Day 36

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

Day 36

April 11, 2016

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April 11, 2016 Day 36

1 Monday, 11 April 2016

2 (9.30 am)

3 MR JUSTICE HILDYARD: Yes. Good morning.

4 MR STROILOV: May it please your Lordship. May I call

5 Professor Guriev.

6 MR JUSTICE HILDYARD: Yes, I think we need to swear in

7 an interpreter first.

8 MR STROILOV: Yes, my Lord.

9 MR JUSTICE HILDYARD: Perhaps that can be done.

10 MS GALIA KULLMANN, Interpreter (Sworn)

11 MR JUSTICE HILDYARD: Thank you very much. We had better

12 swear the witness in.

13 PROFESSOR SERGEI GURIEV (Affirmed)

14 MR JUSTICE HILDYARD: Do sit down. I hope you have some

15 water.

16 Yes?

17 Examination-in-chief by MR STROILOV

18 MR STROILOV: Professor Guriev, can you please be shown

19 {E2/10/1}. Professor Guriev, this seems to be the first

20 page of your report prepared for these proceedings; is

21 this so?

22 A. Yes, this is my report.

23 Q. And can we now scroll down to {E2/10/28}. That seems to

24 be your signature under that report, is it?

25 A. This is my signature, yes.

1 Mr Lord will ask you some questions.

2 Cross-examination by MR LORD

3 MR LORD: Professor Guriev, could you please look at

4 {E2/10/1}.

5 A. Yes.

6 Q. Where you will see in paragraph 2 of this, your first

7 report, you say you have agreed to act pro bono as

8 the banking expert in these proceedings. Is that right?

9 Are you acting without any present expectation of being

10 remunerated?

11 A. Yes, this is correct.

12 Q. And why are you acting pro bono?

13 A. I believe that a person like Mr Arkhangelsky deserves

14 justice and I would like to support his right to

15 justice.

16 Q. And what’s your basis for thinking that he deserves

17 justice; why do you say that?

18 A. He has been recognised as a — he has received asylum in

19 France, which is extremely rare, and I think on the

20 basis of this, I think whatever I can do for people who

21 ask for my opinion, I can try to do so. I myself, being

22 an academic, I think it is my duty to provide expert

23 opinion to court, whenever court calls for me to do so.

24 Q. So would it be fair to say that you sympathise with

25 Mr Arkhangelsky?

1 3

1 Q. And can you now be shown {E2/10.1/1}. This seems to be

2 the first page of the supplemental report of yours

3 prepared for these proceedings; is that right?

4 A. Yes, this is correct.

5 Q. And if we could now scroll down to {E2/10.1/8}, that

6 seems to be your signature under that report; is it?

7 A. Yes, this is my signature.

8 Q. And can you now, please, be shown {E2/11/1}. This seems

9 to be the first page of the joint statement you prepared

10 with the claimants’ expert, Mr Turetsky, for

11 the purposes of these proceedings; is that right?

12 A. Yes, this is right.

13 Q. If we could please scroll down to {E2/11/8}, you can see

14 what appears to be your signature there on the right?

15 A. Yes, the signature on the right is my signature.

16 Q. And can you confirm today that the contents of your two

17 reports and the opinions attributed to you in this joint

18 statement represent your true and full professional

19 opinion on the matters which they discuss?

20 A. Yes, I confirm.

21 Q. And do you want these two reports and your parts of

22 the joint report to stand as your evidence to this court

23 in these proceedings?

24 A. Yes, I do.

25 MR STROILOV: Thank you very much. Now my learned friend

1 A. I have never met Mr Arkhangelsky before this, and

2 I don’t really know him. I’ve never had any

3 relationship with him except for — no personal

4 relationship except for this.

5 Q. Could you be shown, please, {I18&19/18/230.67}.

6 Professor Guriev, you will see from that page that there

7 is an extract from the CoFrance website which was

8 advertising a conference that CoFrance was going to put

9 on, I think, and host, in Nice in January 2014; can you

10 see that page?

11 A. Yes.

12 Q. And you can see it was at the Hotel Negresco, and if you

13 go, please, to the next page {I18&19/18/230.68} you can

14 see there is an itinerary or a timetable for part of

15 the conference, and you can see on Wednesday

16 22 January 2014, it looks as if you were going to give

17 some sort of presentation at 9.00 am in the morning; is

18 that right?

19 A. I have participated in this conference. I presented at

20 11.00 am, yes.

21 Q. And again at 11.00. So you had quite a big slot, didn’t

22 you?

23 A. Yes.

24 Q. All morning.

25 A. Yes.

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1 Q. And what were you talking about in that seminar?

2 A. I was talking about the Russian economic situation and

3 the Russian political system.

4 Q. And how did you come to participate in a Negresco

5 conference organised by CoFrance?

6 A. Vitaly Arkhangelsky has invited me to participate in

7 this conference.

8 Q. And why did you go?

9 A. He invited me; I decided to go.

10 Q. So if anyone invites you to any conference you go, do

11 you?

12 A. No. No.

13 Q. So can you tell his Lordship why you went to this

14 particular conference?

15 A. If you are asking me if there was a compensation

16 involved, there was a compensation involved.

17 Q. And what was that?

18 A. I’m not sure I can disclose that now. There was

19 a compensation, I would ask for anybody else who invited

20 me to conferences like this, and I have done so on many

21 occasions in 2013, 2014 and 2015.

22 Q. And if you look on down the itinerary, you can see that

23 at 4.30 there was a slot in which Mr Ameli seems to have

24 presented; can you see that?

25 A. Yes.

1 A. In my report I list the documents that I have read, that

2 I thought these documents represent the substance of

3 the matter, and this is what I know about this case.

4 Q. And have you followed any of the evidence given in this

5 case, to this court?

6 A. I’ve — in my report I list the testimonies of witnesses

7 and, based on these testimonies and whatever knowledge

8 I have about the Russian banking system, I prepared my

9 report.

10 Q. And what about the evidence that has been given to

11 the court in this case, the actual evidence given live

12 to this court?

13 A. I have seen some publicly available files, records of

14 this court, but I am not sure what exactly you mean.

15 I’m not sure what your question is.

16 Q. So you have seen at least some of the evidence that has

17 been given under oath in this case?

18 A. Yes.

19 Q. And have you seen some of that given by Dr Arkhangelsky?

20 A. Yes.

21 Q. And have you seen evidence given by him in relation to

22 payments that he claims to have made to an official in

23 Russia?

24 A. No. If you show it to me I can read it, but this is

25 something I’ve not seen.

5 7
1 Q. And if you look further on down to 1 Q. Can you look at your report, please, {E2/10/30}. It
2 the Thursday, January 23, 2014, you can see that 2 appears from your CV that you are both an academic and
3 Mr Jeffrey Gauci from London seems to have given 3 an economist; would that be a fair description of your
4 a presentation; can you see that? 4 expertise?
5 A. Yes. 5 A. Yes.
6 Q. «How to choose where best to file a claim to the 6 Q. Have you actually ever been involved in lending
7 opponent in continental Europe and what strategy to 7 decisions for any bank?
8 develop and position». Can you see that? 8 A. I was a board member of two largest Russian banks, and
9 A. Yes. 9 as such, I voted on lending decisions to affiliated
10 Q. Now, we know, Professor Guriev, that Mr Ameli or 10 parties and on large transactions. By Russian law,
11 Professor Ameli and Mr Gauci have variously helped 11 board members have to be involved in certain lending
12 Dr Arkhangelsky and OMG in relation to this litigation 12 decisions. I have been a board member of Sberbank,
13 with the Bank of St Petersburg. Are you aware that 13 which is the largest bank in Russia, and for that
14 those two gentlemen have helped in that respect? 14 matter, in central and eastern Europe, since 2008 until
15 A. I’m not sure. I have not participated in the part of 15 2014.
16 the conference after lunch on Wednesday. I have not 16 I have been a board member in Russian Agricultural
17 been to that part of the conference. 17 Bank, Rosselkhozbank, since 2008 until 2009.
18 Q. Have you actually met Professor or Mr Ameli? 18 Q. And have you been involved in any enforcement decisions
19 A. I’m not sure. Probably he was in the audience. I may 19 taken by a bank?
20 have met him. 20 A. No.
21 Q. And — 21 Q. Can I ask you, please, about the context for the repo
22 A. But I have not — as I said, I left after lunch and I’ve 22 arrangement between the parties in this case? That repo
23 not been participating in that part of the conference. 23 was entered into in late 2008, wasn’t it?
24 Q. And how closely have you followed Dr Arkhangelsky’s 24 A. Yes, it is actually not completely clear. As I stated
25 claim in this litigation? 25 in my report, some of the details of this agreement were
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1 apparently concluded on an oral basis, not on a written

2 basis, but the memorandum was signed in December 2008,

3 yes.

4 Q. And if we go to {E2/10/7}, we see your evidence about

5 the historical context. I am sure you are familiar with

6 it, paragraphs 19 and 20, and you say in paragraph 19

7 about halfway down, you say:

8 «[The] … oil prices fell by a factor of three …

9 second, the Russian market faced a ‘sudden stop’ —

10 contrary to the experience of previous years, the

11 capital flows into Russian were reduced to zero. Both

12 factors precipitated a five-fold decline in stock prices

13 and multiple margin calls and fire sales by leading

14 Russian companies.»

15 And I assume that that’s your opinion.

16 A. I stand by this opinion.

17 Q. So it would be fair to say that there was a serious

18 economic crash, wasn’t there, around about the time of

19 this repo?

20 A. Yes.

21 Q. And when you say there were multiple margin calls, those

22 would often be by lenders, wouldn’t they?

23 A. Yes, this would be related to covenants in the lending

24 agreements, if that is what you are asking.

25 Q. So, in other words, lenders — when you say «multiple

1 borrowers cannot service their debts, the banks can

2 undertake several actions. Some of them would be to ask

3 for additional security, some of them would ask to —

4 would propose to restructure the loan and some of them

5 would simply seize the collateral and liquidate it.

6 So many things may happen. Yes.

7 Q. And there were fire sales by leading Russian companies;

8 is that right, in your opinion?

9 A. Yes.

10 Q. And paragraph 20 you say this:

11 «At the same time, in order to avoid bankruptcies of

12 major clients and further propagation of fire sales,

13 banks needed to refinance the debts of illiquid but

14 solvent debtors. The problem was that as the value of

15 collaterals collapsed, lending became much riskier. In

16 addition to the macroeconomic risks above, the ‘gambling

17 for resurrection’ incentives brought about a substantial

18 increase of the risks of debtors’ misbehaviour and asset

19 stripping or asset tunnelling activities.»

20 You say there, I think, that the value of

21 collaterals collapsed. That, presumably, would have

22 included real estate that was collateralised at that

23 time by Russian lenders or borrowers?

24 A. In each particular case we need to look at the value of

25 collateral, yes. Some pieces of real estate became less

9

1 margin calls», you mean lenders were making demands

2 because they felt they were undersecured; that’s right,

3 isn’t it?

4 A. The margin call actually means something very formally

5 defined, which is, if there is a lending agreement which

6 is secured by collateral, the value of this collateral

7 is linked to a market price of a certain security, then

8 the margin call is something which is triggered by

9 a change in the price of this collateral. It’s not

10 a feeling of the lender, it is something that is

11 formally triggered by the covenant in the lending

12 agreement.

13 Q. But it arises, doesn’t it, because the margin, in other

14 words the security, or the gap between the loan and the

15 security, that that has widened because of a drop in

16 the value of the security. That’s typically what

17 happened here, isn’t it?

18 A. Exactly. What I’m saying is it’s not because the

19 lenders feel something, it is because the market price

20 of the underlying collateral changes.

21 Q. But the net effect is that lenders, such as banks, were

22 asking for more security from borrowers, weren’t they?

23 A. This may happen, yes.

24 Q. And did happen, didn’t it, at that time?

25 A. It — whenever … whenever a bank sees that the

11

1 valuable, some industrial assets became less valuable,

2 some financial assets became less valuable, so it may

3 include real estate, yes.

4 Q. And you say that the values collapsed. So would it be

5 fair to say that in your opinion, land collateral at

6 that time also collapsed in value?

7 A. Some pieces of land, some pieces of real estate probably

8 became less valuable. I cannot say that all the land

9 and all real estate became less valuable. Russian real

10 estate market is not very liquid at any time and it

11 wasn’t very liquid in 2008 for sure.

12 Q. You then say that:

13 «… as the value of collaterals collapsed, lending

14 became much riskier.»

15 A. I do say that.

16 Q. And presumably what you meant by that was that lending

17 banks became much more exposed financially because they

18 were not as adequately secured as they had been?

19 A. What I mean by this, in addition to explaining what

20 I mean in the next sentence, which is «gambling for

21 resurrection», which is the incentive problem or moral

22 hazard problem, gambling for resurrection is a term from

23 academic finance, which means that if borrowers have

24 nothing to lose they undertake excessively risky

25 projects. But in addition to that I also mention

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1 macroeconomic risks which means that for banks it would

2 be harder to lend because the value of collaterals would

3 be more difficult to assess. There was additional

4 uncertainty. That is exactly what I mean by

5 macroeconomic risks.

6 Q. And when you say gambling for resurrection, you,

7 presumably given your role at Sberbank, you would have

8 been aware of that practice, of debtors gambling for

9 resurrection, wouldn’t you?

10 A. Yes, absolutely. I’m not sure I can give you details of

11 private deals between Sberbank — transactions between

12 Sberbank and its borrowers, I can tell you about one

13 particular example which was eventually covered by the

14 media, and if you want I can go ahead with that, but in

15 principle, yes, Sberbank was facing gambling for

16 resurrection episodes, yes.

17 Q. And do you agree with Mr Turetsky about some of

18 the practices that borrowers resorted to at that time in

19 order to try to get out of debts? Do you agree with his

20 analysis of some of the things that happened at that

21 time?

22 A. Can you show me the exact quote, please?

23 Q. Yes, I will, yes. (Pause).

24 Could you please be shown {E2/9/5}, paragraph 4.2 at

25 the foot of the page, where Mr Turetsky talks about the

1 you talk about the good bank/bad bank division,

2 emanating from the Swedish banking system; can you see

3 that?

4 A. Yes.

5 Q. And you describe the model where:

6 «The original bank would preserve normal assets and

7 become a ‘good bank’, functioning normally as a lender.

8 The non-performing assets would be transferred to a ‘bad

9 bank’ (in the case of Sberbank, this was called

10 ‘Sberbank-Capital’ and was fully owned by Sberbank).

11 The ‘bad bank’ would be an asset management company

12 rather than a bank; its job would be to restructure the

13 non-performing assets and recover the maximum possible

14 value; the ‘bad bank’ would not lend.»

15 Can you see that?

16 A. Yes.

17 Q. Now, it is right, isn’t it, in the case of the repo in

18 this case, or the two repos in this case, that nothing

19 happened to the assets which were pledged in favour of

20 Bank of St Petersburg: they remained pledged, didn’t

21 they, to Bank of St Petersburg?

22 A. This is actually a difficult question. I tried to

23 understand that and I saw that on one hand side the

24 assets remained pledged. On the other hand, the assets

25 actually changed hands. The holders of these assets

13 15
1 risks that still arose in relation to a pledge. If you 1 intervened in managing the assets. They also changed
2 go over the page, please, you can see that he describes 2 hands from original purchasers to subsequent purchasers,
3 the following. He actually refers back to 5.15 of his 3 and in that sense it’s not clear how this transaction
4 earlier report, which we can go back to in a minute. He 4 was structured from the point of view of the Bank.
5 said: 5 So in that sense — and this is what I’m trying to
6 «… there was abundant practice during the 6 point to in my report — the bad bank/good bank model
7 financial crisis amongst security providers to challenge 7 I describe in paragraph 22 is transparent and regular.
8 the provision of security, especially if such security 8 The transaction that happened between
9 was provided by entities other than the borrowers 9 Bank of St Petersburg, OMG and original and subsequent
10 themselves. Grounds for challenging security included 10 purchasers, is much less transparent and quite unusual.
11 absence of corporate approvals…absence of corporate 11 Q. Isn’t there a key difference between the good bank/bad
12 benefit, missing co-signatures from the chief 12 bank model you described in paragraph 22, where
13 accountant, third party rights to the property, absence 13 non-performing assets are actually transferred, and the
14 of legal title to the property, and so on.» 14 repo in this case where the pledged assets remained
15 And forgery, sorry, I missed out forgery; can you 15 pledged with the Bank, in favour of the Bank; isn’t that
16 see that? 16 a key difference in this case?
17 A. Yes. 17 A. Can you clarify your question?
18 Q. I think you would agree, wouldn’t you, that those were 18 Q. Well, Professor Guriev, part of your opinion — which we
19 the sorts of allegations that borrowers were coming up 19 will come to — is that as far as you are concerned
20 with around about the time of the repo in order to get 20 registered pledges are a very good form of security;
21 out of debts; would that be fair? 21 isn’t that right?
22 A. This has happened. How common that was is not clear. 22 A. This is correct.
23 But all these tactics were used by certain borrowers, 23 Q. So in the repo — or the two repos in
24 yes. 24 the Bank of St Petersburg case, if, in fact, the
25 Q. And can we go, please, to {E2/10/8}. In paragraph 22 25 registered pledges in favour of Bank of St Petersburg
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1 remained in favour of Bank of St Petersburg,

2 notwithstanding the repo, on your opinion the Bank would

3 remain well secured, wouldn’t it?

4 A. No. With this statement I disagree because from the

5 point of view of an outsider, the normal situation where

6 the Bank lends to a borrower and has a collateral

7 pledged, the normal situation is that the borrower is in

8 control of these assets, or the Bank takes over the

9 management of those assets.

10 In this particular case we see a situation where the

11 borrower, OMG, no longer could control these assets, and

12 in that sense, from the outsider’s point of view it

13 would be completely impossible to figure out who is in

14 charge of the assets and how the borrower can repay this

15 debt.

16 Q. Were you aware when you wrote your first report that the

17 assets of Western Terminal and Scandinavia Insurance

18 that had been pledged in favour of

19 Bank of St Petersburg, that they remained pledged to

20 the Bank of St Petersburg; were you aware of that?

21 A. Yes, I didn’t see that the pledge has changed, but,

22 indeed, I wrote that the situation has become really

23 non-transparent, in the sense that if you read the

24 testimonies of the Bank’s executives, you see that they

25 transfer the control in the holding, which is not clear

1 arrangement was originally implemented, the loans were

2 not transferred from the Bank and none of the collateral

3 previously granted to the Bank was removed from the

4 Bank.»

5 Just taking it in stages, do you agree with

6 Mr Turetsky that the function — in a bad bank/good bank

7 situation, one of the functions of the bad bank would be

8 to hold either the defaulted loans or the actual legal

9 title to assets as he describes there; do you agree with

10 the first part of that proposition? Forget the OMG

11 situation, do you agree with what he says about

12 generally?

13 A. Yes, in general, yes, mm hmm.

14 Q. And then if we look at the last sentence which starts:

15 «In the case of the situation with OMG, at the time

16 the repo arrangement was originally implemented, the

17 loans were not transferred from the Bank…»

18 Pausing there, that’s correct, isn’t it: the loans

19 were not transferred away from Bank of St Petersburg?

20 A. No, the loans from not transferred from the Bank.

21 Q. Then looking at the second part of that sentence where

22 he says this:

23 » … none of the collateral previously granted to

24 the Bank was removed from the Bank.»

25 Again, that’s right, isn’t it? None of

17 19

1 what that means, of the assets to the firms and

2 (inaudible) for long term clients of the Bank, or

3 trusted persons of the Bank. I’m sorry for using this

4 imprecise language, but this was the language which was

5 used by the Bank’s executives.

6 Q. Can you please be shown {E2/9/2}, which is Mr Turetsky’s

7 supplemental report. If you look at paragraph 2.3,

8 Mr Turetsky explains why he doesn’t agree that the good

9 bank/bad bank structure is significantly relevant to

10 the issues you have been asked to look at in this case;

11 can you see that paragraph?

12 A. I see that. I see that. Don’t worry.

13 Q. And have you read that?

14 A. Yes, and this is the supplemental report, right?

15 Q. That’s right.

16 A. Mm hmm.

17 Q. And if you look about halfway down, Mr Turetsky says

18 this:

19 «The function of a ‘bad bank’ would normally be told

20 hold either (i) defaulted loans so that the ‘good bank’

21 would not have to make loan loss provisions or (ii)

22 actual legal titles to assets which the ‘good bank’ has

23 originally obtained via enforcement action and

24 subsequently transferred to the ‘bad bank’. In the case

25 of the situation with OMG, at the time the repo

1 the collateral that the Bank had before the repo was

2 taken away from the Bank as a result of the repos, was

3 it?

4 A. This is not exactly true. This is exactly where this

5 non-transparency comes in. The assets were actually

6 removed from OMG and given to so-called original

7 purchasers. They remained pledged, but original

8 purchasers got control over those assets and in that

9 sense, I’m not sure what Mr Turetsky means that

10 collateral was not removed from the Bank. I see that

11 the control over this collateral was actually in

12 the hands of original and subsequent purchasers, and we

13 can see that from the testimonies, that they even

14 replaced the management and so on.

15 Q. But, Professor Guriev, prior to the repo, or the repos,

16 the Bank’s collateral amounted to pledges of assets

17 owned by Western Terminal and Scandinavia Insurance,

18 didn’t it?

19 A. That’s correct.

20 Q. Prior to the repo, the Bank of St Petersburg did not

21 have any collateral over the shares of those two

22 companies, did it?

23 A. No.

24 Q. The shares were not pledged in favour of the Bank as

25 part of collateral for the loans, were they?

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1 A. No.

2 Q. And under the repo arrangement, the shares in those two

3 companies, those shares were actually transferred to

4 the original purchasers, weren’t they?

5 A. But —

6 Q. Sorry, can you listen to the question, please?

7 A. Yes, the shares —

8 Q. The shares were transferred?

9 A. — the shares were transferred, yes.

10 Q. And the pledged assets, which were obviously owned by

11 those two companies, were pledged in favour of

12 Bank of St Petersburg, they remained pledged in favour

13 of the Bank, didn’t they?

14 A. They did, but the control over the shares changed the

15 value of the collateral, it affected the value of

16 the collateral, and in that sense I don’t see that the

17 original situation where the borrower could control the

18 collateral remained in the full control of

19 the collateral.

20 Q. Professor Guriev, how did the change in control of

21 the shares that had not been pledged to the Bank as

22 collateral change the value of the pledged collateral?

23 A. The standard debt contract foresees the borrower to be

24 in control of the pledged assets, and it is the

25 incentive and ability of the borrower to run this

1 in favour of a bank, isn’t that designed to protect the

2 bank against default by a borrower?

3 A. Absolutely.

4 Q. And isn’t one of the advantages of a pledge that it

5 attempts to prevent the borrower from dissipating that

6 collateral, that collateralised asset, so as to preserve

7 it — in order that the value is preserved for the

8 lender?

9 A. This is correct. Yes.

10 Q. And if a bank was concerned that a borrower might try to

11 dissipate assets that might be available to the bank as

12 security, wouldn’t it be in the bank’s interest to

13 reduce the control of a borrower in those circumstances

14 rather than to increase it?

15 A. This is a question I don’t fully understand. As I said

16 before, the standard debt contract is where the bank

17 lends against the collateral, and in case the loan is in

18 default, the bank may seize the collateral, take the

19 control of the collateral, and that’s exactly what

20 I describe in my report. That would be normal practice

21 and this is what the Bank seemed to be willing to avoid,

22 which I don’t understand.

