would be the leading

23 bank, and then it would be 10, 15, 20 banks, including

24 EBRD and others, or European Investment Bank,

25 Scandinavia Investment Bank and so on, that they were

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1 requiring special structuring. And one of the key

2 points was to refinance all the Russian debt, because

3 the foreign banks, they wanted to create different

4 structures in Cyprus and so on, to lay the projects in

5 the standard financing guidelines done by the

6 international banks in respect to ex-Soviet Union

7 projects.

8 So that was the Bank’s condition, that we have to

9 get rid of most of the local Russian banks’ loans.

10 Q. Could you be shown , please. This is

11 a letter of 12 September 2008 from BNP Paribas to you

12 and to others; can you see that?

13 A. Yes.

14 Q. And it is not right, is it, for you to say that they had

15 agreed; what you say in your statement is:

16 «… they were willing in principle to fund the

17 project…»

18 That isn’t actually right, is it; BNP Paribas never

19 said that they were willing in principle to fund the

20 project, did they?

21 A. No, they were willing to fund the project and this

22 letter you are referring to, it’s their first formal

23 initial offer to us. It’s a subject — subject to

24 further negotiations because BNP Paribas, as well as all

25 other international banks, have strong corporate

1 Q. Yes, the first page on the screen, I think.

2 A. Yes.

3 Q. And then the second page, they explain how they would

4 take the matter forward from their side?

5 A. Yes.

6 Q. All right? The top of that page, they say:

7 «The following sections are intended to provide you

8 with the requirements of BNP Paribas (as

9 an international financing institution) in order to be

10 ultimately in a position to lend to the Project.»

11 Do you see that?

12 A. Yes.

13 Q. And they talk about different phases, and they say:

14 «During a first phase …»

15 And you can see what it says there.

16 A. Yes.

17 Q. It says:

18 «(i) the risks related to the Project will need to

19 be reviewed (ii) a financial model developed (iii) a

20 term-sheet agreed and (iv) a review of the involvement

21 of Multilaterals institutions and/or ECAs conducted.»

22 A. Yes, and most of these things been done already by that

23 date. So market analysis been done, paid by the

24 European Bank for Reconstruction and Development, and it

25 comprised Western Terminal and Vyborg Port, so the

201

1 governance and guidelines, what and how to do, and that

2 was the first initial offer. And normally it would work

3 like this, so —

4 Q. Sorry, sorry. Can I ask you questions —

5 A. — it’s a kind of a firm offer.

6 Q. Can I ask you questions, please.

7 If you look at this letter, they are writing to you,

8 providing you with this letter of interest; can you see

9 the very first sentence?

10 A. Yes.

11 Q. I’m going to take you through — not today — the

12 BNP Paribas letters to show the state, or the status, of

13 BNP Paribas’ interest in Western Terminal, all right?

14 A. Yes.

15 Q. We are starting now with a letter of interest, and it is

16 only a letter of interest, isn’t it? It’s not

17 an agreement in principle to fund, is it?

18 A. No, but it was on a much later stage.

19 Q. And if we go over the page, you can see — sorry, on the

20 first page, they say in the third paragraph:

21 «We have reviewed the preliminary information

22 provided to us and believe that the Project incorporates

23 good fundamentals.»

24 A. Sorry, can I have this page? You are reading the first

25 page?

203

1 marketing analysis has been done.

2 Health and safety analysis has been done already by

3 that time. So most of these due diligence things have

4 been done already and presented to the Bank. And

5 technical advisers and managers, we’ve been in

6 the process of tendering to two of them. I don’t

7 remember, Scott Wilson and something like that. So it’s

8 two big English companies who have been preappointed as

9 project management companies.

10 So most of the things we are describing in this

11 letter, knowing their standard requirements, we have

12 done them in advance, just to save time.

13 Q. Dr Arkhangelsky, it is right, isn’t it, that most of

14 this letter was setting out the various conditions of

15 BNP Paribas’ participation in this project?

16 A. Yes, and most of the conditions been fulfilled by that

17 time already.

18 Q. Yes, but not by them. BNP Paribas hadn’t carried out

19 any due diligence by then, had they?

20 A. Due diligence is done not by BNP Paribas, but it is

21 international, independent consultants, like, for

22 example, Beckett Rankine and so on, who are normally

23 appointed by such banks like EBRD. They were doing all

24 these due diligence things, and by that time, most of

25 the documents have been finalised already.

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1 MR LORD: My Lord, I see the time.

2 MR JUSTICE HILDYARD: How do they end up? How long is this

3 letter? I simply can’t remember.

4 A. Sorry?

5 MR JUSTICE HILDYARD: I’m so sorry, Mr Arkhangelsky.

6 A. No, no, I’m trying to understand your question.

7 MR JUSTICE HILDYARD: I don’t know how many more pages there

8 are of this letter. Ah, just the one.

9 MR LORD: Given the time, I think I had better stop, my

10 Lord —

11 A. Three pages, three pages.

12 MR LORD: Unless your Lordship has five minutes. I wanted

13 to finish the letter, but it is quite important ground

14 and it is up to your Lordship.

15 MR JUSTICE HILDYARD: We are all right for five minutes, but

16 we need just five minutes to try and agree some

17 timetabling.

18 MR LORD: I will stop on this letter. I will finish at this

19 letter.

20 MR JUSTICE HILDYARD: Yes.

21 MR LORD: Sorry, Dr Arkhangelsky.

22 This letter, I suggest, is explaining that

23 BNP Paribas is going to want to carry out risk analysis

24 and due diligence; in other words it is going to want to

25 have that done on its behalf. Whether it does it or it

1 Q. So BNP Paribas is proposing to carry out a pretty

2 thorough review of your development plan, isn’t it?

3 A. Yes.

4 Q. Then on the last page —

5 A. And as I said, for example, market advice or market

6 analysis, which is one of the key issues, already been

7 done by that time.

8 Q. But they are going to check all that, aren’t they?

9 A. Of course, yes, but normally it takes a rather short

10 period of time if you have a first class international

11 company who has conducted that already, especially on

12 behalf of European Bank for Reconstruction and

13 Development.

14 Q. At , they say, second paragraph:

15 «At the end of the first phase and based on the

16 above tasks, we would be in a position to approach our

17 risk department to provide a commitment to the Project.»

18 So, only if they are satisfied after their risk

19 analysis and due diligence process and their financial

20 modelling will they even approach their risk department

21 to provide a commitment to the project; isn’t that

22 right?

23 A. They had a so good reputation and so good knowledge of

24 our Oxus people, so they had a full confidence in them.

25 Oxus had professional liabilities, as far as

205 207

1 gets a contractor, that’s due diligence risk analysis

2 conducted by and on behalf of the Bank, isn’t it?

3 A. It’s us who would employ independent consultants.

4 Q. We will come to that. So that you don’t say anything

5 that might be wrong, we see in another letter that they

6 want to have an independent consultant.

7 A. Yes, absolutely.

8 Q. And they object to the idea that you can suggest one.

9 A. Let’s see this on Monday.

10 Q. That will be on Monday.

11 A. Yes, I don’t remember each and every.

12 Q. Mm. They want their own independent consultants.

13 A. No problem, but the fact is that — and it’s a standard

14 fact — that if, for example, valuation of our project

15 already been done by European Bank for Reconstruction

16 and Development, so most probably all these banks or

17 independent consultants would take these documents and

18 consider them as a serious one, just to save time and

19 money for everybody, so that would be standard practice.

20 Q. You can see the sort of investigations they’re going to

21 carry out on page , can’t you?

22 A. Yes.

23 Q. You can see the risk analysis and due diligence process

24 and the financial model; can you see that?

25 A. Yes.

1 I understood. So definitely, this is a very formal

2 letter, but I got a feeling that, considering experience

3 of Oxus and their specialists, BNP Paribas had a full

4 confidence to the project and they were well prepared to

5 finance that by that time already, subject to some

6 technical things and documentation which had to be

7 produced, but, as I said, most of the documents have

8 been done by that time on behalf of European Bank for

9 Reconstruction and Development.

10 Q. If you look at the timing in this letter, BNP Paribas

11 are saying that they think:

12 «… overall due diligence can be achieved in

13 a reasonable period of time (around 3-4 months)…»

14 A. Yes, absolutely.

15 Q. Then they end up by saying, second to last paragraph:

16 «Please let us know if the above is agreeable to you

17 in order for us to provide you with a proposal in

18 relation to our remuneration.»

19 Do you see that?

20 A. Sorry?

21 Q. «Please let us know…»

22 A. «Please let us know…»

23 Yes.

24 Q. So they were only going to go forward, weren’t they,

25 with even this proposal if you agreed to pay something?

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1 A. Of course, because consultants had to be formally

2 employed and all these had to be paid, yes. That’s

3 a standard practice.

4 MR LORD: My Lord, I think that would be, obviously,

5 a necessary and convenient point to stop.

6 MR JUSTICE HILDYARD: Very good, well done.

7 Housekeeping

8 MR JUSTICE HILDYARD: Timing?

9 MR LORD: My Lord, I haven’t made quite as much progress

10 this week as I had hoped. I would imagine I might need

11 to go into Wednesday with Dr Arkhangelsky, and I suggest

12 that in those circumstances, we have Mrs Arkhangelskaya

13 on Friday, if your Lordship could travel, or if the

14 court can sit for a day on Friday. We would finish

15 Dr Arkhangelsky on Wednesday and then Thursday would be

16 a reading day and Friday would be Mrs Arkhangelskaya.

17 That would allow me to finish my questions with this

18 witness, make up some lost ground we have lost this

19 week, one way or another, and that would be acceptable

20 as far as I am concerned, but obviously it is a matter

21 for your Lordship and the witnesses whether that is

22 acceptable to them.

23 MR JUSTICE HILDYARD: My understanding of the parameters is

24 that Mrs Arkhangelskaya must be given at least

25 a half-day in order for you to swap roles and,

1 MR ARKHANGELSKY: The sooner the better. The sooner the

2 cheaper, for sure.

3 MR LORD: But my understanding was that that would mean that

4 Dr Arkhangelsky would go back home on Wednesday and then

5 Mrs Arkhangelskaya can travel up for Friday, so the

6 handover, there is a whole day, at least a day, to

7 effect the handover, as it were.

8 MR ARKHANGELSKY: No, no, Thursday — as far as we

9 understood, the Thursday would be good enough, so if you

10 allow that.

11 MR JUSTICE HILDYARD: Mr Lord, do you need the Thursday?

12 MR LORD: I would welcome the Thursday because it would mean

13 that I can take stock and I can review more carefully

14 what matters I need to put to Mrs Arkhangelskaya in

15 the light of what I put to Dr Arkhangelsky. So I would

16 anticipate being able to put — I don’t intend to

17 duplicate matters if I feel I have adequately traversed

18 them with this witness, and I would carry out a review

19 and a taking stock, which I would greatly appreciate,

20 and then I would be definitely a day or less with

21 Mrs Arkhangelskaya on Friday.

22 MR JUSTICE HILDYARD: Because the price of us moving to

23 Friday — which is not my preferred thing, but, equally,

24 I want to be even-handed, even though the Bank has the

25 considerable advantage in terms of representation.

209

1 therefore, if you were to finish on Wednesday at

2 lunchtime, that could be achieved. But you don’t think

3 you would?

4 MR LORD: I would hope to finish by lunchtime, but it might

5 be a bit touch and go. I hope to finish by lunchtime,

6 but it always depends. I think I may do, and it may be

7 that we could sit a little bit earlier, a day or two, to

8 make up some ground or —

9 MR ARKHANGELSKY: But you initially indicated that it should

10 be Thursday, so it would be really convenient to have

11 a whole Thursday for her, and even for travelling, or —

12 no?

13 MR JUSTICE HILDYARD: Well, initially —

14 MR ARKHANGELSKY: We would suggest on Thursday, yes, for

15 her.

16 MR JUSTICE HILDYARD: Is that her — what arrangements have

17 been made thus far?

18 MR ARKHANGELSKY: Yes, because it is much easier to travel

19 on Thursday, yes, in any respect.

20 MR JUSTICE HILDYARD: What arrangements have been made for

21 her thus far?

22 MR ARKHANGELSKY: No arrangements yet. So we are waiting

23 for your advice on that.

24 MR JUSTICE HILDYARD: When do you have to make the

25 arrangements?

211

1 I would have preferred Thursday, but I quite understand

2 that this is a long and arduous cross-examination for

3 all concerned, but the price of it would be you would be

4 guillotined on the Friday at 4.00 pm in order to allow

5 us to get the train back.

6 MR LORD: Yes, absolutely. And if the decision could be

7 deferred until Monday, for example, I could then see —

8 I don’t know how late we can change the trains, but

9 I will have a better idea by Monday at 4.00 or 4.30.

10 Your Lordship, I am very happy to keep to

11 the Thursday, but if I have to finish by Wednesday

12 lunchtime with this witness, who is the most important

13 witness, come what may, then I want to make sure I could

14 finish later that day, even an hour, so I could put

15 things, and I’m conscious I must allow a break and

16 a handover and so on.

17 So it is half for me and it is half for the

18 requirements of Mr Arkhangelsky.

19 MR JUSTICE HILDYARD: Yes. I think safety first is the

20 Friday, but it will be guillotined at 4.00 pm on the

21 Friday, and I wouldn’t want her to have too long a day,

22 so I wouldn’t imagine starting before 9.45. Those would

23 be the ground rules on the Friday.

24 MR LORD: That’s fine.

25 MR JUSTICE HILDYARD: Dr Arkhangelsky, if you can wait until

210 212
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1 Monday —

2 MR ARKHANGELSKY: Yes, we have to wait, so we are in your

3 hands and if you can, yes, find the …

4 MR JUSTICE HILDYARD: If you can wait until the Monday and

5 you prefer Thursday, then there is a possibility that

6 you will get your preference when Mr Lord has, over the

7 weekend, gone through his notes and refreshed his view.

8 MR ARKHANGELSKY: Yes, and maybe one more point for

9 Thursday, that if — because most probably she would

10 fly, so it means that starting just for security reasons

11 10.30 on Thursday, and then have a longer day as you

12 need.

13 MR JUSTICE HILDYARD: Well, at the moment, safety first is

14 Friday, so that she would, I suppose, come — I don’t

15 know whether she proposes to do a day trip, does she?

16 MR ARKHANGELSKY: That’s preferable, yes.

17 MR LORD: Well, my Lord, it would be safer to say Friday,

18 I think, in those circumstances. I think we should say

19 Friday today, settle on Friday.

20 MR JUSTICE HILDYARD: Friday, but you realise she may not be

21 here early on Friday on that footing, if she is flying

22 out.

23 MR ARKHANGELSKY: In between 10.00 and 10.30, roughly, yes.

24 MR JUSTICE HILDYARD: Roughly?

25 MR ARKHANGELSKY: I mean, she probably would be by 10.00,

1 not here for the start at 9.45. I think that is the

2 best I can do.

3 MR LORD: Thank you, my Lord.

4 MR JUSTICE HILDYARD: Thank you very much. It’s been, even

5 though a short week, quite a hard week, I think, so

6 I wish you a very good weekend.

7 MR ARKHANGELSKY: I’m sorry. About Monday, what time do we

8 start?

9 MR JUSTICE HILDYARD: Good question.

10 MR ARKHANGELSKY: May I suggest 10.30, the same, for the

11 reasons of the flight, so I take an early flight, never

12 knows when it comes.

13 MR JUSTICE HILDYARD: Well, I don’t approve the early

14 flight. That is a matter for your risk and my fury if

15 you were late, but I will agree to 10.30 on Monday.

16 MR ARKHANGELSKY: Yes, I hope that will be in order.

17 MR JUSTICE HILDYARD: Thank you very much. Thank you all,

18 it has been a very hard week. Thank you.

19 (4.15 pm)

20 (The court adjourned until 10.30 am on

21 Monday, 22 February 2016)

22

23

24

25

213 215

1 but, you know, sometimes flight are delayed.

2 MR LORD: My Lord, I can’t give any promises; if the flight

3 is delayed by two hours, then —

4 MR ARKHANGELSKY: No, no, no, she will take the first

5 possible flight but, you know … she will be here early

6 but, you never know. It’s France, it’s strikes and

7 socialists.

8 MR LORD: My Lord, I had anticipated that

9 Mrs Arkhangelskaya, if she is flying, would come up the

10 night before, the evening before, to be ready for the

11 next day.

12 MR JUSTICE HILDYARD: I think that — I am sorry to put this

13 this way and I realise that it is an imposition in some

14 ways, but I think she must come on the Thursday to be

15 available on the Friday. After all, if she were to

16 arrive on the Thursday, I haven’t imposed —

17 MR ARKHANGELSKY: Okay, we are in your hands. Just tell us

18 when she come and so that we can —

19 MR JUSTICE HILDYARD: Yes. I think, for certainty’s sake,

20 she must be here by 9.45 am on Friday, and I will

21 guillotine her cross-examination at 4.00 on Friday.

22 MR ARKHANGELSKY: Very good.

23 MR JUSTICE HILDYARD: I think that that is the safest way to

24 do it, but that does imply that she must be here on the

25 Thursday, because it would be quite wrong if she were

214

1 INDEX
2 PAGE
3 MR VITALY DMITRIEVICH ARKHANGELSKY ………………. 5
4 (continued) ……
Cross-examination by MR LORD (continued) 5
5 Housekeeping ………………………………… 113
6 Cross-examination by MR LORD (continued) …. 123
7 Housekeeping ………………………………… 209
8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

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February 19, 2016 Day 13

A

abandoning (2) 27:2,5 abilities (1) 3:11 ability (1) 171:17 able (22) 4:21 16:12

16:17,20 39:5 81:17 88:13 92:13 98:14,21 104:1 117:18 120:2 121:6 137:7 140:21 163:20 164:6 170:7 173:19,20 211:16

abroad (2) 197:11,13 absolutely (61) 4:11 15:7 16:14,19

17:24 19:8 22:2 23:19 24:18 30:24 53:22 64:20 67:3 70:16 76:15,25 78:3,15 87:14 91:18 95:17 96:2 100:20 104:22 108:2 123:9,17 124:9 135:17 137:16,16,19 138:8 138:18,24 139:19 141:21,21 154:9 155:6 158:12,14,21 158:21 164:21 168:5 169:4 171:8 171:10 172:12 178:19 179:13 180:16 190:12,21 192:9,18,18 206:7 208:14 212:6

accept (14) 13:7 14:24 22:8 35:2 40:11 58:7 59:21,24 60:12 145:24 147:3 147:3 148:15 163:20

acceptable (5) 48:10 113:16 156:19 209:19,22

accepted (1) 74:19 access (2) 5:7,14 account (9) 9:10

12:25 16:4 25:14 101:3 135:22 140:17 142:18 145:16

accountancy (1) 33:11 accountant (3) 10:8

142:8 157:12

accountants (1)

172:24 accounted (1) 31:7 accounting (25) 2:6

3:4 6:10 7:23,24 8:7 10:2,25 17:25 18:2 25:7 29:10 32:24 36:18,19,25 37:13,15 39:4 109:15,18 125:9 133:3 135:15 171:25

accounts (79) 1:20,22 5:22 6:19 7:2,4,7 7:16 8:15,25,25 9:20,24 10:17 11:4 11:5,9,11,15,19 18:16 21:12 25:2 28:3,14,18 30:1,4,7 30:9,13,13,19,22 31:8,16,24 36:10 36:15 38:4,5,9 39:16 40:12,17,18 79:14 86:23 100:18

101:1,6,9 106:21 advisers (7) 4:13,17 altered (1) 160:1 approve (1) 215:13 211:8,15 212:18,25 assumed (2) 50:10
107:3 109:7,8,14 9:11 29:18 35:9,11 alternative (1) 116:23 approximately (1) 213:2,8,16,23,25 143:10
110:22 125:11 204:5 Alvarez (1) 140:19 104:9 214:4,17,22 215:7 Assuming (1) 114:8
127:23 131:7,25 advising (1) 34:23 ambition (1) 173:11 April (9) 42:22 43:14 215:10,16 216:3 assumption (2) 147:1
133:5 134:2,6 advocates (1) 158:18 Ameli (1) 118:6 43:18 53:7 56:5,7 Arkhangelsky’s (1) 182:2
135:12,16 139:3 aerial (3) 159:24 American (3) 81:7 64:5 182:15 183:13 143:19 assumptions (11)
140:22 141:24 165:14 166:9 88:19 124:25 aquatoria (2) 176:23 armed (1) 86:12 13:25 14:16 18:8
144:11,25 148:23 affairs (2) 49:15 53:12 amount (14) 14:7 176:24 arose (2) 116:18 19:12,24 20:14,17
150:11,17 151:2 affect (1) 17:19 15:1 47:13 58:4 archive (1) 122:13 150:12 24:15 174:22 182:5
152:4,5 172:24 affidavit (2) 6:22 7:14 95:12 98:18 118:17 arduous (1) 212:2 arranged (1) 4:10 182:10
accurate (2) 23:12 affidavits (1) 106:19 132:17 150:12 area (5) 12:21 85:21 arrangements (7) 55:5 attach (1) 137:4
104:21 affiliated (8) 19:20 154:1 173:4 178:20 113:19 114:15 120:1 128:13 attached (1) 111:3
accusations (1) 84:1 55:14,20 59:4 178:21,23 124:14 210:16,20,22,25 attachment (1) 187:4
achieved (3) 103:12 152:6,9,16,18 amounts (3) 67:18 arising (3) 131:4 136:2 arrest (7) 66:10 68:1 attend (1) 119:25
208:12 210:2 affiliation (3) 152:10 70:19 143:4 174:5 69:4,6,19,21 70:21 attention (3) 3:25
acquire (4) 48:20 152:24 153:5 analysis (10) 40:19 Arkhangelskaya (9) arrested (7) 65:6,8 142:24 144:10
81:21 163:16 afloat (4) 68:6,14 173:8 203:23 204:1 118:9 120:8 209:12 68:19,22,23 70:19 attract (1) 183:23
199:24 69:11 71:18 204:2 205:23 206:1 209:16,24 211:5,14 70:24 attractive (4) 24:22,23
acquired (16) 32:9,9 afraid (8) 18:11 25:12 206:23 207:6,19 211:21 214:9 arrests (1) 70:20 72:5 194:8
45:4 46:10 50:11 86:9 117:13 160:6 and/or (1) 203:21 Arkhangelskaya’s (1) arrive (1) 214:16 audio (2) 119:8
52:6 57:14 58:19 162:17 165:21 annum (1) 185:12 119:25 article (1) 3:18 120:11
58:25 59:5 83:11 172:20 answer (34) 3:11 Arkhangelsky (200) artificial (2) 151:20 audit (1) 86:22
159:13,17 160:2 afternoon (3) 12:2 11:17 13:12 17:14 1:6 3:8,10,15,18 170:13 audited (4) 30:1,4
172:3 199:7 114:10 121:2 18:11,21 19:10,17 4:7,19,25 5:19,21 arts (1) 81:11 31:16 36:10
acquiring (2) 61:4 age (1) 122:5 19:21 20:1,3,7,21 6:5,22 7:2 9:19 ascertained (1) auditors (12) 8:19
87:13 agency (3) 6:12 104:2 21:24 33:3,8 35:3 10:16 11:17 12:7 116:12 9:14 29:18 37:24
acquisition (14) 31:22 104:22 39:17 54:25 55:6 13:11,18 14:2 ascribing (1) 172:3 37:25 38:3,4,12,18
35:20 38:8 40:6 aggregate (3) 14:7 68:11 75:12 80:7 15:14 16:9,17 aside (1) 83:8 38:24 39:10,11
43:25 45:2 57:12 15:1,5 83:24 84:24 105:17 18:10,21 19:15,22 asked (29) 1:10 5:21 August (9) 43:20
82:23 83:8 85:14 ago (6) 19:3 39:18 105:18 106:3,5,6,8 20:8 21:1,17 22:17 12:7,10,12 21:17 51:15 64:1 77:21
92:18 99:19 198:19 72:18 108:1 119:10 139:21,24 188:13 25:3 26:5 27:9 25:12 33:17 38:15 87:9 109:19 160:25
199:5 136:25 answers (11) 16:15 28:19 30:1,21 39:9 49:16 54:2 161:17 165:14
acquisitions (8) 9:2,3 agree (24) 3:15 14:10 33:19 40:23 76:21 32:18 33:14 34:19 82:19 84:17,18 authorisations (1)
9:13,13,18 23:19 15:7 20:2 23:15,17 112:15 186:13 35:7,18 37:1 38:5 111:11 120:18 176:10
23:20 24:17 52:7 58:24 65:23 188:3,4,6 189:19 38:11 40:2,11,22 126:15 130:1 144:7 authorities (9) 33:1
acted (1) 35:11 89:19 117:7 133:5 190:3 41:9,22 42:2,9 43:5 149:3,13,15,17,19 81:2 106:10 138:21
acting (1) 35:12 134:4,5,5 137:10 anti-torpedo (1) 170:4 45:15 47:23 50:9 158:3 163:13 139:12 140:16
active (2) 53:21 67:7 140:4 154:6 196:4 anticipate (1) 211:16 51:4 52:4 53:4 175:20 191:19 161:22 174:9 176:6
activity (9) 8:24 196:8,12,17 205:16 anticipated (1) 214:8 54:24 56:7,20 asking (25) 9:19,21 authority (5) 76:20,23
107:10,19,22 215:15 Antiquar (2) 81:8,9 57:22 59:21 62:17 13:20 16:11,21 134:24 175:25
108:10,16,18 110:3 agreeable (1) 208:16 anxious (4) 26:2,13 63:4 66:23 67:11 17:7 38:13 42:2 176:5
123:23 agreed (6) 48:14 75:18 133:2 68:20 70:12 72:10 49:14 59:25 64:17 automatically (1)
acts (1) 89:24 178:4,15 201:15 anybody (7) 82:19 73:14,24 74:3,23 75:15 80:12,18 135:9
actual (1) 40:6 203:20 208:25 98:15 113:20 115:9 75:11,17,25 77:12 88:23 97:10,15 autumn (1) 200:15
addition (1) 169:4 agreeing (4) 8:13 195:9,17,22 80:8,11 84:2,17 98:8 99:16 109:11 available (22) 2:24
additional (3) 47:16 19:25 33:8 98:21 anyway (3) 90:13 89:10 90:4,7 91:21 110:11 123:3 4:14 40:14 67:21
48:20 92:14 agreement (25) 48:11 164:22 183:19 92:15 93:6,20 137:20 166:7 191:7 68:11 69:4 70:2
address (6) 113:23 48:17,17 55:21 apologise (7) 35:21 95:22 96:22 100:17 asks (1) 186:3 71:1 113:22 114:2
114:6 116:9,10,15 58:2,9 62:7 63:8,12 70:10 106:25 101:11 102:8 aspects (1) 172:7 114:5,18,19 116:8
135:24 63:14,15,16,19,20 130:23 131:17 103:11 104:5 106:3 assessment (1) 117:24 118:23
adept (1) 6:18 63:21,23 78:12,16 148:5 198:25 107:2 110:17 104:21 120:6 137:18
adequately (1) 211:17 87:9 89:18 90:14 apparently (1) 54:19 111:15 112:2,16 asset (16) 3:1 36:24 154:10 155:9 198:6
adjourned (1) 215:20 90:14 177:15,16 appear (3) 127:25 116:20 117:3,5 81:16 82:12,23 214:15
Adjournment (1) 202:17 132:22 133:10 118:18,21 119:3,14 83:10,11,15 85:16 avenue (1) 2:2
113:9 agreements (6) 34:2,4 appeared (5) 31:24 120:3,15,23 121:5 86:3,14 98:15 average (3) 105:13
adjusted (2) 189:20 34:6 38:21 39:6 129:8 136:24 121:11,19 122:17 99:13 129:21 171:1 181:24 182:7
189:23 45:25 143:15 188:20 123:3 125:6 126:14 178:17 aviation (1) 164:18
administration (2) Ah (1) 205:8 appears (3) 112:11 127:1,12 128:21 assets (33) 36:18 avoid (4) 69:6 74:6
136:11 161:23 air (1) 160:12 127:24 143:19 130:3,15 131:2,6 48:10 81:15 82:3 115:9,20
administrative (2) alert (1) 116:20 applied (2) 175:24 131:25 133:2 85:7 99:7 106:16 aware (20) 8:16 38:19
114:23 117:21 alerted (1) 74:25 190:5 134:17 139:4 125:21 126:1,2,3,5 39:12,23 62:11
administrator (2) Alexander (1) 83:17 apply (2) 22:3 151:24 140:17,23 141:9 126:8 127:9,21,25 64:2 75:9 93:10
136:17,21 Alexey (3) 10:10,12 appointed (1) 204:23 143:22 144:3,7 129:1,5 132:9,9,13 95:17 124:18 149:2
adopt (1) 133:3 187:20 appraised (2) 111:25 146:10,16 147:8 132:22 133:9,25 173:21 187:11
adopted (3) 6:10 Alfa (4) 157:19,20,20 178:8 150:8 151:6,16 134:17 135:4 138:4 194:24,25 195:20
117:17 125:9 157:25 appreciate (4) 1:12 152:7 153:23 156:5 138:23 142:9,18 196:5,16,17,18
advance (4) 52:23 allegation (1) 18:25 14:6 16:23 211:19 158:19 159:3 160:9 153:2 154:3,10
58:7 171:20 204:12 allegations (1) 67:10 appreciated (1) 1:8 162:16 163:2,3,6 assets/characteristic… B
advanced (3) 58:3 allege (2) 66:20,22 appreciation (1) 76:8 164:6 165:19 167:1 184:18 b (1) 126:12
63:23 88:10 alleged (3) 67:10,12 approach (4) 173:16 168:7 175:17 assigned (2) 38:25
B- (2) 103:20,21
advantage (2) 76:4 67:13 197:15 207:16,20 177:13,15,20 103:19
back (24) 16:22 21:18
211:25 allegedly (1) 60:16 approached (6) 91:1 180:18 182:24 assist (2) 26:5 137:25
22:7 25:4 35:22
advantages (2) 1:22 allow (5) 200:4 94:23 186:9 192:7 183:17 184:2 185:5 assisting (2) 93:22
56:3 58:4,10 70:11
167:18 209:17 211:10 192:16 194:10 186:24 187:21 94:1
91:21 100:18
advice (10) 9:16 11:1 212:4,15 approaching (2) 69:9 189:25 194:9 195:8 assume (10) 15:9
101:21 116:1,14
26:15 37:17 47:1,6 allowed (3) 45:9 200:9 197:4 198:21 38:12 73:3 91:16
120:13,19 127:14
74:17,20 207:5 63:25 167:10 appropriate (1) 35:3 204:13 205:5,21 134:21 142:3
133:1 148:4 183:3
210:23 allowing (3) 93:22 approval (2) 117:16 209:11,15 210:9,14 146:20,21 154:9
183:17 187:5 211:4
advise (1) 74:16 100:5 172:18 176:8 210:18,22 211:1,4 186:8

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212:5 based (30) 8:16 9:7 71:18 117:17 73:19,22 111:16,19
background (2) 84:16 16:18 18:7 32:23 145:14 148:11 112:18,23 113:1,5
84:22 34:1,4 36:10,23 163:23 205:9 211:1 123:4 155:20 156:1
backing (1) 137:15 37:10 38:3 53:15 212:9 159:1 212:15
bad (5) 57:8 148:12 55:21 66:8 67:3 big (23) 3:18 67:14 breaks (1) 178:13
159:21 164:9 68:10 100:14,25 73:5 85:7 95:13,14 Breeze (14) 55:11,16
165:24 105:25 106:9,12 98:18 124:23,24 55:24,24 56:11,15
balance (12) 129:2 138:4 139:10,11 150:3,5,5,21 56:16,21 57:1,23
138:12 140:7 142:10 178:22 153:16 157:9,25 58:1,1,3 59:19
150:16 171:21 180:16 189:11 161:13 169:8 brief (1) 84:16
172:8,10 174:5,6 193:25 207:15 172:23 174:11 briefing (1) 10:3
193:6,7,9 basic (7) 20:17 105:9 193:14 197:6 204:8 briefly (2) 85:4 193:23
balanced (2) 137:5,7 105:12,15 171:1 bigger (1) 69:23 bringing (1) 77:4
balances (1) 145:1 191:11 196:19 biggest (5) 87:21 Bristows (1) 7:18
Baltdraga (2) 157:8,9 basing (2) 175:1,2 110:12 175:15 British (1) 83:3
Baltic (2) 72:16,18 basis (25) 10:4,5 21:7 177:11 193:17 broker (7) 138:9
bank (123) 4:3,12 22:13,17 24:12 bill (2) 155:12 156:13 139:8 141:16,17
11:3 19:1 21:12 35:10 36:14 45:12 billion (14) 36:1,4 143:1,3,6
34:24 35:9 42:25 52:24 80:22 86:23 45:19 47:13 48:15 brokers (1) 49:2
45:9 46:20,23,23 111:1 115:25 63:24 97:16 98:8 Bromley-Martin (9)
46:25 47:5,19,25 134:14 135:6 99:16 101:15 179:17 186:1,21,25
48:11 49:13 50:10 138:16 140:14,15 132:12 178:10,17 187:22 190:18
50:19 55:21,22,23 145:23 169:10 178:19 194:15 195:9,24
57:12 58:2,2,4,7,10 191:7,19 195:24 bills (8) 132:15 133:17 Bromley-Martin’s (2)
62:7,11,15,16,20 196:3 133:22 139:5,9,25 187:6 200:16
63:8,12,17,17 baton (4) 162:11,19 156:13,17 Brothers (4) 64:2
64:10 66:21,23,25 164:18,19 birch (1) 164:23 71:21 88:12 95:3
67:6,8,9 72:25 bb- (1) 103:21 BIRT (12) 113:12 brought (4) 50:23
76:13,17 79:15,20 bear (1) 2:8 116:9 117:7,20 67:15 138:15
80:5,6 81:3,3,21 bearing (1) 117:23 118:8,14 119:7 173:11
86:17 87:22 88:25 Beckett (1) 204:22 120:7,17 121:1 BSMZ (2) 82:4 88:1
89:4,9,24 90:3,5,10 becoming (1) 61:13 122:7,22 BSP’s (1) 93:22
91:8 92:23 93:13 began (1) 174:13 bit (24) 7:11 9:3 41:15 budget (1) 177:7
93:21,25 94:25 beginning (10) 30:23 41:15 49:11 60:2,4 building (3) 5:12 44:4
95:2,2,11,19 101:2 69:7,12 94:20 66:1 73:15 94:11 62:22
101:4,5,7,10 102:2 115:18 132:10,11 99:2 111:17 112:19 bulk (1) 187:10
102:3 106:1 128:24 132:13 163:13 112:23 127:3 bullet (3) 51:22 184:1
129:24 134:25 175:22 131:14 136:1 137:8 184:4
135:1,14,15 136:3 begins (1) 104:3 145:15 148:10 bundle (7) 130:17
136:9 138:15,20 behalf (10) 10:10 159:3 164:14 210:5 131:10 143:18
140:6 146:2,3,15 32:12 78:16 128:24 210:7 160:4 173:17,23
146:17 150:3 153:5 182:15 184:9 bits (1) 112:14 188:5
156:18 164:3 167:4 205:25 206:2 blank (1) 117:12 bundles (1) 173:13
170:16 173:16 207:12 208:8 block (1) 2:2 bunkering (3) 65:16
178:2,15 181:21 behave (1) 197:19 BNP (18) 191:22 68:24 71:12
189:1 192:24 believe (12) 4:4,12 197:23 198:1,3 burden (1) 117:21
193:15 194:21 21:24 31:1 84:18 200:22 201:11,18 bureaucracy (1) 168:1
196:20 197:25 87:23 89:17 126:17 201:24 202:12,13 bureaucrats (1)
200:23,24,25 126:22 150:23 203:8 204:15,18,20 197:18
203:24 204:4 206:2 197:18 202:22 205:23 207:1 208:3 business (74) 2:18,25
206:15 207:12 believed (5) 8:10,21 208:10 3:1 8:4,23 9:3,4,5
208:8 211:24 29:18 174:23 198:4 board (2) 101:23 9:22 10:25 11:2,12
Bank’s (6) 47:2 76:16 believing (1) 99:6 192:24 13:5,14 19:6 20:22
167:12 175:12 belonged (1) 174:24 boat (1) 164:16 24:7 25:1 41:18
193:8 201:8 belonging (2) 80:24 body (1) 176:22 42:4,8,8,10,11,14
banker (1) 173:25 81:15 bogus (1) 34:7 42:21,24 52:19
bankers (2) 8:19 belongs (1) 194:1 bonded (1) 173:1 61:3 66:11,18,20
194:18 Belykh (2) 11:5 166:7 books (3) 37:9,14 68:16 69:5,17 70:3
bankruptcy (5) 136:10 benchmark (1) 180:12 81:7 70:3 71:5,17 72:4,5
136:11,13,17,21 benefited (1) 158:20 border (3) 82:13 73:11 74:15 79:21
banks (43) 14:18 Berezin (6) 10:10,12 184:21 194:7 81:9 87:13 88:2
29:17 86:16 92:8 21:6 29:15,24 boring (1) 114:22 91:19,20 105:5,9
94:23 95:6,13,14 93:17 borrowing (3) 23:18 105:16,19,21
95:18 100:5 102:1 berth (2) 161:19 24:21 45:1 124:13 137:17
127:22 140:1,8 168:4 borrowings (1) 24:17 140:18 153:3
157:25 165:6 berths (6) 161:25 bottom (7) 24:2 154:20,24 157:11
175:19 187:18,24 167:22 168:3 107:12 111:6 175:13 181:16
192:7 193:6,10,13 176:25 193:24 150:15 184:15 187:19 188:25
193:19 194:8,10,12 194:1 185:7,8 189:5,10 190:25
194:16,21 195:3,25 best (16) 3:11 4:13 bought (11) 36:5 191:4,16,16 194:20
196:4 200:8,17,18 6:15 29:19 57:10 46:17 49:4 54:9 196:3 197:1
200:19,21,23 201:3 57:15 103:13,19 83:10 160:22,25 businesses (10) 1:14
201:6,25 204:23 104:7 109:4,15 161:5 173:12 1:15,23 21:1 35:20
206:16 120:19 164:5 174:13,19 68:6,7 71:19 72:20
banks’ (1) 201:9 169:17 171:15 BP (2) 84:4 85:23 157:17
barge (1) 196:10 215:2 brackets (7) 13:8,13 buy (12) 46:14 78:13
bark (5) 164:25 165:1 better (18) 6:2 28:17 14:5,8 15:4 24:3 82:12,17 85:3,16
165:1,1,3 29:9,9 37:16 42:15 102:18 86:2,13 97:13
barrier (1) 160:18 49:20 51:1,2 57:3 break (14) 41:13 128:14 174:2

200:12 buyer (1) 173:25

buying (3) 63:7 84:19 138:10

BV (1) 62:5

BVI (2) 6:22 106:19 by-passing (1) 168:1

C

C1/1/20 (2) 167:2,16 C1/1/21 (1) 169:14 C1/1/22 (1) 169:23 C1/1/23 (3) 191:24 197:22 201:15

C1/1/28 (1) 15:16 C1/1/29 (3) 43:6 47:8

58:13

C1/1/30 (2) 60:19 70:12

C1/1/54 (1) 179:1 C1/1/58 (1) 130:3 C1/1/9 (2) 5:25

103:10 calculate (3) 142:9

182:11,12

calculation (3) 132:20

180:23 190:5

calculations (4)

178:22 181:13 191:12 196:3 calendar (2) 16:25

17:16

call (3) 28:8 135:8 164:23

called (20) 28:8 43:2 62:5 72:16,25 77:18 78:4 80:25 92:22 106:1,2 113:19 129:6,22,24 133:11 134:18 140:3,21 151:18

candid (1) 122:4 capable (1) 185:11 capacity (3) 8:22 179:20 180:5 capital (4) 105:11

106:11 115:7 135:2 captain (1) 50:17 care (8) 7:21 9:14

58:22 66:4 75:1 84:5 89:4 176:23

career (1) 81:10 careful (1) 35:16 carefully (6) 13:25

75:10 76:9 126:18 174:4 211:13

cargo (7) 41:20 42:22 166:1 170:14 185:11,17,20

carried (5) 12:11 110:1 126:2 161:3 204:18

carry (4) 205:23 206:21 207:1 211:18

case (29) 21:13 24:15 41:19 57:11,22 63:4 67:14 75:23 76:13,23,24 84:9 87:23 90:4,7,12,13 91:17 99:9 100:14 113:25 122:1 127:21 135:7 141:10 143:10 182:8 185:19 190:25

cases (2) 119:21

181:18

cash (6) 92:19,19 71:7,10 72:8
98:24 99:8 143:7 charters (1) 57:9
156:19 cheaper (1) 211:2
catastrophes (1) check (11) 9:12 11:19
137:13 37:16 113:15 114:3
caught (1) 52:17 114:24 115:13,21
causation (1) 1:17 120:7 146:6 207:8
caused (4) 26:10 checked (1) 172:8
70:20,21 76:1 checking (4) 21:9
causes (1) 117:18 145:25 161:24
ceased (2) 66:11,14 183:16
cent (24) 87:5,6,7 chief (3) 46:22 142:8
90:15,18,21 91:7 157:12
91:14 97:19 99:17 choice (1) 119:24
101:14,19 102:17 choose (1) 25:25
102:19 129:1 133:9 circa (1) 187:16
133:13 134:9,19 circular (1) 184:9
137:22 138:2 140:9 circulate (2) 121:1,4
188:22 191:14 circulated (3) 114:25
Central (4) 106:1 115:20 116:10
134:25 135:1 circulation (1) 115:8
138:20 circumstances (4)
centre (49) 21:5 2:21 98:3 209:12
122:11 128:1 129:6 213:18
129:7,22,25 130:8 cities (2) 60:4 61:19
132:15,23,25 133:1 City (48) 86:11 128:1
133:11,15,21 134:8 129:6,7,22,25
134:19 137:21 130:8 132:15,23,25
138:3,8,18 139:6,8 133:1,11,15,21
139:19 140:3,21 134:8,19 137:21
141:7,10 142:5 138:3,8,18 139:6,8
143:15 144:8,19 139:19 140:3,21
150:10,18 151:18 141:7,10 142:5
152:4 153:21,25 143:15 144:8,19
154:25 155:4,7,12 150:10,18 151:18
156:12 157:11,23 152:4 153:21,25
157:24 158:9,9,20 154:25 155:4,7,12
ceremony (1) 62:14 156:12 157:23,24
certain (4) 2:6 27:11 158:9,9,20 187:13
76:24 146:24 claim (1) 136:23
certainly (9) 2:18 claiming (1) 174:9
25:22,23 40:12 claims (1) 108:6
50:12 64:13 114:16 class (7) 9:16 11:20,22
116:10 177:18 38:12 73:5 173:25
certainty (1) 5:4 207:10
certainty’s (1) 214:19 clause (2) 46:3,4
certification (3) 11:15 clean (4) 82:25 83:7
30:12 125:4 83:11 172:7
cessation (2) 66:18 cleaned (2) 136:5
68:2 172:24
chain (4) 186:21,22,23 cleansing (1) 176:15
187:2 clear (8) 12:2 24:22
chairman (3) 97:6 74:7 75:2 116:4
101:23 192:23 126:16 132:12
challenged (2) 93:4,5 141:22
challenging (1) 93:7 cleared (1) 4:23
chance (7) 10:24,25 clearly (1) 77:8
14:21 34:13 82:11 clerk (1) 130:18
168:3 196:8 click (2) 16:6 122:12
change (4) 18:6 64:2 client (8) 34:25 74:11
110:16 212:8 75:3 76:17 91:6
changed (3) 59:15 92:22 157:9 173:25
136:9 140:11 client’s (1) 67:7
changes (3) 109:1 clients (13) 11:11
110:4 161:13 18:16,19 71:10,14
changing (5) 10:7,15 72:4 74:9,13,17,21
41:14 52:24 135:3 80:4 81:2 89:1
channel (2) 176:6,21 close (4) 136:2 187:12
characterisation (2) 187:19 190:6
27:3,6 closing (2) 26:1
characterise (1) 25:25 187:13
charge (3) 9:22 34:14 club (1) 118:12
175:3 code (1) 36:19
charges (1) 68:24 cold (1) 111:22
charter (10) 44:11,18 collapse (4) 64:2 67:1
44:22 45:25 54:19 71:20 95:4
56:2,18,20 71:11 collapsed (3) 62:10
71:16 88:12,13
chartering (4) 45:12 collapses (1) 95:4

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219

February 19, 2016 Day 13

collateral (2) 45:3 32:17 33:4 38:25 comprised (2) 150:18 136:7 145:20 177:2
178:11 41:8,12,21 42:10 203:25 146:18 168:16 copies (2) 160:6,8
colleagues (2) 194:15 42:14,20 43:2 compulsory (1) 189:1,9 208:2 copy (9) 6:1 122:8
200:16 46:21 47:1,2,4 194:18 consisted (1) 85:6 131:6 148:13,14
collect (3) 18:17 50:11 51:21 52:5 concentrated (1) consolidated (2) 31:8 160:9 162:16,23
136:17 173:19 53:20 54:5 55:14 140:2 39:16 165:20
collected (4) 136:14 55:20 62:4 63:1 concerned (10) 5:1,1 conspiracy (2) 1:14 copying (1) 160:7
136:14 173:15,22 64:8,19 65:16 66:6 46:17 80:14 83:19 67:13 core (3) 130:16
collecting (2) 18:20 66:11,19 67:23,24 87:15 144:24 conspired (1) 90:5 131:10 143:18
143:6 68:2,9,13 69:3 161:19 209:20 constituent (1) 1:21 corporate (4) 87:22
colloquialism (1) 35:8 70:18 71:7 72:17 212:3 constraints (1) 5:6 88:7 196:19 201:25
Colonel (1) 136:22 72:19,19 73:4,25 concerns (2) 26:10 constructed (1) 62:2 correct (16) 21:25
column (3) 108:22 74:10 76:16 77:17 35:9 construction (2) 63:23 22:9,11,12 40:8
150:14 185:7 77:18,25 78:2,5,7,9 conclusion (1) 4:15 167:25 59:13,20 96:16
columns (1) 107:8 78:13,13,17 79:22 conclusions (3) 2:5 constructions (1) 62:4 109:20 130:6
combined (7) 7:6 27:9 80:3,9,14,24 81:14 3:13 128:23 consultancy (11) 28:8 133:13 154:9
28:3,10 29:3 30:13 81:16,25 82:25 condition (7) 159:14 28:14 32:21,25 155:13 168:5
30:22 83:5,20 84:3,6,20 159:18,19 160:1 34:2,4,6,12,12 179:13 191:6
combining (1) 38:4 85:3,6,11,23 88:1 200:17,20 201:8 38:21 39:6 corrected (2) 119:7
come (25) 5:6 40:15 89:11,25 91:14 conditions (7) 70:1 consultant (1) 206:6 190:18
41:25 43:7 47:24 92:18 94:6 96:12 72:5 87:4 90:16 consultants (7) 9:11 correctly (1) 133:20
49:19 66:7 81:21 97:13 98:9,14 161:24 204:14,16 9:15 204:21 206:3 correspondence (1)
84:10 86:5 94:16 99:20 100:1 101:1 conduct (1) 76:23 206:12,17 209:1 134:21
105:1 108:19 103:3 104:16 conducted (3) 203:21 consulted (1) 118:7 cost (3) 17:15 40:6
132:16 147:18 105:13 123:7,11,18 206:2 207:11 Consulting (8) 142:14 173:4
155:19 167:10 123:22 124:1,4,6 conferences (2) 52:14 143:1,3,5,8,12 costs (1) 69:25
183:9,17 206:4 129:6 135:2,13,16 52:21 154:14,18 counsel (1) 62:13
212:13 213:14 135:17 136:4,9,20 confidence (8) 22:21 consume (1) 63:16 counterclaim (2) 1:13
214:9,14,18 136:22 137:4,8 29:15 126:16 142:6 contact (2) 81:22 1:17
comes (11) 12:17 138:10,25 139:2,13 142:11 152:22 103:7 counterparties (1)
35:14 58:3,9 76:5 139:16,18,20,23,24 207:24 208:4 contacts (2) 79:18 140:2
105:11 109:13 140:25 141:17 confidentiality (2) 99:12 country (2) 193:13
186:11 189:10 142:10,18 143:3,5 116:19 118:12 contained (1) 133:10 197:20
190:6 215:12 143:8,11,13 144:11 confirm (7) 53:9 64:17 container (4) 177:10 couple (1) 52:22
comfortable (1) 145:1 151:2,24,25 85:5 109:11 140:12 181:5 182:6,12 course (21) 2:1 5:13
196:25 152:6,15,20,25 156:14 195:21 containers (15) 8:3,5 22:6 38:6,21
coming (12) 14:9,20 153:1,2,12,17 confirmation (2) 22:3 166:16,20,22 181:8 39:1,17,20,20
50:6 58:4 94:17 154:18 156:19 62:22 181:10,17,21,23 41:24 98:12 114:17
95:10 102:24 157:8,10,10 158:9 confirmed (3) 21:20 182:1,2,13 185:2 115:15 120:7 121:2
106:13,17 146:6 167:24 174:5 23:12 99:8 185:16,19,21 133:19 161:16
187:16 196:2 175:14 179:17 confirming (1) 62:24 content (1) 155:23 207:9 209:1
comment (3) 37:20 184:5 207:11 conformity (1) 5:15 context (1) 84:2 court (13) 40:10 115:3
74:5 130:9 company’s (3) 104:4,8 confusion (2) 115:9 continuation (1) 115:6 116:2,14
comments (3) 49:21 126:7 115:20 111:5 118:5,10 119:23
49:22 50:2 comparatively (5) congratulate (1) 73:19 continue (4) 41:13 121:12 126:17
commercial (3) 44:1 65:20 86:2,4,14 conjecture (1) 142:4 98:16 112:17 199:2 131:19 209:14
78:2 153:13 189:8 connected (4) 91:17 continued (6) 5:19,20 215:20
commitment (3) compare (2) 109:8,20 124:2 142:19 169:5 123:1 216:3,4,6 cover (1) 34:7
176:6 207:17,21 compared (3) 175:11 connections (1) contract (17) 32:21 covered (6) 162:11,19
community (2) 4:6 175:12 190:25 124:17 36:2 62:12,19 164:17,19,21,24
73:7 comparison (1) 65:21 connote (1) 13:8 77:17 87:5 89:8,12 covering (1) 164:24
companies (68) 9:25 compensation (1) conscious (1) 212:15 95:23 96:1,12 create (10) 24:8 33:1
10:9,22 15:10,11 32:16 consequences (1) 97:18,25 100:12,14 68:6 69:23 87:25
16:25 17:21,22 competitive (1) 84:12 100:25 171:17 92:14 94:2,2
20:22,23 28:11,12 167:18 consider (5) 22:12 contract’s (2) 59:13 173:20 201:3
28:13,23,24 29:6 competitors (1) 85:13 91:15 181:21 59:13 created (14) 14:1 18:7
29:10 30:21 32:3,4 167:24 206:18 contractor (1) 206:1 20:14,17 23:23
32:19 39:5,15 compiled (1) 9:20 considerable (1) contracts (13) 28:7,8 42:12 45:8 47:3
40:18,19 46:24 complete (9) 66:4 211:25 39:3,14 55:8 57:5,8 78:18 88:3 143:11
58:24 59:4,5 66:5 69:16 92:5,17 94:6 consideration (4) 61:15 62:15 63:13 146:14 173:23
67:20,22 68:5,8,12 94:12 98:9 103:2 26:24 29:24 115:5 71:16 72:9 195:19 185:18
68:15 86:19 90:11 187:9 169:7 contrary (1) 197:15 creating (1) 20:11
92:16,24 93:11,14 completed (1) 73:18 considered (33) 11:12 control (6) 55:22 creation (2) 41:19
93:23 94:7 103:24 completely (9) 26:17 20:20 28:12 34:11 135:1 136:19,20 42:21
105:10 106:11 47:6 50:24 75:21 47:4 71:5,6,18,24 138:25 158:15 credibility (1) 1:16
123:24 124:25,25 75:24 83:11 86:11 72:15,22,23 73:2,6 controlled (7) 135:5 credible (1) 40:12
134:13,22 138:3 140:11 175:6 81:1 82:24 83:15 135:10 138:20,23 credit (6) 23:21,24
140:13 141:2 completeness (1) 84:8 85:25 86:14 139:12 140:14 45:19 92:11 97:15
142:13,14 152:4 111:8 99:18 100:6 102:22 158:10 140:5
154:14,14,21 completion (1) 185:9 102:25 111:3 controller (1) 8:2 creditors (1) 153:14
156:22,22 157:22 complex (8) 14:10,12 124:23 138:6 154:1 controlling (1) 82:5 crime (1) 88:20
158:5 175:15 204:8 14:13,14 15:9 59:8 181:16,25 193:8,12 convenient (3) 158:22 criminal (8) 34:25
204:9 60:2 85:16 193:17 209:5 210:10 81:1,9,22 82:5 87:4
companies’ (1) 28:19 complexity (1) 14:4 considering (22) conversion (1) 190:5 88:21 99:1
company (165) 10:21 compliance (1) 30:6 11:25 24:25 63:2 converted (1) 190:4 criminals (1) 100:7
14:17 18:18 19:20 complicated (4) 15:13 71:17 82:12 85:14 convey (1) 39:21 crisis (12) 23:22 54:10
19:20 21:5,8,10,13 20:15 45:8 135:19 86:4,13,19 87:2 cooperating (3) 50:21 54:15 60:17 61:20
29:7,13,21 30:15 comprise (3) 129:5 91:2 102:24 124:13 67:5,8 62:9 68:5,8 70:6
30:16 31:3 32:14 132:22 134:9 126:18 135:11 cooperation (2) 177:1 71:9 98:25 193:20

critical (1) 104:16 criticise (1) 24:12 criticism (1) 166:8 cross-examination (…

5:18,20 36:3 64:16 123:1 151:21 195:7 212:2 214:21 216:4 216:6

cross-examinations …

163:14 crucial (2) 137:17

170:15

crunch (5) 23:21,24 87:19 92:11 140:5

cryptic (1) 75:17 currency (1) 55:22 current (6) 9:17 10:4

36:24 102:10,14,16

Currently (1) 51:23 customers (2) 93:22

153:12

customs (2) 169:21

173:1 cut (1) 69:25

Cyprus (1) 201:4

D

D107/1550/1 (1)