23 But in the bank — in the standard situation, the

24 bank which sees that a borrower doesn’t service the debt

25 should, indeed, secure the collateral, and either take

21 23
1 collateral in his own interest, and eventually repay the 1 it over and liquidate it, or put it in, for example,
2 debt. 2 a bad bank and make sure that the value is restored.
3 Now, in this situation, the shares were removed from 3 That’s true.
4 the control of OMG, and in that sense it wasn’t clear 4 But giving the asset to somebody else is something
5 how the original borrower could manage the collateral. 5 that is unusual.
6 In that sense, of course, the value of the collateral 6 Q. Can I ask you, please, about the documents that you were
7 depends on who runs the collateral. 7 shown for the purposes of your first report? Can you go
8 Q. We will come to whether that’s right, Professor Guriev, 8 to {E2/10/39}, please. This is an extract from a letter
9 we will come to the terms of the repo arrangements in 9 of instruction to you of 26 August 2015, «Documents
10 a minute, and I am going to put to you that you are 10 enclosed», and you can see a list of the documents.
11 wrong in what you have said, but let’s assume that you 11 Please, if you could cast your eye down that list, you
12 are right about that: is it your expert opinion that the 12 can see number 9.
13 fact that a pledged asset may no longer be run by 13 A. Yes.
14 a borrower but, rather, some other entity, that that in 14 Q. «Various contemporaneous documents including…
15 and of itself reduces the value of a pledged asset owned 15 memorandum dated 30 December 2008.»
16 by that borrower, or by a relevant company? 16 A. Yes.
17 A. No. 17 Q. Then there is a (ii), that is intriguingly blank.
18 Q. Is that your professional, academic opinion on this, is 18 A. Mm hmm.
19 it, Professor Guriev? 19 Q. Then over the page there are some more categories, do
20 A. Well, in theory that may happen. It may increase or 20 you see that?
21 decrease the value of the collateral, but yes, in 21 A. Mm hmm.
22 principle the value of an asset depends on who runs the 22 Q. It doesn’t look, from that list of documents that you
23 asset and what the incentive of this physical or legal 23 were sent, that you were actually sent the repo
24 entity is. Yes. 24 agreements themselves; is that right? Can you confirm
25 Q. Isn’t the purpose of a pledge of collateral as security 25 to his Lordship that you weren’t sent them?
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1 A. No, I wasn’t sent a repo agreement. I was judging —

2 I was basing my report on the testimonies of the Bank’s

3 executives, which I’ve read, and also of Mr Smirnov and

4 Mr Sklyarevsky’s testimonies.

5 Q. Did you think, as a responsible expert witness, that it

6 was appropriate for you to be giving an opinion about

7 the effect of repo arrangements where you had not

8 actually looked at the written arrangements themselves?

9 A. I think so, because I assumed that Bank’s executives who

10 were aware of the content of these agreements, and

11 moreover Mr Smirnov and Mr Sklyarevsky, who were parties

12 to this agreement, would testify under oath and

13 correctly represent the substance of this agreement.

14 Q. Did you not think it would be relevant for you in your

15 investigation to look at the terms of any written repo

16 agreement or agreements, just to see what they actually

17 said and how they dealt with the matter? Surely that

18 was a relevant matter for you to consider as part of

19 your expert consideration, Professor Guriev?

20 A. I was asked specific questions. I decided that what

21 I’ve read in those testimonies is sufficient to

22 highlight the unusual aspects of those agreements.

23 Q. Can I suggest to you, Professor Guriev, that you ought

24 to have called for those documents, if you were aware of

25 them, which you obviously were. You ought to have

1 I wonder if you could be shown, please, {D106/1530/1}.

2 Can you see that, Professor Guriev?

3 A. Yes.

4 Q. Is that the first time you have seen that document?

5 A. Yes, I think so.

6 Q. You can see that the Russian is at {D106/1530/4}. It’s

7 right, isn’t it, that this repurchase agreement

8 involving the Western Terminal shares was not as

9 informal as you suggested in your report, was it, in

10 the light of this document? (Pause).

11 A. So this — as I said, there are certain irregularities

12 in this agreement, and these include inconsistencies

13 with what I have seen in the testimonies, in

14 the memorandum itself, and I do see the nominal price,

15 which is here, RUB 9,900, which is certainly what is

16 supposed to be called in Russia a nominal price, but

17 yes, it is a formal agreement.

18 Q. Thank you. If you would be kind enough, please, to go

19 to {D106/1530/7} where you have the English translation,

20 and if you want to see a copy of the Russian original,

21 it is at {D106/1530/9}, please. If those could be up on

22 the screen at the same time. Professor Guriev, you will

23 see that actually this is another agreement in respect

24 of the Western Terminal repo. In fact, three different

25 agreements were entered into in that regard. In other

25 27

1 called for them, oughtn’t you, on reflection?

2 A. Say that again? That was a question?

3 Q. Yes.

4 A. Okay.

5 Q. Do you not think now, looking back on it, you ought to

6 have asked — your expert opinion, you criticise the

7 repo arrangements in this case, and we will come to some

8 of the things you say about them later this morning, and

9 you suggest that they betoken a number of very serious

10 things, and yet you haven’t looked at, or seemingly

11 asked to see, the actual repo agreements themselves? Is

12 that right?

13 A. I disagree with you. I believe that for the specific

14 questions I was asked, it was sufficient for me to read

15 the testimonies of the witnesses who are parties to

16 these agreements, and of the Bank’s executives, who

17 apparently were aware of the content of this agreement.

18 In my expert opinion, I refer to specific statements

19 made by these witnesses.

20 Q. Have you actually looked at the repurchase agreements

21 themselves at any stage?

22 A. I don’t think so.

23 Q. Not even up to now?

24 A. No, I don’t think so.

25 Q. Perhaps you could be shown some of them, please.

1 words, each of the two repos had three separate

2 agreements. You have seen the first agreement, which is

3 the sale of the shares, the sale of the shares from OMGP

4 to Sevzapalians.

5 Then the second agreement I am now showing you was

6 a provisional share purchase agreement, and again, you

7 can cast your eye down it quickly, but you can see that

8 this and the next document I am going to show you

9 effectively created a written contract concerning the

10 repurchase of those shares by OMGP from Sevzapalians.

11 A. So what I would like to point your attention to is that

12 nowhere in this agreement we see the connection to

13 the loan Bank of St Petersburg made to OMG. In that

14 sense there is an informal link between the relationship

15 between OMG and the Bank, and those agreements. This is

16 what makes the whole transaction really unusual.

17 These documents are contracts. They include nominal

18 prices. We don’t see here any reference to assessment,

19 independent assessment of those assets. In that sense,

20 it is something that I pointed to. I think Mr Turetsky

21 also referred to absence of independent assessment of

22 the value of the assets that these agreements deal with,

23 but yes, these are formal documents, even the

24 provisional contract is related to the main contract and

25 there should be, as you said, a third contract

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1 somewhere.

2 Q. Yes, it’s just if you stay at {D106/1530/7} can you see

3 paragraph 6.1 «Special Provisions»:

4 «The parties undertake to act reasonably and in good

5 faith during performance of obligations under this

6 agreement.»

7 Can you see that?

8 A. Yes.

9 Q. So it looks, doesn’t it, as if this was a formal

10 contract where OMGP and Sevzapalians agreed to act

11 reasonably and in good faith in performance of their

12 obligations under this agreement?

13 A. As long as this is the signature of Mr Arkhangelsky,

14 this is what he agreed to, yes.

15 Q. And that good faith agreement would impose some

16 obligations, wouldn’t it, on Sevzapalians in and about

17 its acting under a repo agreement?

18 A. Can you please clarify your question?

19 Q. Well, what do you understand by paragraph 6.1, the good

20 faith and acting reasonably provision; what do you

21 understand that to achieve?

22 A. I believe that a statement like this means that the

23 parties will act in good faith and make reasonable

24 efforts to carry out their obligations under this

25 contract.

1 likely —

2 A. Honestly I don’t see any date on any of those documents.

3 So some of this — so I see some signatures accompanied

4 with dates, and some are not. In that sense, I am a bit

5 concerned that this may or may not be considered to be

6 legal documents.

7 Q. Right. And it is right, isn’t it —

8 A. Even if you look at the main contract and try to see the

9 date somewhere here, you would see there is a date near

10 the signature of Mr Gavrilov, but no date near the

11 signature of Mr Arkhangelsky.

12 Q. But you have the seal. You can see that it has been

13 sealed and signed, hasn’t it, on behalf of both of

14 the parties to it, at least on the face of it?

15 A. I see the signature, I see the seal. I don’t see the

16 date. Also I’m worried that additional documents are

17 also not dated. They are all sealed, I agree with that.

18 Q. And it is right, isn’t it, that the repurchase price was

19 the same nominal value of RUB 9,900?

20 A. That’s correct.

21 Q. So whatever the shares were or weren’t worth, these

22 contracts meant that OMGP was going to get them back, at

23 least on the face of it, for the same amount — it would

24 have to pay no more than it actually received from

25 Sevzapalians originally?

29 31

1 Q. And if you go to {D106/1530/11}, you will see that this

2 was an annex, but it was also a signed agreement, and

3 you can see that at {D106/1530/13} to {D106/1530/14},

4 you can see it was a form of share purchase agreement?

5 A. Mm hmm.

6 Q. So this was actually, I think, the formal agreement

7 whereby the shares would be transferred back to OMGP.

8 A. Mm hmm.

9 Q. Do you agree, Professor Guriev, that this looks like

10 another formal agreement and contract?

11 A. This is annexed to the contract, and I didn’t have time

12 to look at the main contract, but probably in the main

13 contract they should mention this annex. If that is so,

14 then yes, it’s an important part of that main contract.

15 Q. Thank you.

16 A. I don’t see a date here, though. If you look at the

17 Russian translation, there is no date.

18 Q. On the execution of it, you mean?

19 A. No, I mean this is a signed contract without a date.

20 Q. Yes.

21 A. In that sense there would be a problem in enforcing this

22 contract in the Russian court of law.

23 Q. Yes, isn’t that because, really, both parties have

24 executed this in blank so that the date can be put in as

25 and when the shares are retransferred; isn’t that the

1 A. I agree with your statement on the face of it, but this

2 is, as we know, a much more complicated matter, because

3 these contracts were part of a trilateral agreement with

4 the Bank, with those purchasers and with

5 Mr Arkhangelsky, and first this repurchase agreement was

6 conditional on financial transactions between the Bank

7 and Mr Arkhangelsky’s companies; and we also see that

8 these shares were actually not returned to

9 Mr Arkhangelsky. He was not able to exercise his right

10 to repurchase them at RUB 9,900 because the management

11 was changed before the expiration of this agreement.

12 Q. And if we look at {D106/1530/4}, I think you can see

13 that there is a date on the first of the contracts

14 I showed you, but I think it just hasn’t come out very

15 well in the photocopying.

16 A. Okay.

17 Q. If you go to {D106/1530/1} you can see in

18 the translation they put «illegible». It may be a bit

19 faint on your screen. Perhaps it doesn’t matter very

20 much.

21 A. I should say that I see some illegible part in there,

22 probably the month you can say illegible. The day

23 I think is missing, and the year is missing. But I am

24 not an expert in reading illegible documents.

25 Q. And if we go to {D106/1531/1} you can see the equivalent

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1 suite of documents in relation to the Scan Insurance

2 repo?

3 A. Yes.

4 Q. All right. And can you see that that is the first page

5 of the English translation and the Russian is at

6 {D106/1531/3} and this does appear to be dated, doesn’t

7 it?

8 A. It has a date on some — yes, it has a date.

9 Q. And can you confirm to his Lordship that you haven’t

10 seen this document before now?

11 A. I have not seen this document, no.

12 Q. And if we go to {D106/1531/5}, that’s the equivalent

13 second in the suite?

14 A. Yes, that’s a provisional agreement, yes.

15 Q. And you have not seen that before now?

16 A. No.

17 Q. And {D106/1531/9}, that is the third of these

18 agreements, that is the form of the repurchase,

19 effectively, and can you confirm you have not seen that

20 before — before now?

21 A. I don’t think so, no. Mm hmm.

22 Q. I would like to ask you, please, about the December 2008

23 memorandum, and if you could be shown, please,

24 {E2/10/16}, paragraph 48.

25 A. Yes.

1 carefully analysed by lawyers.»

2 Now, would you change your opinion if it were the

3 case that this repo or these repo agreements were

4 actually considered by OMG’s lawyers at the time?

5 A. Change my opinion about what?

6 Q. Well, you are referring here to whether lawyers have

7 looked at the terms of the deal or not, aren’t you? It

8 is your words, not mine.

9 A. Yes.

10 Q. So you seem to be placing some store on the importance

11 of this contract, or these contracts, being analysed by

12 lawyers for OMG; is that right?

13 A. Correct, and when I’m saying that, I’m referring to

14 the whole body of relationship between OMG, the Bank and

15 the purchasers. I think I have to return to my

16 statement that even after I’ve seen the repo agreements

17 today, I stand by my opinion that it is strange that we

18 have the agreement between OMG and the purchasers

19 without mentioning the memorandum; and, on the other

20 hand, the memorandum, which doesn’t seem to be a proper

21 legal document, and I understand that this memorandum

22 was not examined by OMG lawyers, but I don’t see that as

23 a decisive factor.

24 Q. But assume for one moment that, in fact — let’s start

25 with the memorandum. Let’s assume for one moment that

33

1 Q. You say this:

2 «I have read the parties’ ‘Memorandum’ dated

3 30 December 2008. It obviously is not a contract of

4 the kind described above. I note Mr Matovnikov’s

5 comment on paragraph 55.1 of his report that the

6 memorandum ‘reads more like the minutes of a meeting’

7 and ‘intended to be an agreement in principle rather

8 than a legally binding document’. Whether it was

9 legally binding is an issue of Russian law on which I do

10 not propose to comment. However, I agree that it is way

11 outside the normal practice to record an agreement of

12 this kind in a document of this kind.» {E2/10/17}.

13 Then you —

14 A. I am missing — which page?

15 Q. If you go to the next page, it is in your report.

16 A. Next page.

17 Q. Yes, thank you, Professor Guriev.

18 A. Mm hmm.

19 Q. Paragraph 49:

20 «I find it surprising that the Bank thought it

21 appropriate to do so. I find it equally (or even more)

22 surprising that the OMG actually transferred its assets,

23 prima facie under a sale contract for a purely nominal

24 price, without first seeing a formal contract setting

25 out all the terms of the deal, and having that contract

35

1 the memorandum itself had been — that OMG lawyers had,

2 in fact, been involved in the process which led to that

3 being signed at the end of December 2008. That would,

4 I think, on your opinion, be a reassuring sign, wouldn’t

5 it, that OMG had genuinely signed up to that particular

6 deal?

7 A. That would be one of the reassuring signs. It is not

8 the only unusual part of this agreement, but it is

9 strange that — the way the agreement is worded and

10 signed, yes, it is strange.

11 Q. And if the repo contracts themselves that I have just

12 taken you through, if in fact the evidence was that

13 OMG’s lawyers were involved in the process which led to

14 those agreements being signed, again, you would find

15 that a reassuring feature in terms of showing that the

16 borrower had actually genuinely — or OMG were genuinely

17 signing up to that arrangement, wouldn’t you?

18 A. Here in paragraph 49 I am talking about the memorandum,

19 not about repurchasing agreements. I am pretty sure

20 that if these repurchasing agreements have a seal, and

21 assuming that illegible date is correct, that it should

22 have been a proper process within OMG, and lawyers of

23 OMG should have examined the repos.

24 What I am talking about is the signature under the

25 memorandum, which doesn’t seem to me as something well

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1 prepared and carefully designed. Yes.

2 Q. Just assume —

3 A. Another feature that I would like to mention, which

4 I mentioned again, we don’t see any trace of independent

5 assessment of those assets.

6 Q. But you, as somebody involved on the banking side —

7 A. Mm hmm.

8 Q. — you would find it reassuring, wouldn’t you, if, in

9 fact, the counterparty — in other words, the borrower

10 or the linked party to the borrower that was offering

11 some further security — if, in fact, it had had its

12 lawyers involved in the process of giving any further

13 agreements; that would be reassuring, wouldn’t it?

14 A. Absolutely. It would be one of the reassuring signs,

15 yes.

16 Q. And it would be reassuring because it would suggest,

17 wouldn’t it, that the borrower at least had available to

18 it some legal advice as to what it was getting itself

19 into?

20 A. Absolutely.

21 Q. Was it your understanding, or has it been your

22 understanding up to now, that OMG did not have any legal

23 assistance in and about entering into either of these

24 repo arrangements or the memorandum?

25 A. My understanding is, and this is what I have seen in

1 A. Okay.

2 Q. And can his Lordship take it that you have never called

3 for or looked at those addenda documents?

4 A. What I did, I —

5 Q. Sorry, Professor Guriev, I’m sorry, I do need an answer

6 to that. Can you just confirm that you have never, if

7 it is right —

8 A. In answering questions that I was asked, I read the

9 documents that I was provided.

10 Q. And those did not include any addenda to loan agreements

11 between individual OMG companies and the Bank?

12 A. No.

13 Q. And can you confirm to his Lordship now that you still

14 have never considered any such document. If that’s the

15 case?

16 A. No. Not between OMG and the Bank.

17 Q. You have not considered them?

18 A. I have not considered them.

19 Q. No. Thank you.

20 Can you be shown {E2/9/5}, please. This is what

21 Mr Turetsky says about the documentary materials in this

22 case. Could you read that paragraph, please?

23 A. Which one?

24 Q. Paragraph 3.8. Just read it to yourself, please. Thank

25 you, Professor Guriev. (Pause)

37

1 Mr Arkhangelsky’s testimonies, was that he was forced to

2 sign this memorandum. This is not something I can make

3 statements about —

4 Q. No.

5 A. — and this is not the question I was asked, but this is

6 what I’ve read in Mr Arkhangelsky’s testimonies, and in

7 that sense, this is what I can say. Yes.

8 And, moreover, reading this memorandum, I can assume

9 that this memorandum was not carefully designed and here

10 I fully agree with the Bank’s expert, Mr Matovnikov, who

11 doesn’t see this memorandum as a carefully designed

12 contract.

13 Q. And were you aware that the extensions to various loan

14 agreements that formed part of the accompanying

15 restructuring, that those — that there were individual

16 addenda agreements that dealt with the restructuring of

17 the actual loans themselves; were you aware of that?

18 A. Which loans are you talking about and what is your

19 question?

20 Q. If you look at paragraph 50(a) of your report?

21 A. Okay.

22 Q. You refer to addenda to loan agreements.

23 A. Yes.

24 Q. So you those are the documents I am referring to, it is

25 your words, Professor Guriev.

39

1 A. Okay.

2 Q. And Mr Turetsky is right, isn’t it, in what he says in

3 paragraph 3.8, in view of what you have now seen, which

4 you hadn’t seen before?

5 A. I agree with the following statement: Per se, each of

6 those agreements, assuming that the date is correct, and

7 the signature is correct, then each of these agreements

8 is a formal document. Taken together with the

9 memorandum, and the relationship between OMG and the

10 Bank, this set of repurchasing agreements and the

11 memorandum look very informal and intentionally

12 confusing for me.

13 Q. And if you look at paragraph 3.9, can you again see,

14 please, what Mr Turetsky says there?

15 A. Yes, he says that these assets could not generate any

16 income.

17 Q. Well, if you assume for one moment that Western Terminal

18 and Scandinavia Insurance were in serious financial

19 difficulty, just assume that for one moment, and assume

20 further that if they are not insolvent they are all but

21 insolvent companies, all right? If you assume those two

22 things.

23 A. I can — you want to say that Mr Turetsky suggested no

24 income could be generated; right?

25 Q. I want you to listen to the question if that’s all

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1 right.

2 A. Okay.

3 Q. I was really trying to —

4 A. Thank you. I tried to clarify your question, sorry.

5 Q. I was suggesting that if you were to assume that

6 Western Terminal and Scandinavia Insurance were in

7 serious financial difficulty, and are either insolvent

8 or all but insolvent, it wouldn’t be surprising, would

9 it, that the question of any income generated by those

10 two companies wasn’t something that the parties were

11 concerned with at that time?

12 A. First, even financially insolvent companies can pay

13 dividends. Interestingly, that happens. Moreover,

14 I would like to refer you to the testimony of

15 Mr Sklyarevsky where he discusses his dealings or his

16 negotiations with Mr Zelyenov, and they discuss the

17 transfer of shares that Mr Zelyenov’s companies, Gelios

18 and Agentstvo Po, transferring to Mr Sklyarevsky’s

19 companies, they do discuss prices there.

20 So it is an agreement within which the original

21 purchasers and subsequent purchasers could have

22 exchanged financial assets, and that could generate

23 a non-trivial amount of money for Mr Zelyenov, or

24 Mr Zelyenov’s companies.

25 In that sense, I think it is a non-trivial question.

1 Q. No. What you are saying there, Professor Guriev, is

2 that you have expected the parties to agree, the Bank

3 and OMG, as to whether any such surplus recovered should

4 be returned to the OMG; that’s right, isn’t it?

5 A. Yes, this is a hypothetical possibility, where if the

6 Bank takes over the collateral, sells it in a public

7 auction, and recovers the value in excess of the loan

8 agreement, yes, the Bank may return — should return the

9 excess amount to the original borrower. Yes.

10 Q. But you are also envisaging that an outcome could be

11 that any such surplus would accrue to the Bank, aren’t

12 you? Because you are seeing whether the surplus should

13 be returned to OMG, so that implies that it may not be

14 the case that it would be so returned.

15 A. Here I talk about restructuring of the debt.

16 Restructuring of the debt is a new contract amending

17 the original loan agreement, and it may include changes

18 to the distribution of proceeds of the sale. Yes.

19 Q. So there wouldn’t be, on the face of it, anything

20 untoward about the repo arrangement generating some

21 additional surplus collateral for the Bank, would there?

22 A. I don’t understand your question. Which repo you are

23 asking about?

24 Q. Well, as part of these repo arrangements?

25 A. Which repo arrangements?

41 43

1 I agree it is not the crucial problem in this agreement,

2 whether distribution of income is omitted or recorded.

3 As I said, the most important problem I have with those

4 agreements is that the link between OMG relationship and

5 the Bank and the repurchasing agreements is not present

6 in those agreements.

7 Q. And if you go to {E2/10/16}, please, which is another

8 page in your first report, in paragraph 47(c) you

9 comment upon various aspects of the repo. You say this

10 in (c):

11 «I would expect the contract to address the

12 possibility of the collateral being sold off at a public

13 auction, and whether the surplus value recovered at such

14 auction should be returned to the OMG.»

15 Can you see that?

16 A. I see that, and here, if you can see the first

17 paragraph — the first paragraph of 47, first paragraph

18 on this page, I talk about the contract between OMG and

19 the Bank, not about the repo agreement.

20 Q. Yes. But what you are discussing in paragraph 47(c) is

21 the prospect that the repo might generate a surplus over

22 and above the previous collateral value; isn’t that

23 right? There might be some extra —

24 A. Maybe some extra, sure. We don’t know what the value

25 would have been in the public auction, yes.

1 Q. Well, either the Western Terminal or the

2 Scandinavia Insurance one.

3 A. On this page I am talking about the relationship between

4 the Bank and the OMG. You are talking about repo

5 arrangements between the OMG and the original

6 purchasers. So in that sense I think it is confusing to

7 ask questions about my statements on this page and on

8 the repo agreements you have shown me.

9 Q. But you are talking about assets or income within

10 Western Terminal and Scandinavia Insurance, aren’t you?

11 A. Yes.

12 Q. That is what you are talking about. Are you not saying

13 there that there may be some additional assets within

14 those two companies, and you are saying in paragraph (c)

15 that you would expect the question of whether any

16 surplus value recovered from the sale of any of those

17 assets should be returned to OMG; that is what you are

18 talking about, isn’t it?

19 A. I say that this new contract, which would be the

20 amendment of the original loan contract, may consider

21 this possibility. What I’m saying is there may be

22 different options for the Bank and the borrower to

23 reconsider the relationship that they have regarding the

24 disposition of the collateral and proceeds from its sale

25 if this asset is auctioned off.

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1 Q. But you would not rule out the possibility that actually

2 a surplus of the sort that you describe in paragraph (c)

3 would actually not be returned to OMG but would accrue

4 to the Bank as lender?

5 A. I don’t rule out this possibility.

6 Q. Thank you.

7 A. Now, let me explain what I mean by this. The original

8 loan agreement foresaw OMG to repay the debt to

9 the Bank. If this has not happened, the Bank and OMG

10 can renegotiate this agreement, which may include

11 various possibilities, including that the proceeds from

12 the sale would be appropriated by the Bank, or excess

13 value may be appropriated by the OMG.