103:15

D112/1264.1/1 (1)

95:20

D112/1264.1/2 (1)

95:21

D116 (1) 158:24

D116/1726.3/0.3 (4)

143:16 144:24 147:4 150:7

D116/1726.3/0.7 (2)

145:14 146:4

D116/1726.3/0.9 (1)

145:8

D116/1726.3/1 (1)

148:8

D116/1726.3/2 (1)

148:8

D116/1726.3/3 (1)

150:7

D116/1726.3/7 (2)

145:13 146:5

D116/1727.1/0.1 (1)

152:5

D116/1727.1/0.23 (1)

156:3

D116/1727.1/0.26 (2)

155:10 156:4

D116/1727.1/0.6 (1)

153:8

D116/1727.1/23 (1)

156:2

D116/1727.1/26 (1)

155:11

D116/1727.1/6 (1)

153:9

D117/1756/1 (3)

52:25 53:1 64:4

D117/1756/2 (2) 53:1 64:13

D118/1808.1/1 (1)

182:14

D118/1808.1/2 (1)

183:6

D118/1808.1/3 (1)

182:18

D196/2931/1 (1)

160:3

D21/415/2 (1) 170:19 D33/522/1 (1) 106:18

D33/522/31 (3)

111:13,24 112:5

D33/522/6 (1) 107:1 D33/522/7 (1) 111:5 D33/523/1 (2) 25:3,10 D33/523/48 (1) 35:19 D33/523/5 (1) 25:11 D33/523/9 (1) 30:18 D34/545/1 (2) 54:18

56:3

D38/660/6 (3) 41:7,18 43:1

D38/660/64 (1) 42:1

D43/750/13 (1)

179:14

D45 (2) 113:7 158:24

D45/783/1 (2) 56:2,19 D45/783/9 (1) 56:19 D48/818/1 (1) 186:15 D48/829/1 (2) 186:12

188:6

D51/888/5 (1) 189:15

D52/889/11 (1)

199:17

D52/889/35 (1) 159:6 D52/889/6 (1) 190:23 D52/889/7 (1) 175:16 D52/889/9 (2) 199:3

199:11

D55/947/1 (1) 45:14 D55/947/4 (1) 46:3 D55/947/8 (1) 45:17 D55/951/1 (1) 177:14

D55/951/14 (1)

177:19

D55/951/7 (2) 177:12 178:6

D64/1010/1 (1) 51:6 D64/1010/8 (1) 51:20 D67/1042.7/1 (2) 74:2

77:13

D67/1042.7/2 (1)

77:20

D67/1042.7/21 (2)

74:4 77:15

D67/1042.7/3 (1)

78:20

D68/1059/1 (3) 16:3,6

17:5

D68/1059/2 (5) 12:4 12:10 16:23 17:8 22:7

D74/1074/5 (2)

201:10 202:9

D74/1074/6 (2) 203:6 206:21

D74/1074/7 (2)

207:14 208:11 daily (7) 10:4 21:7

52:24 71:8 113:18 113:25 134:14

Damen (3) 44:5 62:12 62:21

danger (2) 74:14,15 dangerous (2) 82:16

84:12

Daniil (1) 187:20 dare (1) 76:2

date (14) 47:13 51:17 56:4 77:21 87:17 92:1 109:19 122:14 126:7 150:11 161:5 174:21 183:10 203:23

dated (5) 77:20 87:9 96:18 109:4 175:19

dates (1) 57:6 day (29) 3:6 27:19

28:7 36:2 39:13,22 58:5 59:14 74:6

Opus 2 International transcripts@opus2.com
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220
February 19, 2016 Day 13

114:17 124:17 Deloitte (2) 83:6 174:11 divider (9) 130:17,24 96:22 99:15 100:17 E6/19/62 (1) 126:9 enquired (1) 149:4

128:17 160:15 141:5 difficulties (6) 60:15 131:10,23 143:18 101:11 103:11 eager (1) 3:23 enquiries (2) 71:15
168:17 176:21 Deloittes (1) 140:20 64:18,24,25 87:18 160:5 188:7 189:15 104:5 106:3 107:2 earlier (2) 125:7 210:7 119:18
186:13,17 198:22 department (5) 33:11 95:16 190:23 110:17 111:15 early (8) 1:7 111:17 enquiring (1) 155:1
209:14,16 210:7 33:12 52:9 207:17 difficulty (3) 75:20 DMITRIEVICH (2) 5:19 112:2 123:3 125:6 128:13 187:13 ensure (3) 4:13 5:4
211:6,6,20 212:14 207:20 94:8 120:22 216:3 126:14 127:1,12 213:21 214:5 125:8
212:21 213:11,15 dependent (1) 169:21 diligence (20) 9:15 Doctor (1) 142:20 130:3,15 131:2,6 215:11,13 ensuring (2) 4:9 6:9
214:11 depending (1) 85:21 83:4,6,14 84:4 document (45) 11:6 131:25 133:2 earn (2) 105:14 entailed (1) 169:25
day’s (1) 115:12 depends (7) 19:11,24 86:22 171:18,21 16:5,7 23:23 42:2 134:17 139:4 154:10 enter (3) 55:5 167:11
Day11/14:1 (1) 21:16 20:16 32:21 181:12 172:5,7 173:24 42:18,21 43:16 140:17,23 141:9 easier (3) 121:22,23 182:1
Day11/14:12 (1) 182:2 210:6 204:3,19,20,24 51:6 53:14 56:10 143:22 144:3,7 210:18 entered (2) 57:11
21:17 deposits (1) 106:15 205:24 206:1,23 83:13 106:6,7,19 146:10,16 147:8 easily (3) 94:14 141:8 139:8
Day11/14:15-16 (1) depth (1) 71:12 207:19 208:12 120:4 144:24 150:8 151:6,16 166:21 enthusiastic (1) 192:8
21:23 derived (1) 36:10 diligences (1) 81:18 145:11,19,21,23,25 152:7 153:23 156:5 easy (3) 55:23 120:20 entirely (2) 26:22
Day11/62:22 (1) describe (5) 26:9,23 direct (1) 138:16 146:14,20,21,22 158:19 159:3 160:9 121:25 132:12
33:17 67:25 114:23 direction (1) 141:12 147:6,6,19,20 162:16 163:2,3,6 EBITDA (1) 189:11 entity (10) 19:20
Day11/63:1 (1) 33:13 176:16 directly (3) 34:15 148:5,15 150:23 164:6 166:7 168:7 EBRD (3) 195:4 200:24 123:15 129:22,24
Day11/63:10-12 (1) described (2) 54:4 37:23 194:16 151:20 153:10 175:17 177:13,15 204:23 133:11 134:18
33:21 169:3 director (16) 29:14 155:16 156:6 177:20 180:18 ECAs (1) 203:21 140:2,21 144:8
Day11/72:1 (1) 40:1 describes (1) 112:11 48:21 49:14 79:20 168:12 177:14 182:24 183:17 educated (3) 2:12 151:18
Day12/67:3 (2) 158:2 describing (2) 163:2 93:17 136:8,17 183:11,21 184:1 184:2 185:5 187:21 25:7 197:10 entries (8) 2:6,7
158:3 204:10 141:22 147:22,25 186:10 187:17,23 189:25 194:9 195:8 effect (7) 2:15 8:4 108:25 142:2
days (2) 40:8 182:8 description (6) 14:5 152:8,21 153:3,4 documentation (4) 197:4 198:21 37:5 66:19,22 153:15 154:21
deal (15) 87:1,2 89:8 14:24 26:16 42:21 172:11 175:8 47:3,7 105:25 204:13 205:21 89:24 211:7 158:9 185:8
89:12,20,21 91:16 168:9,12 director’s (1) 147:15 208:6 209:11,15 211:4,15 effectively (4) 66:11 entry (15) 28:4 108:25
91:22 92:5 93:1,3 designed (1) 184:9 directors (1) 136:20 documented (1) 34:3 212:25 66:13 95:25 132:25 132:6 142:17
93:18 94:13 97:24 desire (1) 76:16 dirty (2) 83:12 159:21 documents (34) 15:24 draconian (1) 90:16 efficiency (1) 21:15 143:14 144:10
100:1 despite (1) 193:20 disappeared (1) 82:2 16:2,12 21:19 draft (12) 42:23 43:18 efforts (3) 4:13 122:6 149:8,18 150:10,13
dealing (1) 125:21 detail (4) 11:9 35:19 disappointed (1) 29:10 50:20 62:19 179:15 180:2 192:1 153:9 155:11
deals (1) 87:23 83:25,25 138:25 62:23,24 77:12 182:15 187:15 eggs (1) 137:22 156:12 158:20
debt (11) 102:16 details (7) 10:24 disaster (1) 150:5 103:16 136:22 189:14,15,19,21,23 eight (4) 32:3 73:13 159:8
133:1 143:11 14:20 20:10 58:21 discharging (1) 35:13 145:10 151:1,12,13 190:22 170:11 182:1 equally (1) 211:23
150:12 198:7,15,20 84:10 93:2 168:17 disclose (2) 4:4 161:7 172:22 drafted (1) 179:18 either (12) 7:24 55:25 equities (1) 106:14
199:22,23 200:19 detriment (1) 76:13 194:10 173:14,14,15,18,19 drafting (1) 190:1 82:1 95:18 99:12 equity (3) 14:19 183:9
201:2 develop (9) 34:18,22 disclosed (9) 16:14 173:20,21,23,24 drafts (2) 52:24 186:8 115:22 128:6 138:9 183:24
debts (4) 102:10,14 168:21 170:8 41:18 42:17 145:24 191:5 192:11,13 draught (2) 169:12,13 140:20 141:16 equivalent (3) 148:7
130:9 200:6 173:11 179:12 162:14,21 163:12 199:10 204:25 draw (1) 2:5 158:10 200:11 181:1 190:22
December (12) 27:10 195:15 200:5,11 164:2 192:13 206:17 208:7 drawing (2) 142:24 element (1) 84:5 Erium (1) 48:23
54:15 61:21 62:10 developability (1) disclosing (1) 196:22 doing (14) 10:21 187:12 elements (1) 1:21 especially (19) 2:11
68:20 69:7,13 37:11 disclosure (9) 16:13 18:19 25:9 36:15 drawn (2) 144:10,15 eliminate (1) 174:8 3:21 4:5 6:10 11:5
71:24 90:5 98:23 developed (2) 42:12 42:3,17 50:21 51:7 74:8 76:14 89:7 dredging (2) 176:7,21 else’s (1) 5:11 52:21 57:8 67:15
106:25 192:22 203:19 67:7 78:10 143:15 97:10 111:2 112:16 due (28) 9:15 54:10 elucidated (1) 2:15 82:12 95:6,11
decide (2) 8:23 117:3 development (34) 192:10 114:12 172:20 54:15 61:20 81:18 embark (1) 8:23 120:3 124:19
decided (7) 40:9 34:11 37:5 41:20 discount (5) 126:11 197:1 204:23 83:4,6,14 84:4 empire (1) 94:11 128:14 159:19
69:25 72:3 86:25 42:22 43:22 72:24 126:12 127:22 dollar (3) 108:22 86:22 89:14 99:13 employ (2) 158:17 162:8 190:14
99:13 136:6 156:20 72:25 73:12 167:25 128:1 140:9 189:16 190:15 129:6 171:18,20 206:3 194:19 207:11
deciding (1) 19:5 168:23,25 169:8,25 discrepancy (1) 40:5 dollars (7) 65:24 72:2 172:5,7 173:24 employed (7) 46:21 establish (1) 76:23
decision (6) 29:25 170:15,17 175:23 discuss (9) 7:2 13:24 79:9 88:15 107:6 194:2 204:3,19,20 83:3,5 136:9 137:1 established (2) 30:14
71:16 194:20 195:1 179:7 182:19 183:1 20:9 37:17 76:16 129:14 189:19 204:24 205:24 172:23 209:2 31:2
195:3 212:6 184:14 185:9 77:2 130:13 163:10 double-counting (1) 206:1,23 207:19 employees (5) 8:20 estate (2) 112:14
decision-making (1) 192:25 193:4,16,16 181:15 185:25 208:12 82:8 152:12 191:9 174:3
21:6 194:11,22 196:5,7 discussed (19) 7:17 doubled (1) 36:5 duplicate (1) 211:17 195:18 estimate (2) 22:19
decrease (1) 182:4 203:24 206:16 11:8 20:19 27:19 doubling (1) 182:9 dust (1) 164:23 employing (2) 8:10 165:8
dedicated (2) 113:19 207:2,13 208:9 33:2 40:8 74:12 doubt (4) 1:19 26:14 duties (1) 35:13 9:14 estimated (3) 16:25
114:13 developments (1) 82:22 167:4 175:14 145:10 146:14 empty (1) 181:19 17:17 23:3
deep (10) 10:24 11:7 162:15 176:19,20,22,25 Dr (150) 4:25 5:21 6:5 E encountered (3) estimates (1) 23:3
13:16 14:20 19:13 devices (2) 131:12,18 177:2 187:8 193:23 6:22 7:2 9:19 10:16 e-mail (12) 113:23 60:16 64:11,19 estimating (1) 23:12
20:9 37:20 50:13 devoted (2) 89:1 195:7 199:15 11:17 12:7 13:11 encourage (1) 26:15 estimation (2) 169:5
127:14 130:15,19
84:10 134:14 125:5 discussing (6) 8:18 13:18 15:14 16:9 ended (3) 27:10 61:12 189:11
130:23 131:3
deeply (1) 11:3 Diameter (1) 187:4 11:24 54:12 74:11 16:17 18:10,21 106:25 Estonia (1) 68:22
143:19 186:16
defendants (1) 41:19 died (2) 150:3 172:11 163:18 200:22 19:15,22 20:8 21:1 energetic (2) 50:15,18 euro (1) 190:14
187:1,6,22 189:22
defendants’ (3) 1:13 difference (2) 18:4 discussion (4) 74:9 21:17 22:17 25:3 engines (5) 54:14 62:1 Eurobonds (1) 95:8
e-mails (1) 186:17
42:17 51:7 162:7 86:17 98:17 134:20 26:5 27:9 28:19 62:3,3 121:6 European (14) 123:10
E116/1726.3/3 (1)
deferred (2) 153:14 different (35) 10:7,14 discussions (7) 48:1 30:1,21 32:18 England (1) 119:22 159:20,23 192:24
144:24
212:7 11:1 17:24 19:13 49:1 93:3,9,16 33:14 34:19 35:18 English (19) 11:24 193:5,15 194:21
E15/19.27/0.24 (1)
definitely (8) 39:6 20:18,18 28:9 29:8 195:4,5 37:1 38:5,11 40:2 38:12 42:20 49:23 197:10,12 200:24
139:4
67:8 118:24 135:21 34:1,3,4 49:1,1 disseminated (1) 40:11,22 41:9,22 53:1 62:23,24 73:9 203:24 206:15
E5/16/14 (1) 128:20
157:24 195:2 208:1 52:13 54:9 85:22 115:4 42:2,9 43:5 45:15 77:15 119:13,23,23 207:12 208:8
E6/19.27/0.1 (1)
211:20 88:4 90:12,13 distinguishing (1) 47:23 50:9 51:4 123:20 124:19 euros (1) 189:19
131:10
definition (2) 118:4 91:11,19,19 106:14 105:4 52:4 53:4 54:24 148:6 150:7 156:4 evaluate (1) 36:18
E6/19.27/0.22 (1)
160:7 109:16 119:1 140:1 distribute (1) 120:24 56:7,20 57:22 164:12 204:8 evaluated (1) 178:12
132:7
delay (1) 56:8 150:1 154:16 distributing (2) 21:10 59:21 62:17 63:4 enhanced (1) 173:10 evaluating (1) 48:13
E6/19.27/0.24 (2)
delayed (2) 214:1,3 155:16 172:12 185:18 66:23 67:11 68:20 enjoy (2) 25:5,5 even-handed (1)
132:15 133:19
delicate (1) 26:11 175:6 176:17 201:3 disturb (3) 149:11,21 70:12 72:10 73:14 enjoying (1) 105:23 211:24
E6/19.27/0.25 (2)
delivered (2) 56:6 203:13 149:22 73:24 74:3,23 enormous (5) 89:2 evening (1) 214:10
132:19 142:12
62:20 difficult (10) 48:24 dive (1) 113:12 75:11,17,25 77:12 128:15 171:24 event (3) 57:14 58:19
E6/19/59 (1) 125:16
delivery (8) 56:4,5,8 68:3 69:9 76:1 divide (1) 182:11 80:11 84:2,17 173:4 174:10 61:12
E6/19/60 (1) 125:24
56:23 59:10,14 82:17 120:5 121:20 Divided (1) 129:15 89:10 90:4,7 92:15 enormously (1) 82:17 events (4) 52:17 87:8
E6/19/61 (1) 126:1
61:16,21 121:24 122:7 dividends (1) 110:4 93:6,20 95:22 enquire (1) 120:21 95:5 146:18

Opus 2 International transcripts@opus2.com
Official Court Reporters +44 (0)20 3008 5900

221

February 19, 2016 Day 13

everybody (7) 48:6 95:1,1,5,8 193:1 206:19

evidence (34) 6:17 7:11,19 8:6 14:23 14:24 19:2 25:19 27:11,17 28:25 29:12,20,22 31:11 36:12 37:1 38:17 38:20 40:4 51:2 56:11 57:1 58:14 58:18 60:7 80:15 91:25 97:23 98:5 125:8 130:1,2 158:3

evidencing (1) 192:11 ex-President (1)

192:22 ex-Soviet (1) 201:6 exact (2) 163:21

174:21

exactly (5) 2:23 27:5 74:11 154:7 161:5

examination (1)

163:22 example (27) 17:21

18:20 32:23,24 34:13 61:25 62:11 71:12 83:16 86:17 87:20 117:15 142:25,25 156:18 169:12 173:1 182:9 192:22 193:15,18 194:22,23 204:22 206:14 207:5 212:7

examples (1) 145:13 excess (1) 153:13 excessive (1) 83:25 exchange (12) 133:21

133:23 139:5,10,25 155:12 156:13,13 156:17 186:17 190:10 191:11

excluding (1) 170:24 executives (4) 46:23 47:2 62:14,16

exhibit (3) 15:24 16:2 103:16

exhibited (9) 16:10,12 21:19,24 22:5 43:6 43:12 106:19 183:16

exhibiting (2) 7:6 16:7 existence (3) 93:10

170:16 193:7 existing (1) 140:7 expand (1) 18:1 expanded (1) 43:19 expanding (1) 10:15 expansion (1) 82:15 expect (2) 76:20

117:21

expected (2) 176:3,7 expecting (2) 169:11

188:1 expenditure (1) 3:3 expense (8) 13:4,14

13:22 16:24 17:16 17:24 18:13 19:6

expenses (6) 3:3 62:6 65:12 71:8,8 104:16

expensive (2) 190:14 190:15

experience (6) 7:25 46:21 87:16 124:6 124:15 208:2

expert (10) 111:1 125:13,17 134:1

136:25 140:19 141:4 151:7,8,9 experts (5) 2:12 8:21

8:21 140:18 167:12 explain (21) 14:15

19:17 20:3 40:5 54:4 60:22 61:1,9 67:22 79:21 84:2 94:10,14 98:2,10 98:11 127:4,16 168:5 180:24 203:3

explained (4) 17:12 38:9 85:4 168:20

explaining (8) 64:9,18 64:24,25 65:2,3,5 205:22

explains (1) 158:11 explanation (13)

100:17,21 110:24 142:1,1,3 149:17 151:16,19,21,23 158:8 164:12

explanatory (1) 131:4 exploit (1) 167:18 export (1) 81:11 exposed (1) 95:7 exposure (1) 134:18 expropriation (1)