14 That is the matter for the agreement between OMG and

15 the Bank. The new agreement.

16 Q. But, Professor Guriev, I had understood you to be

17 looking there at any additional assets or collateral

18 within Western Terminal or Scandinavia Insurance that

19 hadn’t already been pledged to the Bank. That’s how

20 I had understood paragraph (c).

21 A. I’m not talking about any additional assets here.

22 Q. You are talking about the existing pledged collateral,

23 are you?

24 A. Yes.

25 Q. The existing assets of Western Terminal and

1 A. Then the Bank should take over the pledged collateral

2 from Renord now, or from OMG? This is where the

3 confusion comes in because with the repo agreement, OMG

4 still has a right to repurchase the assets back, and so

5 the Bank would have to take the collateral from OMG, and

6 that’s exactly what makes this transaction impossible to

7 analyse.

8 MR JUSTICE HILDYARD: But the repo refers to the shares, not

9 the assets.

10 A. Yes, exactly. Exactly. Yes, but who is going to —

11 whom the Bank will go after depends on who owns those

12 shares at the moment when the Bank says: I need to seize

13 their collateral.

14 MR JUSTICE HILDYARD: Yes.

15 A. So when you put together the sequence, please clarify at

16 what time default happens and who is in possession of

17 the shares at that time.

18 MR LORD: Well, Professor Guriev, if we look at the

19 memorandum, for example, {D107/1537/1}, if we look at

20 the memorandum that the parties signed, December 30,

21 2008. Sorry, {D107/1537/1}. You can see,

22 Professor Guriev, and leaving on one side for one minute

23 the exact description of the parties, because there are

24 issues about that.

25 A. Mm hmm.

45 47

1 Scandinavia Insurance that were pledged to the Bank?

2 A. Yes.

3 Q. And you could contemplate a situation where the parties

4 could have agreed that a surplus from the sale of those

5 assets already pledged to the Bank would accrue to

6 the Bank?

7 A. Yes, I can foresee a situation like this, and I have

8 seen these situations in Russian practice, yes.

9 MR JUSTICE HILDYARD: Was that the situation here, in fact,

10 under the repo, if the sequence was: repo arrangement;

11 transfer of shares; default; control exercised —

12 obtained by the Renord-Invest company; assets therefore

13 of OMG or the repoed company belonging to

14 the shareholders; money comes into the Bank; returned if

15 surplus to the repoed company; benefit inures to

16 the person who acquired the shares under the repo, that

17 is to say the Renord-Invest company. That’s what

18 appears to be provided for and there isn’t anything in

19 the repo arrangements to prevent that, is there?

20 A. Can you clarify the sequence again?

21 So initially we have a repo agreement between OMG

22 and Renord?

23 MR JUSTICE HILDYARD: Yes.

24 A. Okay. Then default by OMG to the Bank?

25 MR JUSTICE HILDYARD: Yes.

1 Q. But you have a reference to Group Oslo Marine acting by

2 Dr Arkhangelsky, and you have Bank of St Petersburg

3 acting through Mr Savelyev. Then it says:

4 «Agreed as follows:

5 «In order to secure the loans … listed… special

6 companies(the Purchasers) purchase shares in the

7 following Group companies.»

8 Can you see that? That must be OMG.

9 A. Yes.

10 Q. And that’s Western Terminal and Scandinavia Insurance,

11 isn’t it?

12 A. Yes.

13 Q. Thank you. Then you can see there is a list of

14 the various loans.

15 A. Yes, correct.

16 Q. Then if you go over the page to {D107/1537/2}, see

17 paragraph 2:

18 «After the complete fulfilment of the Group’s

19 obligations to the Bank, sale and purchase transactions

20 in reverse will be carried out for prices specified in

21 reverse sale and purchase contracts which will be signed

22 between the Purchasers and the current owners of

23 [Western Terminal] and [Scandinavia Insurance] …

24 simultaneously with the direct sale and purchase

25 contracts.»

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1 Can you see that?

2 A. I can see that.

3 Q. You have now seen that in fact those repurchase

4 agreements and contracts were, in fact, it looks like,

5 doesn’t it, they were in fact entered into as this

6 clause 2 envisaged; do you agree?

7 A. I disagree. I think you should read Mr Sklyarevsky’s

8 testimonies, where he openly says that he pretty much

9 took over the management of those companies, while the

10 number 3 — item number 3 here says that:

11 «The Purchasers undertake… not to interfere in

12 everyday commercial activities of the purchased

13 companies.»

14 Q. That’s a slightly different point. If you look at

15 clause 3, take you up on that point:

16 «The Purchasers undertake… not to interfere in

17 everyday commercial activities of the purchased

18 companies.»

19 So it does look as though there was at least some

20 understanding between these parties that there wouldn’t

21 be any interference in the everyday commercial

22 activities of the repo companies on condition that the

23 group fulfilled its obligations to the Bank; can you see

24 that?

25 A. When you say «repo companies», you mean Renord and other

1 «Not to worsen in any other way the material and

2 financial situation of the companies.»

3 Can you see that?

4 A. I see that.

5 Q. So it looks, doesn’t it, Professor Guriev, as if the

6 understanding was that the OMG — if you like, the OMG

7 side of this deal, they agreed not to do those things;

8 do you agree?

9 A. If this is a voluntarily signed agreement by

10 Mr Arkhangelsky, then yes, this agreement on behalf of

11 OMG promises not to do things listed in clause 4.

12 Q. And just assume for a minute, his Lordship has put the

13 question to you, just assume for one minute that under

14 these arrangements OMG, in effect, lost its right to

15 call for the repurchase of the shares, just assume that,

16 all right?

17 Just assume, I’m not asking you to — just assume.

18 A. Wait a second, assume because of what, the right was

19 lost?

20 Q. No, just assume. Assume that it lost the right to call

21 for the repurchase of the shares.

22 A. There may be different scenarios, there may be different

23 scene — no, I am happy with this question, I want

24 a clarification of this question. There may be

25 different scenarios for this assumption. Please roll

49 51
1 purchasers? 1 out a scenario. Please clarify a scenario which would
2 Q. No. No. It is talking about Western Terminal and 2 make it obvious what is that you have in mind?
3 Scandinavia Insurance, isn’t it, clause 3. 3 Q. Well …
4 A. Can you please clarify your question? 4 A. You mean the repurchasing agreement was annulled, or how
5 Q. Clause 3 comprises some understanding, doesn’t it? 5 did the party OMG or Mr Arkhangelsky lose his right to
6 A. Yes. 6 repurchasing the shares?
7 Q. Simplifying it, what clause 3 is saying is, providing 7 Q. That there was not complete fulfilment of OMG group
8 the OMG group fulfils its obligations to the Bank — 8 obligations owed to Bank of St Petersburg, for example.
9 A. Yes. 9 Just assume that for one minute.
10 Q. — there will be no interference in the activities of 10 A. Okay, so we assume that this memorandum holds?
11 Western Terminal or Scandinavia Insurance? 11 Q. No, just assume that under this repo agreement —
12 A. Correct. 12 A. Which repo agreement?
13 Q. And doesn’t it follow from that that if the OMG 13 Q. Either the Western Terminal or Scandinavia Insurance.
14 companies do not fulfil their obligation to the Bank, 14 A. Between Mr Arkhangelsky and Renord?
15 then the Bank would be entitled to interfere or to 15 Q. Sorry, Professor Guriev. It’s right, isn’t it, that
16 intervene in those two repoed companies? 16 under a repo agreement an asset or shares are sold with
17 A. No. This is a basic logical mistake. If you say «If A, 17 a view to their being repurchased?
18 then B», this doesn’t imply that «if not A, not B.» 18 A. Yes.
19 This is basic logic. 19 Q. I’m simplifying it.
20 Q. And in clause 4 it says this: 20 A. Yes.
21 «The sellers and the management of the companies on 21 Q. In other words, some sort of security goes one way with
22 sale undertake: 22 a view that it potentially will come back the other way?
23 «Not to sell or transmit to anyone these companies’ 23 A. Yes.
24 assets. 24 Q. Just assume, making it very simple, that under these two
25 «Not to stop their activities, or 25 repo arrangements, the shares in Western Terminal and
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1 Scandinavia Insurance have passed out of OMG’s

2 ownership. Just assume that, all right, it has gone in

3 the first direction. Just assume that, all right?

4 A. So they moved to the first direction but OMG still has

5 a right to repurchase them back or not?

6 Q. Yes.

7 A. Yes, okay, okay.

8 Q. Then assume — it is not a matter for you —

9 A. Yes.

10 Q. — just assume that his Lordship finds that OMG lost the

11 right. Just assume that —

12 A. Okay.

13 Q. — if you can’t do it —

14 A. Okay.

15 Q. — if you say you physically can’t, you conceptually

16 can’t assume that, I won’t waste any more time, because

17 I have to get on.

18 A. Let me propose a scenario under which that may happen.

19 Q. Sorry, Professor Guriev, I’m going to continue that,

20 that is not a helpful —I’m going to keep going.

21 A. No, no, wait a second —

22 Q. I am sorry, Professor Guriev, no.

23 A. — I think this is disrespectful to me because I can

24 assume and I can go — I can continue with that, but the

25 scenario could be that part of the repurchase agreement

1 these shares that OMG ultimately do not have a right to

2 get the shares in these two companies back, there would

3 be nothing untoward or improper about any surplus value

4 that would attach to those shares accruing to a company

5 other than OMG?

6 A. Yes, if at the moment when the sale goes on the

7 shares — the ownership of those assets legally resides

8 with whatever company, like Renord or SKIF, they

9 probably should get the surplus value. Yes.

10 Q. Thank you.

11 Now, could you go, please, I want to look at your

12 evidence about the risks associated with a registered

13 pledge, if I may. {E2/10/18}, which is your first

14 report. It’s paragraph 55, Professor Guriev, if you

15 would be kind enough, please, to look at that.

16 A. Yes.

17 Q. It comes, really, in a section, if you go back to

18 {E2/10/17} — do you have a hard copy there,

19 Professor Guriev? I want to help you —

20 A. Okay.

21 Q. If you can —

22 A. Thank you, so which paragraph?

23 Q. Sorry Professor Guriev, {E2/10/17}, paragraph 52 is the

24 beginning of this section. Can you see it is headed

25 «Pledges of real estate».

53

1 is cancelled, annulled, made void by his Lordship or by

2 some other court of justice. If that is the case, let’s

3 continue.

4 Q. All you have to consider for the purposes of this

5 question —

6 A. Yes.

7 Q. — is you have to assume that any right of the OMG group

8 to repurchase the shares in Western Terminal or

9 Scandinavia Insurance has been lost or forfeited. You

10 haven’t got to do anything other than assume that.

11 A. Okay. I will assume that, having in mind the scenario

12 that I outlined.

13 Q. And do you agree that under the arrangements that we

14 have looked at this morning, nothing has happened to

15 the assets already pledged by Western Terminal and

16 Scandinavia Insurance, those pledged assets are not

17 affected — they are not affected, are they, by any of

18 the repo arrangements we have looked at this morning?

19 A. As I already mentioned this morning, the value of those

20 assets will depend on who is in charge of those assets,

21 and it may be different if they are controlled by Renord

22 or SKIF or other companies, but these assets remain

23 pledged, yes.

24 Q. I think what his Lordship was putting to you, or was

25 asking you to consider, was that if you assume that

55

1 A. Yes.

2 Q. Then there is a section where you debate what you see as

3 the possible — as some, I think, security realisation

4 risks —

5 A. Yes.

6 Q. Such as there may be.

7 A. Yes.

8 Q. Then paragraph 54 you say this — well, you can see what

9 you say in paragraph 54. Can you just confirm that you

10 agree with what you have said there?

11 A. I agree with what I say.

12 Q. And you agree that borrowers did, on occasion, resort to

13 spurious claims that documents have been forged?

14 Towards the end of the paragraph.

15 A. I — in the context of this sentence, there is a word

16 «dishonest actions by borrowers», and in this case it is

17 not for me to judge whether claims that documents have

18 been forged were honest or dishonest, or spurious, but

19 forgery has happened in Russia in that particular time

20 for sure.

21 Q. And you can see what you say in paragraph 55. I think

22 what you are saying in paragraph 55 is that although you

23 note the various possible enforcement issues —

24 A. Mm hmm.

25 Q. — you say, I think in the final sentence in

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1 paragraph 55:

2 «Indeed, where there is a registered pledge of real

3 estate, there is practically no risk that the lender can

4 be defrauded by dissipation of assets.»

5 A. I agree with that.

6 Q. Now, can I ask you, please, to look at what

7 Dr Arkhangelsky said in evidence to his Lordship in this

8 case? Could you be shown, please, {Day15/59:22}. If

9 you have seen this evidence already —

10 A. No.

11 Q. — Professor Guriev, then please shout, and I will —

12 A. No.

13 Q. Thank you very much.

14 A. So you want me to read the whole 25 lines?

15 Q. I am going to tell you what I would like you to read as

16 quickly as you are decently able, but do take your time.

17 If we could have on screen for — if Professor Guriev

18 could have — I don’t know if there is a hard copy of

19 this transcript?

20 A. I have in front of me 25 lines on the top of page 59.

21 Q. I think, very helpfully, I think the actual — although

22 you have it on screen, you can then have it in hard

23 copy.

24 A. Okay.

25 Q. Starting on page 59 —

1 A. Sure, I’m sorry:

2 «If I start the war with the Bank, it would require

3 from the Bank at least two years of active struggle in

4 the courts before they would be able to start any

5 proceeding, any enforcement, and two years’ time was

6 more than enough to get financing, or refinancing or so

7 on.»

8 Q. Yes, it starts:

9 «Because I just explained to his Lordship …»

10 If you could just read down that page to page 60,

11 then when you have done that, page 61, down to line 19,

12 please. (Pause).

13 A. I have read that. I don’t understand the meaning of:

14 «You cannot just take profits …»

15 And so on. This is something I don’t understand.

16 I don’t understand who «you» is supposed to be.

17 Q. But presumably you understand what Dr Arkhangelsky had

18 in mind when he talked about starting a war on the Bank.

19 A. Mm hmm.

20 Q. Do you?

21 A. I understand that — I can imagine, I can assume, right,

22 so this is my understanding from this transcript, that

23 he had in mind refusing to pay, after which the Bank

24 would go to the court and try to seize the collateral,

25 and manage the collateral or liquidate the collateral

57 59

1 A. Okay.

2 Q. — Dr Arkhangelsky was giving evidence about the

3 circumstances surrounding the end of December meeting

4 with Bank of St Petersburg.

5 A. Okay.

6 Q. All right, if you want just to read —

7 A. Yes.

8 Q. — the run-in to line 22, and the Q are the questions

9 and A is the evidence by Dr Arkhangelsky. Could you

10 see, please, at line 22, what Dr Arkhangelsky said? He

11 said this:

12 «Answer: Because I just explained to his Lordship

13 that I had two options: either to agree with the Bank,

14 or start a war with the Bank. If I start the war with

15 the Bank, it would require from the Bank at least two

16 years of active struggle in the courts before they would

17 be able to start any proceeding, any enforcement, and

18 two years’ time was more than enough to get financing,

19 or refinancing or so on.»

20 Can you see that?

21 A. I’m sorry, I’m a bit confused because on the hard copy

22 I have something different than on the screen. let me

23 switch to the screen.

24 Q. I’m sorry, I think sometimes they tidy up the transcript

25 and …

1 and so on. Is that the understanding?

2 Q. What’s the war aspect? Why would he be at war?

3 A. I think it is best to ask Dr Arkhangelsky —

4 Q. Okay.

5 A. — but in … I think it’s used in a figurative way,

6 I don’t assume that it is a real war — a court war, or

7 whatever it is. I think you should clarify that with

8 Dr Arkhangelsky.

9 Q. Would you agree, Professor Guriev, that if a defaulting

10 borrower declares war on the lending bank that’s trying

11 to realise collateral, that is likely to create some

12 risk for the enforcing bank, isn’t it?

13 A. I don’t understand the word — I don’t understand the

14 meaning of the war. What I’m saying is, my assumption

15 is that what he had in mind, but this is for you to

16 clarify it with him, was to refuse paying, which is not

17 an advisable behaviour, of course, because this is what

18 undermines your reputation in business, and if you don’t

19 behave in good faith, it will be very hard to continue

20 your business career.

21 Q. Let’s assume that this is a borrower — let’s assume

22 that, let’s say, we are dealing with a borrower who was

23 gambling for resurrection, thought he had nothing to

24 lose and was just going to make life as difficult for

25 the Bank as possible. Just assume that.

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1 A. Okay.

2 Q. He could make up allegations that documents had been

3 forged, couldn’t he?

4 A. He — I’m not sure this is the case here, but in

5 principle, if the borrower has nothing to lose, he could

6 have done that.

7 But there is a very important thing. Nothing to

8 lose is a different meaning. Defaulting on the debt is

9 a business action. Forging documents or pretending that

10 the Bank has forged documents may actually end up with

11 a criminal indictment, and these are two different

12 things.

13 Q. One of the advantages for a bank that had taken

14 possession of the shares to companies where the

15 companies’ assets had been pledged in favour of

16 the Bank, one of the advantages surely would be that the

17 Bank was potentially, after default, facing a friendly

18 counterparty rather than a hostile warring counterparty;

19 wouldn’t that be an obvious advantage of that sort of

20 arrangement?

21 A. I don’t see here the Bank taking hold of the shares.

22 I see here the shares being transferred to somebody else

23 than the Bank.

24 Q. But the Bank would be in a better position, wouldn’t it?

25 Even if the shares were not owned by the Bank, the Bank

1 the borrower. These strategies may actually result in

2 a criminal indictment. In principle you can produce

3 whatever forged documents in any country, but these are

4 prosecuted by long term — long prison terms and in that

5 sense, real estate is different in the sense that it is

6 much harder to dissipate, tunnel, reappropriate and so

7 on.

8 But yes, you can forge any document anywhere, but

9 this is a very risky strategy in any country, including

10 Russia.

11 Q. And one of the advantages of the repo arrangement in

12 this case was that potentially it would reduce the

13 ability of the borrower to engage in various spoiling

14 tactics; isn’t that right?

15 A. By not having the shares —

16 Q. Yes.

17 A. — Mr Arkhangelsky had a much narrower ability to manage

18 his assets.

19 Q. And potentially to try to frustrate the Bank’s

20 enforcement of its pledged security within those two

21 companies?

22 A. I should say that this is not exactly correct, because

23 the strategies mentioned here, such as forging legal

24 titles and so on, for that you don’t really need shares.

25 You can produce and forge any documents you want if you

61 63

1 would be in a better position if the party holding those

2 shares was well disposed to the Bank rather than the

3 borrower who was at war with the Bank?

4 A. I cannot judge that in the sense that neither war nor

5 friendship are legal categories. If I were

6 a shareholder or a board member of this bank, I would be

7 extremely worried that the shares moved from OMG, or

8 Mr Arkhangelsky, with whom the Bank has contracts and

9 a business relationship and a loan agreement, to

10 somebody with whom the Bank has no legal contract. This

11 is what I’ve written in my report and this is what

12 I find really unusual, and this is why I think this

13 transaction is so strange.

14 Q. Well, we will come to your view on the Bank’s rationale

15 for this, I think, shortly.

16 Can you please look at {E2/9/5}. Can you look at

17 paragraph 4.2 and 4.3, Mr Turetsky gives an opinion of

18 the sort of risks that a lender might run in terms of

19 enforcing pledged security if the borrower had the

20 intention to defraud the creditor; can you see?

21 A. I see that.

22 Q. Would you agree that if you had a borrower who had that

23 intention, those would be risks that the lending bank

24 would potentially run?

25 A. These are highly risky strategies on behalf of

1 go that route.

2 MR JUSTICE HILDYARD: I’m not sure the extent to which

3 I need expert evidence as to whether any of this is

4 possible.

5 MR LORD: No.

6 MR JUSTICE HILDYARD: What one can know, but I would like

7 your confirmation in case I am barking up the wrong

8 tree, is that you could have as many repo or other

9 arrangements as you like in force, and if the borrower

10 says he has forged all of them, or that all of them were

11 forged, rather, the Bank does not have the security it

12 wanted. Nothing is safe against wholesale forgery or

13 other fraud. Nothing.

14 A. I fully agree with your Lordship. I think I can

15 produce — well, I would not do so, but I can imagine

16 a situation where somebody forges the title to this

17 building and is able to sell this building, even if it

18 is registered.

19 MR LORD: Let’s hope that doesn’t happen for the next couple

20 of weeks.

21 A. Let’s hope so.

22 MR JUSTICE HILDYARD: I will say nothing.

23 How much longer do we have, because I’m just

24 a little bit worried about…

25 MR LORD: I am conscious that Professor Guriev needs to go.

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1 I will probably be another 20 or 25 minutes.

2 Professor Guriev, could you look, please, at

3 {AA2/8/73}. This is a document which, the defendants

4 exhibited to their opening.

5 A. Yes.

6 Q. And is it a document that you have read before?

7 A. I have read this document.

8 Q. You don’t refer to it, do you, in any of your evidence?

9 A. I don’t refer to it, but when I discussed our initial

10 reports with Mr Turetsky, I saw that he referred to this

11 document. I have read this document.

12 Q. If you go, please, to {AA2/8/78} we see that this

13 document sets out, from whoever this body is, the

14 National Anti-Corruption Committee, it sets out a number

15 of schemes, schemes 1, 2, 3, 4. Scheme 2, «forcing to

16 conclude a transaction»; can you see that?

17 A. Yes.

18 Q. If we go to {AA2/8/80} you see the following at the top.

19 It says this:

20 «This scheme involves corrupt relationships with

21 agents of law enforcement bodies, courts, and court

22 bailiffs service.»

23 Then it gives as a case study Sberbank v MAIR; can

24 you see that?

25 A. I see that.

1 A. Yes.

2 Q. — that these allegations on this page are well made?

3 Is that what you are saying?

4 A. I … I don’t think that it is appropriate for me to

5 answer this question right now, because I am not sure to

6 what extent what I am going to tell you includes

7 confidential information.

8 Q. Well, Professor Guriev, the reason I ask you about it

9 this —

10 A. Yes.

11 Q. — is because I don’t know what use is going to be made

12 of it by Mr Stroilov, and therefore I wanted to ask you

13 about it, and I wanted to show you that Sberbank seemed

14 to feature in these allegations and they feature again

15 at {AA2/8/87}. Are you familiar with that case at the

16 bottom, Mojaev v Sberbank?

17 A. No. I have seen that in this report but I don’t

18 remember this case. I think it could have been done

19 before my — beginning of my term on the board.

20 Q. But, Professor Guriev, you wouldn’t have his Lordship

21 place any reliance, would you, on the contents of

22 the National Anti-Corruption Committee report here? You

23 wouldn’t have his Lordship rely upon this, would you?

24 A. This is a report which is reliable as an analytical

25 document. I think we can treat it as public

65 67
1 Q. Have you read this page before? 1 information, as media reports, but not as something
2 A. I did. 2 decided by the court of law.
3 Q. Whoever this body — this body that produces this 3 Q. Thank you.
4 report, I think is identifying this as an example — 4 Can I ask you, please, about enforcement. Can you
5 that this Sberbank case was an example of this sort of 5 see {E2/10/22} of your report? Paragraph 65 you say:
6 corruption; is that right? 6 «Following a default, the creditor bank’s main job
7 A. That’s correct. 7 was to assure the control over the collateral.»
8 Q. I think if you look at this chronology, that the 8 Presumably you stand by that statement?
9 corruption would have happened, I think, around about 9 A. Yes.
10 2008, 2009, 2010, and that would be at a time, wouldn’t 10 Q. And if you go to {E2/10/23}, paragraph 68.
11 it, Professor Guriev, when you would have been on the 11 A. Mm hmm.
12 board of Sberbank; is that right? 12 Q. You say:
13 A. I started my term on the board in June 2008. Since that 13 «Normally the parties would try to agree to sell the
14 I am pretty sure there have been a number of cases, and 14 assets at a reputable auction house trusted by both
15 we discussed this case as well, and unfortunately 15 parties to organise a genuine auction achieving maximum
16 I cannot really communicate to you the nature of 16 recovery.»
17 the discussion within the board, but we did investigate 17 Can you see that?
18 cases like this. 18 A. Yes.
19 Q. Right. 19 Q. Could you be shown {Day15/61:1}, please, which was
20 A. As I mentioned, I can refer you to a case which was 20 Dr Arkhangelsky’s evidence again.
21 covered by the media. This particular case is more 21 Can you look at {Day15/61:18-19}. Sorry, if you
22 complicated than that because there is no conclusion on 22 read that page, Dr Arkhangelsky is talking about
23 this case here. 23 potential realisation by the Bank of pledged security.
24 Q. And are you saying that, from your knowledge as 24 Can you see what he says on that page?
25 a director of Sberbank — 25 A. Yes, he talks about consent to reservation or sale of
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1 the assets.