168:2 extend (1) 35:9

extent (3) 2:5 119:24 120:22

external (1) 8:21 extra (1) 36:10 extract (2) 12:5

175:17 extremely (4) 67:7

81:7 88:19 191:17 eye (1) 9:24

F

face (4) 2:18,24 3:2 134:16
facilitated (1) 35:12 facilities (3) 120:12 161:20 169:21

facility (2) 116:8 198:7 fact (33) 5:2 34:12

48:1 50:14 57:6,14 62:9 63:2 67:2 69:8 69:20 70:2 75:11 83:10,12 85:8 86:4 87:7 91:11,13 98:15 100:18 116:22 136:21 139:24 172:1,11 175:3 185:23 194:2 194:6 206:13,14

factor (4) 18:12 19:5 172:14 193:8

facts (1) 164:3

fair (16) 14:23 45:5 66:1 101:15,17 102:8 103:20 109:1 110:1,4,16 125:20 126:2 157:22 175:4 192:15

fairly (1) 127:15 familiar (8) 7:15 8:7

8:14 10:1,13 11:6 126:14 127:15

family (2) 8:4 146:13 famous (3) 3:19 80:25

81:7

far (31) 3:20 6:11 23:23 36:20,20 42:13 54:8,10,16 55:9 57:6,19 59:8

59:11,19 61:19 93:14 flexible (1) 92:10
66:24 93:18,25 financial (41) 1:12 flight (6) 214:1,2,5
106:15 109:4 10:2 20:15 21:6 215:11,11,14
110:22 116:18,24 23:22 24:23 28:20 flows (1) 143:7
151:19 170:17 29:14,17 33:11 fly (1) 213:10
207:25 209:20 60:17 68:4 87:19 flying (2) 213:21
210:17,21 211:8 89:25 92:20 93:17 214:9
fast (4) 86:1,21 88:11 94:8 125:21 126:1 focusing (1) 110:5
169:8 126:2,5,6,8 138:19 follow (4) 6:17 7:14
father (1) 83:17 139:9 141:16 142:6 47:6 129:8
fault (5) 6:25 10:17 153:17,20 154:2,3 followed (1) 48:18
109:24 162:18 154:8,8,11 155:6,8 following (6) 23:2
163:7 156:15 189:11 46:12 73:10,12
favour (1) 178:2 203:19 206:24 95:4 203:7
favourite (2) 25:14 207:19 follows (4) 22:8 92:15
124:15 financially (1) 21:5 93:12 195:23
faxed (1) 148:3 financiers (1) 196:9 foot (3) 49:24 108:21
feature (1) 30:22 financing (18) 15:19 150:9
February (7) 1:1 71:24 17:21 21:14 62:22 footing (1) 213:21
96:18 98:6,24 63:10 87:21 88:11 footnote (1) 35:19
99:22 215:21 88:14 92:7 94:17 foreign (1) 201:3
federal (4) 176:22 95:9 99:19 191:22 Forest (1) 30:16
177:7,7,8 193:4 194:18,23 forfeit (4) 90:20,23
feed (1) 120:6 201:5 203:9 97:23 100:11
feeder (1) 51:23 find (21) 16:13 28:4 forfeited (2) 95:24,25
feel (4) 76:5,11 29:18 40:20 72:4 forged (1) 156:6
145:14 211:17 81:7 83:17 92:4,17 Forgive (1) 143:23
feeling (4) 112:22 94:5,10 99:9 101:4 form (2) 129:2 153:13
119:18 171:1 208:2 120:13 121:3,10,13 formal (3) 153:5
female (1) 50:17 121:20 141:6 187:8 201:22 208:1
fencing (2) 86:10 213:3 formally (3) 176:23,23
161:20 findable (1) 114:7 209:1
feudal (1) 197:20 finding (1) 115:9 former (1) 194:4
fifth (1) 123:24 findings (1) 146:24 formula (2) 26:8
figure (8) 13:9 14:4,7 finds (1) 146:22 83:18
14:25 15:6 110:12 fine (1) 212:24 formulation (1) 27:7
165:13 180:15 finish (17) 62:18 70:9 fortune (2) 83:1 104:1
figures (18) 7:17 13:1 73:15 111:22 113:3 forward (4) 104:15
20:12 65:20,21,23 155:25 156:1 166:23 203:4
67:4 109:20,21 195:13 205:13,18 208:24
111:6 188:21 209:14,17 210:1,4 forwarding (1) 130:18
189:13,16,17 190:2 210:5 212:11,14 found (7) 9:6 18:15
191:2,7 196:2 finished (3) 85:9 75:25 83:9 85:14
file (4) 30:7 42:18 111:20 113:6 99:12 126:4
119:16 120:16 Finnish (1) 184:21 four (12) 28:23 32:2
filed (1) 30:6 firm (2) 122:5 202:5 58:8 61:10 69:16
final (18) 29:24 39:8 first (69) 6:22 9:16 96:20 101:6 136:24
39:23 56:10 61:21 12:14 17:1 24:7 163:15 171:9 174:7
99:3 146:8 156:1 27:19 28:6,9,19 181:18
159:8 175:18 36:2 38:12 39:13 fourth (11) 45:13,17
187:15 188:1 39:22 40:16 43:5 46:16 47:10,12
189:23 190:22 43:18,25 44:10,25 62:7 63:6,9,11,24
191:2,5,12 198:23 46:21 48:7,14 143:25
finalise (6) 57:18 53:17 58:23 61:3 frame (4) 160:23,23
98:19,22 99:6,9 62:8 63:10 68:19 161:10,10
187:17 74:6 79:6 87:7 France (1) 214:6
finalised (6) 54:11 92:11 95:24 96:6 fraud (1) 66:24
100:3 136:3,5 97:4 101:11,16 free (2) 92:19 167:24
161:7 204:25 102:9,13 107:14,17 French (1) 5:15
finalising (1) 52:15 115:14 124:17 fresh (1) 95:9
finally (5) 48:7 49:4 136:5,8,16 137:10 Friday (20) 1:1 209:13
57:16,16 66:9 154:16 161:14,24 209:14,16 211:5,21
finance (44) 2:25 12:5 172:21 173:25 211:23 212:4,20,21
12:10 15:19,25 176:21 177:10 212:23 213:14,17
16:10,18,22 17:17 183:4,12 188:11 213:19,19,20,21
18:7 20:11 22:4,7 201:22 202:2,9,20 214:15,20,21
22:18,20 23:4,11 202:24 203:1,14 friendly (1) 92:8
23:25 24:13,19 207:10,15 212:19 from/loss (1) 109:25
57:12 62:25 63:22 213:13 214:4 front (1) 25:10
69:4,19 79:12 fit (1) 112:17 fuel (18) 65:14 68:23
86:16 87:20,21,21 five (9) 61:10 101:6 68:24 73:25 77:18
87:22 88:7,12 91:3 136:25 166:13 77:25 78:13 80:13
94:18,22 100:8 176:13 181:18 84:20 85:3 89:11
102:6 152:17 205:12,15,16 92:18 94:6 96:11
179:11 198:19 flatly (1) 35:5 97:13 98:9 100:1
200:9,18 208:5 fleet (6) 41:20 42:22 103:3
financed (5) 63:3 69:5 60:25 61:4,13 65:4 fuelling (1) 161:25
73:2 80:16 195:19 flesh (1) 120:16 fulfilled (1) 204:16
finances (2) 71:2 flew (1) 99:4 full (17) 29:15 43:21

66:4 76:20 118:3 126:16 136:19,20 138:25 142:11 152:21 164:11 172:21 173:9,17 207:24 208:3
fully (2) 70:1 126:22 fund (9) 24:7 47:16

101:8 198:6 199:22 201:16,19,21 202:17

fundamentals (2)

198:5 202:23 funded (1) 199:8 funders (1) 199:19 funding (7) 24:7 62:6

91:4 94:15 155:9 194:11 199:18

fundraising (1) 192:1 fundraising’ (1)

187:11 funds (12) 20:23

21:10 24:6 39:23 63:9,16 102:4,22 106:10 139:11 141:11 153:13

funny (1) 83:17 further (7) 25:23

52:18 69:23 113:17 115:5 184:12 201:24

fury (1) 215:14

G

gain (2) 3:2 5:7 gangs (1) 86:9 gangster (1) 175:12 gangsters (1) 172:10 garbage (1) 165:3 Gary (1) 3:19 Gatchina (6) 44:14

52:1 53:23 60:11 60:12 65:4

Gavanski (1) 81:5 Gazprom (1) 82:10 general (11) 7:21 10:8

48:11 49:14 62:13 91:17 141:23 185:11,17,20 200:6

generally (3) 71:25 161:18 189:6 generated (2) 2:22

108:9

genuine (3) 146:20,21 146:22

genuinely (2) 18:13 19:6

German (2) 123:20

124:25

Germany (3) 62:5 88:5 192:23 getting (2) 82:25

177:3

give (20) 4:22 7:11 14:21 21:13 34:17 34:21 64:16 80:12 80:13,18,19 92:14 110:24 142:25 151:16 163:21 164:11 177:18 183:10 214:2

given (22) 14:25 26:16 36:12 38:20 39:14 40:4 46:15 50:19 63:17 67:20 100:18 117:15 118:4 119:25 163:3 177:22 178:1

188:13 190:2 191:2 205:9 209:24

gives (2) 67:4 106:6 giving (3) 40:22 45:3

58:14 global (1) 7:22

go (70) 1:17,18 7:11 16:22 22:7 25:11 25:15 30:18 34:13 34:15 39:25 43:1 46:3 48:19 51:19 56:3,18 58:12 59:17 60:5 70:11 75:10 77:20 81:18 95:13 110:20 111:4 111:13 113:17,20 118:25 125:24 127:5,18 131:20,20 142:12 145:12 146:17 147:4,10 148:4,4 150:2,6 153:8 158:4,16 160:23 161:9 163:23 167:1 169:14 171:17,18 178:5,5 182:18 183:3,4 184:13 188:3 190:22 198:12 199:17 202:19 208:24 209:11 210:5 211:4

goes (7) 1:16 35:3 101:9 104:12 114:20 131:9 132:14

going (50) 3:24 9:4 10:21 14:8 15:4 18:25 22:25 23:14 33:25 41:8,11,15 42:11,12 46:10 64:15 72:10 73:24 75:6,15 76:2 80:16 87:8 89:10 90:2 95:5 99:25 104:15 113:20 127:1,4 143:21 146:18 159:3 165:17,18,19 170:7 176:15 178:25 179:10 191:21 200:4,10 202:11 205:23,24 206:20 207:8 208:24

good (52) 1:3,5,6 5:3 11:13 21:4 25:1 29:14 38:13,16 51:5 81:16 82:11 82:25 87:1,2 89:20 89:21 91:22 92:5 94:13 101:24 102:6 105:19 113:3 116:22 121:5 123:17 145:11 160:5,10 163:15,17 164:13 166:12 170:17 171:14 172:4,14 181:14 191:14 193:6,8 198:4 202:23 207:23,23 209:6 211:9 214:22 215:6 215:9

goods (2) 150:10 154:4

goodwill (2) 2:11,14 Googles (1) 121:3

Gorod (2) 47:21 157:6 governance (2)

196:19 202:1

Opus 2 International transcripts@opus2.com
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222

February 19, 2016 Day 13

Government (2) 86:11 197:7
grandmother-in-law…

148:19

granted (2) 153:12

176:3

grateful (3) 26:23 117:22 122:25

gratuitous (1) 153:12 great (2) 39:10 80:18 greater (1) 167:23 greatest (1) 197:25 greatly (1) 211:19 gross (3) 12:16,22

188:21 ground (5) 52:17

205:13 209:18 210:8 212:23

group (60) 7:9,22 8:2 9:5,12,17,25 10:1,9 14:17 15:20 17:20 17:24 18:2,16 21:2 21:4,11,15 28:11 28:13,22 29:6 30:16 32:3,15 39:4 40:18 42:7 69:11 78:7 79:14 83:1,7 88:18 89:1,2 92:16 92:24 93:23 102:11 102:15,16,21,24,25 118:14 123:13 139:20 152:11,12 152:25 153:6 157:9 157:10 183:22 184:17 191:16 196:2 200:6

Group’s (1) 198:15 guarantee (2) 4:24

63:21 guidelines (2) 201:5

202:1

guillotine (1) 214:21 guillotined (2) 212:4

212:20

Guz (15) 11:5 62:23 63:20 81:19,20 82:11 85:13 88:16 88:24 90:14 91:5 91:12,16,20 195:7

H

half (12) 96:25 97:12 97:19 129:5 132:21 133:25 134:17 138:23 142:18 181:25 212:17,17

half-day (1) 209:25 halfway (4) 12:15 132:9 175:21

179:23 hammer (1) 122:2

hand (2) 105:6 122:9

Handed (1) 113:7 handle (2) 164:22

165:1

handling (2) 166:1

185:11

handover (3) 211:6,7

212:16 hands (4) 26:17

112:19 213:3 214:17
handysize (1) 73:4 hangover (1) 170:3 happen (2) 71:19

119:22 happened (8) 61:1

63:4 65:2 66:19

77:6 179:8 191:10 197:13

happening (2) 44:25 77:6

happens (1) 5:10 happy (12) 11:4,10

43:15 50:14 75:13 77:2 104:23 113:1 114:8 117:7 196:21 212:10

hard (9) 5:25 6:9 125:8 160:9 162:16 162:23 165:20 215:5,18

head (4) 8:22 81:11 116:11 195:6 heading (5) 106:24

107:15,17 125:20 199:18

heads (1) 124:20 Health (1) 204:2 hear (3) 39:7 76:15

119:16

heard (2) 25:19 137:1 hearing (1) 121:8 heavily (4) 48:22 49:5

50:21 135:9 heavy (1) 166:1 hectare (4) 179:21,24

180:5 181:10

hectares (2) 176:20

180:10

held (2) 129:21

134:18

help (8) 4:21 51:3 92:24 111:12 137:8 137:21 155:3 177:9

helped (4) 69:6 92:9 92:11 143:17

helpful (2) 37:18 189:18

helpfully (1) 111:15 helping (1) 93:14 hereinafter (1) 178:10 hidden (1) 122:19 high (8) 85:14 86:6

104:2,14 166:1 171:19 191:15 194:19

higher (4) 104:16 124:4,5 172:19 highest (2) 150:13

192:25

HILDYARD (137) 1:3,5 1:9,19,25 2:10,20 3:4,10,17 4:7 5:3 5:13,17 14:2,12,14 14:23 15:3,8,12 26:4,8,20,22 27:2,8 35:7,16 39:25 50:1 73:17 74:22 75:4,7 75:20,22,25 76:18 77:9,11 80:7 83:21 83:24 84:14 88:16 88:23 89:6 90:19 90:23 109:22,25 110:8,11,15,19 111:12,18,21 112:16,21,25 113:5 116:7,17 117:4,6 117:13 118:2,11,20 119:1,4,18 120:5 120:21 121:11,22 122:16,23 124:8 128:16 130:21,25 131:5,16,18,24 137:2,13,17,20,24 143:23,25 148:17 148:21 149:25

155:24 158:23 164:14,20 165:22 166:10,14,19,23 173:6 175:6,10 205:2,5,7,15,20 209:6,8,23 210:13 210:16,20,24 211:11,22 212:19 212:25 213:4,13,20 213:24 214:12,19 214:23 215:4,9,13 215:17

hiring (1) 45:2 historical (2) 81:15

85:10 historically (1) 85:9 history (3) 81:24

83:20 193:18

hobby (3) 124:14

137:4,11

Holdings (4) 55:12 56:11,15,16

hole (1) 150:9 Holland (1) 62:13 home (1) 211:4 honest (1) 100:21 Hong (1) 88:4

hope (5) 43:7 130:16 210:4,5 215:16

hoped (2) 114:16 209:10

host (1) 113:18 hour (2) 114:11

212:14

hours (2) 199:2 214:3

Housekeeping (4)

113:11 209:7 216:5 216:7

houses (1) 113:17 huge (5) 72:17 83:20

89:2 158:17 189:7 hundreds (2) 52:13

65:23

hungry (2) 193:10,20

I

I20/26/32 (2) 143:20 144:6
ICC (1) 5:14

ice (2) 72:1 73:5 idea (9) 43:2 46:9

47:24 66:24 72:18 92:7 192:16 206:8 212:9

identified (1) 132:18 identify (11) 18:11

22:14 28:3 33:3,9 127:8 129:24,25 139:1 142:13 161:10

identity (2) 19:4 84:6 IFRS (21) 2:10 7:24

11:11,15 14:3 25:7 28:14 30:9 36:15 36:17,17,18,19,25 37:13,14 40:17 86:22 109:14,18 125:4

Igor (1) 10:11

ii (1) 203:19

iii (1) 203:19 illegal (1) 81:10
Ilya (4) 80:25 81:8 88:19 91:13
IM (1) 187:10 imagine (3) 118:4
209:10 212:22 impairment (1) 2:14

implausible (1) 114:12 13:13 14:5,7,15,17
146:16 inflame (1) 27:4 14:18,19 15:1
implemented (1) influenced (1) 92:12 16:24,24 17:4,9,15
197:12 influencing (2) 168:23 17:18 18:12,17
implies (1) 152:23 170:17 19:4,5,19 22:24,24
imply (1) 214:24 inform (2) 194:12 23:1,13 58:5,10
importance (1) 137:4 195:24 62:8 63:10 76:12
important (15) 17:20 information (27) 38:2 92:25 93:24 178:20
19:11,14 69:11 38:14,22 39:14 178:24 184:10
86:20 116:4 128:13 49:15 50:6 51:1 192:5,19,21 197:25
128:18 130:20 52:10 59:20 78:11 202:8,13,15,16
143:2 167:17 121:20 126:4,20 interested (6) 3:22
168:16 182:5 135:24 141:6 76:12 118:24 120:3
205:13 212:12 151:11,14 159:8 193:1,21
imposed (1) 214:16 175:18 178:25 interesting (9) 82:12
imposition (1) 214:13 179:15 189:14 83:9,15 85:15,25
impossible (3) 135:17 192:20 198:18,24 86:15,20 119:15
138:24 151:13 199:19 202:21 124:24
impression (2) 26:4 informing (1) 93:19 interests (6) 50:12
122:20 infrastructure (7) 52:6 58:25 59:5
improper (1) 38:7 193:2,3,7,11,14,18 73:3 197:19
improperly (2) 35:11 193:21 intermediary (1)
35:12 Ingosstrakh (1) 124:5 138:17
improve (1) 177:9 inherent (1) 173:8 internal (3) 21:14
improvement (2) initial (7) 48:17 90:14 45:10 199:8
37:11 161:12 171:1 175:24 191:1 international (28)
improvements (12) 201:23 202:2 9:14 24:24,24 47:5
161:3,17,19 162:2 initially (4) 58:6 52:14,21 66:6 73:6
162:6,15,25 163:2 148:13 210:9,13 83:14 86:24 94:17
163:16 165:9 169:9 initiative (1) 15:19 95:2,7 104:22
177:8 inside (5) 7:23 13:16 105:10,16,18
improving (1) 37:5 17:24 90:2 167:11 123:22 124:24
in-house (3) 8:20 insinuate (1) 35:10 125:3 193:10
53:16 178:21 insinuation (3) 163:19 200:17,21 201:6,25
inaccurate (2) 22:15 165:25 180:23 203:9 204:21
22:19 insofar (1) 114:17 207:10
inappropriate (1) 39:2 instalment (5) 89:13 internationally (1)
include (6) 28:5,11 91:22 95:24 96:25 123:25
30:13 46:16 65:14 97:19 internet (3) 81:23
67:14 institution (1) 203:9 120:24 121:10
included (5) 28:15 institutions (1) 203:21 interpreters (1)
29:3 88:1 127:9 instructed (1) 125:13 118:21
160:16 instruction (1) 135:7 interrupt (4) 4:25 77:3
includes (1) 126:8 instructions (2) 74:9 113:12 180:21
including (13) 1:22 75:3 intervene (1) 100:5
11:2 24:17 28:12 instrumental (1) intra- (1) 18:1
31:18 39:15 102:22 78:16 introduced (1) 102:5
106:14,14,15 insurance (76) 6:14 invest (5) 108:3 138:5
127:21 135:24 7:4 9:7 10:13 30:15 139:10,10 156:20
200:23 90:6 103:9,12,24 invested (5) 9:9
inclusion (1) 2:13 105:5,7,9,10,13,16 106:11 135:2,5
income (13) 2:19 27:9 105:16,19,21,23 154:3
71:7 104:11 105:1 106:9,10,21 107:3 investigations (2)
105:11 106:13,13 107:18,19,20,22 88:21 206:20
106:16,24 109:13 108:7,10 123:4,6,7 investing (7) 107:10
110:3 111:9 123:10,18,19,22,24 107:22 108:16,18
incorporates (1) 124:1,6,13,19 110:3 151:25 195:3
202:22 125:3,22 127:24 investment (34) 8:24
increase (8) 23:17 131:7 133:3 134:19 11:8,9 87:25
48:16 94:3 168:25 134:22,23 135:8,13 104:10 105:1,11,20
170:14 171:25 135:16 137:11 105:22 106:13
173:7 182:3 138:21 139:22,23 109:1,12 110:5
increased (2) 37:9 139:24 140:13,15 111:25 112:7,12
191:5 141:11,19,20,23 124:24 137:14
incur (1) 104:16 142:9,9 143:1,3,8 138:9 141:17 152:1
independent (16) 143:13 144:16 154:12 156:15,15
18:18 37:22,23 151:23,24,25 169:6,6 179:7
71:6 104:23 112:1 154:17,19,24 184:9 188:2 193:12
123:7,12,15 152:8 Insurance’s (3) 129:1 194:14 200:14,24
152:21 204:21 133:9 134:17 200:25
206:3,6,12,17 insurers (1) 108:1 investments (18)
independently (1) intend (3) 25:20 26:18 105:7,15 106:15
124:22 211:16 110:2,8 125:21
INDEX (1) 216:1 intended (2) 27:3 137:12 139:14,23
indicate (1) 126:7 203:7 140:13 142:22
indicated (1) 210:9 intentional (1) 122:19 153:18,20,25 154:2
indicates (1) 165:18 inter-OMG (1) 18:1 154:8,19 155:6
individual (1) 135:23 interest (48) 12:15,18 investor (3) 183:23,24
individually (1) 12:18,19 13:3,6,7 183:25

investors (7) 18:8,9 24:24,25 165:7 184:10 186:9

InvestrBank (1) 49:9 invite (1) 3:12 involved (26) 8:25

15:10,20 21:2 33:7 33:10 43:25 44:4 46:24 48:22 49:5,7 50:14 56:16 57:4 67:12 84:4,13 85:15 86:6 91:12 93:8 100:14 134:12 153:2 196:6

involvement (1)

203:20 ironed (1) 5:2

island (5) 170:1,4,13 170:16 176:19

Islands (1) 48:3

ISO (3) 11:15 30:11 125:4

issue (10) 21:15 37:21 73:7 74:12 91:3 120:23 128:18 139:9 140:5 182:4

issued (3) 48:15 63:21 127:22

issues (6) 1:17,18 116:18 122:24 149:11 207:6

italics (1) 49:24 item (1) 2:17 iv (1) 203:20

J

January (4) 71:24

98:23 143:20,24

jet (1) 99:5

job (3) 38:13,16 114:13

joint (2) 48:1 91:15 jot (1) 118:11

judge (2) 145:9 189:8 judgment (1) 117:15

July (4) 56:23 136:23 175:19 178:16

June (7) 103:22 162:4 186:16,18,19 187:5 187:17

JUSTICE (137) 1:3,5,9 1:19,25 2:10,20 3:4 3:10,17 4:7 5:3,13 5:17 14:2,12,14,23 15:3,8,12 26:4,8,20 26:22 27:2,8 35:7 35:16 39:25 50:1 73:17 74:22 75:4,7 75:20,22,25 76:18 77:9,11 80:7 83:21 83:24 84:14 88:16 88:23 89:6 90:19 90:23 109:22,25 110:8,11,15,19 111:12,18,21 112:16,21,25 113:5 116:7,17 117:4,6 117:13 118:2,11,20 119:1,4,18 120:5 120:21 121:11,22 122:16,23 124:8 128:16 130:21,25 131:5,16,18,24 137:2,13,17,20,24 143:23,25 148:17 148:21 149:25 155:24 158:23 164:14,20 165:22

Opus 2 International transcripts@opus2.com
Official Court Reporters +44 (0)20 3008 5900

223

February 19, 2016 Day 13

166:10,14,19,23 173:6 175:6,10 205:2,5,7,15,20 209:6,8,23 210:13 210:16,20,24 211:11,22 212:19 212:25 213:4,13,20 213:24 214:12,19 214:23 215:4,9,13 215:17

K

KAP (1) 42:20 Kasparov (1) 3:19 keep (15) 3:6 9:24

15:15 25:24 41:15 68:5,14,16 69:11 69:25 71:18 75:15 99:13 105:13 212:10

Keith (1) 187:8 kept (2) 9:10 120:12 key (14) 21:15 37:21

62:3 72:23 73:7 82:7 102:1 105:15 140:5 171:10 182:4 182:10 201:1 207:6

keys (1) 21:12 killed (3) 81:24 82:2

172:11

kind (12) 12:9,14 21:11 25:11 45:11 51:19 71:20 88:8 91:15 93:19 173:21 202:5

KIT (28) 12:5,10 15:19 15:25 16:10,18,22 17:17 18:7 20:11 22:4,7,18,18,20 23:4,11,25 24:13 24:19 86:16 87:20 87:21,21 88:12 91:3 94:22 152:17

knew (2) 33:22,24 know (102) 4:17,17

13:6,10,11,12,15 13:15,23 22:10 26:6 28:2,14 29:5,8 32:19 34:23 37:19 38:23 49:2 50:16 56:13 57:16 58:21 59:7 60:2 73:11 74:24 75:16 76:1 80:4 81:23 84:10 84:23 86:7 87:4,20 89:7 90:2,4 91:6,7 91:12 93:1 94:21 99:1 105:9 110:15 116:7,11,13 118:9 118:13,14 119:4,5 119:6 120:5,11,20 121:24 122:20,21 123:14 126:14 127:3 128:11 139:1 145:23 147:3,3 149:12 152:25 156:7,10 157:1,2,8 157:23 160:5 162:12 165:23 172:11 174:2,2 180:15 181:12 188:19 191:9 193:5 195:4 196:1 197:11 205:7 208:16,21,22 212:8 213:15 214:1 214:5,6

knowing (5) 34:24 74:8 124:19,20

204:11

knowledge (3) 8:11

130:8 207:23 known (7) 80:20 81:5

81:22,25 83:18 88:19 102:2

knows (3) 54:13 172:6 215:12

Kolpino (8) 44:18,23 52:1 53:24 58:15 59:18,23 65:4

Kong (1) 88:4

Krygina (13) 48:21

49:10,14 50:15 53:15,16 57:4 58:22 65:18 66:3 67:5,12 72:3

L

laid (1) 70:6

Lair (18) 42:4,14,24 43:13,15 112:1,9 112:12 170:18,20 171:6 172:1 173:7 174:17,21 175:8 178:23 181:15

land (25) 47:10,20,24 48:12 55:11,16,23 55:24 56:11,15,16 56:21 57:1,23,25 58:1,3 59:19 112:14 160:15,16 162:11,19 164:14 166:16

language (2) 153:25 164:13

large (1) 118:3 largely (1) 127:25 late (2) 212:8 215:15 latest (1) 88:14 laundering (2) 82:24

83:13

law (4) 122:5 193:25 193:25 194:3

lawyers (4) 11:25 35:13 53:16 172:23

lay (3) 19:21,25 201:4 leaded (1) 88:18 leading (6) 73:9 104:1

123:9,10 125:3 200:22

leap (1) 4:14 learning (1) 25:9 leave (1) 85:16 led (1) 68:1

left (2) 107:17 164:15 left-hand (2) 107:20

185:7

legal (3) 32:25 46:25 47:2

legally (1) 83:7 Lehman (4) 64:2

71:21 88:12 95:3 lend (2) 97:12 203:10 lender (1) 94:12 lenders (2) 192:16

196:22 lending (2) 189:1

196:20 lendings (1) 95:7 lengths (1) 146:17 Leningrad (2) 60:3

61:19

let’s (15) 3:6 5:17 26:20 48:14 69:19 83:13 95:9 105:23 124:14 138:2,14 169:10 173:3 195:8

206:9 63:5,10 79:15 94:4 110:10,13,20
letter (37) 49:9,13 95:15 102:24 201:9 111:13,20,24 113:1
50:4 53:4 62:21 local (2) 73:5 201:9 113:12 114:8
64:4,10,14,17,23 located (5) 85:22 115:25 118:1,16
68:18 72:24 96:15 120:25 124:1 122:7,22 123:1,2
130:11,13 143:17 163:21 175:15 124:8 125:6 128:8
143:19,22,25 location (1) 169:17 128:10,16,20
149:19 201:11,22 log (1) 81:23 130:15,15,22,22
202:7,8,15,16 logic (3) 91:6,7,10 131:2,6,17,22,22
204:11,14 205:3,8 logical (1) 156:21 131:25 132:8 139:3
205:13,18,19,22 logistical (1) 120:22 143:24,24 144:1,1
206:5 208:2,10 London (4) 88:5 114:9 148:25 150:2,6
letters (5) 63:18,22 116:14 187:13 155:23,25 156:2
115:7 133:20 long (21) 13:17 19:12 158:22,22 159:3
202:12 22:11 25:13 26:25 160:4 164:25 166:6
level (8) 65:21 74:11 40:24 69:22 72:12 166:6,18 167:1
92:12 105:14 80:19 113:1 133:17 174:13 175:16
190:17 191:9 193:1 152:20 174:3 182:6 188:7 198:25 205:1
194:19 193:12 197:6 205:1,9,10,12,18
levels (4) 181:18,18 198:22 199:22 205:21 209:4,4,9,9
182:1,12 205:2 212:2,21 210:4 211:3,11,12
Levitskaya (1) 136:22 longer (4) 64:15 72:11 212:6,24 213:6,17
liabilities (1) 207:25 197:13 213:11 213:17 214:2,2,8,8
liability (3) 1:16 103:1 longer-term (2) 60:20 215:3,3 216:4,6
137:15 70:14 Lord’s (1) 165:23
liaise (1) 166:15 look (46) 2:10 10:24 Lordship (77) 1:4,7,10
licence (1) 135:9 12:9,14 13:3,21 1:12 3:16 5:1 7:19
licences (3) 176:14 21:16 22:23 24:2 14:10 17:12 19:3,9
177:3,4 27:9 40:16 45:17 22:14 25:17 28:4
lie (2) 20:3,21 49:8 50:3 58:13 35:6 39:13 49:25
life (1) 197:11 60:13 61:12 64:23 60:2 67:22 69:3,12
light (2) 110:13 68:18 77:12 96:5 70:23 73:8 74:5
211:15 107:15 108:25 79:11 80:4,22
limit (2) 5:11 97:15 117:20 122:17 95:22 98:2,11
limitations (1) 153:6 125:12 134:20 99:21 100:9 103:23
limited (1) 126:4 138:12 139:3,5 111:15,16,24
limits (1) 48:16 143:14 144:23 113:15 114:24
line (18) 6:7 12:15 145:22 146:11 115:11,14,21 116:4
13:4,22 16:24 17:3 148:9 150:15 152:3 118:18 119:9 123:2
17:9,15 22:24 24:2 159:11,24 166:23 128:9 130:19 131:9
33:16 45:19 70:13 167:14,15 188:25 131:11,23 132:16
107:11 108:21 197:22 202:7 132:19 141:22
179:22 181:22,24 208:10 143:17,22 146:22
lined (1) 166:16 looked (1) 144:16 147:5,15 155:3,23
lines (2) 21:23 181:25 looking (10) 14:3,4 160:8 161:9,15
link (3) 120:24 121:1 20:12 28:21 121:16 162:13 163:4,11
121:4 121:17 133:5 166:7 167:3 168:6
liquid (1) 86:1 142:12 148:22 172:5 181:13,17
list (4) 51:12,13 135:3 183:8 205:12,14 209:13
187:8 looks (32) 36:4 42:7 209:21 212:10
listed (1) 122:14 47:23 51:25 56:20 Lordship’s (5) 25:20
listen (2) 96:5 127:11 58:24 59:1,4 60:22 117:8 130:16 132:6
listening (1) 117:18 60:24 78:12,22 162:24
listing (1) 121:12 89:12 91:6 97:9 lose (6) 87:6 90:21,25
lists (2) 118:16 126:3 107:14 108:8 99:25 100:15
literature (1) 88:20 109:12 127:23 111:23
litigation (1) 77:5 132:16 133:24 loss (7) 2:21 3:5 24:1
little (5) 41:15 83:19 134:16 146:13 24:13,20 104:14
122:3 137:8 210:7 148:13 150:15 105:13
live (1) 197:13 156:8,21 161:12 lost (15) 54:13 55:10
lives (1) 88:20 184:8 189:13 190:2 55:19 57:7 61:22
LLC (6) 47:21 139:6,8 191:13 87:7 91:14 96:11
140:21 150:10 Lord (161) 1:4,7,10,20 98:16 99:12 103:6
153:21 1:24 2:8,8,16,16,23 128:8 160:7 209:18
LLCs (1) 141:7 3:7,7 4:21,21 5:9,9 209:18
Lloyd’s (3) 51:12,13 5:16,20,21 14:21 lot (15) 9:11 10:23
124:21 15:14 25:18 26:2,7 25:12 48:6 50:19
loan (31) 21:13 44:10 26:7,8,15,18,18,21 50:20 54:13 55:10
44:17,21 45:13,18 26:25,25 27:5,5,9 57:7 59:10 61:22
45:23 46:5,16 35:2,2,15,15,18 124:16 165:11
47:11,12 48:15 39:25 40:2 50:3 176:14 192:21
58:3 62:7 63:6,9,11 70:9 73:14,24 74:7 lots (2) 119:21 192:19
63:24 66:8 88:9 75:3,4,6,6,9,14,15 low (6) 65:23 86:2,4
92:21,22 93:5,13 75:21,24,24 76:19 86:14 190:17 191:9
93:23 153:13,20 76:22 77:1,3,12 lower (2) 150:8 168:2
178:20,20,23 80:11 83:19,19,21 LPC (1) 145:1
200:11 83:23 84:7,17 LPK (8) 144:13 148:9
loans (12) 18:17 44:25 89:10 91:21 99:3 149:18 150:17
46:19 57:11 58:8 109:23,24,24 110:7 151:17 153:21

154:13,17

LPN (6) 23:20 88:9 91:3 92:8 94:16 95:7

Luga (8) 46:10 49:17 52:7 54:7 57:14 59:1 60:1,24

Lukina (2) 10:12 142:8

Lukoil (1) 86:18 lunch (1) 123:4 Luncheon (1) 113:9 lunchtime (6) 4:22 5:4

210:2,4,5 212:12

M

M&A (1) 86:21

M1/20/11 (1) 6:21

Madame (1) 11:7

Magnum (2) 117:19

117:22 main (1) 105:22

maintains (2) 114:9 114:15

major (20) 7:17 74:15 81:1,2 85:6 86:18 94:15 100:2,6 105:10,12,12,20 123:18 124:19 161:18 175:13 193:5 200:17,19

majority (2) 25:22 109:12

maker (1) 194:20 making (11) 4:13

27:11 34:8 36:11 44:10 52:13 55:19 127:20 131:14 195:2 198:6

man (1) 9:22 man-made (1) 170:1 managed (3) 21:5

103:2 192:21

management (9) 7:21

7:22 10:3 65:18 68:5 138:3,10 141:17 204:9

manager (1) 136:16 managers (1) 204:5 managing (2) 139:14

139:18 manipulate (1) 14:22 Mann (1) 62:5 manuscript (1) 49:22

March (5) 65:9 126:5 127:24 132:11 136:8

margin (4) 15:25 188:22 189:2,8

marine (15) 21:4 30:16 42:7 83:1 123:19 142:14 143:1,2,5,8,12 154:13,18 157:4 161:23

maritime (1) 65:12 mark (3) 162:24,25

164:6

marked (5) 115:1,19 115:22,24 150:11

market (26) 11:14 53:21 72:17 73:6 85:20,22 88:7 94:17 98:25 99:14 105:14 123:21 124:7,18 125:3 140:6,11 152:2 170:23 172:9 177:11 181:24

193:4 203:23 207:5 207:5

marketing (2) 52:9 204:1

markets (3) 138:19 142:6 154:11

marking (2) 115:24

164:8

Marsal (1) 140:19 Marshall (1) 48:3 match (1) 140:22 material (2) 40:12

161:12

materially (2) 22:15

22:19

mathematical (2)

20:15,16 matter (8) 13:19

26:22 27:4 36:21 122:20 203:4 209:20 215:14

matters (11) 1:12 12:24 17:19 75:22 76:24 77:5 116:24 137:2 149:1 211:14 211:17

Mayor (1) 81:12 mean (24) 9:2 10:20

13:2,6 14:3 39:20 50:20 95:2 96:10 107:19 108:11 117:1 124:11 145:3 149:19 152:24 155:7,18 158:1 173:4 189:21 211:3 211:12 213:25

means (17) 4:9 13:13 88:9 102:20,21,21 102:21 110:14 152:19 154:2 178:6 181:20 182:2,10 191:4 194:6 213:10

meant (3) 19:10 56:6 167:23

media (2) 82:22 122:11

Medvedev (1) 82:8 meet (8) 3:2 82:21 86:8 92:24 93:23 137:13,15 192:22 meeting (1) 175:24 meetings (3) 192:11

192:25 194:17

memorandum (21)

87:25 159:9 169:6 169:6 175:18 179:1 179:15 184:8 188:2 189:14,21,21,23,24 190:18 192:20 194:14 198:18,24 199:19 200:14

memorandums (1)

11:8

memories (1) 142:5 memory (1) 165:13 mention (1) 28:23 mentioned (3) 1:23

32:2 119:9 mess (1) 48:4 message (1) 74:23 met (4) 97:8 99:4

103:4 192:17 metres (2) 169:12,13 metric (1) 185:17 middle (8) 12:16 69:9

88:14 109:4,17 166:17 199:4,12 middle/end (2) 68:15

88:6

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224

February 19, 2016 Day 13

military (1) 170:4 213:1,4 215:7,15 natural (1) 145:20
Miller (1) 82:9 215:21 nature (5) 26:11
million (97) 23:2,4,8 money (54) 15:4 21:2 33:24 72:19 80:9
23:14,14 24:3,13 40:15 45:1,10 81:17
24:20 27:18,24 54:13 55:10,19 near (2) 47:20 184:21
36:7,7 40:6,13 41:3 57:7 58:4,9 61:22 nearest (1) 177:10
78:22 79:1,1,2,6,9 63:6,11 68:11 nearly (5) 111:20
79:9 86:3 88:15 69:21 70:19,25 138:1,7 140:15
89:13 90:15 91:7 71:1,2 79:12,14 141:15
91:15,23 92:5,7,14 82:24,25 88:10 necessarily (1) 32:14
92:17 94:6,11 95:12 97:12 98:24 necessary (13) 21:14
95:12 96:23 97:1 99:8,24 100:15,23 38:13,14 83:12
97:20 98:17,23 101:3 102:10,14,25 84:23 172:25
99:10,22 100:19,24 105:14 108:3 173:18,22 175:23
100:25 102:17 135:19,20 136:14 176:3 179:11
104:9 108:9,11,19 136:18,18 137:18 194:17 209:5
109:2 126:6 129:12 138:5 143:12 need (21) 21:7 37:16
129:20,20 132:17 154:10 155:5 40:24 49:12 51:1
132:21 133:14,15 158:14,15,17 75:4 112:17 113:23
133:16,23 150:13 165:11 173:4 127:18 131:19
150:22 153:22 206:19 165:20 173:17,17
154:1 170:23 171:4 money-wise (1) 62:3 187:23 198:23
172:2,3,16 185:17 monies (5) 20:23 58:8 203:18 205:16
185:21 188:14,15 132:24 135:18 209:10 211:11,14
188:18 189:2 190:3 158:4 213:12
190:4,6,7,8,8,11,11 monitor (1) 160:11 needed (3) 98:22 99:7
191:2,3 195:10 month (3) 90:21 99:7
196:6 198:6,15,18 92:21 172:2 needlessly (1) 5:1
199:8,22,23 200:4 monthly (1) 140:15 needs (3) 80:4 119:10
200:10 months (10) 24:9 197:21
millions (2) 72:2 52:22 69:16 96:20 negative (5) 2:11,14
141:7 136:25 160:25 13:8 24:3,8
mind (8) 2:9 19:15,16 161:4 171:22 174:8 Negodov (1) 195:6
19:18 29:12,20 208:13 negotiations (4) 48:23
32:17 61:3 mooring (1) 161:20 57:5 93:16 201:24
Minister (2) 72:22 morning (5) 1:3,5,6 neighbouring (1)
82:9 98:5 100:9 82:13
Ministry (3) 72:21 mortgage (4) 46:16 Neste (1) 85:23
73:1 176:4 48:16 177:16,22 net (3) 24:1,2 111:6
minor (1) 67:3 mortgaged (3) 48:12 neutral (1) 26:19
minute (1) 50:3 178:9,11 never (32) 7:22,23
minutes (12) 19:3 mortgages (1) 48:2 10:23 11:24 49:3
39:18 73:20 155:21 mortgagor (1) 178:2 54:8,11 58:1,19,24
155:22 158:23 Moscow (4) 56:24 59:5 60:23,25
166:13,13 176:14 95:13,14 124:1 66:16,17 90:9 93:4
205:12,15,16 mother (2) 148:19 93:8,8 103:2
Misharin (1) 72:21 150:3 137:13 148:23
misleading (1) 101:12 motivated (1) 50:18 158:15 179:10
misquoting (1) 198:21 motivating (1) 72:3 186:9 196:11,14,14
missed (1) 161:15 move (2) 35:5 41:8 197:14 201:18
missing (2) 106:23 moved (1) 26:12 214:6 215:11
173:14 movies (2) 163:15,17 new (30) 9:2,3,12,13
mistake (2) 60:11 moving (3) 21:2 9:18 23:20 24:7,17
191:1 112:25 211:22 24:17 47:6 48:21
mistakes (4) 189:20 MTPY (1) 185:11 48:22,25 54:14,14
189:22 190:1,16 Multilaterals (1) 62:22 63:12,22
Mm (2) 24:16 206:12 203:21 67:15 69:10 71:15
mobile (2) 131:12,18 multiple (1) 106:17 72:4,8 88:5 94:16
model (33) 12:5,25 mundane (1) 89:11 112:25 114:1,3
13:16,16,20,21,24 mustn’t (2) 180:18 122:4 193:13
13:25 14:16 16:11 182:23 news (4) 121:6,7,16
16:18,22 18:5,6,7 mysterious (1) 3:5 122:13
19:12,13,24 20:9 newspapers (1) 73:10
20:10,12,16 22:4,7 N Nice (1) 120:9
22:9,10,14,18 N1 (1) 49:8 nickname (1) 81:9
23:11,25 24:15 night (1) 214:10
N2 (1) 49:8
203:19 206:24 nine (2) 32:3 73:13
N3 (1) 49:8
modelled (2) 22:23,24 non-operational (1)
N4 (1) 49:8
modelling (3) 12:11 2:17
N5 (1) 49:8
18:22 207:20 non-payment (3)
N6/3/1003 (2) 49:8,12
moderate (2) 104:4,8 65:11 68:23 70:20
name (11) 42:5,19
moment (9) 1:19 3:14 Nordheim (3) 57:20
46:24 54:20 81:4,8
10:8 95:17 102:19 59:12 61:17
81:8,9 92:23
102:25 107:25 Norheim (3) 57:20
146:13 195:7
128:15 213:13 59:12 61:17
names (8) 46:24
Monday (15) 130:12 normal (7) 39:7 56:9
57:19,21 59:12,15
163:22,22 164:11 94:25 145:15 158:4
59:15 60:3 61:18
166:5 187:19 206:9 181:18 194:18
Natalya (1) 10:9
206:10 212:7,9 normally (14) 9:13

52:20 71:23 94:24 110:24,25 145:15 181:16,25 189:10 193:25 202:2 204:22 207:9
north-western (1)

79:20

Norwegian (1) 85:23 Norwood (1) 142:14 note (5) 88:9 111:14 115:1 122:3 132:7

notes (9) 11:9 92:8 111:12 126:6,11,12 127:22 128:1 213:7

notice (7) 25:23 65:20 67:6 88:10 116:13 120:18 148:1

notification (1) 121:12 notified (2) 114:1

121:14 noting (1) 26:12

November (7) 54:16 61:21 62:9 98:23 99:5 103:5 136:11

Novikov (1) 79:19

Novy (2) 47:21 157:6 number (27) 3:21

10:14 13:1 15:24 24:4 28:7,16 42:18 54:20 56:4 60:8 61:25 62:5 63:2 81:12,24 95:5 115:15 135:22,23 135:24 140:25 148:7 162:15 163:21 167:17 198:9

O

oath (6) 13:12 19:2,9 27:17 38:17 97:23
object (1) 206:8 objects (1) 88:2 obligation (1) 133:1 obligations (5) 10:23

16:13 30:7,8 95:10 observes (1) 128:25 obtain (2) 166:15

176:15 obtained (2) 166:14

172:25 obtaining (2) 6:12

38:14

obvious (4) 4:9 24:11 86:7 191:13

obviously (13) 1:16 2:24 4:7 23:3 67:21 80:12 114:20 115:13 117:25 121:13 161:14 209:4,20

occasion (1) 33:2 occasions (1) 81:19 occurred (1) 62:10 October (26) 49:10

61:21 62:9 88:7,14 89:14,15,23 90:1 90:11 91:23 92:16 92:25 93:21,24 94:20,21 96:10,20 97:22 99:5 100:10 100:15 103:5,6 109:19

October/November …

71:23 99:11 offensive (1) 35:17 offer (4) 47:9 201:23

202:2,5

offered (2) 47:19 operation (3) 52:3 112:2,4 125:17,24
85:13 67:3 143:2 126:9 132:8,9,14
offering (1) 47:24 operations (5) 8:6 9:7 132:18 133:12,16
office (10) 34:13 81:4 10:13 44:1 134:15 133:18 142:12
81:4,5 83:4 86:10 operators (1) 117:19 144:1 145:12,22
88:25 89:3,8 92:13 opinion (4) 3:24 8:19 146:4 147:11,21,23
offices (1) 86:10 37:23 104:23 147:23 148:4,5,5,6
official (19) 25:21 opportunity (1) 40:22 148:6,16 150:6,9
26:9 27:12 28:5 opposed (1) 2:6 150:11 153:8
31:12 34:15 36:11 opposition (1) 3:22 155:10 156:2
37:3,12 38:19 40:4 option (1) 19:23 169:23 175:21
62:12,21 130:14 options (3) 20:19 177:13 179:14,23
168:10 177:1 114:4 116:3 182:18 183:4,4,5
194:13 195:11 Opus (1) 166:4 183:12 184:1,4,13
196:7 oral (5) 63:14,19,20 184:18 185:8 199:4
officially (2) 100:13 119:5 120:6 199:12,17 202:19
152:18 orally (1) 119:11 202:20,24,25 203:1
officials (2) 168:22,24 order (13) 3:2 25:24 203:3,6 206:21
oh (3) 17:23 27:25 68:12 92:24 122:14 207:4 216:2
145:24 135:20 183:23 pages (7) 10:18 73:18
oil (4) 65:14 85:7,23 195:15 203:9 111:9 127:5 205:7
86:18 208:17 209:25 205:11,11
okay (21) 5:17 6:4 212:4 215:16 paid (51) 12:18,19
41:13 42:4,23 48:8 ordering (3) 37:25 13:4,6,8,13 14:5,7
52:12 59:23 79:4 54:13 176:24 14:8,15,17,18,19
79:25 127:2,7,13 ordinary (1) 2:20 15:1,1 16:24 17:4,9
129:17 146:23 organisations (1) 17:18 19:4 22:24
147:2 155:22 124:2 23:1 27:22 34:3
160:10 173:17 organised (2) 21:11 36:22,22,23 41:3
183:14 214:17 93:2 46:25 62:6,7,8 79:6
old (4) 48:24 50:17 organising (1) 194:17 79:7,10 91:6
149:21,23 oriented (1) 197:21 100:15,19,25
Olga (7) 10:12 48:21 original (3) 55:25 101:21 102:17,19
50:15 58:22 66:3 147:20 151:13 135:18,21 151:11
67:5 142:8 originally (1) 47:19 171:2,9,19 195:10
OMG (78) 5:22 7:9,15 Oslo (5) 21:4 30:16 203:23 209:2
8:2,14 12:6 15:19 42:7 83:1 157:4 paper (2) 98:16,20
19:20 20:22,23 ought (5) 116:5 papers (2) 138:13,15
23:1,13,18 24:1 117:11,17 118:4 para (1) 188:12
28:19 29:13 31:3,6 131:18 paragraph (42) 6:5 7:3
31:14,16 33:4,22 outside (3) 75:22 15:18 43:7 45:18
42:21 48:19 53:23 123:13 167:11 45:22 47:8,11
53:24,24 54:6,19 outstanding (3) 97:19 53:17 58:13,14
54:20 56:6,21 57:1 143:4 187:9 60:13 65:1 70:12
58:24 59:4,4 67:20 overall (1) 208:12 72:14 97:4 101:11
67:21,23 68:12 overnight (2) 71:20 101:16 102:9,13
69:3,5 71:2 78:7,9 95:15 103:11 104:3,25
78:13,17 85:3 overwhelming (1) 128:25 153:16
87:12,16 89:25 187:10 167:2,15,21 169:14
92:16,22 93:14,22 owed (4) 132:23 169:18,23 175:22
94:7,11 123:6,13 133:1,11 143:12 176:18 179:2,3
139:16,18 142:13 owned (15) 31:14 189:16 191:24
142:19 144:11 47:20 56:11,15 197:22 199:5
152:7 154:14,21 57:1 58:1 59:19,22 202:20 207:14
156:22 158:4 78:9 124:23 152:13 208:15
179:10 182:15,23 167:22 193:4,24 paragraphs (3) 6:24
183:8 184:9,19 194:5 65:2 144:2
188:14 190:2 owner (8) 8:1,22 parallel (1) 61:8
199:21 56:21 81:6 82:3 parameters (1) 209:23
OMG’s (2) 188:18 91:14 171:11 paraphrase (1) 97:9
199:8 194:20 paraphrasing (1)
OMGP (8) 12:11 16:24 owners (3) 82:1 84:6 126:24
17:16 19:4,19 172:18 Paribas (15) 191:22
24:14 30:14 31:14 ownership (1) 174:4 197:23 198:1,3
once (3) 116:5 122:18 owning (1) 194:7 201:11,18,24
180:14 Oxus (10) 179:17 202:12 203:8
Onega (5) 142:15 180:2 181:16 190:3 204:18,20 205:23
157:6 163:17 192:1 194:14 195:9 207:1 208:3,10
184:20,25 207:24,25 208:3 Paribas’ (2) 202:13
ones (2) 109:16 204:15
144:16 P Paris (4) 116:15 120:7
online (1) 160:6 P&L (1) 18:14 198:1,3
onset (1) 60:16 part (24) 2:3 20:22
page (80) 12:16 17:7
onwards (3) 6:24,25 37:10 58:9 60:25
17:9 25:10,12,14
167:15 61:13 62:3 74:22
30:19 43:2 49:24
open (2) 98:25 116:2 74:23 75:18 79:6
60:19 106:23 107:2
opening (1) 10:18 84:11 85:10,17
108:8,21 110:20,20
operates (1) 53:23 92:11 102:14
110:21,23 111:4
operating (2) 71:25,25 105:20 114:9 122:5

Opus 2 International transcripts@opus2.com
Official Court Reporters +44 (0)20 3008 5900

225
February 19, 2016 Day 13

134:24 176:5,8,15 134:14 172:20 165:14 166:9 178:5 179:1,14 119:16,17,17 previously (2) 1:23 profitability (7) 25:1