2 Q. Yes, and he is suggesting that he doesn’t know any

3 borrower who would be consenting, unless they have good

4 reasons; can you see that? Can you see that?

5 A. Yes.

6 Q. He is really suggesting, isn’t he, there, that

7 a borrower is not — it is standard, I think he is

8 saying, for borrowers not to consent to the realisation

9 of security in this way; isn’t that right?

10 A. If the borrower has not paid its debt and it’s been

11 established by the court of law, then it is, by

12 definition, the right of the Bank to repossess the

13 collateral and sell it.

14 Q. Could you be shown the joint memorandum, please, at

15 {E2/11/7}. Can you see what you have agreed? This is

16 under the «Standard practice and procedure for the

17 enforcement of a pledge of real estate in security of a

18 loan following a default…»

19 A. Mm hmm.

20 Q. «In particular, the practice and procedure of public

21 auction sales of securities». You can see that the

22 issue you were asked to address was 4.1:

23 «Standard practice and procedure of the enforcement

24 of a pledge of real estate in security of a loan

25 following a default.»

1 by Sberbank, or certainly was in 2009?

2 A. Yes, I confirm to your Lordship.

3 Q. Does Sberbank entirely own the Russian Auction House?

4 A. I think at that point it was 100 per cent owned by

5 Sberbank.

6 Q. In 2009?

7 A. Yes.

8 Q. And if you could please be shown {D192/2921/0.01}, and

9 {D192/2921/4}. Can you see, Professor Guriev, that that

10 is a translation from an article which I think appeared

11 in Kommersant on 27 October 2009. I hope the Russian

12 are will be on the screen. It is the same reference,

13 but it is page 4; have you seen this before?

14 A. I have not seen that before, no.

15 Q. You can see what it says in English, a translation:

16 «Yesterday, the first auction of bank pledges took

17 place in Russia … Bank of St Petersburg became the

18 first bank to sell its pledges at an open auction. The

19 auction was organised by the Russian Auction House (RAD)

20 that was founded together with by the Sberbank and the

21 property fund of St Petersburg.»

22 Can you see that?

23 A. Yes.

24 Q. Then it goes through what happened happened, and then if

25 you go to the second page please, if you just read that

69 71

1 «The experts agreed that the practices and

2 procedures for enforcement of a pledge over real estate

3 must follow the process set out in Russian legislation

4 regarding enforcement of security and comply with any

5 applicable legal requirements.»

6 Can you see that?

7 A. I see that. I agreed to that.

8 Q. It is right, isn’t it, in your opinion, that if, in

9 fact, the auction process complied with the relevant

10 legal requirements, there would be no basis for the

11 borrower to complain?

12 A. If it has been established that the borrower has been in

13 default and the loan agreement foresaw the repossession

14 of the collateral, and therefore the Bank would become

15 the rightful owner of the collateral, then of course if

16 the Bank legally sells the collateral, the Bank does not

17 require the borrower’s consent.

18 Q. Can I ask you, please, about the Russian Auction House.

19 Could you be shown {D10/217.87/1}. You can see that

20 this looks like something off the Sberbank website

21 explaining Sberbank’s, I think, setting up or

22 participation in the Russian Auction House business?

23 A. Yes.

24 Q. Can you confirm to his Lordship that the Russian Auction

25 House is established and, I think, owned, isn’t it now,

1 to yourself quickly, this article appears to quote from

2 the director of the bank audit department of the FBK,

3 I think it is Alexei Terekhov. Then you can see what

4 this article recalls at the end, the last few lines:

5 «Mr Terekhov says ‘Probably, the participants of

6 the transaction just decided to follow the procedure

7 provided by the law, and the bank discharged from its

8 books problematic assets at an acceptable price’ — he

9 reckons.» {D192/2921/0.02}, {D192/2921/5}.

10 Can you see that?

11 A. I can see that.

12 Q. As a board member of Sberbank at this time, were you

13 aware of this landmark event featuring the Russian

14 Auction House, ie the first auction of bank pledges in

15 Russia?

16 A. No. This is not a major event for Sberbank. Sberbank

17 is involved in many businesses and a sale of a land

18 plot, even the first sale of a land plot is not

19 something that reaches the board.

20 Q. You have no basis, do you, Professor Guriev, for

21 doubting the integrity of the Russian Auction House?

22 A. Judging on this article, I would ask to look into this

23 transaction because there are certain features that are

24 problematic. I still agree with Mr Terekhov cited here,

25 and I would like to communicate that FBK firm is

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1 actually a reputed auditing and consulting firm in

2 Russia, that the fact that a public auction house was

3 involved, an auction house not affiliated with the Bank,

4 this is a good sign.

5 Q. Yes.

6 A. I am worried that the reserve price was — the initial

7 price was only raised by 5 per cent. This is a worrying

8 sign.

9 So if I was a board member of Sberbank and you send

10 me this article at that point, I would ask to look into

11 this transaction.

12 Q. But as a board member of Sberbank, you had no cause to

13 consider severing your ties with Russian Auction House

14 because of corruption with it, did you?

15 A. We have not seen — we have not been aware of any clear

16 cases of corruption, and we have never investigated

17 cases of corruption.

18 Q. To do with the Russian Auction House?

19 A. Yes.

20 Q. Thank you. Can I just ask you, {E2/10/21},

21 paragraph 62, where you deal with the prospects of

22 refinancing. Would you agree, Professor Guriev, that

23 the question ultimately of whether or not to extend

24 credit or call default on a borrower who is in default,

25 at least potentially, that that ultimately is

1 highly unusual.

2 Q. And one of the factors that the lending bank would take

3 into account would be the question of whether it trusted

4 the borrower, still, wouldn’t it? Typically?

5 A. Typically, but we talk about a country with continental

6 law where parties rely on written contracts first and

7 foremost, and only then on things like trust and so on.

8 Q. Can I ask you, please, to go to your first report,

9 {E2/10/9}, this is my last five minutes or four minutes

10 of questions.

11 A. Okay.

12 Q. {E2/10/9}, please. Professor Guriev, in your first

13 report, you make a number of quite serious allegations

14 against the Bank, including that it intended to deceive

15 the regulator, the shareholders, and the market.

16 Can you see in 25(d) what you say there?

17 A. » … was grossly improper — effectively to deceive the

18 regulator, the shareholders and the market.»

19 Yes.

20 Q. And if you go to {E2/10/10}, paragraph 28, in

21 paragraphs 28 and 29, I think you are suggesting that —

22 you are raising the prospect of fraud, aren’t you, in

23 this case?

24 A. Which sentence do you have in mind?

25 Q. Well, paragraph 28, the last sentence, starting:

73

1 a commercial decision for the lending bank?

2 A. Absolutely.

3 Q. And that lending bank must decide, mustn’t it, what to

4 do, referable to, or based upon what the Bank thinks is

5 in the Bank’s best interests?

6 A. I think your question is not completely clear to me

7 because in this transaction I think that —

8 Q. That wasn’t a question about this transaction.

9 A. No, no, because the word «bank» may mean different

10 things, and in this case the Bank’s outside shareholders

11 and the Bank’s managers, their interests actually

12 diverged, and this is what worried me here, and in that

13 sense, if you have no conflict of interest between

14 various shareholders in the Bank, that would be

15 a different story.

16 But, yes, the Bank’s best interest is to assure that

17 the loan is repaid. If the loan is not repaid, the

18 Bank’s best interest is to repossess the security, the

19 collateral, and recover whatever funds are available.

20 Q. And there is no standard practice whereby banks would

21 agree to extend loans to a borrower who is in default?

22 There is no standard practice, is there: it would depend

23 upon each case and what the lending bank thought was the

24 right thing to do in those circumstances?

25 A. Each case is different, but what I observe here is

75

1 «If these assets …»

2 A. «… it would be an example of defrauding the bank’s

3 shareholders … and bank’s depositors.»

4 Q. If, in fact, the assets that were security to the Bank

5 were actually — if those assets were to remain pledged

6 to the Bank, these concerns wouldn’t arise, would they?

7 A. They would arise because the control over these assets

8 was shifted from the original owner, OMG, to somebody

9 who is not connected to the Bank, and in that sense,

10 there is a concern, and by making the statements,

11 I actually referred to testimonies of the Bank’s

12 executives who clearly say that they did those things

13 exactly to make sure that the market and the regulator

14 doesn’t know that, and Mr Matovnikov’s own words,

15 Mr Matovnikov was the expert for the Bank, who said that

16 this was done exactly so, the regulator and the market

17 doesn’t know about what’s going on.

18 Q. If you go to {E2/10/14}, in paragraphs 41 to 43 you

19 refer to the use of third parties in relation to these

20 arrangements, don’t you?

21 A. Yes.

22 Q. And at paragraph 42, you can see that various potential

23 reasons for this course are set out, aren’t they?

24 A. Yes.

25 Q. And one of those is:

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1 «To avoid the companies purchased as part of the

2 ‘repo’ becoming related parties of the Bank…»

3 Can you see that?

4 A. Yes.

5 Q. You say in paragraph 43:

6 «I do not disagree those might be the reasons why

7 the assets were transferred to ostensibly independent

8 ‘purchasers’ rather than the Bank or its subsidiary.

9 However, such purposes would be quite improper.»

10 Do you see that?

11 A. Yes.

12 Q. Can I suggest, Professor Guriev, that there would be

13 nothing improper in Bank of St Petersburg entering into

14 a repo, as we see in this case, using third parties, in

15 order to avoid having to consolidate those companies’

16 position on the Bank’s balance sheet? The Central Bank

17 capital requirements are designed, aren’t they,

18 principally, to preserve the stability of the banks?

19 A. Mr Lord, can you clarify your question? The Bank has

20 not entered the repurchasing agreement in this case.

21 Q. Well, if the Bank’s rationale included a wish not to

22 have to consolidate the financial position and balance

23 sheets of Western Terminal and Scandinavia Insurance,

24 and any connected companies on Bank of St Petersburg’s

25 balance sheet, that would be a perfectly proper

1 Bank of St Petersburg in particular, assume that these

2 shares are owned by Mr Arkhangelsky and not by the third

3 parties. So this is the transaction which is conducted

4 in some unusual way, and as Mr Matovnikov and

5 Mr Sklyarevsky discussed that, these transactions are to

6 avoid a negative reaction of the stock market.

7 Q. I thought, Professor Guriev, I understood your concern

8 to be the fact that these shares were being held by

9 third parties, the original purchasers, and not by

10 Bank of St Petersburg, but in fact that isn’t your

11 concern, is it, from that last answer?

12 A. My concerns are that this transaction is conducted in

13 such a way that even we, who spend many days or weeks or

14 months trying to understand this transaction, we can’t

15 even easily formulate what’s going on. You are saying

16 the Bank gave these shares to the third parties, while

17 we see that the Bank was not a party to the repurchasing

18 agreement, and in that sense this is exactly the

19 intentional non-transparency which was created, and this

20 is exactly why Mr Matovnikov, Mr Sklyarevsky and myself,

21 we agreed that this transaction was to create additional

22 non-transparency about this deal.

23 Q. But that would be a concern, wouldn’t it, as far as the

24 regulator was concerned and not OMG?

25 A. It would be a concern for the regulator and

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1 consideration of Bank of St Petersburg, wouldn’t it?

2 A. Can you ask me a question that I can answer yes or no?

3 If, please?

4 Q. If Bank of St Petersburg uses third parties to hold the

5 shares in Western Terminal and Scandinavia Insurance —

6 A. Okay.

7 Q. — because if it holds the shares itself, it will have

8 to consolidate the Western Terminal and

9 Scandinavia Insurances —

10 A. Exactly.

11 Q. — on the Bank’s balance sheet, there is nothing wrong,

12 is there, with the Bank having that third party

13 arrangement?

14 A. So I think I understand your question and by now I can

15 answer it, and what I would like to say is, what you are

16 saying is, is that nothing wrong, then the Bank

17 misrepresents what’s going on to the regulator, and

18 I think it is wrong.

19 Q. No, I’m sorry, Professor Guriev, that the Bank — why is

20 it wrong for the Bank to, if you like, keep

21 Western Terminal and Scandinavia Insurance as companies,

22 to keep them separate from Bank of St Petersburg

23 accounts and reserves? What’s improper with that?

24 A. Because the market and the regulator, when assessing the

25 stability of the Russian financial system and the

1 shareholders.

2 Q. And if you can look at {E2/9/4}, please, this is

3 Mr Turetsky’s report, where he deals, I think, in

4 paragraphs 3.5 and 3.6 with the points I have just asked

5 you about. I wonder if you could read those, quickly

6 and tell his Lordship whether you accept what

7 Mr Turetsky is saying there and, if you disagree, why

8 you disagree?

9 A. I think this is the argument that we have discussed

10 before, that as long as the assets remain pledged

11 everything is correct. I disagree with this analysis.

12 I think this is a — the repurchasing agreement changes

13 the situation and the balance sheet of the Bank, and

14 this transaction was intentionally non-transparent and

15 unusual.

16 Q. Professor Guriev, in your first report you make

17 various — you use the word «fraud» on occasion in

18 relation to the Bank’s intention. In your supplemental

19 report on the joint statement, you make the allegation

20 about deception of regulators and the market and

21 shareholders, but you don’t repeat any suggestion that

22 Bank of St Petersburg’s purpose might have been to

23 defraud OMG. Should his Lordship take it that, having

24 got more familiar with this case, you are no longer of

25 the opinion that Bank of St Petersburg’s intention was

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1 to defraud OMG, whatever else you think it may have been

2 doing wrong?

3 A. In this report, in the original report and in

4 supplemental report I have never meant that the Bank was

5 trying to defraud OMG. All my statements were about

6 misleading regulators and the markets.

7 MR LORD: Thank you. I understand. Thank you,

8 Professor Guriev.

9 MR JUSTICE HILDYARD: No re-examination, my Lord. Do you

10 have any questions? Obviously Professor Guriev has to

11 leave, I think the final, final deadline is 10 minutes.

12 A. In 10 minutes.

13 MR JUSTICE HILDYARD: Yes. Well that is a disincentive.

14 Questions by MR JUSTICE HILDYARD

15 MR JUSTICE HILDYARD: Can I just ask you a couple of

16 questions and restrict them to that. Can we go to

17 {D107/1537/2}, which is the memorandum which you

18 consider to be somewhat informal. This is the provision

19 which controls, or may control, when the right to

20 repurchase arises.

21 A. Mm hmm.

22 MR JUSTICE HILDYARD: I don’t think, but I will be corrected

23 if I am wrong, that the timing of the right to

24 repurchase is specified in any other document.

25 MR STROILOV: I think it is specified in the repo contracts

1 what I mean?

2 A. Yes.

3 MR JUSTICE HILDYARD: Now, am I right in thinking that the

4 effect of that clause 2 is that for as long as any of

5 the Group’s obligations to the Bank remain outstanding,

6 they are not going to get the shares back, and one of

7 the effects is to mirror a cross-default provision,

8 because until all the indebtedness is repaid, you are

9 never going to acquire back control, and if you have not

10 got control, you have no ability to recover any of

11 the surplus assets which might, thereafter, be returned

12 to the companies; do you see what I mean?

13 A. Yes, sir, your Lordship. So first, yes, clause 2 should

14 be, in my view, interpreted as as long as the OMG has

15 not repaid the loans, the debt to the Bank, it has no

16 right to get the shares back.

17 MR JUSTICE HILDYARD: Yes.

18 A. To buy the shares back.

19 MR JUSTICE HILDYARD: And the consequence of that is that

20 any surplus assets returned in respect of any particular

21 transaction will not inure to the benefit of OMG; it

22 will inure to the people who presently own the shares?

23 A. Your Lordship, this is exactly my problem. This is

24 a contract which doesn’t specify that, nor do the

25 repurchasing agreements specify those issues, and this

81 83
1 as some date — 1 is why I said this agreement is not sufficiently
2 MR JUSTICE HILDYARD: Can we have a look at that, then. 2 specific regarding those issues.
3 That’s why I need help. 3 In principle, the income should accrue to the
4 A. The contracts, I think, I think there was half a year. 4 holders of the shares. So in this case, as long as
5 I think June 2009, right? 5 Renord holds the shares, whatever income those shares
6 MR STROILOV: No, I think there were some dated June 2011, 6 generate will accrue to Renord, if this is what you are
7 if I remember correctly. 7 asking.
8 MR JUSTICE HILDYARD: Can we have a look at that? 8 MR JUSTICE HILDYARD: Yes. It’s amongst the effects of that
9 MR STROILOV: I think Mr Lord will find it quicker. 9 provision?
10 MR JUSTICE HILDYARD: Just one example will suffice. 10 A. Yes.
11 MR LORD: It is my fault, it is {D106/1530/7} and it is 11 MR JUSTICE HILDYARD: And then just on the question as to
12 clause 5.2. Yes, I should have taken the witness to it. 12 whether the regulators were being misled, my
13 I meant to, I am afraid I just overlooked my note, I’m 13 understanding of what you are telling me is that
14 afraid. It is 5.2. There does appear to be a date 14 a concern of yours is that the relationship between the
15 there. 15 Bank and the original and subsequent purchasers, which
16 A. Mm hmm. Yes. 16 were each companies in the Renord Group, is very
17 MR JUSTICE HILDYARD: That’s the conclusion of the master 17 unspecified; there’s nothing really which details the
18 agreement? 18 arrangements between them?
19 A. Yes. 19 A. Correct. I see no written agreement between the Bank
20 MR JUSTICE HILDYARD: But as to when the right on behalf of 20 and Renord or SKIF or whatever original or subsequent
21 the original — the seller to the original purchasers 21 purchasers, yes.
22 arises, I’m not sure that is specified except in 22 MR JUSTICE HILDYARD: And that in consequence, it could be
23 clause 2, which provides that it is only after the 23 thought that the arrangements enabled the Bank to have
24 complete fulfilment of the group’s obligations to 24 their cake and eat it; that is to say to have the assets
25 the Bank that the reverse repo will occur; do you see 25 held, the shares held, off balance sheet to avoid
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1 consolidation, whilst possibly retaining some

2 unspecified measure of interest in the shares in

3 question; is that one of your concerns?

4 A. I am — yes, your Lordship. I am concerned with the

5 fact that we don’t understand — so if I were

6 a regulator, I would be misled by the fact that there is

7 a certain, informal arrangement here which I cannot

8 monitor based on the Bank’s financial documents, and

9 this is what should have worried me as a regulator.

10 MR JUSTICE HILDYARD: And does not the very same opaqueness

11 and ability, therefore, for the Bank sometimes to say

12 one thing and sometimes to say another — I’m not saying

13 they would, but the legal ability — also constitute

14 a risk to OMG as the person who otherwise would be

15 entitled to the shares but for the repo arrangements?

16 A. I think the relationship between the Bank and the

17 regulator or external shareholders I think is separate

18 from the relationship between the Bank and the OMG. And

19 I think the problem that I saw in the memorandum and in

20 the documents that I have inspected, regarding the OMG

21 I saw one major problem, which was violation of item 3,

22 of clause 3, interference in operational activity,

23 changing the managers, and so on. This is what I find

24 unusual.

25 With regard to the Bank’s non-transparency with

1 have some water there.

2 Examination-in-chief by MR LORD

3 MR LORD: Mr Turetsky, could you please turn in the papers

4 in front of you, look up or be shown {E2/8/1}, which is

5 your first report in this case; can you see that?

6 A. Yes.

7 Q. And you sign it at {E2/8/29}.

8 A. Yes, I did.

9 Q. And can you confirm to his Lordship that that is your

10 first expert report in relation to this case?

11 A. Yes, this is correct.

12 Q. And if you could please look at {E2/9/1}, you will find

13 the supplemental report of yours which is signed by you

14 on {E2/9/8} on 20 November 2015. Again, can you confirm

15 that is your supplemental expert report?

16 A. Yes, I confirm that, and this is my signature.

17 Q. And if you could please look at the joint memorandum

18 that you, I think, reached and signed with

19 Professor Guriev, that’s at {E2/11/1}. I wonder if you

20 could be shown the front page of that, and then the

21 signature, I think, by you and Professor Guriev is on

22 {E2/11/8}.

23 A. Yes, this is our joint statement.

24 Q. And have you considered your reports and joint statement

25 recently?

85 87

1 regard to external shareholders or the Central Bank,

2 I think this is something where I don’t see a direct

3 problem for OMG. This is the relationship of the Bank

4 with the regulator and the market.

5 MR JUSTICE HILDYARD: Right. Yes.

6 Well, I think especially having regard to your

7 commitments, that suffices me. Do those questions give

8 rise to any others?

9 MR LORD: No, thank you.

10 MR STROILOV: Not from me, my Lord.

11 MR JUSTICE HILDYARD: Professor Guriev, thank you for

12 coming, especially on the basis of which you appear to

13 have come, and I am glad that we have been able to

14 release you in time for your other obligation.

15 A. Thank you so much. Thank you.

16 MR JUSTICE HILDYARD: Would that be a good time for a break?

17 MR LORD: Yes, my Lord.

18 MR STROILOV: I think it would be.

19 (11.44 am)

20 (A short break)

21 (11.56 am)

22 MR LORD: May it please your Lordship, may I call

23 Mr Turetsky, please.

24 MR MIKHAIL TURETSKY (Affirmed)

25 MR JUSTICE HILDYARD: Mr Turetsky, do sit down. I hope you

1 A. Yes, I refreshed it for the purposes of today’s

2 hearings.

3 Q. And can you confirm to his Lordship that those are the

4 expert opinions that you give in relation to this

5 matter?

6 A. Yes, I can confirm that.

7 MR LORD: Thank you.

8 Cross-examination by MR STROILOV

9 MR STROILOV: Mr Turetsky, can you please, again, be shown

10 some bit from your first report. If we could go to

11 {E2/8/2} I think at paragraph 1.3 you set out your

12 recent and relevant experience.

13 A. This is correct.

14 Q. And that obviously consists of advising in your capacity

15 as a lawyer, various parties in relation to lending

16 disputes; would that be a fair summary?

17 A. This is a collection of my representation of lenders and

18 borrowers.

19 Q. Indeed, and if — I think if we could — I think on this

20 page I can see reference to 10 bullet pointed cases, and

21 then if we could scroll down one page, there are another

22 four. So out of these 14, if I am not mistaken, we have

23 13 lenders and in the end you have one borrower; can you

24 see that?