194:18 173:18 207:24 picks (1) 128:24 182:14 183:18 146:19 163:22 45:4 168:25 189:9
participating (1) 93:9 Perez (1) 142:7 picture (5) 161:21 184:13 186:12,15 167:19 183:22 price (17) 78:19,19,22 190:25 191:4,14,15
participation (2) 88:9 performance (5) 162:8,9,19 166:17 187:8,18 191:24 192:25 197:14 86:2,4,14 96:23 profitable (3) 85:20
204:15 104:2,4,8,13,17 pictures (9) 131:14 197:22,23,23 214:5 97:13 101:15 171:2 188:25 191:17
particular (27) 8:23 performing (1) 123:21 162:20 165:25 199:17 201:10 possibly (1) 40:15 171:19,19,20 profitably (1) 8:17
10:24 17:3 26:14 period (8) 27:16 166:1,4 167:7,11 202:6 208:16,21,22 posted (1) 122:18 172:19 173:9 profits (2) 104:9 105:1
29:21,22 33:4,9 132:13 143:10 170:10,10 pledge (6) 47:9,19,24 postponing (1) 56:8 211:22 212:3 progress (2) 41:16
76:16,17 78:18 153:17 156:20 pie (1) 121:25 177:15,22 178:5 potential (8) 18:9 prices (1) 128:15 209:9
84:19 89:1,8 90:12 178:20 207:10 piece (2) 6:17 194:7 pledged (1) 178:17 37:6 173:25 183:25 Prime (1) 82:8 project (34) 8:24 43:3
93:1 100:2 114:14 208:13 pitches (1) 121:13 plot (1) 165:16 184:10 192:15 principle (4) 198:5 72:15,22,23,23
121:15 125:5 137:4 permission (2) 25:20 PKF (3) 36:15 37:17 plots (2) 112:15 194:11 199:19 201:16,19 202:17 73:2 100:2 124:24
149:8 176:18 34:22 38:25 160:16 practice (6) 105:19 printout (1) 122:8 167:8 169:1 172:6
183:14 186:8,10 permissions (4) 34:18 place (4) 113:14 119:9 plus (4) 173:12 110:14 194:24 priority (2) 72:15 172:8,13,23 174:3
194:3 172:22,25,25 142:10 174:17 178:20,24 185:17 197:1 206:19 209:3 168:4 174:23 192:5
parties (7) 28:9 permits (6) 174:16 placed (3) 121:9 137:9 pm (10) 113:3,6,6,8 practices (1) 6:11 prison (1) 81:13 193:18 197:6 198:4
119:24 121:14 175:23 176:3,10,14 137:21 113:10 158:25 pre-prepared (1) privacy (1) 116:19 198:6 201:17,20,21
136:18 178:4,8,12 177:6 placement (2) 138:9 159:2 212:4,20 80:19 private (18) 91:19 202:22 203:10,18
parties’ (1) 115:4 person (19) 48:25 141:16 215:19 pre-purchase (2) 99:4 101:1,9 102:3 204:9,15 206:14
partly (3) 122:4 173:8 80:25 81:15,16,22 placing (3) 39:10 point (46) 3:3 11:13 170:25 173:3 115:16,19,22,24,24 207:17,21 208:4
173:10 82:2,5,20,21,25 138:10 143:7 15:3,3 17:25 18:19 pre-tax (3) 104:9 116:1,24,25 117:10 projected (1) 1:22
partner (1) 183:9 83:3 86:12 89:2 plan (25) 41:18 42:4,8 25:17 26:1 51:22 188:14 191:3 117:11 118:1 projecting (1) 11:12
parts (2) 85:7 106:14 114:9,13,15 136:10 42:8,11,14,21,24 56:22 69:5 76:19 preappointed (1) 136:15 168:4 projection (1) 24:13
party (4) 15:11 118:10 147:12 149:21 43:12,15,17,22,22 83:14 86:15 87:12 204:8 privately (3) 124:22 projects (13) 34:11
120:1 156:10 personal (17) 40:9 46:14 57:21 61:3 93:15 107:25 predates (1) 66:22 193:3 194:5 64:1 72:16 193:2,3
passage (1) 126:15 74:14,24 76:5,10 87:19 88:2 92:20 110:23 112:15 predicting (2) 23:25 privatisation (1) 82:5 193:7,11,14,22
passport (2) 88:3 82:18,18 83:8 128:11 183:22 114:23 115:17 24:20 privatised (1) 194:3 194:23 195:3 201:4
94:19 85:15 86:6 101:24 187:15 196:3,5 119:1 126:19,25 prefer (2) 112:23 probably (22) 16:7 201:7
patches (1) 160:15 102:2 124:14,14,16 207:2 127:1,3,4,16,20 213:5 25:15 42:14 52:10 promises (1) 214:2
pause (6) 41:25 75:14 124:16 197:21 planned (4) 61:8 128:4,24 129:8 preferable (1) 213:16 53:15 58:19 60:9 promising (3) 60:21
76:6 130:20 131:4 personality (1) 50:16 92:20 94:16 167:18 132:22 137:10 preference (1) 213:6 110:24 112:15 70:15 72:12
177:18 personally (13) 33:7 planning (4) 23:19 138:20 139:21 preferred (2) 211:23 122:16 124:22 pronunciation (1)
pay (20) 32:24 66:1 33:10 49:6 50:13 24:6 168:20 195:10 147:5 151:6,6 212:1 132:5 155:21 96:16
69:21 87:5,6 90:15 57:4 91:12 93:8 plans (10) 11:12 62:10 159:20 162:6 prejudice (1) 25:25 157:20 158:17 proper (15) 8:10,11
90:17,21,24 91:22 98:17 124:20 62:11 64:3 169:25 181:14 182:5 184:4 preliminary (4) 55:8 164:5 172:6,19 9:24 11:1 40:19
97:22 101:20 108:6 126:18 134:12 181:16 182:19 209:5 213:8 56:10,17 202:21 186:2 206:16 213:9 42:16 74:8,20 75:3
135:21 137:14 158:15 197:5 183:1,21 184:14 pointing (2) 142:22 premia (1) 105:6 213:25 75:9 76:7 126:22
171:20 195:10 persons (2) 76:12 plates (5) 162:11,19 162:17 premises (1) 2:7 problem (11) 5:2 25:5 172:7,21 173:24
198:13 200:11 84:1 163:7 164:18,19 points (8) 5:14 12:13 premium (1) 143:6 75:13 76:3 100:2 properly (3) 35:13
208:25 perspective (1) 9:22 play (1) 197:6 115:15 116:18 prepaid (2) 59:14 62:2 120:15 127:17 156:8 162:7
paying (3) 32:15 Perspectives (2) 183:1 player (11) 83:18 117:4 143:21 186:4 prepare (1) 166:4 128:22 140:17 property (12) 100:4
71:11,14 184:14 124:7,25 138:6,9 201:2 prepared (9) 23:20 199:1 206:13 109:1 110:5 111:25
payment (18) 29:22 Petersburg (57) 4:3,12 138:19 139:9 pole (1) 196:10 53:14 66:5 80:20 problems (10) 33:1 112:7,11,12 152:14
29:23 32:22 34:2 11:3 19:1 34:24 141:16 142:6 152:1 police (1) 164:4 99:9 182:21 196:21 64:8,10 65:17 67:3 152:19,22 177:8
55:19 57:22 58:5 42:25 45:9 46:22 155:8 policy (1) 196:19 200:18 208:4 68:17 69:24 87:16 178:9
58:10 65:14 79:13 47:2 49:13 50:10 players (7) 11:14 politician (1) 3:19 preparing (1) 128:10 117:18 191:11 Property’ (1) 178:11
90:23 92:1,4 57:12 62:13,15,20 67:15 85:22 86:24 politicians (2) 3:21,22 prepayment (5) 59:9 procedure (1) 82:17 proportion (1) 133:8
100:10 135:20,23 63:8 64:10 66:21 124:20 125:3 poor (1) 159:19 87:5 91:2 92:10 proceed (3) 77:11 proposal (3) 88:24
196:6 197:17 66:23 67:6 81:3,3,6 177:11 Popov (3) 128:4 99:18 145:22 147:1 208:17,25
payments (54) 15:10 81:12,21 82:4,6,7 pleadings (1) 67:11 132:18 140:19 prepayments (11) proceedings (18) 3:20 proposes (1) 213:15
18:17 19:19 23:13 82:19 83:4 85:12 please (115) 1:4 5:24 Popov’s (3) 128:5,23 54:9,14 55:9 57:18 3:23 4:2,10 5:7 proposing (4) 26:8
25:19,21 26:9 89:24 90:5,10 91:8 6:3,5,21 12:4 15:15 132:20 61:16,25 62:1,4,6 18:15 38:20 39:13 113:16,18 207:1
27:12,17 28:5,25 92:13,23 93:13,21 16:22 19:9 21:16 port (22) 81:6 82:4,6 63:2,12 50:20 73:10 125:14 proposition (2) 88:17
29:7 31:11,20 32:5 93:25 94:25 95:11 21:17 25:3 33:13 82:7,14 85:8,9,9,10 presence (2) 62:16 150:5 158:18 196:9
32:8,11 33:6,18,22 95:19 101:2,4,5,7 33:15,18 35:18 85:17,18 106:16 100:13 162:22 163:12 props (1) 166:8
33:24 34:1,8 36:11 101:10 135:14 41:5,6,6,23 43:1,1 161:23 170:4 176:5 present (2) 3:14 164:3 167:6 196:15 prospect (1) 179:11
37:2,6,12 38:19 153:5 161:23 45:14,16 46:3 182:19 183:22 102:19 proceeds (1) 46:18 prospects (5) 60:20
39:2,12 40:3,4,14 175:15 176:5 178:2 51:19 52:25 53:1,3 184:17,23 193:17 presentation (4) 51:9 process (6) 39:11 70:14 72:11,12
44:11,21 45:24 178:15 184:20 54:18 56:19 58:12 193:21 203:25 51:12 52:17 182:15 131:19 176:8 204:6 73:5
55:11,16 57:23,25 185:10 60:13 64:4,6,15 portfolio (3) 110:9 presentations (6) 52:8 206:23 207:19 prove (1) 104:1
65:14 67:21,25 Petrocommerce (1) 70:12 74:1,2,4 76:7 137:6,7 52:13,15,22 162:13 procure (1) 196:7 provide (10) 37:23
79:4 92:25 93:24 86:17 77:3,13 95:20,21 portfolios (1) 123:19 196:22 produce (1) 106:16 113:23 142:1
135:15 153:14 petrol (3) 85:11,18,21 98:11 103:10,15,18 ports (12) 12:6 23:1 presented (1) 204:4 produced (10) 42:14 149:17 155:3,8
168:10,22 169:2 PetroLes (6) 152:5,6 106:18 113:7 123:2 23:13,18 24:1 31:3 presently (1) 116:22 43:16 47:7 151:20 203:7 207:17,21
194:13 195:25 152:13,17 153:9 125:12,16,17 31:6,14,16 159:20 president (2) 82:9 167:6 183:11 184:9 208:17
196:23 154:10 127:19 131:3 184:19 193:3 102:2 184:12 186:7 208:7 provided (6) 38:15
pen (2) 163:1,3 petroleum (11) 74:10 133:18 143:14,16 position (12) 11:19 pressure (2) 104:17 producers (1) 55:25 39:3 50:20 120:9
pending (2) 115:5 80:3 81:14,25 83:3 143:16 145:18 15:5 28:20 76:6,10 150:3 professional (12) 9:16 140:24 202:22
117:15 85:6,11,17 88:1 146:4,6 147:4,17 92:17 117:8 119:25 presumably (3) 43:15 22:20 138:6,8,17 providing (2) 38:1
people (37) 5:5,10 98:14 99:20 147:23 148:7,17 120:1 156:14 104:20 110:4 138:19 139:9 202:8
8:10 10:1,7,14,15 Petrov (1) 83:17 150:2,6 152:3 203:10 207:16 pretty (1) 207:1 141:15 142:5 152:1 provision (1) 138:21
10:22 11:2,18 phase (2) 203:14 153:8 155:20 positioned (1) 153:1 prevent (2) 67:25 155:7 207:25 public (9) 4:5,5,6,10
22:20 35:12 81:24 207:15 158:24 159:5,6,11 positive (2) 4:22,24 68:16 professionally (1) 28:13 74:19 78:10
82:1,10 84:13 86:8 phases (1) 203:13 159:25 160:23 positively (1) 29:2 previous (13) 48:23 22:22 80:21 115:8
88:18 89:2 98:13 photograph (3) 161:15 162:3,24 possibilities (1) 19:14 81:6 82:1 133:16 profit (16) 2:21 3:5 publication (1) 113:24
99:2 100:6,14 160:12 162:3 166:6 163:1,3 164:6 possibility (1) 213:5 133:18 137:5 140:6 12:17,22 17:25 publications (6)
101:9 102:5 113:24 photographs (8) 167:2,14,15 168:8 possible (17) 4:8,11 162:8 171:11 24:2,9 108:6,9 113:20,21 120:25
116:7,15 118:5,15 159:24,24 161:11 169:14 170:18 6:11 66:22 94:12 172:18 174:4,9 109:13,25 111:6 122:13,13,14
121:10,19 131:12 161:14 163:7,11 175:16 177:12,17 111:19 112:24 190:24 188:12,15,21 191:3 publicly (1) 113:22

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Official Court Reporters +44 (0)20 3008 5900

226

February 19, 2016 Day 13

published (1) 3:18 punch (1) 150:9 purchase (21) 36:2

45:11 47:16 49:2 62:20 77:17 78:19 79:22 88:1 94:6 96:12,22 97:13,18 97:25 98:9 101:14 103:3 171:2,17 173:9

purchased (2) 58:6 84:3

purchases (5) 54:11 55:24,25 56:17,17

purchasing (3) 1:23

61:15 79:23 purpose (14) 4:3

30:11 36:25 37:14 45:22,24 46:6 55:22 60:5 75:19 125:5 135:25 183:15 186:8

purposes (7) 36:16,18 48:8 63:7 147:7 151:20 164:7

put (22) 3:12 60:7 70:25 71:3 75:20 83:13 114:11,21 116:13 121:7 124:8 130:16 181:17,22 181:24 182:3 188:19 211:14,15 211:16 212:14 214:12

Putin (2) 81:10,11 putting (8) 1:10 17:1

17:11,14 104:17 109:23 151:17 169:10

Q

quality (17) 8:16,20 66:6 86:23 100:4,4 123:21 124:3,7 148:12,12 160:10 164:5,10,18 165:5 165:24

quantification (1) 1:18 quarter (5) 127:23

129:7 150:16,17 151:17
quarterly (2) 135:6

140:14 query (1) 127:5

querying (1) 200:3 question (51) 1:15

3:16 4:1 9:21 11:21 13:18 17:14 18:22 18:22 19:1,7 20:7 21:18 24:19 39:18 40:21 50:4,6 70:17 75:11 76:7 83:22 84:18 88:11 91:21 93:20,20 96:5 99:17 100:7,8 104:20 106:4,5 109:3 124:9,10 127:11 131:11 136:2,24 142:21 161:22 168:7 175:9 188:11,19 190:24 195:13 205:6 215:9

questioning (1) 25:22 questions (47) 1:11

1:11 2:23 3:12 5:22 12:12 16:11,18 25:16,18 38:14 39:5 41:5,11 60:6

64:21 70:8 75:7,9 75:15 76:1,11,20 76:22 80:7,13,16 89:11 111:11 118:18 120:18 131:4 136:6 137:1 144:8 149:6 183:20 186:13 187:9 188:3 188:4,6 190:17 191:1 202:4,6 209:17

quick (1) 2:10 quickly (1) 25:15 quite (82) 3:21 9:5

10:13,14 11:7 13:1 17:20 21:4 22:20 22:25 24:11,22,22 24:22,23 25:15 28:7 29:14,14 37:17 46:19 48:24 50:14,17,18,18,22 54:13 55:9,10 56:9 57:7 59:10 61:22 61:25 62:5 63:1 73:11 74:22 81:12 81:24 83:9,16 85:15,19,25 86:15 86:20 90:17 91:10 92:10 95:5,6,12 98:18 109:22 116:17 119:19 124:16 128:13,18 135:11,23 136:7 143:2,4 146:16,19 156:21 162:14 165:10,10 167:9,12 191:13,15 194:8 205:13 209:9 212:1 214:25 215:5

quoting (1) 180:5

R

railway (2) 165:15,17 raise (7) 2:4 25:17
76:20 99:22,24 119:2 199:21

raised (3) 5:13 143:20 149:6

raising (3) 100:7 115:11 179:11 ramifications (1)

75:10

ran (2) 8:6 21:1

Rankine (1) 204:22 rate (5) 63:10 69:16 190:5,10 191:11

rated (5) 123:25 124:3 124:4,4,5

rating (11) 6:12,12,14 11:16 30:11 103:12 103:19,25 104:1,22 125:4

ratings (1) 103:21 ratio (1) 105:13 ratios (1) 104:14 re-evaluation (1)

173:5

read (12) 7:20 33:14 33:18 97:3 130:12 130:19,25 131:3 148:10 153:24 174:23 181:7

reading (8) 6:18 10:19 101:15,17 126:19 128:6 202:24 209:16

reads (2) 109:1 178:7 ready (1) 214:10

real (16) 48:4 72:12 recommended (1) 176:6 167:5 178:22 202:21 203:19
83:1,4 112:14 88:24 reinsurance (3) 6:11 reporting (1) 132:10 revise (2) 40:23,24
145:10,19,23 reconsider (1) 16:15 105:5 143:7 reports (3) 111:3 reviving (1) 72:16
146:14 147:6,20 Reconstruction (7) rejected (2) 35:5 128:23 181:23 rich (1) 89:2
148:15 150:23 192:24 193:16 192:16 representation (1) rid (1) 201:9
171:1 172:9 174:3 194:21 203:24 relate (1) 9:1 211:25 right (99) 4:8 6:1 8:9
realisation (1) 63:25 206:15 207:12 related (3) 31:20 representatives (1) 8:15 10:20 13:11
realise (5) 3:1 111:21 208:9 39:15 203:18 115:5 14:2 15:12 20:24
122:24 213:20 record (8) 80:21 101:2 relates (6) 82:3 representing (1) 22:9 25:6,8,10,15
214:13 109:15 119:6,10,23 134:21 154:23 158:18 30:2,7 32:5 41:12
realised (3) 54:17 162:23,25 176:18 180:16 represents (1) 101:14 41:16 44:2,14 45:7
87:24 94:22 recorded (3) 36:9 193:19 reputation (11) 74:16 46:11 47:25 48:5
really (89) 2:16,17 119:11 163:24 relating (3) 15:24 100:8 171:12,14,15 50:9 59:24 61:9,14
7:20 8:7,14,14 9:3 recording (3) 119:9 35:20 65:12 172:4,5,14,17 64:22 66:21 68:13
9:19,21,23 11:13 120:11 131:13 relation (16) 27:12 173:10 207:23 76:18 78:2,5,14
11:14,18 12:13,19 records (2) 57:22 29:1 31:12 32:5 required (3) 39:4 84:14,24 87:1,10
13:2,18,19,20 14:2 101:5 44:10 45:1 49:15 173:21 198:19 89:6,14 92:25 94:9
14:12,21 19:18 recover (1) 72:8 51:9 55:5 58:15 requirement (4) 101:8 96:3,8,22 98:16
20:7 25:1 29:12,20 recoverable (1) 67:23 97:12,24 139:22 153:4 100:4 101:22 103:2
29:22,23 34:5,6,7,9 130:10 129:21 149:8 199:18 103:20 105:2
35:2 48:24 49:5 recreate (1) 72:18 208:18 requirements (9) 9:8 110:19 111:24
50:16 52:24 60:6 recreated (1) 173:15 relations (3) 101:25 9:8 18:8 45:10 112:17 116:6
66:5 74:7,10 75:16 recreation (1) 176:19 102:3 168:24 142:10 161:25 122:17 125:22
81:16 82:16,18 recurring (1) 2:18 relatively (2) 67:17,25 203:8 204:11 131:5 142:20
84:9 86:8,12 88:23 redevelopment (1) release (1) 3:2 212:18 144:23 145:12
90:16 98:22 99:7 198:14 relevance (3) 1:20,21 requires (1) 76:6 146:20 150:24
103:25 104:25 redirect (1) 122:1 122:2 requiring (2) 119:20 151:22 154:12
109:11 113:1 123:6 redistributing (1) relevant (7) 18:12 201:1 155:21 156:12
123:12,15 124:6,10 21:10 19:5 76:24 84:9 rescue (1) 67:24 159:17 163:18
124:21 126:24 reduce (1) 182:8 132:6 168:19 research (1) 126:22 165:24 166:17,23
136:19 137:20 refer (10) 6:14 15:18 175:25 resending (1) 187:1 170:16 171:6 173:6
138:24 145:9,20 25:20,21,23 26:18 reliability (3) 18:4,6 reservation (1) 48:9 178:15 184:17,21
150:25 151:5 55:1 60:15 80:18 24:12 reserve (2) 15:5 185:22 186:3
159:21 162:14 191:25 reliable (3) 11:13 104:14 187:21,24 190:9,13
163:13,15 164:20 referable (1) 177:2 153:4 175:11 reserves (12) 9:7,9 190:20,21 191:20
165:4,5 171:12,14 reference (15) 13:7 reluctant (1) 19:17 94:2,4 105:12,20 192:12 194:9 200:8
171:18 173:3 31:3 54:1,6 80:15 relying (3) 11:18,20 106:10,11 134:22 201:14,18 202:13
174:10,11 175:1 106:23 146:8 152:3 11:22 135:2 142:9 153:7 203:6 204:13
181:15 183:9 168:10 177:18 remain (3) 115:23 reserving (1) 45:10 205:15 207:22
193:10 210:10 179:20 181:4 116:25 117:2 resources (5) 68:10 right-hand (1) 164:17
reason (14) 4:11 20:9 183:24 184:25 remained (1) 153:18 91:2 106:17 141:1 rights (9) 45:3 95:25
24:5 54:25 73:8 198:23 remember (31) 12:6 199:9 96:11 97:24 99:25
78:18 92:3 94:5 references (1) 154:13 20:4,5 27:25 28:6 respect (10) 12:1 100:11,16 152:14
99:16 104:20 referred (2) 38:18 31:4 32:1 43:20 44:11,17,22 75:22 152:22
121:15 139:1 103:11 46:24 57:17,19 136:12 142:11 risk (21) 40:9 68:6,7
171:10 195:25 referring (31) 7:3 59:11,11 61:14,18 163:17 201:6 74:14,24 82:18
reasonable (1) 208:13 13:22 16:5 17:3 63:17 69:15 78:10 210:19 84:5 85:15 86:6
reasonably (3) 6:18 26:11 29:1 47:12 130:11 132:5 respectfully (1) 117:7 140:2 168:2 171:19
6:18 7:15 51:25 59:18 60:3,9 134:11 157:20 responses (1) 187:19 171:24 174:8
reasons (3) 79:22 72:13 87:17 109:4 161:5 174:19 responsible (3) 8:11 205:23 206:1,23
213:10 215:11 109:7,14,15 112:4 182:25 183:10,14 50:25 180:3 207:17,18,20
reassured (1) 5:5 133:12,13 138:13 184:11 204:7 205:3 rest (5) 80:10 87:6 215:14
receivable (2) 150:11 167:3 168:12 179:6 206:11 90:20,24 101:21 risked (1) 40:9
150:17 189:6 190:24 remembers (1) 69:12 restructure (1) 198:14 risks (4) 83:8 174:4,5
receivables (10) 192:14 195:12,16 remind (1) 148:17 restructuring (1) 69:9 203:18
127:22 129:2,6,11 199:10 201:22 removal (3) 169:25 result (12) 24:8 37:12 roadshow (2) 88:6,8
132:23 133:10 refers (1) 112:9 170:7 176:19 65:11 66:10 72:2 Robin (2) 186:25
137:6,7 140:1 refinance (5) 102:7,9 removed (3) 115:13 104:10 107:19 194:15
151:17 102:14 200:5 201:2 115:25 116:1 108:10,18 146:24 roles (1) 209:25
receive (1) 118:2 refinancing (1) 102:10 remuneration (1) 169:2 192:19 roll-on/roll-off (1)
received (2) 12:18 reflect (1) 153:20 208:18 results (7) 24:23 185:2
153:13 reflects (1) 107:25 rename (1) 57:21 28:18 38:3,3 109:9 Ros-holding’ (1)
receiver (3) 39:8,23 refreshed (1) 213:7 renamed (1) 61:18 110:1 169:5 171:11
135:23 refuse (1) 20:7 rent (2) 45:24 174:3 retreat (1) 18:10 Rosmorport (8)
receivers (1) 34:3 regard (2) 2:11 75:1 renting (1) 55:25 return (6) 5:17 38:2 175:25 176:4,8,22
reception (1) 5:10 regards (1) 126:4 repairs (1) 167:25 99:17 132:25 155:9 194:23 195:1,4,6
recipient (2) 18:12 region (3) 60:3 61:19 repay (3) 95:10 103:1 200:18 roubles (30) 36:1
19:4 71:23 199:23 returns (4) 105:6,22 45:19 47:13 63:24
recirculate (1) 115:12 regional (1) 124:1 repayments (1) 49:3 108:4 110:4 78:22,23 79:9 86:3
recirculated (3) registration (1) 48:2 repeat (1) 142:21 revaluation (1) 109:13 89:14 96:23 97:1
116:21 117:11,23 Registry (1) 48:3 replaced (1) 128:1 revaluations (3) 110:8 97:16,20 98:8
recital (1) 77:22 regular (3) 150:4 replies (1) 189:20 110:12,15 99:16 101:15
reclamation (1) 176:7 169:10,11 reply (4) 40:20 92:9 revealed (1) 28:20 102:17 104:9 107:5
recognised (1) 173:9 regulated (1) 139:23 94:25 130:14 revenue (2) 2:25 129:12 132:12,17
recollect (2) 27:11 regulation (6) 106:12 replying (1) 190:17 105:5 132:21 135:22
166:7 135:8 138:4 139:11 report (12) 86:22 review (6) 8:25 150:13 153:22
recollection (5) 130:8 141:20 193:5 109:4 120:13,19 153:17 203:20 154:1 178:10,18,19
134:8 140:3 141:4 regulator (1) 136:10 125:13,18 126:16 207:2 211:13,18 roughly (6) 12:15 28:1
142:20 regulatory (2) 9:8 126:19 128:5,6 reviewed (3) 10:17 79:2 165:12 213:23