25 A. I think this is 12 and 2. One representation on the

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1 previous page, advising MDM-Bank, was effectively 1 Q. Yes. It does happen that sometimes banks may be
2 borrower representation. 2 implicated in reiderstvo. It’s not unheard of; would
3 Q. If we could scroll up one page {E2/8/2}. 3 you agree with that?
4 A. Where you see the fourth bullet from the bottom 4 A. In theory it might happen. I haven’t seen this in my
5 «Advising MDM-Bank as agent for restructuring», so in 5 practice.
6 a sense we were working together with the Russian bank, 6 Q. Well, if I may show you the … if we could, please, go
7 MDM-Bank, representing a borrower, Izhevsk Auto Plant, 7 to {AA2/8/73}, and I don’t know if perhaps it is better
8 but you are right, two out of 14 on this list are 8 to have the Russian version, or perhaps it is
9 borrower representations. 9 unnecessary. I appreciate your English is fluent, but
10 Q. I’m not quite sure what I mean, well obviously if you 10 just to be on the safe side, perhaps I will find the
11 are advising MDM-Bank as agent for restructuring of 11 Russian version.
12 bonds for a major Russian car factory, so are you — who 12 Are you comfortable with the English version?
13 is the lender and who is the borrower? Can you explain 13 A. Yes.
14 a little further? 14 Q. This seems to be a report by a body called National
15 A. The creditors in that situation were bond holders and 15 Anti-Corruption Committee.
16 MDM-Bank was hired by Izhevsk Auto Plant, so essentially 16 A. Yes.
17 we were hired as legal advisers and MDM-Bank was hired 17 Q. And you see the title. That is, as you can see it is
18 as financial advisers to assist Izhevsk Auto Plant in 18 published in Moscow in December 2011, and if you could
19 restructuring its bonds owed to bond holders. 19 scroll down one page, you can see the list of editors.
20 Q. So it is fair to say, and I am not suggesting there is 20 {AA2/8/74}.
21 anything necessarily wrong with it, it is fair to say 21 Now, I think pausing here, the existence of this
22 that your relevant experience mostly consists in 22 report suggests to me that as of 2011 and the preceding
23 advising lenders rather than borrowers; is that fair to 23 years, the Bank’s involvement in raiding was
24 say? 24 a noticeable problem in the Russian economy; wouldn’t
25 A. I have represented quite a few borrowers in the past, 25 you agree with that understanding?
89 91

1 but I agree with your assessment that I have acted for

2 lenders more than I did for borrowers.

3 Q. Would you accept it may have rather influenced your

4 overall approach to lending problems? Well, it may

5 have — this experience may have influenced your views,

6 rightly or wrongly?

7 A. I believe I had a sufficient degree of interaction with

8 borrowers, and in addition to situations when borrowers

9 ended up hiring me as their legal adviser, there were

10 a number of instances when we went quite far in

11 discussing the situation, but then for various reasons

12 they did not decide to hire us.

13 But I agree with you that I represented lenders more

14 than borrowers but I respectfully submit that I think

15 I have a pretty broad picture from both sides.

16 Q. Right. Would you agree that a rather widespread kind of

17 criminal activity in Russian business is something

18 called reiderstvo, which is slightly misleadingly

19 translated as «corporate raiding». Would you agree that

20 is a widespread problem in Russia?

21 A. We do see this term quite often, and probably in

22 the 1990s/early 2000s that was quite regular.

23 Q. Are you suggesting that it no longer is?

24 A. It’s difficult to be scientific about it, but I would

25 say there is less of that now.

1 A. Mm hmm. Thank you, Mr Stroilov. I can confirm that

2 I have seen this report while preparing my expert

3 report. I was thinking to include the reference to it,

4 but then I came to a view that this report was not

5 authoritative enough to be referred to.

6 Q. Right. But you would agree — I think you have read it,

7 and I think my Lord has read it, so I wouldn’t need to

8 take you through this in great detail. In general

9 terms, would you agree that the report seems to suggest

10 that raiding by the banks is a problem in Russia which

11 is of such size that it is worth some mention and some

12 discussion; would you agree with that?

13 A. If his Lordship pleases, I can explain why I do not

14 consider this report authoritative, and because I did

15 not consider it authoritative, I did not take any

16 conclusions out of it.

17 Q. Yes, please explain.

18 A. If you look at the list of authors, there are five

19 authors. Two of them are lawyers, which their names

20 don’t ring a bell, and the three are some low key

21 anti-corruption activists. They were not bankers. They

22 do not represent, and they have not asked the opinions

23 of banks when preparing this report, and some of the

24 analysis they give in this report is factually wrong,

25 and in fact if you look at the website where this report

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1 was published, immediately after that there was an open

2 letter from some of the banks referenced in this report,

3 saying that the facts are wrong and that this really

4 must libel(?) rather than scientific analysis.

5 Q. So are you suggesting that the overall conclusion of

6 this report, namely that, simply put, banking raiding is

7 a problem in Russia? Are you suggesting that is wrong,

8 in your opinion?

9 A. I think the examples given here are completely

10 ill-conceived, and we can get to the specific examples.

11 In particular there is one example which deals with the

12 repo arrangement. I think the facts are completely

13 wrong in that example, and I don’t think this report is

14 evidence of there being any raiding by the banks. There

15 might be, but not because I read this report.

16 Q. Right. Well, if you could, just for the reference sake,

17 which is the case you are saying is inaccurate? You can

18 go through this, or if you remember which one it is,

19 I just want to be clear on which case.

20 A. Yes, there is a discussion of a case between Alfa Bank

21 and Mr Senatorov where it is alleged that Alfa Bank has

22 behaved improperly, and straight after this report there

23 was an open letter from the manager of Alfa Bank to

24 the website which published this report, suggesting that

25 they get their facts straight.

1 campaigners, did you, just in case I misheard you, did

2 you refer to low-key anti-corruption campaigners; was

3 that your phrase, or am I confusing what you have said

4 about lawyers and anti-corruption campaigners?

5 A. I don’t think I am in a position to assess who is

6 a high-profile anti-corruption campaigner and a low-key

7 anti-corruption campaigner. I just said that the

8 authors of this report did not appear authoritative

9 enough to me.

10 Q. Well, wouldn’t you agree, Mr Turetsky, that, in fact,

11 these people are as expert or as inexpert as you are,

12 it’s just that you happen to have a different opinion;

13 wouldn’t you agree with that?

14 A. It’s hard for me to say. I don’t know the person.

15 I think, Mr Stroilov, just to elaborate a little bit,

16 it’s not — I don’t want to concentrate too much on the

17 authors, I would like to concentrate more on the

18 substance, and the substance did not look scientific to

19 me.

20 Q. Now, I am not asking for an exact figure, but generally

21 speaking, if you take your knowledge in terms of your

22 own experience and whatever other sources of knowledge

23 you have, how many disputes between banks and borrowers

24 you would say you know in sufficient detail to form

25 an opinion? How many in numbers? Dozens? Hundreds?

93 95

1 Q. Right, and I think further you have just suggested that

2 you wouldn’t consider the editors, the people you can

3 see here on the screen, as experts; would that be a fair

4 summary of what you have said a few minutes ago?

5 A. Yes, that’s right.

6 Q. And I think you have suggested that the reason you have

7 suggested it is you have characterised them, these

8 people, as lawyers and low-key anti-corruption

9 campaigners, but including no bankers or people having

10 experience with the banks; is that a fair interpretation

11 of what you have said?

12 A. They are low-key lawyers and anti-corruption activists

13 with no banking experience.

14 Q. Right. With no disrespect, what is the difference

15 between the low-key lawyers who have edited this report

16 and you, in terms of expertise?

17 A. Where we are getting into difficult territory here,

18 because I am not personally familiar with these people,

19 I just said that their names are not particularly

20 prominent, and the professions that are given for them

21 do not suggest that they would be involved in major bank

22 loan transactions, such as the ones that are discussed

23 in this report. It’s typically done by major law firms

24 rather than individual lawyers.

25 Q. And I think when you are talking about anti-corruption

1 A. It’s hard to say, but dozens would probably be the right

2 figure.

3 Q. I think these people, rightly or wrongly, they have

4 analysed some dozens of cases, and I am trying to find

5 the reference which you may remember, but you would

6 agree that they analysed some dozens of cases where

7 people alleged that they were victims, or witnesses, of

8 raiding. Wouldn’t you accept — I mean, I’m just trying

9 to understand what your comment on this report is. Are

10 you saying that this is simply an amateur pamphlet and

11 has nothing to do with a respectable expert opinion, or

12 are you saying that this is opinion of different people

13 who may have their own information, their own opinions,

14 but you disagree, as an expert; do you understand the

15 distinction I am trying to draw? I’m just trying to

16 understand what, exactly, you are saying.

17 A. I did not find this report and the analysis scientific

18 enough. That’s what I would like to say.

19 Q. Can we go back to your report, please, and —

20 MR JUSTICE HILDYARD: Can I just ask: When you said dozens

21 of disputes in which you personally were involved, do

22 you mean disputes where there were suggestions of

23 raiding or do you mean simply that the bankers and the

24 borrowers had points of disagreement of the ordinary

25 commercial kind?

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1 A. I think the question was how many disputes I was aware

2 of at the time, and I said dozens, because in some I had

3 involvement and others I had direct knowledge of.

4 But you showed me right, my Lord, that I meant

5 disputes between banks and borrowers as opposed to

6 allegations of raiding.

7 MR JUSTICE HILDYARD: Yes.

8 MR STROILOV: If I could pick up on that, how many of

9 the cases you were involved in had allegations of

10 raiding made in them by either side: your side, the

11 opposing side?

12 A. I think if you look at my report, I have section 5.25

13 there.

14 Q. Yes.

15 A. In that section I am expressing my view on the subject.

16 Q. If we could go to {E2/8/17}, that’s where I meant to

17 take you next.

18 A. Yes. That section 5.25, and here I say that it is to

19 say that there is an alternative view that has been

20 expressed by some of my borrower clients, and that is

21 that the banks have behaved improperly; and then

22 I explain that it is my experience, and certainly my

23 recollection from 2008/2009, that it is much more likely

24 to expect fraudulent or unethical behaviour on the side

25 of the borrowers as opposed to the banks.

1 Q. Yes, just to the end of this paragraph. 5.25. Well,

2 the paragraph you referred to. If you could re-read it

3 in full, and I am asking my Lord to read it in full.

4 A. 5.25?

5 Q. Yes. To the end of — to the large heading «Procedure

6 for signing addenda». I am just interested in this last

7 paragraph of the repo?

8 A. At the same time?

9 Q. Yes, ending with the words » … to the circumstances».

10 A. Mm hmm.

11 Q. So starting 5.25, paragraph 5.25.

12 A. Yes.

13 «I believe that the various additional protections

14 developed by Russian banks at the time of the financial

15 crisis were, for the most part, justified by reference

16 to the circumstances.»

17 Q. So I think really the evidence you are giving here is

18 that in your experience —

19 A. Yes.

20 Q. — banks have been acting honestly, without exception;

21 whereas borrowers — well, I don’t know, you can think

22 of dozens of examples. So presumably that means that

23 the majority of borrowers in cases you were involved in

24 were acting dishonestly; is that what you are

25 suggesting?

97 99

1 Q. Yes, but my question was how many cases were there in

2 your practice, or in which you were involved in

3 whatsoever way, where there were allegations of raiding

4 from the borrower against the Bank?

5 A. It is hard to say, but there certainly were several when

6 the borrowers complained that the banks were needlessly

7 harsh on them, or aggressive. I don’t think any of my

8 actual clients went as far as to suggest that the banks

9 raided them, but they certainly were in some cases

10 unhappy at how they were treated.

11 Q. So in how many cases were you involved where allegations

12 of raiding were made by either side?

13 A. If your question is in how many cases I was involved

14 where people said that one or the other side raided

15 them, I would probably say none, but I am certainly

16 aware of a number of cases where this was alleged.

17 Q. Yes. If you could re-read your paragraph 5.25, re-read

18 it in full, and when you have reached the bottom of

19 the page just shout and I will cause it to be scrolled

20 down.

21 You are looking at the paper version. Then,

22 my Lord, if you are comfortable with that I will ask to

23 scroll down so that you can see the remainder of

24 the paragraph. Can it be scrolled down? {E2/8/18}.

25 A. Did you say 5.20 …

1 A. Yes, I am suggesting that there were much more cases

2 when borrowers were acting dishonestly as compared to

3 cases when banks were acting dishonestly.

4 Q. Right. Would you say that among experts in Russian

5 banking, there is a consensus in terms of this kind of

6 ratio: that the Bank is nearly always honest and the

7 borrower is very often dishonest; would you say that is

8 a view shared by anyone you would expect to be

9 considered an expert in the field?

10 A. It’s hard for me to say. I was asked to give my expert

11 opinion rather than expert opinion of anyone else, but

12 certainly in terms of the people I talked to, a lot of

13 them would share that view.

14 Q. Now, I think — I am speaking from memory and I will be

15 corrected if I am wrong — I think your duties as

16 an expert, where there is a range of expert opinions,

17 you must (a) outline that range of opinions and, (b)

18 state your own opinion. It seems — well, this being

19 so, it seems you have complied with (b); you haven’t

20 complied with (a), have you?

21 A. I think we have just discussed section 5.25 of my

22 report, where I am saying exactly that; that I have to

23 report that there is an alternative view, which

24 I explain, and then I say that I don’t share that view.

25 Q. But don’t you suggest here that whereas some borrowers

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1 expressed concerns, and that’s understandable, the

2 borrower is not an independent or impartial expert, that

3 concerns were there, but you as an expert, you tend to

4 dismiss any such concerns; isn’t that a fair reading of

5 that paragraph?

6 A. I think, Mr Stroilov, if you read my report, it’s —

7 I do not refer to any expert supporting the borrower’s

8 view, but likewise I do not refer to much experts

9 supporting the Bank’s view. I am just analysing the

10 facts as they are, so I wouldn’t say that the report —

11 I think the report treats both sides fairly, but my view

12 is certainly with one side.

13 Q. But would you accept that there may be other experts who

14 take a more, should I say, pro-borrower view, if —

15 would you accept there may be such experts?

16 A. I’m sure, and I know that you had a very good expert

17 speak from this desk right before me.

18 Q. Thank you. Now, may we please go to page 10 of

19 the report {E2/8/10}, and perhaps if we could, on the

20 other screen, if we could call the supplemental report

21 of Professor Guriev, which is at {E2/10.1/3}. I would

22 ask you to look at paragraph 5.7.

23 A. Yes.

24 Q. And you have obviously read — then Professor Guriev

25 makes certain criticisms of that paragraph in his

1 the bankers and the bankers started to realise that

2 repos are so much more efficient, and they first started

3 to use — oh, actually, if you think of where it comes

4 from, I think it comes from a pawn shop. So how a pawn

5 shop operates: so people bring their chattels into

6 a pawn shop, they leave it there. If they can buy it

7 back, they buy it back, if not, if they are delinquent

8 for one day or for any other reason they lose ability to

9 buy out, and this is with the person who has done the

10 repo.

11 So it first came to the financial markets and then

12 people in banking started to realise that they could use

13 it in other contexts as well.

14 So the purpose of this statement is to say that the

15 concept of repos is extremely well known, and all the

16 people in the banking industry know exactly what it is,

17 and they have started to use it outside this financial

18 stock exchange transactions context, and I give some

19 examples in my report which are very similar — I should

20 say, not dissimilar to what happened in this case, when

21 people started to use the concept of a repo in

22 a slightly different set of circumstances.

23 MR STROILOV: Yes. Then obviously if you look at

24 Professor Guriev’s paragraph 9, you can see that he is

25 criticising the figure you give as being — belonging to

101 103

1 supplemental report, in paragraphs 7 to 11, I think.

2 So wouldn’t you — firstly, I think the first point

3 he makes, is that really the figures to which you refer,

4 they relate mostly to totally different kind of repos,

5 to financial markets repos rather than lending security

6 repos; would you accept that?

7 A. Yes.

8 Q. That’s in paragraph 8 of Professor Guriev’s report.

9 A. Yes, thank you very much, Mr Stroilov, I would accept

10 that, and if it pleases his Lordship, I am happy to

11 elaborate on this section of my report.

12 MR JUSTICE HILDYARD: Mr Turetsky, has the repo market that

13 you describe in 5.6 and 5.7 got anything to do with this

14 case at all?

15 A. Thank you, your Lordship. I think it does, and the key

16 point here is the understanding of how it works. So the

17 key point about the repo is that people use it because

18 it is much safer and better as a means of security, or

19 as a means of protection, as compared to charges or

20 mortgages, and the exact reason is that in a repo

21 context, one gets possession and ownership of the asset

22 on day one, so there is no need to go through

23 enforcement proceedings upon a default.

24 So the whole idea of repo being superior to

25 mortgages and charges, it came to the view of

1 2014. I think you are suggesting that the aggregate

2 size, or the aggregate turnover of repo transactions,

3 was in the region of RUB 64.6 trillion, isn’t it?

4 Whereas Professor Guriev points out that in 2010, so

5 that’s the first year when the data is available, the

6 figure was only RUB 39 trillion.

7 Now, you would agree that obviously his figure is

8 more relevant than yours, isn’t it?

9 A. Thank you, Mr Stroilov. I certainly agree with that.

10 In 2014 it was around $2 trillion and in 2010 it was

11 $1.5 trillion.

12 Q. May I ask you, why didn’t you give that figure in your

13 own report? Why didn’t you give Professor Guriev’s

14 figure of RUB 39 trillion? Did you know it?

15 A. Can I ask it back, Mr Stroilov: do you see a large

16 difference between 2 trillion and 1.5 trillion?

17 Q. Right. Now, thirdly I think he suggests that the figure

18 may be misleading, because where repo transactions take

19 place with liquid securities, then it happens very

20 often. So in one year, you know, you would have the

21 very same securities being used for repo transactions

22 a number of times over. So in reality, this figure is,

23 in a way, it is always exaggerated; do you agree with

24 that?

25 A. The purpose of this paragraph, and I give the number for

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1 2014, Mr Guriev gives the number for 2010, both of those

2 figures are very, very significant, and the purpose of

3 giving these figures is just to give an example,

4 a statistical metric how prevalent repo transactions

5 were, and that the banking industry knew what repos are.

6 If you scroll down in my report I then go and say that

7 the repo in this case had some unusual features, so I am

8 not disputing that, but the paragraphs which you refer

9 to set the stage to explain that everyone in Russia knew

10 what repos are exactly.

11 Q. Yes, and if you could now scroll up again.

12 I am on the figure on the statistics you have given.

13 Now, Mr Turetsky, do you consider that the figure

14 you have put into your report really helps to answer the

15 question asked of you whether the repo arrangement used

16 in this case was conventional and commonly used

17 arrangement in Russia? Would that figure — is that

18 figure really helpful?

19 A. The purpose of that figure, as I said, is to demonstrate

20 the prevalence of repo arrangements. I think that is

21 relevant, and Mr Guriev also gives a similar figure for

22 a different year, which is also very significant.

23 I do agree that most of those transactions were not

24 in the context of the situation like the

25 Bank of St Petersburg situation, but conceptually and

1 we say that repos were common and conventional, repos of

2 the type that occurred in this case.

3 MR JUSTICE HILDYARD: Yes.

4 A. And it is not a yes or no answer, because it is

5 a difficult question. I spent a number of pages on it,

6 Mr Guriev spends a considerable number of pages on it.

7 So the logic of my response is that everyone in

8 Russia at the time knew exactly what the repo is, and

9 what they have done in this case and what several banks

10 have done, in fact, was to apply this concept of a repo

11 to a particular situation, because if you think of it,

12 the repos of which there were 2 trillion, what are they?

13 One side has securities, the other side has the money,

14 so instead of doing a secured loan, they trade. So one

15 side delivers the security, the other side delivers the

16 money, and if the money is paid back, then the security

17 goes back. If it is not, then the assets are lost.

18 So what happened in this case, OMG got RUB 4 billion

19 and — I mean, the problem in this case is that it

20 didn’t occur at the outset, so had it occurred at the

21 outset, that OMG would have received RUB 4 billion and

22 delivered the shares in Western Terminal and Scan on day

23 one, it would be a classic repo, because that would be

24 exactly what repos are: you take the money and you

25 deliver the collateral.

105 107

1 structurally, those were repos as well.

2 MR JUSTICE HILDYARD: But only in the sense they involved

3 repurchase. I’m troubled about this really, because the

4 market in repurchase arrangements, whether for financing

5 or swaps or anything else, is absolutely enormous, but

6 it has nothing to do with this case, has it, beyond the

7 fact that it is true that possibly as old as time, there

8 have been absolute transfers by way of security, one of

9 which examples is a pledge shop.

10 But how is the volume of non-security type

11 repurchase arrangements in one of the world’s largest,

12 if not the largest market, going to help me in this

13 case?

14 A. Thank you very much, your Lordship. I think the

15 difference between those repos, of which there were

16 2 trillion or 1.5 trillion, and the repo we had in this

17 case, is significant, but structurally it was the same.

18 MR JUSTICE HILDYARD: Both involved repurchase, but I can’t

19 remember what the market in repurchase is and other

20 swaps was. It might have been 630 trillion, I think.

21 A. Right.

22 MR JUSTICE HILDYARD: Something like that. Jolly

23 interesting, but how is it going to help me?

24 A. Right. The answer, the overall question which was posed

25 to me and Professor Guriev in our instructions was can

1 What happened in this case was it wasn’t

2 contemporaneous, so originally they lent on the basis of

3 a security, and then when they realised that the

4 borrower is unable to — is in financial difficulties,

5 they wanted additional security, and they said: oh,

6 there are so many repos done, repos are more valuable

7 than security, why don’t we restructure this as a repo.

8 So that’s my reading of what happened in the case

9 and that’s why I think it is relevant to — I don’t

10 suggest that too much emphasis was to be given to this

11 2 billion, 2 trillion or 1.5 trillion figure, you are

12 right, but I think it is important to understand the

13 mindset of people; that they knew what it was and they

14 just applied to it their facts.

15 MR STROILOV: Now, isn’t it the case, Mr Turetsky, that in

16 paragraph 5.7 you quote some statistics, which are

17 simply misleading in the context of this case. Well,

18 the figure you give simply seems to exaggerate how

19 conventional and commonly used repo arrangements of

20 the kind used in this case were in Russia; would you

21 accept that as a criticism?

22 A. Thank you, Mr Stroilov. I just explained the context on

23 which this number was given. I am not saying further

24 down in the report that this repo was exactly of

25 the kind of which there are 2 trillion, I’m explaining

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1 that it is different, so I would not accept your 1 borrower, the Bank still can enforce against it, because
2 criticism. 2 it is a pledge, it is there, Western Terminal is in
3 Q. Right. Could we now please go — well, we are still on 3 the same part of the map where it has been, whatever
4 the same report. If we could scroll it to {E2/8/15}, so 4 Mr Arkhangelsky may do, and the Bank can enforce. So
5 that’s a little further, a few pages down. 5 does not that remove much of the rationale of the repo
6 If you could, just so that it is not taken out of 6 which you set out in your report?
7 context, if you could re-read paragraph 5.22, but what 7 A. Thank you, Mr Stroilov. If his Lordship permits, I can
8 I really want to ask you about is the first sentence of 8 explain a little bit about how mortgages are enforced
9 paragraph 5.23: 9 and why there may be a problem?
10 «These various ancillary forms of protection 10 Q. Well, just explain how does the repo of shares help to
11 employed by banks are typically confidential in nature.» 11 enforce a registered pledge, or mortgage?
12 That, I think, if you have had a chance to glance 12 A. Mm hmm. Thank you very much, Mr Stroilov. This is
13 through paragraph 5.22, what this seems to suggest in 13 a very good question, and in fact at the time, and even
14 the round is that security repo transactions, so, 14 until now, a lot of my clients are asking how robust is
15 rather, banking loan security repos, should I say, are 15 a mortgage, how well can they sleep at night if they
16 typically confidential in nature. May I suggest to you 16 have a mortgage over particular fixed assets, and we
17 that they are not; there is no reason why they should be 17 have analysed, me and my colleagues, we have analysed
18 confidential in nature; wouldn’t you accept that? Just 18 this extensively, and our advice is usually that it is
19 for completeness, I think that is a point made by 19 a very good and strong negative protection.
20 Professor Guriev. If we could call back {E2/10.1/5} 20 So if a bank has a registered mortgage over
21 A. Thank you, Mr Stroilov. 21 a particular piece of real estate, you can be — one can
22 My Lord, in the banking industry we know what bank 22 be relatively certain that this real estate will not be
23 secrecy is and most of the transactions with client are 23 sold; that there would be no fraudulent conveyance over
24 subject to client confidentiality. So loans are 24 that real estate. So if there is a mortgage registered,
25 confidential, there’s no practice of disclosing the 25 then the borrower would not be able to sell it without
109 111
1 loans unless there is a compelling reason to do it from 1 the Bank’s consent. So it is a very good negative
2 a marketing perspective or a regulatory perspective. So 2 protection.
3 you wouldn’t necessarily know which bank gave a loan to 3 However, with respect to positive protection,
4 whom, and even more so, you wouldn’t necessarily know 4 ability for the Bank to take over that asset, my
5 which bank restructured which loan, and certainly there 5 conclusion and that of my colleagues was not as robust,
6 is no obligation to disclose that, unless in some 6 because in the end the Bank would probably be able to
7 specific circumstances where some stock exchange listing 7 enforce, to foreclose, but there would be so many
8 is involved or something, but there was no reason in 8 hurdles along the way, and the legislation, which dates
9 this case to make these arrangements public. 9 back to the early 1990s and is somewhat inconsistent, is
10 Q. Now, can we please go, I think just one page up in 10 such that you really rely in many instances on
11 the report, so that’s to page 14 in {E2/8/14}. Now, 11 cooperation from the borrower, so what the law says is
12 I think you have a section called «Difficulties with 12 in certain instances the borrower has to agree
13 enforcing pledges over company shares», and that’s in 13 valuation, the borrower has agreed to certain types of
14 the general context of explaining the difficulties which 14 enforcement, and if you are in court then the borrower
15 Russian banks suffered in the period. You outline some 15 may raise all sorts of objections in court, some of them
16 difficulties with enforcing pledges over company shares, 16 may be even frivolous and they could still defer the
17 don’t you? Now, would you agree that all of this is 17 time when enforcement comes.
18 utterly irrelevant to this case? 18 So it wouldn’t be an unrealistic estimate that the
19 A. Thank you, Mr Stroilov. I would certainly disagree. 19 Bank may spend two or three years trying to enforce.
20 This was very relevant to this case. 20 Probably they would enforce at the end, but they would
21 Q. Now, by contrast to a pledge of shares, a registered 21 lose so much time, and value might have been reduced
22 pledge of mortgage estate is different, isn’t it, 22 over time, and certainly they need money now as opposed
23 because — simply because, unlike — well, if real 23 to money in three years. Apologies for a long answer.
24 estate is pledged, you can’t really dissipate it. You 24 Q. Now, do you know any other cases where the rights of
25 can’t transfer it to whoever if you are a dishonest 25 the Bank as against the borrower were secured (a) by
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1 registered pledge of virtually all real estate of

2 certain companies, and (b) by a repo of shares of the

3 pledgers? Do you know any other case where that

4 happened?

5 A. Thank you very much, Mr Stroilov.

6 I think, my Lord, in my expert opinion, I cite four

7 examples like that, where there was a repo and, to my

8 knowledge, there was also a security. Now that

9 Mr Stroilov very helpfully brought up this

10 anti-corruption report, it mentions the case of

11 Alfa Bank v Senatorov which I think is a really

12 interesting benchmark for these proceedings, because

13 there Mr Senatorov also alleged some wrongdoing by the

14 bank but at the end the parties have settled and the

15 borrower accepted that there was value given for the

16 pledges and that the repo was a repo. So, yes, I can

17 cite at least five examples like that.

18 Q. Now, I am not sure you quite understood the question.

19 If you can, just for speed, I am asking you about this

20 specific combination: a pledge of real estate and a repo

21 of the shares of companies of which — of the pledger

22 companies. I don’t think that was the combination, at

23 least in the cases which you cite, or am I mistaken?

24 A. I heard you and I gave you the answer. In

25 the Alfa Bank v Senatorov case, certainly there were

1 the sentence there was a repo of shares in Traktornye

2 Zavody and Vnesheconombank case, but do you know whether

3 in that case there was also a registered pledge of real

4 estate.

5 A. My reading of the Traktornye Zavody case is that that

6 was a very significant borrower of VEB and you cannot

7 get a loan from VEB without very significant security,

8 so you would get a lot of mortgages and pledges. So my

9 reading of the sequence of events was that they had

10 mortgages and pledges, it’s just during the crisis they

11 thought that they need something extra, and by this

12 something extra, they used the repo.

13 But if you ask me was I privy to those arrangements,

14 have I seen the documents, the answer is no.

15 Q. I think haven’t you explained to my Lord some half

16 an hour ago that, according to your understanding, the

17 practice was that repo was quite simply a more reliable

18 form of security, so you don’t need a pledge if you have

19 the repo? I may have misunderstood what you were

20 saying, but I thought that’s what you said. So if there

21 was a repo, perhaps there was no pledge in

22 the Traktornye Zavody case.

23 A. Mr Stroilov, are you suggesting that I should recommend

24 to the banks who take the repo to release the mortgages

25 and pledges that they have?

113 115

1 real estate pledges and a repo.

2 Q. I think in the cases which you cite, I think there are

3 four cases, I am just trying to find them, but

4 generally, I think you are not saying that that was the

5 position in your examples as well.

6 A. I mean, if you take the VEB v Amurmetal case, for

7 instance. So Amurmetal was a large borrower of VEB with

8 a lot of pledges and mortgages, and what I described as

9 the repo element which came later, that upon realising

10 that the borrower is in default and is unable to service

11 its debt, VEB insisted on there being a repo, but I do

12 not think that they lifted the mortgages and the pledges

13 that they had prior to that repo.

14 Q. Now, if you could — I have found it, I think. If you

15 could go to one page down in the Turetsky screen, if

16 I may call it like that, and the other will be the

17 Guriev screen. If you could go one page down to

18 paragraph 5.23 {E2/8/15}, and I think starting in that

19 paragraph, and then over the page, you give the actual

20 examples of repo deals, and essentially these are

21 examples from the press, understandably, you are not

22 telling about your own clients, you are just talking

23 about the cases which have been publicised.

24 So if we could now scroll down one further screen

25 {E2/8/16}, so I think, yes, you are right in

1 Q. I beg your pardon?

2 A. Just to understand your question better, so historically

3 a bank would have mortgages and charges, and then later

4 on they decide to also take a repo; are you asking me

5 whether at that point in time they must release the

6 charges and pledges?

7 Q. I’m just asking you that how many cases you know with

8 such a combination with underlying assets pledged and

9 company shares being subject to a repo arrangement. It

10 seems to me that on the information you have,

11 Traktornye Zavody is not necessarily such a case; would

12 that be fair?

13 A. I can admit that I don’t have first-hand information

14 about that case, but I would expect that to be the case

15 there, and certainly the Alfa Bank v Senatorov was like

16 that.

17 Q. And I think among your own case, as the cases you were

18 involved in, would there be any cases where there was

19 this conversation: pledge of real estate and the repo of

20 the shares in the pledger company; would there be any

21 cases in your practice?

22 A. No, I don’t think so.

23 Q. Because you see, from the way you and Professor Guriev

24 and everyone who endeavours to explain it, let me

25 explain to you my problem with understanding this: it

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1 would be eminently logical if you have a pledge of 1 rather to some third parties acting on behalf of
2 the shares, you are worried about bona fides of 2 the Bank, and that, you agree, was an unusual feature,
3 the borrower, you ask for a repo of the real estate 3 don’t you?
4 assets of the company; that would be logical. 4 A. Yes, I agree.
5 But the other way round, it doesn’t seem to be 5 Q. And I think, again, just — it may be — if I am
6 justified in the way you suggest in your report: asset 6 challenged I will take you through the whole — through
7 tunnelling is just not on. What would you say to that? 7 some paragraphs, but perhaps that’s unnecessary. You
8 A. Mm hmm. Thank you, Mr Stroilov. 8 remember well what Professor Guriev says about this and
9 I think, my Lord, we are getting into a more factual 9 about this arrangement being not only unusual but, in
10 question, what people thought at the time, and 10 his opinion, improper, don’t you?
11 I certainly have read the witness statements, I skimmed 11 A. Yes.
12 through them, should I say, rather, and it is hard to 12 Q. And I think you have heard him saying that today in this
13 say what was going on in the minds of people at the 13 witness box.
14 time. But I can certainly recall this vividly, this was 14 A. Yes, that’s right.
15 late 2008, early 2009, we were — the bankers were 15 Q. Now, I would suggest using what I am calling the Guriev
16 suddenly put in a highly unusual position; that 16 screen. If we could now go to {E2/11/4}. If we could
17 a significant proportion of the borrowers were suddenly 17 zoom in, what I am interested in is line 1.6, and
18 going into default, suddenly not returning their calls, 18 obviously the substantive cells. So that seems to be
19 suddenly offering restructuring in the best scenario and 19 a section of your and Professor Guriev’s joint statement
20 in the worst scenario the banks came to realise that 20 where you set out your respective opinions on this
21 some of the assets are no longer there. 21 point. So the left column is yours, well looking at
22 So we have a phrase in Russian that the land was 22 only the two columns — the left column is yours, the
23 burning under their feet. So the bankers had a sense of 23 right column is Professor Guriev’s, and what I am
24 urgency to act and they had to come up with something, 24 interested in is the bottom paragraph of your section
25 because I put it to you that certainly if the borrower 25 where you essentially comment that whether or not that

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1 goes bankrupt it is very upsetting for the borrower and

2 his immediate family, but if a bank goes bankrupt, that

3 would be pretty unfortunate for thousands of clients who

4 would lose their savings and current account balances in

5 those banks.

6 So there is slight difference in the consequences.

7 So the Bank’s employees worked tirelessly and hard to

8 find a way to secure their position. Some of them came

9 up with additional securities, some of them came up with

10 the repo, some of them came up with something else, but

11 I can certainly attest that the logic for them doing so

12 was trying to get the money back.

13 The last thing they were thinking about was to get

14 the assets, because no one needed the assets at the

15 time.

16 Q. You mean in this case?

17 A. I can’t read the mind of specific people in the case.

18 I don’t know them personally, but I certainly would be

19 very surprised if, in the circumstances, something else

20 was on their mind other than trying to get their money

21 back under the loans.

22 Q. Yes. If we could — I think you and Professor Guriev

23 agree that at least an unusual feature of this repo

24 compared to other loan security repos was that it was

25 not — the shares were not transferred to the Bank, but

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1 arrangement was improper vis-a-vis the regulator and the

2 market and then whoever, it’s outside the scope of your

3 assignment. You don’t need to comment on that. Is that

4 a fair summary of what you say?

5 A. That’s generally correct. This was not the subject of

6 my expert report. I can try and talk about it, but this

7 was not the subject of the report and also I think that

8 whatever happened between the Bank and the Central Bank

9 does not have legal significance for the documents

10 signed with OMG.

11 Q. Right. So do you still hold that view? That approach

12 as set out in this second paragraph of your cell in line

13 1.6?

14 A. Yes.

15 Q. Because if we look at your supplemental report, which is

16 at {E2/9/6}, I think. I think you — no, I think

17 page 5, if we could scroll up to {E2/9/5}. Sorry, I am

18 slightly lost in the reports.

19 I think, no, if we could go to {E2/9/3}, I beg your

20 pardon, Mr Turetsky, page 3 of the same report.

21 I think then, later on, on reflection, you actually

22 set out, you start arguing against Professor Guriev’s

23 view, and as you can see, starting on paragraph 3.4, you

24 say you disagree with this analysis and you explain why.

25 That continues to over the page, if we could scroll

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1 down, it continues through a rather lengthy paragraph,

2 3.5, and then paragraph 3.6.

3 So it seems that between signing the joint statement

4 and making this supplemental report, you actually

5 changed your view as to the relevance of this issue and

6 thought it necessary to comment, didn’t you?

7 A. I don’t think I changed my view. My view is that this

8 was not the subject of instructions, and I don’t think

9 you would disagree with that; this was not in

10 the instructions.

11 The second point is that it had no relevance for the

12 relationship between the Bank and OMG, and that still

13 stands, and I think if you read what I said in

14 the supplemental report, it essentially drives exactly

15 to that point.

16 I did entertain the — I felt that if I am doing

17 a supplemental report, I need to comment on whatever is

18 in Mr Guriev’s report, so I did say what I think on this

19 subject, but this was certainly, just as an additional

20 analysis, my conclusions in the joint statement are the

21 same.

22 Q. Well, no, it seems, really, the way I see it,

23 Mr Turetsky, is that really at the time you are making

24 the joint statement, it really seems you have nothing to

25 say to contradict Professor Guriev’s analysis in

1 least I felt so, and I produced the first draft of

2 the joint statement, and Mr Guriev didn’t disagree. So

3 we didn’t put too much in there and we thought that for

4 the purposes of the joint statement that was sufficient.

5 When preparing the supplemental report, which was

6 prepared some time after, I was reading Mr Guriev’s

7 report and I thought if some allegations are made,

8 I might comment, but this was not the subject of

9 the instructions, that’s why it is not in the joint

10 statement.

11 MR STROILOV: My Lord, I think I need another 30 to 40

12 minutes, I am afraid, so it probably can’t be done

13 immediately. There has to be a break. I am obviously

14 concerned. I don’t know how long my learned friend

15 anticipates with Ms Simonova, not to mention

16 housekeeping, which is probably lost for today. Well,

17 I don’t know. Really I am perhaps in your — I think in

18 your Lordship’s and my learned friend’s hands as to

19 whether we need to reconvene earlier so as to be sure

20 that he can finish with Ms Simonova today.

21 MR JUSTICE HILDYARD: Well, let me state the parameters.

22 I will rise no later than 4.30 pm today. How long do

23 you need?

24 MR LORD: My Lord, I think I said that I think I will need

25 at least two, two and a half hours. I will need

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1 substance: you just — so your answer to that, really, 1 a couple of hours. If I have to finish today, there are
2 is that it is irrelevant: it may be improper, but it is 2 some topics that are more important than others, and
3 irrelevant. 3 I will pare things down, if that’s the direction that
4 Then you have second thoughts and really start 4 I am given. There are some points I need to cover more
5 arguing against him. Isn’t there some change as between 5 carefully. I will pick up speed. There are some points
6 the joint statement first and then the supplemental 6 of assets that are of lesser value and feature lesser in
7 report second? 7 the firmament which I could take more quickly, but there
8 A. Mm. 8 are points there which — I am in your Lordship’s hands
9 Q. Wouldn’t you agree there was some change in your 9 a bit.
10 approach? 10 MR JUSTICE HILDYARD: Well, as I say, I must rise at
11 A. Thank you, Mr Stroilov. I think how we — Mr Guriev and 11 4.30 pm.
12 I spent a fair bit amount of time on the phone 12 MR STROILOV: Yes.
13 discussing the joint statement, and I think the 13 MR JUSTICE HILDYARD: You think you will be another half
14 objective in doing the joint statement was to assist the 14 an hour, 40 minutes?
15 court in digesting the responses of experts to the four 15 MR STROILOV: Yes, I do envisage that, my Lord. I would
16 questions. 16 suggest, should we reconvene at 1.45, and I will try to
17 We both realised that our reports are quite 17 finish by 2.15.
18 voluminous, and it’s not always easy to compare them 18 MR JUSTICE HILDYARD: Are you content with that, my Lord?
19 side by side. So the objective of the joint statement 19 MR LORD: Yes, and as your Lordship has in mind that
20 was to take the questions that were asked in 20 I really must finish today, that I have that two
21 the instructions and comment on them line by line, 21 hours —
22 putting the views of two experts side by side. 22 MR JUSTICE HILDYARD: I don’t know whether Ms Simonova is
23 The question about misleading the Central Bank was 23 available on another day, but 4.30 it will be for today.
24 not in the instructions, so we felt that for the 24 MR LORD: Yes.
25 purposes of the joint statement it was out of place, at 25 MR JUSTICE HILDYARD: I am content to sit at 1.45 pm if
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1 everyone else is, with apologies to all people adversely

2 affected by that. I’m really in your hands.

3 MR LORD: Well, I would favour, your Lordship, if

4 your Lordship would be prepared to sit at 1.45, that we

5 should sit at 1.45 so that I could hopefully be starting

6 by 2.30, no later.

7 MR JUSTICE HILDYARD: Yes. Well and good, 1.45 pm.

8 (1.07 pm)

9 (The Luncheon Adjournment)

10 (1.45 pm)

11 MR JUSTICE HILDYARD: Just to mention in response to

12 the looks of anguish, I have made arrangements to put

13 back my commitments to 4.45/4.50 to give you that little

14 bit extra if it is really required, against my better

15 judgment, but nevertheless it is the fact.

16 MR LORD: Thank you, my Lord, I am grateful and I apologise

17 for that.

18 MR STROILOV: May it please your Lordship.

19 Mr Turetsky, are you familiar with the expert report

20 of Mr Mikhail Matovnikov?

21 A. Not in detail, but I have read that report, yes.

22 Q. I dare say I am surprised by this answer. It seems to

23 me that you have recycled quite a lot of Mr Matovnikov’s

24 report to prepare your own report, isn’t that the case?

25 A. I must correct myself. I have not reviewed it prior to

1 reserved, and what I am saying is that repos as

2 a concept are common and conventional, but what happened

3 in this case had some unusual features, I can’t say that

4 this happens every day.

5 Q. I think not to put too fine a point on it, really

6 Mr Matovnikov’s report quite simply argues the Bank’s

7 case, does it not? Would you agree with that?

8 A. I have no reason to suspect, my Lord, that Mr Matovnikov

9 would follow the guidance to experts so he would

10 probably understand his duty to the court in the same

11 way as I did, so I …

12 Q. If you could quickly go through it and then look at what

13 Mr Matovnikov says, it’s at {M2/41/6}, and I suggest we

14 go straight there. Sorry, I think I must be wrong.

15 {M2/41/6}.

16 So you can see in 5.1, that seems to be the first

17 part of the question asked of Mr Matovnikov, to which he

18 answers.

19 A. Mm hmm.

20 Q. If we could perhaps — well, I don’t suggest going

21 through this in great detail but if we could scroll down

22 one page you can see that the first problem he

23 identifies is dissipation of assets by the borrowers,

24 and then he describes what he means and gives some

25 examples, and I am not suggesting any more than scan

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1 today’s hearing but I certainly reviewed it when I was

2 working on my expert report half a year ago.

3 Q. Right. And you did, effectively, incorporate a number

4 of points made by Mr Matovnikov into your reports, isn’t

5 that fair to say?

6 A. Yes, I think Mr Matovnikov’s report was a bit more,

7 should I say, more and more aggressively supporting the

8 Bank’s side of this kind of bank/borrower issue. So

9 I thought that my conclusions were a little bit more

10 reserved, but you are right. There are a few things in

11 my report which are similar to the conclusions in

12 Mr Matovnikov’s report.

13 Q. Well, when you say — I think you have indicated that

14 Mr Matovnikov’s report is rather more aggressive,

15 I think you said, than yours in terms of arguing the

16 Bank’s side. Are you talking about the form or the

17 substance? Is it that the style, was it too aggressive

18 to your taste, or are you saying that in substance he

19 meant over the top?

20 A. What I meant is, I think Mr Matovnikov — so the first

21 question and probably the main question of the expert

22 instructions for Mr Matovnikov and myself, were was it

23 common and conventional. So if you read Mr Matovnikov’s

24 report, I think he was pretty much saying: yes, very

25 common and conventional. My report is a little bit more

1 reading through this.

2 Then if we go down one further page {M2/41/8} he

3 says that it is typical for borrowers to make spurious

4 claims that documents are forged, and then if we go one

5 page further, Mr Matovnikov suggests that if a borrower

6 is not able to dispute the signatures he would claim

7 lack of authority of the signatory to sign the

8 documents.

9 Then if we could go one further page down

10 {M2/41/10}, he is talking about destruction or

11 concealment of documents and about artificial creation

12 or inflation of related party loans.

13 Then if we could scroll one page down {M2/41/11} and

14 one further page down {M2/41/12}, he is talking about

15 the bankruptcy.

16 Then in 5.2 he is asked how the Russian banks have

17 sought to address those problems, and if we scroll down

18 one further page {M2/41/13} where he describes various

19 methods, and then he comes to repo arrangements as,

20 essentially, the answer, or one of the answers.

21 Perhaps if we could scroll down one further page

22 {M2/41/14}, I am not suggesting anything more than

23 really scan reading through this. Perhaps one further

24 page, just for completeness {M2/41/15}, and then in 5.3

25 he answers how — I think we need to go a little further

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1 before I ask questions. I’m obviously assuming that you

2 are generally familiar with this report, so I am not

3 suggesting a careful reading, being conscious of time,

4 so in 5.3 he is asked how the repo in this case fits

5 into the general practices, and if we could scroll down

6 one further page {M2/41/16}, he does some analysis of

7 the memorandum, and then if we scroll down one further

8 page {M2/41/17}, there is a question about whether there

9 are any:

10 «…good accounting reasons or other reasons for

11 ensuring that the companies acting as purchasers are not

12 subsidiaries of or associated with the bank?»

13 Then he is asked about the requirements, then he

14 gives essentially, I think, the same answer as you give

15 about consolidation.

16 Then he is asked about, at the bottom of the page in

17 5.5, he is asked about how normal is the transfer to

18 subsequent purchasers, and again, if we could scroll

19 down one page {M2/41/18}, he is discussing various

20 evidence.

21 Then finally if we could scroll down to

22 the statement of truth {M2/41/19}.

23 Now, Mr Turetsky, the structure of this seems

24 remarkably similar to your report, does it not?

25 A. I don’t know, Mr Stroilov. Mr Matovnikov was answering

1 Mr Matovnikov, that’s correct.

2 Q. Now, and in substance —

3 A. Yes.

4 Q. — you say — you make exactly the same points as he

5 makes. In substance you may have changed the style to

6 something less aggressive, but in substance you say the

7 same things, don’t you?

8 A. He cites different examples. He cites some of

9 the reasons which I do not cite, like, for instance, he

10 talks about destruction or concealment of documents.

11 I don’t think I talk about that. A few other things.

12 So, yes, I don’t know what you are driving at, but

13 I do agree that the logic flow might be similar.

14 Q. Yes, well essentially you modelled your report on

15 Mr Matovnikov’s report; you just removed these four

16 leading questions; you just polished the most

17 outrageously aggressive advocacy to make it more like

18 a proper expert opinion, you have given some better

19 examples to illustrate those points but, in substance,

20 it is the same, is it not?

21 A. That’s a very interesting theory, Mr Stroilov, but I can

22 only confirm that what you see in front of you today is

23 my report, for which I accept responsibility.

24 Q. Now, if, perhaps, we could go back to your report, which

25 is at {E2/8/12}. There you, in your turn, seem to set

129 131

1 slightly different questions, and that was for

2 proceedings in a different court, but broadly, I think

3 he was making a conclusion — he was driving to make

4 a conclusion that this was a standard practice. My

5 conclusion is a bit more reserved, but the arguments —

6 some of the arguments in my report were certainly

7 influenced by what he said, because that was one of

8 the first things I read.

9 Q. Yes, and what I am suggesting to you is that — well,

10 let’s say your report, in answer to one broad question

11 whether the repo used in this case was conventionally

12 and commonly used, you actually follow the structure of,

13 let’s say, the first four questions asked of him. You

14 firstly address the problems faced by the banks, then

15 you analyse the banks’ responses to these problems, then

16 you analyse how a repo is one of those responses, and

17 then you analyse how the repo, in this case, fits into

18 general practice. So it seems you follow the same

19 structure, even though you answer more general one

20 question as opposed to his four; would you agree that’s

21 fair?

22 A. Yes, Mr Stroilov, probably you are right: I did think

23 that the key point is to explain the context against

24 which the structures were developed, and yes, I do

25 follow some of the elements of the logic of

1 out the problems which lenders faced and to which you

2 say repo transactions were the answer, or part of

3 the answer.

4 Now you are talking in paragraph 5.13 about

5 dissipation of assets by the borrowers. Now, this does

6 not justify a repo of this kind, I mean where you have

7 a registered pledge of real estate and the repo of

8 company shares, well, the risk of dissipation of assets

9 is irrelevant, is it not?

10 A. It is — I mean, I wasn’t an expert on issues of fact.

11 I was answering some specific questions, and what I was

12 trying to explain here why would people opt to use

13 a repo, and this is one of the reasons. Essentially,

14 the key reason for using the repo is that borrowers were

15 behaving unscrupulously in a variety of ways, and that

16 led various bankers to come to the idea of repo, and

17 asset dissipation is one of the reasons why people felt

18 that borrowers are being unscrupulous.