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227
February 19, 2016 Day 13

213:24 Savelyev (11) 53:5,9 second-hand (4) 44:1 206:5,9,20,23,24 ship (4) 45:2,4 68:19 signature (8) 132:3 73:14 75:14 80:2,2

round (5) 13:8,13 53:18 54:5,12 55:2 45:2,4 61:4 208:19 212:7 69:6 147:12,15,16,25 83:19 98:13 102:12
113:17 122:10 63:20 64:5,7,19 secondly (1) 17:2 seeing (1) 187:18 shipowner (1) 55:11 148:11,14,21 106:3 107:1,2
165:2 68:18 secretaries (1) 52:14 seeking (1) 199:21 shipping (71) 41:6,8 signatures (1) 146:11 108:13 109:3,24
RPC (20) 34:14,17,21 saw (4) 36:1 152:16 section (4) 121:6 seemingly (2) 98:8 41:12,20,21 42:9 signed (24) 38:5 53:15 111:7,16,18,21
113:14,18,19 114:7 171:2 197:3 126:23 143:18 128:25 42:11,20,22 43:2 55:8 57:8 61:14 112:4 113:12
114:8,14 116:10,12 saying (18) 3:10 29:2 159:11 seen (14) 38:21 39:6 43:17 46:19 47:5 62:23 72:9 100:13 118:17 123:14
121:1,2,3,3,6,16,25 33:25 34:5,8 35:4 sections (3) 107:21 40:13 43:19 70:18 48:19 49:14 50:11 131:6 132:4 133:6 128:8,9,21 130:22
122:10,20 36:14 80:11 104:25 115:22 203:7 70:19 87:9 97:18 51:10,21 52:5,19 134:2,6 139:3 131:11,22 139:17
RUB (1) 126:6 122:3 134:1 140:4 secured (3) 44:14,18 118:8 147:11 53:13,20,21 54:5 140:23 141:23 142:21 143:24
rules (7) 3:4 5:15 171:6 174:16 44:23 148:23 162:13 55:4 56:8 57:7 58:8 145:6,9 147:14,21 144:6 146:7 147:8
141:20 197:7,11,12 190:12,16 208:11 securities (5) 14:19 189:17 197:13 58:20 59:7 60:16 148:24 156:8 175:8 147:9 148:2 149:14
212:23 208:15 138:5,11 140:6,8 self-insurance (1) 60:20,23,25 61:24 195:19 154:16 155:14,20
ruling (1) 117:15 says (15) 46:4 51:20 security (3) 46:15 136:3 63:1 64:8,11,18 significant (5) 23:17 156:2,4 162:17
run (11) 21:6 46:22 117:11 126:3,9,23 63:21 213:10 sell (9) 2:25 3:1 85:18 66:6,8,11,18 67:1,2 35:24 104:14 165:1,19 168:7
47:1 61:8 66:6 133:16 150:10 see (241) 1:20,21 6:7 85:20 86:23 98:14 67:23 68:2,13 69:6 144:18 192:5 176:12 177:20
73:14 86:18 92:14 159:11 179:23 6:24 7:12 12:16,21 99:13 125:2 172:18 70:15,18 71:1,3,5 significantly (2) 22:25 179:3,4 180:21,24
152:21 159:14,18 185:8 187:7 199:6 12:24,25 13:1,4,25 seller (1) 100:8 71:17,19 72:7,11 167:23 183:4 184:3,3
running (8) 8:17 10:22 203:15,17 14:16 15:18,22,25 sellers (7) 49:1 54:10 72:14,16,18,19 signify (1) 15:4 189:2,25 190:8
21:4,8 27:15 68:16 Sazonov (1) 10:11 16:3,6,9 17:23 22:1 77:24 83:16 101:1 73:4,7,9 80:24 signifying (1) 14:8 194:14 195:13
81:4 123:17 Scan (32) 6:9,14 90:6 22:25 23:4,9 24:2,4 101:6 103:4 81:14 98:13 157:2 signing (2) 62:12,19 198:20,21,25
Rusiv (3) 157:12,12,14 107:3 125:9,11,22 28:17,25 30:1,21 send (1) 52:22 157:3 161:22 signs (1) 159:22 199:10 202:4,4,19
Russia (24) 62:2 71:24 127:9,21,24 130:10 33:19,22 37:9 sending (1) 187:3 Shipping’s (1) 70:24 similar (1) 93:11 202:24 205:4,5,21
82:9 84:5 103:24 131:6,25 132:24 39:24 40:14 41:21 sense (3) 10:18 26:2 ships (16) 46:9,13 Simonova (1) 167:10 208:20 214:12
106:1 121:19 133:1,3 134:17,19 41:23 42:8,12,15 26:19 47:10,16 50:7,11 simply (12) 26:12 29:5 215:7
123:10,19,24 141:11 142:14,25 43:2,7,15 45:18,20 sensible (3) 113:16 50:12 55:1 57:13 39:9 86:5 88:24 sort (7) 34:6 97:19
134:22 135:18 143:2,5,8,12 45:22 46:1,7,12,19 115:10 116:17 57:13 63:7 65:3,4 114:3 119:12 117:16 122:21
140:20 141:7 150:1 144:16 149:18 47:11,12,14 49:9 sent (5) 127:14 66:10 70:19,24 120:11 141:1 161:9 184:8 206:20
151:10,11 193:18 150:17 151:17,23 49:11,17,25 50:6 130:12,13 146:2,3 shipyard (4) 44:5 170:13 172:20 sorts (1) 64:23
194:1 195:11 197:2 154:13,18 50:13 51:17,21 sentence (2) 62:18 62:21,25 177:10 205:3 sounds (1) 122:16
197:12,14,20 Scan’s (5) 125:25 53:17 54:19,22,23 202:9 shipyards (1) 63:22 Singapore (1) 88:4 source (4) 2:24
Russian (89) 3:19 4:6 129:5 132:13,21 56:19 58:21 60:15 separate (3) 86:23 short (24) 73:22 88:10 sit (3) 116:16 209:14 105:22 121:20
7:24 9:8 11:13 133:25 60:17 64:23,25 110:23 118:16 92:14 99:19 118:2 210:7 137:18
28:17 29:9 32:23 Scandinavia (25) 7:4 68:19,20 70:9 separately (2) 85:19 120:18 130:20 site (8) 159:25 160:1 sources (1) 110:16
34:9,13 37:12 30:15 78:2,4 103:9 71:19 77:18,21 185:24 133:17 153:20 161:12,13 162:2,6 Soviet (1) 194:5
38:19 40:17 41:23 103:12 105:7,23 78:10 84:7,8 90:2 September (9) 12:6 154:2,8,11,19 180:10 185:4 space (4) 5:7 117:12
42:15 45:15,19 106:21 123:4,6 96:14,14 103:13,15 24:6 43:20 51:17 155:5,8,20 156:15 sits (1) 116:14 161:21 163:9
47:13 48:9,9 49:12 124:6 129:1 133:9 103:19 104:3,5,18 93:12 103:5 187:13 156:19,20 159:1 sitting (6) 1:7 10:18 speak (6) 20:11 57:3
49:19,20,22 51:13 135:13 141:23 106:7,22 107:5,10 198:3 201:11 198:20 199:23 89:3 151:12 157:10 58:23 114:18 149:3
53:2 54:23 64:12 143:9,13 144:13 107:12,17,18,20,23 September/beginni… 207:9 215:5 157:11 200:16
72:25 77:15 80:25 145:1 148:9 153:21 108:7,8,10,16,18 88:6 shorthand (2) 181:1,4 situation (2) 72:1 74:6 speaking (8) 29:16,17
81:1,11 82:22 154:13,18 200:25 108:20,22,25 sequence (2) 160:24 show (17) 16:4 35:23 six (3) 61:10 182:1 42:13 79:19 87:20
86:12,18,24 87:22 Scandinavian (4) 109:18 110:13 190:1 42:11 57:23 64:4 199:2 99:2 176:17 194:16
88:20 95:2,6,11 30:16 31:2 78:4 111:1,4,5,7 112:2,7 Sergei (1) 48:23 106:6 128:4 144:18 size (3) 181:4 182:12 speaks (1) 122:11
97:3 100:7 106:9 123:20 116:22 122:12 series (1) 143:20 147:16 161:9 197:2 special (11) 36:19
109:7,15 118:22,23 scanned (1) 148:13 125:20,25 126:9,23 serious (3) 94:8 162:16 165:14 slide (1) 51:20 81:4 85:19 86:9,12
119:5,6,11,20 scheduled (1) 61:16 128:2 129:3 130:3 193:14 206:18 166:6 170:18 183:5 slight (2) 117:21 88:25 89:3 119:25
135:21 141:1 scheme (1) 45:8 132:4,8,15,19 seriously (3) 140:13 187:24 202:12 137:24 121:17 135:3 201:1
145:12 146:7 147:6 Scott (1) 204:7 137:24 139:4 168:24 190:19 showed (4) 10:19 slightly (1) 114:22 specialist (1) 110:25
147:10,17,23 148:6 screen (19) 15:15 16:4 140:17 143:16 service (1) 28:15 160:15 183:12 slow (1) 109:23 specialists (10) 11:20
153:24 154:17 17:6,6,8 20:13 43:8 144:21,25 145:1,2 services (1) 32:25 197:25 slowly (2) 49:11 11:22 12:1 22:11
155:13 157:25 53:2 54:18 77:13 145:8,12 146:10 session (4) 115:17 showing (8) 17:1,15 127:18 36:16 38:2 47:4
172:9 175:13,14,25 96:5,14 103:18 147:24 148:2 150:8 116:24 117:1,10 105:19 111:8 small (18) 41:13 65:20 175:13 190:17
177:17 178:7,10 128:20 144:4 150:19 151:13 sessions (1) 118:1 163:15 165:6 65:21 66:8 67:3,4 208:3
193:2,3,11,14,21 160:11 163:4 153:9,15,15,19,23 Sestroretsk (1) 47:20 184:19 190:1 67:17,25 91:19 speciality (1) 13:17
193:25 194:1,7,24 189:18 203:1 156:17 158:5 set (8) 30:22 43:22 shown (36) 5:24 6:21 93:18 111:16 specially (1) 193:22
194:24 196:7 197:7 scribbled (1) 122:9 159:15 160:24 77:4 107:10 172:22 12:4 18:13 21:16 118:18 120:23 specific (1) 124:18
197:7 200:19 201:2 scroll (4) 106:24 161:11,13 162:7,8 173:17,24 182:19 25:2 33:13 35:18 128:9 131:11 specifically (1) 200:12
201:9 147:17,23 148:2 162:14,17 163:4,6 sets (3) 125:25 126:1 41:6 43:5 45:13 170:13 189:2,8 Specsavers (1) 122:1
Russian-backed (1) scrub (2) 198:21,22 163:7,9,11 164:5 189:16 52:25 95:20 103:9 Smirnov (3) 175:7,7 speech (4) 64:16
123:10 sea (3) 53:21 184:17 164:10,11,20,21,22 setting (3) 183:21,22 103:18 106:18 175:10 80:12,19,20
193:25 165:2,5,20,21,25 204:14 125:16 127:6 Smolny (1) 86:11 speed (3) 168:25
S sealed (2) 115:3 156:9 166:11 167:16 settle (1) 213:19 138:13 147:11 socialists (1) 214:7 169:11 187:3
safeguard (1) 139:22 seamen’s (1) 66:1 170:9,15,20 175:21 seven (2) 136:23 158:2 162:23 sold (2) 110:2 140:9 spend (1) 45:10
search (3) 121:6,10 177:13,20,24 178:6 166:13 165:22 166:5 solid (2) 9:7 162:11 spent (6) 63:9 81:12
safer (1) 213:17
151:11 178:13 179:20,21 seventh (1) 123:24 170:19 175:16,19 Solnechnoe (1) 47:20 165:8,10 174:7
safest (1) 214:23
searches (1) 150:4 179:25 181:7,21 Shabalina (1) 11:7 177:12 179:1,14 solved (2) 4:1,20 197:10
safety (5) 159:22
searching (1) 151:10 182:16,19,20,22 shaded (1) 12:21 182:14 186:12,15 somebody (3) 121:3 spite (1) 193:20
161:25 204:2
season (1) 187:11 183:1,3,6,19,23,24 shaky (1) 99:2 189:15 191:24 166:4 182:23 spoke (1) 55:1
212:19 213:13
second (25) 24:21 183:25 184:3,13,14 sham (2) 34:5 94:1 201:10 soon (3) 4:8,11 72:8 spoken (1) 148:25
sake (2) 77:5 214:19
28:10 44:4,17 184:17,22 185:7,14 shape (1) 163:25 shows (2) 16:24 sooner (2) 211:1,1 spotted (1) 173:7
salaries (1) 71:13
51:21 89:13,13 186:16,24 187:6,21 shares (2) 77:25 78:9 191:16 sorry (98) 6:24 7:2 spread (2) 35:7
sale (4) 49:2 77:17,24
91:21 95:24 96:25 188:11,16 189:16 shed (1) 110:13 side (7) 8:6 82:15,16 13:7,18 18:3,21 139:25
78:19
96:25 100:10 111:8 190:7,15,19 191:12 sheet (12) 129:2 107:20 138:9 20:25 22:16 23:6 SPV (1) 78:18
Saltykova (1) 10:9
117:10 122:11 191:13 192:2 138:12 140:7 164:17 203:4 25:3 26:7 27:23 squeamish (2) 26:6,13
satisfied (1) 207:18
144:1 172:21 183:3 194:19 198:8,16 150:16 171:21 sign (3) 118:12 187:17 30:3 34:20 41:10 St (57) 4:3,12 11:3
save (7) 68:7,12 72:4
183:4,5 184:1,4 199:4,13,18 200:1 172:8,10 174:5,6 188:1 43:5 49:12 56:2 19:1 34:24 42:25
72:5 127:3 204:12
203:3 207:14 201:12 202:8,19 193:6,7,9 sign-off (1) 187:23 59:3,16 61:2 62:17 45:9 46:22 47:2
206:18
208:15 203:11,15 205:1 Shevelev (2) 152:8,11 signal (1) 75:17 62:18 63:19 64:15 49:13 50:10 57:12

Opus 2 International transcripts@opus2.com
Official Court Reporters +44 (0)20 3008 5900

228

February 19, 2016 Day 13

62:13,15,20 63:8 Statoil (1) 85:22 suggest (39) 13:11
64:10 66:21,23 status (6) 9:12,17 16:17,23 19:16
67:6 81:3,3,6,12,21 10:4 21:9 83:5 28:17 29:8 38:11
82:4,6,7,19 83:4 202:12 40:2,16 57:3 58:23
85:12 89:24 90:5 staying (2) 69:15 70:6 72:10 89:23 92:3
90:10 91:8 92:13 Steadman (8) 126:17 94:5 101:11 130:19
92:23 93:13,21,25 126:22,23,24 127:8 146:16,17 158:19
94:25 95:11,19 127:20 140:18,25 163:10,11,20 164:8
101:2,4,5,7,10 Steadman’s (2) 164:8,9,10 165:4
135:14 153:5 125:12,17 165:23,25 166:3,10
161:23 175:15 steal (2) 1:14 90:6 166:14 179:10
176:5 178:2,15 step (7) 34:10,10 205:22 206:8
184:20 185:10 67:24 136:16 209:11 210:14
stable (1) 193:6 140:12 148:6,6 215:10
stage (13) 43:25 44:4 stepped (1) 69:3 suggested (5) 54:25
44:7 61:3 87:15 Stevedoring (1) 31:2 82:11 88:16 90:9
89:13 92:4 94:7 stock (3) 76:6 211:13 102:5
98:18 125:2 133:10 211:19 suggesting (9) 22:17
157:14 202:18 stop (6) 69:4,17 22:18 34:17,21
stages (4) 48:14 61:7 196:24 205:9,18 116:3 123:16 156:5
79:4 195:8 209:5 179:6 189:25
stamp (5) 147:7,12 stopped (6) 66:14 suggestion (4) 47:9
148:9,12,14 67:2 70:7 71:11,14 81:20 116:19
stamped (4) 54:22 71:21 165:23
145:16,17 147:21 storage (1) 173:1 suggests (2) 52:4
stamps (3) 147:8,10 story (7) 74:18,19 187:22
147:18 76:11 80:20 84:11 summer (4) 161:8
stand (1) 27:20 84:12 90:12 187:14 192:2
standard (13) 2:13 strange (5) 131:14 200:15
7:24 37:13 40:17 134:20 145:15 supervision (5) 106:9
168:23 172:10 148:11 167:9 134:23,24 139:12
182:7 197:1 201:5 strategic (5) 73:3 140:16
204:11 206:13,19 183:8,25 193:12 supply (1) 191:8
209:3 195:2 supplying (2) 38:1
standards (9) 8:17 strategies (1) 194:25 126:20
36:17 37:15,16 strategy (1) 68:8 support (1) 95:19
52:23 109:18 strengthening (1) supporting (1) 91:10
123:22 125:9 133:3 104:14 suppose (6) 37:11
standby (1) 95:6 stress (3) 3:25 103:23 40:23 117:9 118:6
stands (1) 182:6 181:13 118:9 213:14
start (10) 33:17 63:25 strictly (1) 46:5 sure (61) 2:12,15 3:9
111:17 113:2,5 strikes (1) 214:6 3:17 5:10 16:20
160:2 187:12,18 Stroilov (4) 118:6 22:10 41:1,2,4 52:8
215:1,8 163:13 166:3,6 52:20 56:9 65:18
started (6) 11:10 strong (5) 22:21 37:13 74:12,22 91:16
66:16,25 70:18 101:7 134:23 96:15 99:5 100:21
81:10 200:16 201:25 100:22 108:3
starting (5) 86:8 87:16 strongly (3) 74:16 109:22,24 110:18
202:15 212:22 138:20 140:14 113:3 116:12
213:10 struck (1) 23:22 118:20 121:1,3,14
starts (2) 132:8 structure (1) 194:25 124:8 131:13
187:13 structured (1) 29:16 137:12 138:2,2,7,8
state (12) 35:10 49:15 structures (1) 201:4 138:18 140:15
53:12 54:4 89:25 structuring (1) 201:1 141:15 145:19
124:2 169:21 177:7 study (2) 13:25 20:10 148:20,20,23,24
194:1 197:8,19 studying (1) 7:24 149:12 156:11
202:12 subcontracted (1) 157:21,25 158:13
state-owned (3) 102:1 36:16 162:12 163:6
168:4 176:25 subject (11) 2:13 5:6 180:16 182:21
statement (36) 5:25 17:18 41:14 115:10 186:7,9,10 188:19
14:25 15:16,17 116:20 119:7 211:2 212:13
16:8,10 18:14,23 200:18 201:23,23 surprise (2) 57:25
19:2 22:5 27:10 208:5 137:24
28:10 29:4 43:6 subscribe (3) 113:23 surprised (5) 95:1,3
47:8 58:12 59:17 113:24 114:2 135:11 167:4,12
60:5,7 70:11 72:14 subsequent (1) 52:6 surprising (8) 50:22
103:10 106:24 subsidiaries (2) 31:6,7 136:1,13,19 137:2
107:21 111:5,9 substantial (3) 55:9 137:3 150:25 151:5
125:7 130:2 167:2 95:12 133:8 survive (4) 68:9
167:14 168:13,20 successful (4) 9:5 123:15 124:10,12
179:2 191:25 200:3 73:11 124:21 surviving (1) 124:12
201:15 191:17 Svir (2) 157:15,17
statements (4) 21:19 successfully (1) 8:18 Svyaz-Bank (7) 96:16
28:20 50:19 126:7 suddenly (4) 71:10,11 97:6,10 98:6
stating (1) 14:7 95:8 172:10 101:12,24,25
station (1) 85:21 suffer (1) 76:3 swap (2) 158:24
stations (2) 85:11,18 sufficient (4) 92:17 209:25
statistics (3) 179:24 119:20 126:21 Switzerland (1) 88:21
180:5 189:12 198:13 syndicates (1) 124:20

syndication (1) 200:22 system (2) 113:15
117:19

T

tab (1) 130:23 table (2) 13:15,24 tabs (1) 122:10 take (28) 2:1 3:5 5:5

7:19 9:14 11:17 25:4,13 40:16 64:15 69:3 75:1 76:6,19 83:8 99:21 114:10 185:20 186:1,3 195:8 199:1 202:11 203:4 206:17 211:13 214:4 215:11

taken (11) 2:20 7:17 12:25 115:22 118:17 124:16 125:7 162:3 189:13 198:20 200:12

takes (3) 59:10 119:9 207:9

talk (2) 169:23 203:13 talked (1) 5:9

talking (10) 110:14 131:9 132:1 141:10 141:14 163:8 176:11,13 185:2,4

talks (1) 199:5 Tarasova (3) 145:6

148:18,25

Tarasova’s (1) 146:12 target (8) 46:6 68:4,14 79:22 85:16 98:20

101:20 125:2 task (2) 105:12 142:8 tasks (1) 207:16

Tatfondbank (2)

156:18 157:24 tax (3) 33:1 135:23

174:9

team (2) 158:18 172:23

technical (7) 3:8 114:22 120:12,18 128:9 204:5 208:6

technology (1) 36:21 Tekno (5) 92:21,23

93:5,10,13 tell (25) 19:9 39:7

40:10 42:4 70:23 74:18 79:11 80:3 80:22 84:11,11 88:16 99:3 100:9 112:21,21 116:12 117:18 127:1 151:12 161:15,16 189:22 195:8 214:17

telling (11) 14:6 40:3 40:24 43:13 64:7 72:6 92:6 93:7 116:15 200:8,9 temperature (1) 25:24 ten (10) 20:12 44:1,4 46:14 61:4 62:1

73:20 158:23 170:11 176:13 tendering (1) 204:6

tens (1) 70:5

term (19) 72:11,12 99:19 133:17,17 153:20 154:2,8,11 154:19 155:6,8 156:15,19 174:3

193:12 198:20 55:18 56:15 57:3 63:10 65:3,3 66:10
199:22,23 58:14,18 59:21,23 68:1 69:16 103:24
term-sheet (1) 203:20 60:9 61:17,23 64:7 136:24 154:21,23
terminal (85) 27:13 65:5,6 66:5 67:14 161:3 163:15
29:1 31:9,12,18,22 68:23 70:17 73:17 166:12 173:13
32:6,8,12,13,23 73:19 74:5,19 174:7 181:18
34:18,22 35:25 77:20 78:6 79:2,3 184:19 205:11,11
37:6 38:8 40:7 81:4 83:5 84:2,3 three-stage (1) 43:22
48:13 85:7,17 90:6 86:25 88:20 90:13 thrown (1) 138:22
157:6 159:4,13,18 91:25 92:23 93:16 Thursday (19) 115:16
160:1,4,13 163:17 95:21 96:15 99:12 118:15 209:15
163:18 164:4 102:13 105:17 210:10,11,14,19
165:16 167:5,17,22 106:23 107:25 211:8,9,11,12
168:3,9,21,24 109:19,20 112:15 212:1,11 213:5,9
169:7,17 170:8,9 113:13 115:17 213:11 214:14,16
170:20 171:7 116:19 117:13 214:25
172:15 173:13 119:15,19 120:15 ticket (1) 199:1
174:14 177:9,10 120:21 121:21 tickets (1) 128:14
178:1,16,17 179:7 122:1,3,4,7,18 Tikhvin (13) 46:10
179:12 182:7 125:7 127:3,15 49:17 52:7 54:6
184:20,22,25 185:4 129:8 131:7,18 56:2,18,21 57:2,13
185:5,9,10,18 132:2,3,4,24 59:1,16,25 60:24
188:5 191:21 133:12,17 135:5 till (1) 187:12
193:22,23 194:2,4 136:11,16,24 timber (14) 32:20
194:6,12 195:15 138:14 139:13 151:24 153:3 154:4
196:6 198:14,19 140:20,24,25 141:5 164:22,23,24 165:1
199:6,7,23,24 141:6 144:15 165:2 166:18,19,20
200:5,11,13 202:13 145:24,25 146:1,2 189:5,7
203:25 146:13,18,19 time (124) 5:5 7:15
terminology (1) 26:10 147:17,24 148:2 10:7 12:11 29:15
terms (1) 211:25 150:13 151:19 38:16 44:11,17,22
terrible (1) 171:11 152:14 154:20 45:24 46:20 47:5
territory (3) 164:17 155:16 157:12 48:21 49:6 50:13
176:20 182:11 160:6 161:7,8 50:24 52:2,5,9
test (1) 60:6 163:14,18 164:9 54:19 55:15 56:2,5
TEU (3) 180:18 181:1 165:4 166:18 56:18,20,23,24
185:12 170:10 174:19,22 57:8 59:8,9,10 64:1
TEUs (5) 179:24 180:6 175:5,19 176:16 67:1,5 68:3,4,8,10
180:13 181:7 178:3 179:6,17 68:14,15 69:8,10
185:23 180:2,22 181:15 69:18,23 70:4,9
text (1) 184:12 184:18,24 185:10 71:9,14,16,18 75:4
thank (18) 1:7,9 3:15 185:25 186:2,5,25 76:2,3,5 78:25 79:2
22:13 25:8 26:25 187:3 188:1,2 81:20 82:7,23 83:6
35:15 73:14 103:8 189:2,6,20 190:5 85:19 87:18 88:3
107:1 122:22,23 191:10 192:10 88:22,22 91:1 92:6
151:23 215:3,4,17 194:9 197:14 92:9 95:1,3 99:4
215:17,18 199:15 203:1 205:9 101:24,25 102:4
themself (2) 72:8 94:1 208:11 209:4 210:2 103:4,6,23 113:4
theoretically (1) 72:1 210:6 212:19 113:17 116:1 118:5
theory (1) 168:2 213:18,18 214:12 119:10 124:16
thing (8) 2:4 56:9 59:8 214:14,19,23 215:1 126:21 127:4 129:7
83:21 117:17 215:5 135:3,4 140:8
173:12 176:17 thinking (1) 10:19 142:7 144:15
211:23 thinks (1) 75:12 156:20 158:22
things (15) 3:5 4:22 third (13) 15:11 44:7 162:21 163:15,24
63:3 86:7 108:1 44:21 61:9 136:18 170:12 174:17,25
142:7 168:19 152:3 153:16 175:20 181:11
173:22 174:17 154:25 156:10 182:6,7 186:2
203:22 204:3,10,24 182:18 184:13 187:14 190:14
208:6 212:15 195:21 202:20 192:23 193:1 195:6
think (226) 3:8 4:2,14 this-and-this (1) 121:8 195:21 199:1 204:3
4:21,22,23 5:3,13 thorough (1) 207:2 204:12,17,24 205:1
6:2 7:3 8:11,13 thought (16) 48:7,9 205:9 206:18 207:7
10:12,16 11:25 55:6 68:9 72:7 76:9 207:10 208:5,8,13
12:13 14:13 16:7 86:1 87:12 89:20 215:7
19:16,25 20:13 116:4,25 117:16 time-consuming (1)
22:8 23:12 24:5 121:12 139:13 122:24
26:21 28:22 30:18 187:22 197:5 times (4) 8:1 10:14
34:24 35:1,7,13 thousands (4) 65:24 171:9 191:5
36:13 37:1,15,17 69:13 70:5,5 timetabling (1) 205:17
38:7,10,15,17,22 thread (1) 111:23 timing (6) 29:8 128:12
39:7 41:18 42:1,9 threat (1) 82:19 182:6,13 208:10
42:10,16,23 43:18 three (42) 4:2,19 19:3 209:8
43:19,19 44:20,24 24:9 32:2 40:19 tired (2) 112:20,23
45:6,7 46:9,20 44:25 48:7 49:16 today (9) 1:7 13:12
49:10,20,23 50:18 50:7,12 52:2,18 51:21 97:23 113:4
50:24,25 51:2,3,6,9 53:23 54:2,8 55:1 121:8 170:10
51:12 52:2,16 53:4 57:13 58:11,25 202:11 213:19
53:11,14 54:24 60:23 61:7 62:8 today’s (2) 114:18