19 Q. Now, if we could look at paragraph 5.15.

20 A. Yes.

21 Q. You say that — potentially you say that — well, you

22 make the same point as Mr Matovnikov, that borrowers,

23 among dishonest techniques, the borrowers might make

24 false allegations of forgery or claim lack of authority;

25 isn’t that a fair summary?

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1 A. Yes.

2 Q. Now, that’s irrelevant to repos. If someone is prepared

3 to deny his signature or claim lack of authority

4 dishonestly, whether or not there is a repo, the

5 situation is the same: he will just be denying every

6 document and we will have to go to court and prove the

7 document is valid; is that not so?

8 A. Many thanks, Mr Stroilov, and I think I disagree with

9 that, and I would like to ask his Lordship to have

10 a look at exhibit 8 to my report.

11 Q. That will be — I am just trying to find it.

12 A. It is {E2/8/61}.

13 Q. Okay. Will you please go there.

14 A. So this is an excerpt from — and I don’t know if you

15 have an English version of it?

16 Q. Can we try the next page or the previous page on the

17 other screen.

18 A. Excellent, thank you. Thank you very much {E2/8/60.1}.

19 Q. And we don’t need the Russian version.

20 A. So what was happening at the time is banks were trying

21 to enforce pledges and mortgages and the borrowers were

22 trying to obstruct that, as we have heard even today.

23 The borrowers were trying to, in particular, claim that

24 some signatures were wrong on the mortgages and charges.

25 So the situation became so acute that the borrowers were

1 shares are already with the Bank, or with whatever third

2 parties are involved, so he may try and argue that the

3 repo was forged but the shares — during all this period

4 the shares would be with the Bank or within the Bank’s

5 reach, that’s one point.

6 The other point is that I understand it’s the key

7 argument of the Bank that they felt that if

8 Mr Arkhangelsky remains in control of the shares, he

9 would obstruct the enforcement. So doing the repo was

10 aiming at exactly that: to make sure that the management

11 appointed by Mr Arkhangelsky would not be able to

12 obstruct. So I presume that when the Bank eventually

13 took control of the companies and the reason for

14 replacing general directors, was exactly that: that they

15 didn’t want the general directors to obstruct

16 enforcement of mortgages or charges.

17 Q. Now obviously you are an experienced lawyer practising

18 in Russia. In any of the cases you are aware of, have

19 there been any real forgeries? Not false allegations of

20 forgery, actual forgeries?

21 A. Actual forgeries. I don’t think so.

22 Q. Isn’t it the case that Russia is the world’s centre of

23 forgery? There are many, many false allegations of

24 forgery, I accept that. That’s very widespread in

25 Russia, but isn’t it the case that actual forgery as

133 135
1 disputing and obstructing enforcement, that the Supreme 1 a crime is also very widespread?
2 Arbitrazh Court, which is the highest commercial court 2 A. That’s a very far-reaching statement, Mr Stroilov. I do
3 in the country, felt obliged to issue a guidance, and if 3 admit that forgeries may happen, but I am not in
4 you read this guidance, essentially what it says: if 4 a position to say how many forgeries occur a year and
5 a court in Russia is enforcing on a mortgage and 5 how do we rank in this world ranking of forgeries.
6 a borrower files a concurrent claim to say that the loan 6 Q. But as far as you were concerned, an allegation of
7 or the mortgage were invalid, then the mortgage court 7 forgery against a bank is absurd by definition; would
8 should proceed; they shouldn’t hold enforcement of 8 that be a fair summary of your position?
9 the mortgages despite this borrower claiming that 9 A. It wouldn’t be absurd. Things — I mean, improper
10 everything was invalid. 10 things occasionally happen and in particular, instances
11 This just gives you an idea of how widespread this 11 when there is misbehaviour within banks have occurred
12 was, because the Supreme Arbitrazh Court doesn’t issue 12 when Russian banks have gone bankrupt, so there are
13 guidances lightly, so it was a widespread situation that 13 a number of small Russian banks that have gone bankrupt,
14 they felt they have to help the banks to be able to 14 and prior to their bankruptcies there might have been
15 enforce. 15 some activity by the management or the shareholders of
16 That’s a long answer, I’m sorry for that, but this 16 those banks, but that would be a very specific context.
17 is exactly why a repo is better than a mortgage or 17 In general, in a regular kind of day-to-day
18 charge because the borrowers cannot claim that the 18 operation of a bank, there is so much scrutiny on
19 mortgage or charge are not signed properly. When you 19 a daily basis and there is so much at stake because the
20 have a repo, you have the shares, it’s not a question of 20 key point about — I mean, I do agree that this is what
21 who signed the repo. 21 we call savage capitalism in the report, that the
22 Q. But the borrower can presumably say that the repo is 22 companies and people didn’t behave, sometimes, very
23 forged or there was no authority. 23 scrupulously in the 1990s.
24 A. Mr Stroilov, first of all, even if it says — even if 24 But the thing about the banks was that a company
25 the borrower says that the repo is forged then the 25 could do whatever it wanted, or a person could do
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1 whatever he or she wanted and then bankrupt the first

2 company, set up a new company, transfer all the assets

3 from one company into another, and this was all done

4 very quickly and easily, so there was very little

5 downside for unscrupulous behaviour, whereas banks were

6 peculiar in that they had a licence. So the prospect of

7 losing the licence is essentially the end of the story

8 for the Bank; it is not easy to just stop — just finish

9 one bank and start another bank.

10 So this risk of licence loss or risk of regulatory

11 issues would be a very significant factor deterring

12 banks from misbehaviour, and obviously the sheer number

13 of people involved, the various policies and procedures,

14 make it very difficult for the banks to engage in fraud

15 as opposed to regular companies.

16 But, you are right. Things might happen, and

17 obviously I can’t confirm that nothing ever happened

18 ever.

19 MR JUSTICE HILDYARD: Just before you go on, I worry that

20 I haven’t fully understood the impact of exhibit 8. Am

21 I right in thinking that exhibit 8, which you wanted me

22 to look at, is some guidance in the context of mortgages

23 by the Supreme Arbitrazh Court indicating that if points

24 are made as to the validity of the mortgage on any

25 ground, that that won’t be the occasion of a stay of the

1 talking about false allegations of forgery in your

2 report, isn’t the real reason simply that you know that

3 an allegation of forgery has been made in this case;

4 isn’t that why you mentioned that?

5 A. It certainly has relevance to the facts of this case.

6 Q. So, essentially, the point you are making is that his

7 Lordship should take this allegation sceptically because

8 all Russian borrowers say that, or a lot of Russian

9 borrowers say that because they are crooks; isn’t that

10 what you are saying, to put it crudely?

11 A. I’m just looking at this prompter and it says that we

12 are in Day 36 of the trial, so I’ve only been here half

13 a day. His Lordship has been diligently sitting here

14 for 36 days, so by now he would be much more familiar

15 with the facts than I am, so I would leave it to his

16 Lordship to make a judgment as to whether there was

17 a forgery or not in this case.

18 Q. Can you please look at {E2/10/15}, that’s again a page

19 from the expert report of Professor Guriev. I think in

20 paragraph 45, starting from the third sentence, he makes

21 the point about the general situation in the Russian

22 banking industry at the time. I think if you could read

23 through paragraph 45. (Pause).

24 A. Mm hmm. Yes, I read it.

25 Q. And do you accept that? Do you agree with what

137 139

1 proceedings by the Bank to recover the monies the

2 subject of the mortgage?

3 A. Exactly, your Lordship, but the key point about this is

4 the date. So the date of this clarification is

5 23 July 2009.

6 MR JUSTICE HILDYARD: Right.

7 A. And what I wanted to say is that this just demonstrates

8 how acute the issue has become in July 2009, which was

9 exactly when the events were unfolding. So that

10 happened with many borrowers and with many banks at the

11 time: that the Supreme Arbitrazh Court felt obliged to

12 intervene, but you are reading it exactly right,

13 your Lordship.

14 MR JUSTICE HILDYARD: It is a difficult pronouncement fully

15 to understand, because at some point, presumably, the

16 issue as to forgery or other thing has to be

17 adjudicated, and if it is adjudicated only after the

18 money is recovered, that may be too late, but that is

19 a matter for Russian procedure and Russian law, the

20 mysteries of which will remain such to me.

21 A. Yes, I agree. I agree. The way it is exactly phrased

22 is: prima facie should not be the reason, but you are

23 quite right that it might result in some absurd outcome.

24 MR JUSTICE HILDYARD: Yes.

25 MR STROILOV: Isn’t the reason, Mr Turetsky, why you are

1 Professor Guriev is saying?

2 A. I’m sorry, can you help me:

3 «Mr Matovnikov does not argue that this practice is

4 fully legal…»

5 By «this practice», what does he mean?

6 Q. Well, ignore the sentence. He is talking about the

7 issue of using third parties to avoid consolidating the

8 assets on the Bank’s reports and accounting documents.

9 What I am interested in is the general discussion of

10 the situation in the Russian banking industry; do you

11 agree with what Professor Guriev is saying?

12 A. That no practices were widespread, and that there was

13 a killing of Mr Kozlov?

14 Q. Quite.

15 A. Yes, Mr Stroilov, I agree that Mr Kozlov was killed in

16 2006, and the killing was reported to be contracted by

17 Mr Frenkel, a banker who owned several small banks which

18 were engaged in money laundering and black cash.

19 Q. Generally, do you agree with Professor Guriev’s opinion

20 on a rather worrying state of the Russian banking

21 industry in the period prior to 2013?

22 A. I think, Mr Stroilov, that it is hard to answer that

23 with precision, and all of this is shades of grey. So

24 who was whiter, who was blacker, my certain conviction

25 is that banks were whiter than the corporates, but

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1 I cannot exclude that there were irregularities at some

2 of the banks.

3 MR JUSTICE HILDYARD: I suppose if regulators are liable to

4 be shot they might be less enthusiastic about

5 regulation.

6 A. You are quite right, your Honour.

7 MR STROILOV: Now, Mr Turetsky, the repo arrangement in this

8 case was not a conventional and commonly used

9 arrangement in Russia: it was highly unusual, was it

10 not? I know obviously I’m repeating the bigger, general

11 question. I think the long and short of it, obviously

12 you and Professor Guriev then give different views as to

13 the unusual features, and they are helpful, but really

14 the plain answer to the plain question is that it was

15 unique. It was extremely unusual, was it not?

16 A. Thank you, Mr Stroilov.

17 I think, your Lordship, I was able to identify four

18 or five examples of something similar, and actually

19 quite similar, but it wasn’t happening every day. It

20 wasn’t happening on a very, very wide scale.

21 MR JUSTICE HILDYARD: Did any of the examples you gave, and

22 if so which, involve the repurchase arrangements with

23 respect to shares for which there was no ready market?

24 A. Yes, my Lord. The five examples I gave were for

25 unlisted shares, which were not traded on the market.

1 properly as it could have been done had they had the

2 benefit of time or involvement of an experienced law

3 firm, but what else were they supposed to do; they had

4 to save the Bank.

5 So I do appreciate that there are some differences

6 into how different banks reacted, and some banks did

7 this, some banks did that, but you could just understand

8 why this was, just because they didn’t study in

9 the university what to do when your borrower defaults

10 and threatens not to pay.

11 Q. That is another, rather impressive attempt, if I may say

12 so, to explain away the fact that the repo arrangement

13 in this case was very unusual, was it not?

14 A. I was able to identify only five cases which were pretty

15 similar to this one.

16 Q. Now, Mr Turetsky, I’m not attacking your integrity, but

17 I am attacking your expertise. Your experience is not

18 as an expert, but as an advocate, is it not?

19 A. Thank you, Mr Stroilov. If my Lord is interested in

20 what I do in my regular practice, I am not a trial

21 attorney. In fact, this is my first time ever in court.

22 I am a finance lawyer who does transactions. So I would

23 sit in my office or meet clients, but what I would do is

24 I would prepare documents. I wouldn’t be an advocate at

25 trial.

141 143

1 MR STROILOV: But I think, again, we can go example by

2 example. I think you would agree that the unusual

3 features you identify, that is to say use of third

4 parties, use of nominal price, I think the relative

5 informality of the arrangement — I’m not sure you agree

6 with that — but these unusual features, they are

7 unusual as compared with your four, I think, rather than

8 five cases. So compared to these four cases you have

9 been able to find, the present case still has unusual

10 features; do you accept that?

11 A. Every case is difficult and every case is unique, and

12 I had the pleasure of reading some of the witness

13 statements, and you could almost sense what was going on

14 there because the same thing was going on at other

15 banks. I mean, you saw the witnesses: some of them are,

16 I guess, still quite young, and eight years ago they

17 were even younger, so this was the first crisis they

18 encountered in their lifetimes. They were faced with

19 the extreme pressure of having to decide what to do with

20 all these borrowers defaulting, and they were trying to

21 find a solution, and they haven’t had the precedence,

22 they haven’t had the legal document they could use,

23 someone mentioned the repo, they tried to work out how

24 to do that, they’ve done it.

25 I mean, obviously they might have not done it as

1 Q. And your evidence in this case is a piece of advocacy

2 rather than an opinion of an impartial expert, is it

3 not?

4 A. I would leave it to his Lordship to determine.

5 MR STROILOV: Thank you very much. Will you please stay

6 there.

7 MR LORD: I don’t have any questions.

8 Questions by MR JUSTICE HILDYARD

9 MR JUSTICE HILDYARD: I quite take your point, Mr Turetsky,

10 on the fact that every agreement is, in a sense, unique,

11 but I am grappling in my own mind with how special these

12 ones were.

13 Just to clear out of the way the vast trillions of

14 repo transactions, ordinarily financing vehicles and the

15 like, usually undertaken, as I understand it, under the

16 Global Master Repurchase Agreement with very

17 market-worked clauses of some considerable complication,

18 and that, would you agree, probably accounts for the

19 vast, huge preponderance of the transactions which you

20 refer to in the paragraphs of your witness statement,

21 I think it was 56 and 57, but you remember them better

22 than me; would that be fair?

23 A. I agree, my Lord.

24 MR JUSTICE HILDYARD: And most will involve either

25 government-issued paper or marketable securities, and

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1 most, in fact, will be financing operations of one kind

2 or another?

3 A. Yes.

4 MR JUSTICE HILDYARD: And in that context, would you agree,

5 the market leans heavily, it is considered bad market

6 practice, really, to entertain a repo transaction not

7 for financing purposes but to exercise voting control of

8 a subject company under the guise of a repurchase

9 arrangement; would you agree?

10 A. I think, your Lordship, there were two points in

11 the history of this repo.

12 MR JUSTICE HILDYARD: Yes.

13 A. There was a point in December 2008 when it was

14 concluded, and then there was a point some time in

15 spring of 2009 when I should say it became final and

16 irrevocable.

17 So when it was signed it was meant to be a repo

18 security, but then when the borrower defaulted, it

19 became final, and essentially the borrower had no

20 residual rights in the securities.

21 So my understanding of the events, and I may be

22 wrong, that during the period from 30 December 2008 to

23 whenever, March/April 2009, it was a financial repo, and

24 after that the borrower lost any beneficial interest in

25 the securities, and they were in full legal and

1 interpretation of this, I would say that we should use

2 the usual repo analysis by analogy, because this was

3 meant to be a repo and this was essentially a repurchase

4 transaction, so in a repurchase transaction, if the

5 borrower defaults to pay when due, he loses the right to

6 buy the shares back.

7 So otherwise, an opposite result would be

8 inconceivable because the whole point is that the Bank

9 becomes entitled to sell the shares in the open market

10 and be done with the borrower.

11 If it were the case that the year after, two years

12 after, the borrower could come back and say: sell me

13 those shares, that would make absolutely no sense

14 because the ship has sailed.

15 So this was something that was missing in

16 the document, but on my reading, one could read this

17 into the terms that if the borrower defaults, it’s the

18 end of the story as far as the repo is concerned.

19 MR JUSTICE HILDYARD: Into which agreement would you read

20 those terms? Into the memorandum?

21 A. Into the memorandum. Yes, into the memorandum.

22 MR JUSTICE HILDYARD: To make the whole thing workable?

23 A. Yes.

24 MR JUSTICE HILDYARD: Yes. Somewhere in the evidence, and

25 I forget where, I would like you to help me on this, it

145 147

1 beneficial ownership of the initial and subsequent

2 purchasers.

3 MR JUSTICE HILDYARD: Vested in the purchasers.

4 A. Yes.

5 MR JUSTICE HILDYARD: Subject to the clause that we had

6 a look at in the memorandum, if all the indebtedness was

7 paid, there might come a time when you might be able to

8 reclaim the shares, though it’s not explained, you might

9 tell me how you envisage this would — it’s not

10 explained how that obligation was going to be visited on

11 the original or subsequent purchasers, bearing in mind

12 they weren’t party to the memorandum.

13 A. Yes. Yes, I think your Lordship touches on a very

14 significant point, which I think was an oversight of

15 people who drafted the repo documents, because the way

16 they drafted it is, at any point in time before

17 a certain date in 2011, OMG Ports, or OMG, may by notice

18 require the sale of the shares back to them at the

19 original price, provided they comply with their

20 obligations.

21 What it ought to have said is, it ought to have

22 said: at a certain point this becomes irrevocable.

23 So I think that someone needs to interpret the

24 documents and to — because that is not clearly spelled

25 out. So if your Lordship would be interested in my

1 was stated that the Bank did not in the particular

2 circumstances, and possibly because they mistrusted

3 Dr Arkhangelsky at the time, make available copies of

4 the repurchase side of the purchase agreement. So to

5 the world it appears that there was a purchase without

6 a counter obligation of repurchase; would that be usual?

7 A. I think that that is exactly — so in an usual repo it

8 would all be in a single document. It would say: under

9 certain conditions you sell and under certain conditions

10 you buy.

11 MR JUSTICE HILDYARD: Exactly.

12 A. Here it wasn’t there. So I think what they were trying

13 to do was they were trying to come up with a bespoke

14 document which would achieve the same objective, and

15 I reviewed this repurchase agreement and it seemed to me

16 that someone has put some thought into it, because the

17 way they have done it is if they just wanted — for the

18 sake of argument if they just wanted to get the shares

19 and dispense with Dr Arkhangelsky, they would just have

20 an agreement and some vague obligation to sell it back.

21 What they have in reality come up with is an elaborate

22 document which contains three parts, which is the

23 original sale agreement, then the preliminary agreement

24 to agree on a reverse sale, and then they attach to it

25 the actual instrument of transfer for the eventual sale

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1 back.

2 So I wouldn’t say that this is a perfect structure,

3 and I agree that I haven’t seen it done this way

4 precisely, but it kind of suggests to me that they have

5 put some thought into how they would enable

6 Mr Arkhangelsky to buy the shares back at the time.

7 MR JUSTICE HILDYARD: I quite take your point that one tends

8 to forget how new was the crisis which developed, and

9 how young were the people who were dealing with it, but

10 the structure which in fact was adopted, possibly

11 slightly ad hoc, did pose very significant risks to OMG.

12 A. I agree. I agree. From reading the evidence and the

13 expert statements, and from understanding that

14 Mr Arkhangelsky built a very significant business empire

15 at a very tender age, which clearly suggests he is

16 a very able businessman, I struggle to believe that he

17 wouldn’t understand that, because people may not

18 understand some aspects of difficult commercial

19 arrangements, but to understand that you are

20 transferring your shares to someone is something very

21 basic. Someone who transfers their shares to another

22 person ought to understand that that person may keep

23 those shares.

24 So you are right: there were risks, but it is hard

25 to see how an experienced businessman would accept those

1 anything, actually. If we read the actual sale and

2 purchase agreements, they allowed Mr Arkhangelsky and

3 his companies to demand the sale back. They didn’t even

4 make references to the loan agreements, so if

5 Mr Arkhangelsky really wanted those shares back, he

6 should have certainly sent a demand to the initial

7 purchasers and filed a lawsuit against the initial

8 purchasers for failure to sell them back. I don’t know

9 if that ever happened.

10 MR JUSTICE HILDYARD: Mm. Sounds as if it might have been

11 met with a defence, but there we are. I understand your

12 point, I think.

13 Can I ask you about consolidation, just to pick your

14 brains on that. My memory of the accounting rules, even

15 in England, is hazy, although I think I did sit on

16 a body which was meant to define them.

17 My understanding was, certainly under IFRS, that

18 since a balance sheet is meant to depict a real

19 situation rather than simply form, it’s meant to be

20 substantive rather than form —

21 A. Yes.

22 MR JUSTICE HILDYARD: — my understanding is that in

23 the case of repo shares, if they were made available

24 under standard repo arrangements, the fact that they

25 were the subject of collateral arrangements would have

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1 risks without understanding them.

2 MR JUSTICE HILDYARD: But as we discussed, the biggest risk

3 was the fact that the shares were not acquired by the

4 Bank, they were acquired by third parties, with whom

5 there were no written or clear arrangements. Now, that

6 is a risk if your company falls into the hands of

7 a third party, isn’t it?

8 A. My Lord, I have read this document and it is true that

9 the Bank is not the party to them. The initial

10 purchasers are parties different from the Bank. But

11 that was a binding agreement between OMG Ports and OMG

12 and the initial purchasers.

13 So there was a legal ability of OMG Ports, or OMG

14 group, to send a letter to the initial purchasers and

15 say: we exercise our rights to buy the shares back.

16 I haven’t seen it in the file if they have ever done it,

17 and I would question why haven’t they offered to buy

18 those shares back until 2011.

19 MR JUSTICE HILDYARD: Would that offer carry any weight if

20 they couldn’t repay?

21 A. But what difference — my Lord, you started with

22 a question: was it not such a bad thing that this was

23 not the Bank but initial purchasers, and my response to

24 that is: there was a legal agreement between them and

25 the initial purchasers, and it wasn’t conditional on

1 to be made clear in the accounts, and it would be the

2 seller whose accounts would reflect such value as those

3 shares had, not the buyer. Is that your understanding?

4 How do you, as a transactional lawyer, do you know how

5 they are accounted for on each side of the bargain?

6 A. My Lord, thank you very much, and I think you are being

7 modest about your understanding of accounting. I think

8 you summarised this extremely well.

9 My understanding is the same: that in a regular

10 repo, the economic ownership remains with the seller.

11 MR JUSTICE HILDYARD: Yes.

12 A. So it would be on the seller’s balance sheet.

13 I think the problem in this case is that Russian

14 banks do accounting on the basis of Central Bank rules,

15 and Central Bank rules provide ability to do this with

16 the repo, but they only allow to do this when repo is

17 over listed shares.

18 So technically as far as I understood the

19 regulations when I read them was that there was no

20 technical ability of Bank of St Petersburg to book

21 unlisted shares as being held under repo. They would

22 have had to reflect them as if they actually owned them.

23 So, just by virtue of accounting rules, they

24 wouldn’t be able to say that this is repo shares because

25 repo shares were defined only as listed shares, which

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1 have market valuations, so that they could

2 mark-to-market.

3 MR JUSTICE HILDYARD: I see. So I may have not fully

4 understood that. Under IFRS, as you rightly, as I saw,

5 it explained, although there has been absolute transfers

6 in a point of accountancy perspective, the seller

7 retains the value of the shares, subject to

8 an appropriate note on his balance sheet.

9 But do you say IFRS only applies in the case of

10 marketable securities, or …

11 A. I think — I’m not sure about IFRS. IFRS might be

12 smarter than the Central Bank, but the Central Bank

13 rules at the time, they only enabled the Bank to account

14 listed or traded shares as repo shares, and with these

15 shares my understanding is the Bank could have bought

16 them, but in their accounting the only option would be

17 to say that they actually owned those shares. So they

18 wouldn’t be able to get away with the Central Bank

19 saying: oh, these shares we don’t really own, it’s just

20 under repo, because there was no market valuation of

21 those shares.

22 MR JUSTICE HILDYARD: I see. So you would have had a rather

23 strange position, would you, bearing in mind we know

24 that the seller companies were seeking to adhere to

25 IFRS, that the value of the shares would have been shown

1 liabilities, but that’s the way of things, is it?

2 A. I think, yes, I think there are two ways of

3 consolidation. Equity consolidation, when you take the

4 value of the shares, and there is line-by-line

5 consolidation.