Opus 2 International transcripts@opus2.com
Official Court Reporters +44 (0)20 3008 5900

229

February 19, 2016 Day 13

170:9

told (17) 5:9 11:9 28:6 39:2,12 43:14 53:20 90:19 91:5 95:22 103:4 168:17 195:5,18 196:11,12 196:15

tonnes (2) 185:17,21 top (18) 6:7 9:14

11:20,22 30:15 42:6 62:14 70:13 104:22 105:18 115:1 116:11 122:10 145:3 159:11 175:14 189:16 203:6

topic (5) 7:25 70:8 73:15 111:20 112:25

Tosno (10) 44:12,19 52:1 53:24 58:15 59:15,18,23 65:5 68:22

total (7) 129:11 132:9 132:9,13 133:22 178:8,10

totalled (1) 27:18 totalling (1) 126:5 touch (1) 210:5 touched (1) 196:9 Traber (8) 80:25 81:8

88:19 91:13,16,20 98:21 99:4

trace (14) 29:9 121:7 135:14,17 141:8 151:1,7,7,8,14 161:21 162:20 166:21 174:4

tracing (1) 141:1 track (2) 140:21

159:25

tracks (2) 165:15,17 TradeWinds (1) 73:9 trading (6) 32:20 78:5

152:20 153:1 156:19 189:6
traffic (1) 70:7 train (1) 212:5 trains (1) 212:8

transaction (24) 80:14 82:20 84:19 86:1,5 90:16 91:13 94:1 94:15,18,22 95:19 98:19,22 99:9 100:3,6 101:19 102:6 144:19 150:18,21 171:24 172:20

transactions (15) 49:6 50:25 54:17 80:5 81:17 86:21 89:5 91:8 101:8 110:1 134:9,13 135:12 151:3 171:13

transcribers (3) 115:1 115:11 119:12

transcribing (1)

119:12 transcript (18) 42:18

73:17 114:1,18,25 115:3,12,19,23,23 116:21 118:23 119:11 125:25 158:2 163:1 195:13 195:16

transcripts (10) 4:1,8 113:13,18,25 114:4 114:14 117:9,9 121:8

transfer (6) 20:23 55:23 86:22 135:20 141:11 144:18

transferred (1) 190:8 transfers (1) 135:19 translated (3) 49:23 119:22 133:20 translation (8) 42:16 42:16 78:5 119:5 132:3 154:16

155:11,13 translations (1)
118:22

Transport (4) 72:21,23 73:1 176:4

travel (3) 209:13 210:18 211:5

travelling (2) 128:12 210:11

traversed (1) 211:17 treasuries (1) 102:23 treasury (3) 21:8,11

123:7

trial (2) 21:20 26:1 tried (1) 98:16 trip (1) 213:15 tripling (2) 182:9

190:25

trouble (5) 5:5 121:16 121:17 122:25 141:5

troubles (6) 48:6 65:22 66:7,25 68:17 71:22

true (5) 21:25 72:13 92:19 134:11,11

trust (1) 137:9 truth (3) 40:3,25,25 truthful (1) 98:5 try (10) 5:3 20:13

28:17 46:23 68:4 72:3 111:22 113:3 120:17 205:16

trying (7) 18:10,16 39:21 72:7 84:2 121:23 205:6

Turkish (1) 123:20 turn (1) 41:5 turned (2) 91:11

120:10 turnover (8) 170:14

182:4 188:12,14,18 189:3,7 191:14

Twenty-foot (1) 181:1 twice (1) 97:8

two (44) 1:14 5:13 12:13 15:3 21:19 32:2 39:18 46:13 57:17,19 59:11 70:8 79:4 85:6 88:2 94:23 103:21,24 107:8,21 111:9 114:11 118:16,18 136:20 154:12,21 154:23,23 155:21 155:22 161:14 173:13 181:17,25 184:19 185:8,9 189:17 194:15 204:6,8 210:7 214:3

two-thirds (2) 107:14

108:7

type (6) 32:21,22 52:20 100:5 189:9 191:15

typical (1) 181:4

U

Uljanik (1) 62:21 ultimately (1) 203:10 unacceptable (1)

159:23 unchanged (1) 153:18 understand (51) 1:25

2:8 7:19 9:23 11:23 13:1,3,21,23 14:1 14:25 16:18,20 17:2,13 19:7 20:13 22:23 24:16 25:9 30:2 31:11 42:23 44:9 46:15 50:2 52:16 66:7 75:2 79:11 80:10 83:7 84:4 90:17 109:10 118:21 119:2,19 121:23 128:7,7 138:1,1 142:21 151:15 155:19 174:11 181:22 186:6 205:6 212:1

understanding (22)

2:2 9:17 17:18 21:7 29:9 34:9,25 36:24 57:10 67:4 69:18 70:2 74:7 80:9 91:18 118:19,25 119:7 159:20,23 209:23 211:3

understands (1) 74:10 understood (32) 3:21 23:23 26:25 36:20 36:21 42:13 54:8 54:10,16 55:10

57:6 59:8,20 61:20 66:9,24 71:9,15 75:18 77:8 82:18 93:18,25 95:8 106:15 109:5 110:6 110:22 173:6 175:2 208:1 211:9

undertake (2) 167:25 175:23

undertaken (1)

171:24 underwrite (1) 108:1 underwriting (5) 6:10

88:8 104:13,15 137:11

underwritten (1)

123:20 unfortunately (3)

99:11 103:6 126:20 Union (2) 194:5 201:6 unique (3) 114:6

116:9 124:7 unit (1) 181:2 unofficial (2) 152:23

152:24 unofficially (1) 152:16 unpayments (1) 66:8 unproper (1) 65:18 unreliable (1) 9:20 unsure (1) 10:16 unusual (6) 46:20

50:17 90:17 95:23 136:7 194:8

unusually (1) 191:15 unwise (1) 35:16 update (1) 4:22 updated (2) 52:10

114:3

upgrade (1) 199:22 upload (1) 117:25 uploaded (2) 113:14

117:24

uploading (1) 114:13 upset (1) 76:2 upshot (1) 86:25 upwards (2) 35:24

36:9

URL (4) 114:6 116:9 120:24,24

use (10) 18:16 26:13 26:15 38:22 46:5 63:25 74:20 131:20 131:20,20

usual (2) 2:13 168:1 usually (1) 117:14

V

V-Bank (16) 62:15 79:15,16,18 86:15 91:1 92:8,9,12 94:24 95:18 99:18 101:20,21 102:3,3

valuable (2) 1:14,15 valuating (4) 36:17,17

37:19 174:21 valuation (26) 2:14

11:2 35:24 36:9,16 36:20,23 37:9,14 37:21,22,22 38:1,2 111:2 112:9 167:5 167:8 169:5 170:19 170:25 174:18 175:2 178:22 181:23 206:14

valuations (3) 170:18

181:14,20 value (29) 36:10,24

109:1 110:2,5,16 125:20 126:2 129:11,20 163:10 167:23 170:23 171:1,6,25 172:9 172:13 173:7,10 174:24 175:1,7 178:4,4,5,8,11,16

valued (3) 112:12 170:23 172:1 valuer (1) 112:1 variety (1) 140:1 various (10) 12:24

30:6 57:13 65:11 84:1 112:14 122:14 126:3 177:3 204:14

variously (1) 186:21 vast (1) 109:12 VAT (1) 170:24 vehicle (2) 29:21

141:12

venture (2) 124:21,22 ventures (1) 124:15 verification (1) 39:11 version (19) 41:23

42:15,20 43:21 49:20,23 54:23 62:23 117:10 118:3 119:21 146:7 154:17 159:8 175:18 177:17 180:2 188:2 191:12

versions (3) 43:20 117:23,25

vessel (15) 44:11,18 44:22,23 54:20 56:12,16,17 60:12 61:10 69:19,22,25 70:2 71:6

vessels (51) 44:1,5 46:17 48:7,20 49:3 49:16 51:23 52:2,6 52:18 53:23 54:2,8

54:14,15 55:6 56:1 waive (1) 69:21 177:1 195:16
57:17,19,20 58:1,6 waiving (1) 69:19 199:15 209:11,15
58:11,25 59:9,12 want (64) 2:2 3:12,13 210:1 211:4 212:11
59:14 60:23 61:4 3:25 4:4,24,25 5:4 Wednesday’s (1)
61:10,15,17 62:1,2 5:8,25 12:12 13:16 120:4
62:8,20 65:12 68:1 14:21 16:15 25:16 week (7) 128:12
69:13,15,20,22 25:17,18 26:15 187:16 209:10,19
70:5 71:10,21,25 39:7 54:23 70:17 215:5,5,18
73:4,5 168:4 70:23,25 74:3,6,20 weekend (3) 114:20
170:11 75:2 77:7 80:3,12 213:7 215:6
viability (1) 123:12 80:19 83:25 84:9 weekly (1) 10:4
vice (3) 72:22 81:11 95:14 102:13 weeks (3) 4:2,19
82:8 103:23 111:11 187:14
Vice-President (1) 113:6 114:23 122:9 weight (1) 39:10
81:20 122:23 131:13 welcome (1) 211:12
video (14) 162:13,21 140:12 146:7 147:5 went (9) 30:25 35:25
163:21,23,24 164:3 160:9 161:10 166:8 36:3 71:3 80:17
164:11,12,13 165:6 168:5 181:12,15 115:16 122:4 172:6
165:22 166:11,12 185:20 189:22 175:25
166:24 195:21 197:11,23 weren’t (14) 8:1,7,14
videolink (1) 120:8 199:2 205:23,24 30:4 37:7 66:2
videos (2) 165:5 166:5 206:6,12 211:24 78:17 93:14 97:7
view (7) 11:13 17:25 212:13,21 157:13 170:7 180:8
18:19 86:15 126:20 wanted (16) 73:15 200:9 208:24
159:20 213:7 76:15 79:25 85:3 western (73) 6:10
virtually (1) 153:18 94:3 98:18 102:9 27:12 29:1 31:8,12
visa (1) 94:19 113:14 114:24 31:18,22 32:6,8,12
visas (1) 88:4 115:13,21 120:8 32:12,23 34:18,22
visiting (1) 167:8 191:18 194:19 35:24 37:6 38:8
VITALY (2) 5:19 216:3 201:3 205:12 40:7 48:12 90:6
Vitaly’s (1) 187:17 wanting (1) 2:4 125:9 133:3 157:6
Vneshsconombank (1) wants (3) 74:12 159:4,13,17 160:1
73:1 116:13 121:13 160:4,12 163:18
volatile (1) 104:13 warning (2) 76:14 164:4 165:15 167:5
volatility (1) 71:17 115:13 167:17,22 168:9,21
Volkhov (17) 44:22 warrant (1) 119:20 168:23 169:7,17
49:17 52:7 54:6,19 wary (1) 76:4 170:8,9,20 171:6
54:20 56:6 57:13 wasn’t (25) 9:19 178:1,16,17 179:7
58:15,19 59:1,6,19 13:18 19:21 23:22 179:12 184:20
59:22,25 60:10,24 44:19 55:12,14 185:5,10 187:3
Volodina (1) 11:5 56:7 65:12 75:9 188:5 191:21
volume (4) 88:15 77:24 88:23 93:20 193:22,23 194:2,4
143:2 174:10,11 96:23 97:1,20 194:6,11 195:15
voluntarily (1) 39:12 123:8 152:16,17 196:5 197:15
VP (1) 42:20 170:3,5 171:4 198:14,19 199:6,7
Vyborg (97) 41:6,8,11 178:1 180:10 200:8 200:5,11,12 202:13
41:21 42:9,20 waste (2) 72:2 186:2 203:25
43:17 44:10,17,21 watch (1) 5:7 white (1) 160:18
44:25 45:13,18 watering (1) 161:25 widely (1) 82:22
46:16 47:10,12 way (36) 4:15 21:1 wife (3) 118:24
48:19 49:14 50:11 22:19 25:24 26:11 128:12 148:19
51:10,21 52:5,19 29:19 31:8 35:11 willing (4) 198:5
53:13,20 54:5 55:4 37:21 38:7 48:11 201:16,19,21
57:7 58:8,20 60:16 53:10 54:5 59:2,18 Wilson (1) 204:7
60:20,23,25 61:24 67:2 73:8 76:1 82:2 wise (1) 141:2
63:5,6 64:8,11,18 83:13 85:12 91:11 wish (6) 2:1 15:5
66:11,18 67:1,2,23 114:12 117:14 113:24 114:2 117:4
68:2,13 69:6 70:15 119:17 120:14,17 215:6
70:18,24 71:1,3 122:19 147:14 wishes (3) 35:6 76:21
72:7,11,14,19 73:4 164:2 167:3 195:1 116:20
73:25 74:9 77:18 197:10 209:19 withdraw (1) 135:9
77:25 78:13 80:3 214:13,23 witness (31) 2:6 5:25
80:13,24 81:14,14 ways (1) 214:14 10:10 15:16,17
81:25 82:14 84:19 we’ll (2) 145:22 16:8,10 21:19 22:5
85:3,6,8,9,10,12,17 166:23 43:6 47:8 50:23
85:18 88:1 89:11 we’ve (6) 27:15 54:12 58:12 59:17 60:5,7
92:18 94:6 96:11 69:8 87:9 97:18 70:11 72:14 103:9
97:13 98:9,13,14 204:5 110:11 125:6 130:2
99:19,25 103:3 web (4) 114:6 116:9,9 167:1,14 168:13
157:2,3 184:21,22 116:15 191:25 200:3
193:16 203:25 website (18) 3:20 209:18 211:18
113:13,19,20,22 212:12,13
W 114:3,6,7,10,14,15 witness’s (1) 27:6
wages (1) 66:1 115:10 116:11 witnesses (2) 67:16
121:2,4,18,25 209:21
wait (3) 212:25 213:2
122:10 woman (1) 50:15
213:4
Wednesday (12) wonder (13) 5:24 6:21
waiting (2) 155:19
25:19 114:25 12:4,9 15:14 25:2
210:22
115:16 118:15 45:13 52:25 74:2

Opus 2 International transcripts@opus2.com
Official Court Reporters +44 (0)20 3008 5900

230
February 19, 2016 Day 13

103:15 125:11,16 143:14

wondering (3) 54:24 118:23 119:3

word (2) 26:6,14 wording (1) 169:11 words (17) 2:17 14:22

27:3 42:10 52:18 59:1 61:10 69:5 79:21 97:3 98:20 99:1,2,24 105:6 114:4 205:24

work (17) 15:25 18:2 69:14,20,22 136:12 164:15 171:21 173:3 174:10,12,13 174:16 177:4 195:20 197:18 202:2

worked (3) 6:9 125:8

152:25 working (8) 4:15

33:12 67:9 94:24 114:10,17 118:21 152:11

works (4) 114:12 117:8 167:25 176:24

world (3) 94:12 118:3 150:1

worldwide (3) 70:6 105:10 124:7 worried (1) 76:10 worry (3) 50:3 51:3

106:8

worth (2) 172:15 173:8

wouldn’t (18) 9:23 22:4 32:11 37:10 55:17 96:12 121:16 139:16,18 145:20 151:24 168:19 188:22,25 195:24 196:4 212:21,22

write (2) 53:9 166:4 writer (1) 105:4 writers (1) 73:18 writing (7) 53:12

63:14,19 97:6 98:6 187:20 202:7

written (18) 30:15 51:16 60:10 72:24 96:4 97:25 100:12 105:3 119:6,21 133:15 148:10 153:24 154:4,7 155:5 180:17,22

wrong (8) 94:10 130:23 190:12 197:3,16,16 206:5 214:25

wrote (4) 53:18 55:2 64:5 198:3

X

Y

year (25) 2:22 12:22 23:2,8,15,21 24:7 24:21 27:10 29:11 31:17 36:4 69:10 106:22,25 109:8 132:10 137:5 138:14 140:12 178:24 180:13,15 180:17 185:16

year-and-something…

160:22

years (10) 16:25 17:16 40:20 50:16 72:17 73:13 81:13 124:5 136:23 174:9

yesterday (19) 1:10 3:18 5:21 7:9 10:19 12:2,7 25:13 30:19 30:25 35:21,23,25 85:4 115:17,18 131:15 148:22 168:17

yield (1) 76:11 York (1) 88:5 young (2) 50:15

149:25

YurInvest (1) 30:17

Z

Zhitnik (2) 101:23

102:1

0

0.26 (1) 155:15

0.3 (2) 150:6,6

0.7 (2) 145:18 146:8

07 (1) 29:10

08 (1) 29:11

09 (1) 29:11

1

1 (20) 36:1 45:19 47:13 63:24 97:16 98:8 99:16 101:15 130:22 143:18 148:4,7 177:13 184:22,25 185:11 185:17,21 188:12 188:22

1,286,805,920 (1)

178:9

1.069 (1) 36:1

1.1 (2) 45:18 48:15

1.2 (2) 178:17,19

1.286 (1) 178:10

1.30 (3) 113:3,6,10

1.4 (1) 45:22

1.825 (1) 132:12

1.9 (1) 108:13

1.97 (1) 108:9

10 (4) 94:21 182:8 190:23 200:23
10.0 (2) 213:23,25

10.30 (5) 213:11,23 215:10,15,20
10.5 (1) 23:2

10.838 (1) 109:2

100 (3) 36:7 82:1 138:2
100,000 (3) 185:12,16 185:21
11 (1) 68:20

11.31 (1) 73:21

11.45 (1) 73:23

111 (1) 15:18

113 (3) 43:7,10 216:5

114 (3) 58:13,14 59:18
115 (2) 47:8,11

116 (2) 60:13 133:15

117 (2) 70:12 72:14

12 (2) 198:3 201:11

12.45 (1) 113:8

12.894 (1) 108:19

123 (1) 216:6

13 (6) 43:9 126:12 128:1 131:10,23 160:5

14 (7) 150:12 169:12

182:8 186:16,18,19 187:5

15 (25) 21:23 79:6,9 85:11 88:4 90:15 91:7,15,23 92:5,7 92:14,17 94:6,11 95:12 98:17,23 99:10 100:19,24,25 108:11 116:14 200:23

150 (1) 88:15

16 (5) 21:23 56:4,22 60:8 167:2

160 (6) 27:18,24 40:13 41:3 195:10 196:6

166 (2) 170:23 172:2

16th (3) 5:24 15:16
21:21
17 (2) 24:20 127:22
18 (1) 24:13
18.7 (1) 24:3
19 (1) 1:1
19th (1) 21:21

2

2 (11) 17:7,9 126:11 130:17,21,24 144:2 184:1,4,22 185:4

2.2 (2) 178:6,7

2.25 (1) 36:4

2.40 (1) 158:25

2.55 (1) 159:2

20 (1) 200:23

2001 (1) 9:6

2002 (1) 9:6

2003 (1) 9:6

2006 (6) 104:10 105:1 109:8,9,21 160:21

2007 (38) 7:4 22:25 23:1 25:2 27:10,13 27:15,22 31:17 37:2 53:21 103:22 104:15 105:24 106:22,25 107:3 108:8,22 109:4,9 109:17,20 127:8,21 129:7 159:13 160:2 160:25 161:6,17 162:9 165:14 170:20 174:18 188:14,18 199:24

2008 (53) 12:6 15:20 23:2,13,21 24:1,6 24:14 27:14,15 42:22 43:18 49:10 51:17 56:5,7,23 62:10 64:1 68:15 68:20 69:7,13 77:21 87:9 88:14 89:14,15,23 90:1,5 90:11 91:23 92:16 93:12,21 96:10 97:22 100:10 109:19 150:12 175:19 178:16 179:15 186:16,19 187:2,5 192:2,22 198:3 200:15 201:11

2008/2009 (1) 98:24

2009 (20) 23:15 24:19 27:15 53:7 64:5 65:9 98:6 99:22 126:5 127:24 129:7 129:21 132:11,11 136:8,11,23 162:4 182:15 183:13

2010 (3) 99:5,11

103:6 2016 (3) 1:1 143:20
215:21
209 (1) 216:7
21 (1) 56:23
214 (2) 179:2,4
22 (3) 143:20,24
215:21
220 (3) 40:6 199:8
200:5
225 (2) 153:22 154:1
227 (2) 130:4,5
23 (3) 51:17 156:2
187:17
235,000 (1) 69:1
24 (9) 89:14,15,23
90:1 91:23 92:16
100:10,15 132:14
240,000 (1) 180:13
25 (9) 6:25 7:1,3
96:18 104:9 129:16
129:18,20 133:12
25:1 (1) 150:22
26 (2) 6:24 7:6
26.8 (1) 23:4
264 (1) 42:18
27 (1) 77:21
28 (7) 23:5,6,7,8,14
87:9 170:20
29 (2) 6:5 103:11

3

3 (6) 49:10 51:23 53:7 144:2 150:6 190:7
3-4 (1) 208:13

3.2 (3) 128:25 129:3,4

30 (9) 56:5 79:2 99:22 129:15,16,18,20 191:5,14

30,000 (4) 180:6

181:7,7,10 300 (5) 198:6,18

199:22 200:4,10

30k (1) 179:24

31 (3) 27:10 106:25 126:5

320 (2) 190:6,8

33 (1) 191:3

35 (1) 79:1

38 (1) 79:1

3A (1) 188:7

4

4 (2) 144:2 176:20

4.00 (5) 113:6 212:4,9 212:20 214:21

4.15 (1) 215:19

4.3 (2) 46:3,4

4.30 (1) 212:9

4.5 (4) 188:15,23 189:2 190:4

4.6.5 (1) 125:20

4.6.7 (1) 126:3

4.6.8 (1) 127:10

4/5 (1) 187:14

40 (6) 36:7 50:16 150:22 171:4 172:3 172:16

450 (6) 79:8,9 89:13 97:1,20 102:17

5

5 (6) 54:20 94:21 133:13 144:2 216:3 216:4

50 (26) 28:23 29:6 32:4,19 40:19 82:1

87:5,6,7 90:15,18 90:21 91:7,14 97:19 99:17 101:14 101:19 102:17,19 129:1 133:9 134:9 134:13,19 137:22
500 (6) 188:14,18,23 190:3,8,11

500,000 (2) 185:19,23

51 (2) 23:8,14

550 (1) 190:11

6

6 (1) 169:13

6.19 (4) 111:14,24 112:7,8

60-something (1)

149:24 600 (2) 10:22 134:14

62 (1) 150:3

7
7 (6) 110:21 145:18
145:19 146:8,9
182:8
71 (1) 73:18
725 (4) 132:17 133:14
133:16,21
75 (1) 124:5
77 (2) 167:15,16
78 (1) 167:21
79 (1) 169:14

8

8 (2) 180:10 189:15

8-hectare (1) 185:4

80 (3) 169:18 198:15 200:6

800 (1) 129:11

805.6 (1) 126:6

825,000 (1) 104:10

840 (3) 129:12 132:21 133:23

85 (1) 169:23

850 (1) 129:12

88 (1) 191:2

89 (1) 191:24

9

9.45 (4) 1:2 212:22 214:20 215:1
90 (4) 140:9 197:22 198:9 199:23

900 (3) 78:22 86:3 96:23

9000 (1) 125:4

950 (1) 150:13

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