6 MR JUSTICE HILDYARD: Yes.

7 A. So I am not an expert on accounting but I understand for

8 some reason they thought they would need to do

9 line-by-line consolidation.

10 MR JUSTICE HILDYARD: Yes. I’m sorry to trouble you with

11 those points, recognising they are more accounting, but

12 taking advantage of your experience as a transactional

13 lawyer I felt you might be able to assist me. No fault

14 of yours, but I still find the situation rather curious,

15 and I suppose my last question is: have you ever come

16 across a situation where a bank, operating in

17 the context of a regulatory regime, takes these sort of

18 assets and concomitant liabilities off its balance sheet

19 by simply parking the shares with friends with whom it

20 has — over whom it has no apparent proprietary control;

21 have you come across that?

22 A. Yes, my Lord. My bank clients have told me on a few

23 occasions that they have parked a specific asset with

24 another legal entity not within their group.

25 MR JUSTICE HILDYARD: Subject to no formal arrangements?

153 155

1 in their IFRS accounts as being in their balance sheet,

2 and had the Bank, rather than the immediate purchasers,

3 the subsequent purchasers being the purchaser under the

4 repo, would also have shown those shares as plus in its

5 balance sheet?

6 A. I agree, your Lordship.

7 MR JUSTICE HILDYARD: It seems peculiar.

8 A. I agree, your Lordship, that would be a curious outcome.

9 As far as I understand that was the Bank’s analysis,

10 that if they take the shares they would have to

11 consolidate them, and it seems reasonable to me.

12 MR JUSTICE HILDYARD: I suppose what I am ultimately testing

13 is that both you, and I think Mr Matovnikov, or whatever

14 the proper pronunciation, I apologise to him for not

15 getting it right, you both appear to agree that had the

16 Bank been the purchaser, it would have had to

17 consolidate onto its balance sheet the companies the

18 subject of the repurchase agreements; you agree with

19 that, do you, notwithstanding our discussion?

20 A. Yes, I think I agree with him on that, and that would

21 mean that these companies presumably had loans from

22 other banks. So Bank of St Petersburg curiously would

23 have to consolidate loans taken from other banks.

24 MR JUSTICE HILDYARD: Again, it seems strange you take as

25 an asset that which you do not recognise as carrying any

1 A. Not that I’m aware of.

2 MR JUSTICE HILDYARD: Not that?

3 A. I wasn’t aware of those arrangements.

4 MR JUSTICE HILDYARD: I see. So there may have been more

5 formal arrangements in those contexts?

6 A. It could be, yes.

7 MR JUSTICE HILDYARD: Thank you very much.

8 Does anyone have any questions arising from that?

9 MR LORD: No, thank you.

10 Further cross-examination by MR STROILOV

11 MR STROILOV: I think just one.

12 Mr Turetsky, this point you made last about not

13 having heard from your clients about third parties being

14 used for repos. I think it has been for some months

15 that you and Professor Guriev have been arguing about

16 this very point in the reports, at a meeting, and so on,

17 you have been asked some questions about third parties

18 being used today. Why have you never mentioned that

19 before this moment?

20 A. Sorry, never mentioned what?

21 Q. Why have you never mentioned the fact that you were

22 allegedly aware of some other repos where third parties

23 were used?

24 A. Sorry, Mr Stroilov, as far as I understood his

25 Lordship’s question, it was more general: whether I’ve

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1 seen banks parking assets on third parties. I don’t 1 A. He was using the comparable approach to evaluate the
2 think it was specific to a repo context. If it was — 2 buildings and the land regardless of how the buildings
3 MR JUSTICE HILDYARD: It was a bad question. I had, in 3 and land are used, and I remember you were telling me
4 fact — I think Mr Stroilov may have read my mind, which 4 that these terminals could be used in a different way,
5 was not clearly expressed by me. It was in the repo 5 and after Saturday/Sunday I want to clarify that,
6 context, in order to avoid consolidation, in other 6 my Lord.
7 words. 7 First of all, I want to tell you that these
8 A. If you mean in the repo context, I can only refer to 8 terminals, both Onega and Western Terminal, are sitting
9 those five examples. I think in at least three of them 9 in the special zone, which is called the — it’s
10 it was the Bank proper who took the shares, but I think 10 a combined military zone, or the Russian border. So the
11 those were examples from Vnesheconombank which is a 11 question is — and it’s a zone where you should clear
12 different creature because they are not subject to 12 the customs. Therefore the question is, could you put
13 reserve requirements, they are not subject to liquidity 13 any other business there but the transshipment terminal
14 requirements, they are exempt from all of them, they are 14 is very clear. You couldn’t put there anything because
15 essentially an arm of the government. Then in 15 nobody could go there without any special permissions.
16 the Gazprombank case I think the documents say that it 16 When I was inspecting Onega Terminal, I took the
17 was a different company holding the shares. I don’t 17 photos from outside the terminal. When I got to
18 know if it was affiliated with Gazprombank or not but it 18 the gathering point, I asked: can I go in and take
19 was a different name and I don’t know, it might have 19 photos and look around, and I was told: no, this is the
20 been the case in the Alfa Bank case as well. 20 border. You don’t understand. This is the Russian
21 MR STROILOV: Just to save the trouble of going through 21 border. You could step over some step and be outside of
22 this, I think you have exhibited all your sources of 22 the country, so we — they couldn’t let you in. Nobody
23 information on these five cases, so essentially you will 23 could be let in without special permission.
24 know as much as we will know by reading your reports 24 And this regime is the same for the
25 with exhibits; is that correct? 25 Western Terminal, in addition, that Western Terminal
157 159

1 A. That’s true.

2 MR STROILOV: Thank you very much.

3 MR JUSTICE HILDYARD: Thank you very much.

4 MR LORD: Might he be released, my Lord?

5 MR JUSTICE HILDYARD: Yes.

6 MR LORD: If experts have to be.

7 MR JUSTICE HILDYARD: I did a bit of research on that. My

8 colleagues differed on the matter, on the issue of

9 purdah.

10 MR LORD: I won’t ask for the better view, my Lord.

11 MR JUSTICE HILDYARD: Good, back to Ms Simonova.

12 MR STROILOV: If I may recall Ms Simonova.

13 MS LUDMILA SIMONOVA (Continued)

14 Cross-examination by MR LORD (Continued)

15 MR JUSTICE HILDYARD: Welcome back. You are still under

16 oath. I am sorry we have kept you longer than the 12.00

17 which we hoped for in more optimistic days last week.

18 Do sit down, and remember you are still subject to your

19 oath.

20 A. Thank you.

21 MR LORD: Ms Simonova, I was asking you, I think, some

22 questions about the valuation of the Onega Terminal, and

23 it is right, isn’t it, that Mr Millard carried out

24 an adjusted sales comparable approach to valuing the

25 yards at Onega Terminal?

1 sits next door to this military factory, which also is

2 a special regime. This is why I couldn’t go there even

3 to take photos over the fence.

4 So the question of other use is very, very

5 difficult, and it’s almost impossible any other use but

6 the transshipment trade terminal.

7 Q. And, Ms Simonova, that restricted access aspect would

8 affect who would be interested in buying the property,

9 wouldn’t it? It would reduce the number of interested

10 purchasers, wouldn’t it?

11 A. Yes, of course. We call this weak market. This is the

12 type of market with small amount of transactions. In

13 the international valuation standards they describe this

14 kind of market, you have to be extremely careful,

15 especially with the analogues, with the comparables, and

16 that’s why, as I already stated on Friday, while

17 comparable is not good enough, because it’s — you have

18 to have several comparables to make sure that these

19 comparables are based on market data and that

20 transactions and offers are market data and market

21 offers.

22 Q. Yes, and I think I asked you about why the sale of

23 Western Terminal to OMG in May 2007 wouldn’t be

24 a potential comparable, and I think you said that there

25 were some international valuation standards that would

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1 mean that you can’t take that into account; do you 1 used as comparable at all.»
2 remember giving that evidence on Friday? 2 And I said:
3 A. I said, first of all, it was an old sale. The old sale, 3 «Question: Why is that?»
4 it’s one year — more than one year old. You showed me 4 And you said:
5 the contract very briefly. I don’t remember the date. 5 «Answer: This is what standards state.»
6 If we could go back to look at what date was the 6 Are you standing by that evidence, that there is
7 contract — 7 an international valuation standard that says that when
8 Q. May 2007? 8 you are valuing one asset, you cannot look as
9 A. — but I remember very well that it’s 2007, and the date 9 a comparable at an earlier sale of that same asset; is
10 of appraisal that I was doing was December 2008, and 10 that what you are saying?
11 Mr Millard was doing even further down, it was June 11 A. No. Maybe the sentence that I created wasn’t good
12 2009, so any appraisal will tell you this is too late 12 enough, and all I mean, I just explained to you.
13 and could not be used, and that is the major reason why. 13 Q. So as far as you are concerned, there are no
14 Q. So is it your evidence not that there is 14 international valuation standards that say that when you
15 an international valuation standard in this case that 15 are valuing asset A you cannot take into account as part
16 says you cannot take into account that sale, but rather 16 of your valuation an earlier sale of asset A?
17 it is your view that the sale in question was too — 17 A. Well, you mean that there is no exact — that sentence,
18 took place too many years earlier to be a relevant 18 true.
19 comparable? Which is it? 19 MR JUSTICE HILDYARD: Mr Lord, I think that she elaborated
20 A. The standards makes absolutely clear that the date of 20 this in response to a question from me at {Day35/181:22}
21 sale, date of valuation, is the one of the most 21 through {Day35/182:6}.
22 important points of the market value. You couldn’t 22 MR LORD: Well, I was going to take her to that if she
23 consider that some sale that occurs a long time ago, 23 clarified that I think she didn’t mean what she said on
24 five years ago, 10 years ago, and even more than a year 24 the earlier page, but I’m happy to.
25 ago, could be considered a comparable. 25 MR JUSTICE HILDYARD: I just don’t know …
161 163

1 Plus I already said that the — you have to have

2 several comparables to make sure that they are in

3 the same range; and also you have to study this sale of

4 Western Terminal and make sure it meets all the market

5 requirements and the standards. This is what I mean.

6 Q. Can you be shown, please, Day 35, which is last Friday.

7 A. I’m sorry, if I could get some glass and whatever,

8 because I think this is somebody else’s glass.

9 Q. Yes, definitely. I am sure there is —

10 A. Somebody already used this.

11 MR JUSTICE HILDYARD: And do feel free, if someone could get

12 you some tea or whatever the arrangement was on Friday,

13 by all means feel free to do so.

14 A. That would be very, very useful, but at least water will

15 be very good.

16 MR LORD: {Day35/180:1}, please. Ms Simonova, on screen is

17 the evidence you gave on Friday. You will see in line 7

18 I asked you whether you had taken into account the

19 Western Terminal comparable of 40 million from May 2007.

20 I said:

21 «Question: Would that be a good comparable to value

22 Onega and Western Terminal on your approach?»

23 And you said:

24 «Answer: According to international valuation

25 standards, the deal with the same assets could not be

1 MR LORD: Ms Simonova, his Lordship is right that you gave

2 some further evidence about it — yes, do you want to

3 read on? In fact you actually dealt with it in two

4 places. You dealt with it — sorry, I should have taken

5 you there, it’s my fault. Could we have {Day35/149:1}.

6 Sorry, my Lord, it is my fault, I should have gone to

7 that first.

8 Ms Simonova, you actually gave evidence on this

9 point in two places, and I think at {Day35/149:1} to

10 {Day35/150:1} you explained that you had not been aware

11 of this sale before, and then if you look at

12 {Day35/150:19-25}, you see what you say there.

13 A. Well, I could say that 2008 is far away from my — 2012.

14 I agree with that.

15 Q. Then his Lordship asked you about — well, you picked up

16 the point again at page 180 to 182, if we could have

17 those pages, please {Day35/180:1} and particularly

18 {Day35/181:14}, when his Lordship asked you a question

19 about why it wasn’t relevant to have regard to the price

20 paid for Western Terminal land in 2007, and your answer

21 is at line 22; do you want to read that, Ms Simonova,

22 again? (Pause).

23 A. Well, I agree what I said.

24 Q. And in a weak market, as you describe it, wouldn’t it be

25 appropriate for a valuation of, let’s say,

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1 Western Terminal, to take into account a previous sale

2 of Western Terminal, even if it was a few years earlier,

3 at least to be able to find some sort of — to try and

4 carry out some sort of cross-check?

5 A. Well, appraisals usually consider irrelevant any old

6 information, and it will be interesting if there will be

7 some market value determined as of that day, but it

8 should take into consideration this deal, again, it’s

9 too old and plus you have to study everything around

10 that deal.

11 Q. Is it really your evidence that there was no — yes,

12 Ms Simonova, I think you — do you not place some

13 reliance on the Lair assessments of the properties that

14 you value? Do you not place any weight on their

15 valuations? No.

16 A. No.

17 Q. I think I asked you on Friday whether you had carried

18 out any analysis so as to be able to give an opinion on

19 the average price of industrial land per hectare in

20 St Petersburg in 2009; what’s the answer to that?

21 A. We didn’t conduct analysis of the industrial land that

22 sits all over Leningradskaya Oblast, there is a lot of

23 that kind of land, but all that land could not be used

24 as a comparable for Onega Terminal, and I already

25 explained that there is no way that will allow for the

1 weren’t they?

2 A. Probably. I didn’t study all the documents of

3 the ownership.

4 Q. And items 6 and 7 were owned by LPK Scandinavia, weren’t

5 they?

6 A. Probably, yes.

7 Q. And would you agree, looking at the area, that very

8 roughly 40 per cent of the land plot area, so the

9 non-building area, 40 per cent of your overall area in

10 table 21 would be attributable to the items 1 to 5, to

11 Scandinavia Insurance plots, and some 60 per cent to the

12 LPK land.

13 A. Yes, I agree.

14 Q. I think the overall storage area is some 57,000 square

15 metres, which is 5.7 hectares, and you can see that of

16 that, number 6, 34,500 square metres is on LPK Scan’s

17 plot. I think you have confirmed that that’s the split.

18 Would you agree, Ms Simonova, that if what you have

19 done here is value land owned by two separate entities,

20 you may have — well, I’ll ask that question again.

21 Have you carried out any valuation of numbers 1 to 5

22 without taking into account 6 and 7? Have you valued 1

23 to 5 in their own right?

24 A. No.

25 Q. And have you —

165

1 ro-ro terminal for the cars to be — to drive from the

2 berth to that other pieces of land.

3 Q. Ms Simonova, I’m going to ask you about your approach to

4 valuing the Onega Terminal. You valued this on the DCF

5 approach, didn’t you?

6 A. Yes.

7 Q. And without accepting that that was the right approach,

8 but just looking if we may, please, at your DCF

9 modelling, I want to ask you a few questions about that,

10 please. Could you be shown {E8/26/81}. If you have

11 {E8/26/80} on the other page, you can see that you set

12 out the assets of Onega Terminal in table 21. If we

13 could have both up on the screen, if that is possible,

14 please.

15 You list the seven plots within Onega Terminal that

16 you have been asked to value in table 21, numbers 1 to

17 7. You give their area on the right-hand side, and then

18 on the other page, page 81, you say:

19 «Legal. At the end of 2008, ownership and control

20 of the Onega Terminal changed. Certain assets from sold

21 soon after (items 1-5 in Table 21). In March 2011,

22 other assets (items 6-7 in Table 21) were sold.»

23 Now, if we look at table 21, Ms Simonova, it is

24 right, isn’t it, that assets 6 and 7 were owned by —

25 well, assets 1 to 5 were owned by Scandinavia Insurance,

167

1 A. I have to explain that this is — these seven assets are

2 complex of income generating assets that could — these

3 assets have to be appraised all together, otherwise if

4 we would try to separate them, what should we do? Put

5 a fence between them? There’s not any fence when I was

6 there. It was one piece of land and all these

7 buildings, and there’s not any fences between them.

8 When the cars drive from the boat to this piece of

9 land, they park them independently to whom does

10 the pieces of land belong in the legal sense, but in

11 the physical sense, it’s just an open piece of land —

12 space, and the buildings, and they all were used

13 together, working together.

14 And, by the way, here is the other question you were

15 asking about: could these assets be used in the other

16 way? And I told you that the buildings was specialised;

17 there were rooms for weapons, and to use it for

18 something else you have to invest money and convert it

19 into something. The rooms for inspecting the assets by

20 the customs, also specialised, and so there were a lot

21 of specialised rooms and therefore for a ro-ro terminal

22 and to use it for something else you have to invest

23 money.

24 Q. Ms Simonova, I will ask the question again. Have you

25 valued the Onega Terminal land plots, numbers 1 to 5, in

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1 their own right? In other words, independently of

2 the land under 6 and 7; yes or no?

3 A. No.

4 Q. And have you valued the Onega Terminal land at items 6

5 and 7 in its own right, in other words independently of

6 the assets 1 to 5 on your table 21?

7 A. No, I didn’t.

8 Q. One of your points, Ms Simonova, is that you have to

9 take into account the complex as a whole; in other

10 words, I think what you are saying is you have to take

11 into account the advantage of the aggregation of assets;

12 do you agree that that’s one of your points?

13 A. We have to take into consideration the synergistic value

14 that appears from the fact that these assets work

15 together, and what I did is I appraised all the assets

16 together and then I allocated that value to some of that

17 assets.

18 Q. And do you agree, then, that if you were to value plots

19 1 to 5 separately to 6 to 7, you would have to strip out

20 at least a degree of synergistic value, to use your

21 terminology?

22 A. If we will try to appraise the items from 1 to 5

23 separately from 6 and 7, but that will require separate

24 market research.

25 Q. And you have not done that, have you? You are not in

1 is right, isn’t he, Ms Simonova, you have been

2 overoptimistic in your estimation of the roll-on

3 roll-off capacity based on the amount of available land?

4 A. Let’s go to my table where I am appraising the

5 Onega Terminal. Thank you very much. And look at that

6 table. I also want to point out that the terminal at

7 the date I am there is full of cars, and that this is

8 very important for a lot of other assumptions.

9 Now, there is that factual car turnover, which was

10 like — I think in 2007 it was like 75,000 per year. It

11 was two boats — it was boats coming twice a week, and

12 that was about the … accommodate that amount of cars,

13 I remember there was some table showing how much it was

14 a month.

15 Okay, here is the table 27.

16 Q. Yes.

17 A. And the 240,000, {E8/26/95}.

18 Q. Yes. And Mr Popov is suggesting that that is

19 overoptimistic and that 92,000 is more realistic, given

20 the land size; he is right, isn’t he?

21 A. But look, capacity utilisation: 31 per cent;

22 40 per cent; 45 per cent, and 54 per cent is maximum,

23 which is about 129,429 units a year.

24 Q. And if you go to — if you keep open your table at

25 {E8/26/95} we have E5 —

169

1 a position, are you, to give an opinion as to the value

2 of 1 to 5 separate to 6 to 7 and the other way around?

3 A. I don’t agree with such a statement. We appraised all

4 seven assets. They all exist at the date we were — at

5 the appraisal date, and then we allocate to those assets

6 that we were asked to show it.

7 Q. I’m going to ask you about a number of the assumptions

8 that you have taken in your DCF calculation for

9 Onega Terminal value. Could you be shown, please,

10 Mr Popov’s report at {E5/18/16}, and you can see in

11 paragraph 5.7 that Mr Popov considers your DCF

12 calculation for Onega Terminal, and he says what he says

13 in that paragraph. I want to ask you, please, about

14 some of the specific points that you rely upon and he

15 comments on.

16 If we go to {E5/18/17}, please, there is a heading

17 «Roll-on roll-off handling» and there is a capacity

18 heading there, and you will see in paragraphs 5.8 and

19 5.9 Mr Popov looks at your assumption that the capacity

20 for roll-on roll-off, that is for cars, is 240,000 units

21 per annum from 2009, and he says that assumption is

22 highly overoptimistic due to the available land.

23 Can you see in 5.9 he suggests that 92,000 units of

24 maximum achievable capacity — rather, he estimates the

25 maximum achievable capacity at 92,000 units? Mr Popov

171

1 A. Sorry, it’s not 240,000. 240.

2 Q. 240,000 is the maximum, isn’t it, that you are saying it

3 could handle, isn’t it?

4 A. It’s some theoretical number, and we didn’t insert that,

5 actually, into the report. We just say it will — all

6 the 54 per cent will be achieved.

7 Q. And if we go to 5.15 in Mr Popov’s report at {E5/18/18},

8 he says that your estimate of the throughput is also

9 excessive, and he suggests that 38 per cent utilisation

10 is more realistic, which, given his lower estimate of

11 the capacity, generates only 35,000 units of throughput

12 per annum.

13 Again, he is right, isn’t he, Ms Simonova?

14 A. No, I disagree. This terminal with all the land I think

15 will definitely accommodate 240,000. The reason we were

16 using 31 per cent in the first year forecast, and in

17 reality there were 75,000, for the first five items you

18 are asking me about first five items which only

19 40 per cent of all capacity, but once another

20 60 per cent of capacity was added, I don’t see any

21 problem to accommodate 129,429 cars a year.

22 Q. And Mr Popov suggests that your car handling tariff is

23 too high. He suggests that rather than US $129 per car,

24 US $90 per car would be more realistic; what do you say

25 to that?

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1 A. I could say that in the appendices of my report there is

2 the data on how much other companies are paying, and the

3 reason this tariff is very good, I could tell you,

4 Onega Terminal was the first marine terminal that was

5 built in the big port of St Petersburg. Before that,

6 the cars will be unloaded and loaded in Finland and then

7 they put them on this — you know, these special huge

8 trucks with the cars, and then they drove through

9 Finland. It’s a special car — I am helping the

10 translator — special cars trucks, and you could even

11 see them in my photos in the appendices, and that cars

12 would drive all the way from Finland through the roads

13 all over the year, and they were charging $800 for that.

14 We studied that, for the car to bring it to

15 St Petersburg.

16 The fact that this terminal was built and it was the

17 first terminal and it was immediately occupied, look at

18 the capacity utilisation, they achieve it very, very

19 quickly, and the reason is because the alternative was

20 to pay $800, and so this payment, it was taken from the

21 other ro-ro terminals in the big port of St Petersburg.

22 Q. And if we look at your figures for container handling

23 capacity, if we go to {E8/26/95}, table 27, I think,

24 Ms Simonova, you suggest that the container handling

25 capacity is 75,000 TEUs per annum, don’t you?

1 paragraph 5.24, Mr Popov suggests that the throughput

2 was unlikely to exceed 33,000 TEUs per annum at

3 60 per cent capacity; what would you say to that,

4 Ms Simonova?

5 A. Well, 33,000?

6 Q. Yes.

7 A. TEU?

8 Q. Yes.

9 A. To check that number, we took the size of typical

10 container. We look how many containers could be stored

11 on that space at one time, and we came to the conclusion

12 that this is the relevant number.

13 Q. And if we look at the revenue that you have suggested,

14 you can see that Mr Popov at 5.27 and 5.28 at

15 {E5/18/20}, he considers your —

16 A. And I’m sorry that I’m interrupting you, I have to

17 finish. 75,000 is the — again, it’s a capacity, like

18 240,000, but the real forecast is 38,041,951, up to

19 49,000. So please let’s not confuse the capacity, which

20 is like theoretical number, and which we saw on some

21 other report, like GVA Sawyer’s, and the real numbers

22 that we took using the chain indexes on the car

23 transshipment forecast for big port of St Petersburg,

24 and then we calculate this capacity utilisation, which

25 came to 67 per cent.

173 175

1 A. Yes, it was first year it was based on the previous

2 year, and it was 75,500 cars, which is 31 per cent of

3 the capacity, even less than Mr Popov is saying.

4 But looking at the market forecast for car

5 transshipment, we increased this to 54 per cent.

6 Q. I am talking about the containers now, Ms Simonova, not

7 the cars.

8 A. I am sorry, I didn’t notice.

9 Q. If you listen to the question, please, I am talking

10 about containers now, not cars. TEUs.

11 A. Mm hmm.

12 Q. And you have put 75,000 down, haven’t you? If we go to

13 {E5/18/19}, in paragraph 5.20, Mr Popov says that in his

14 opinion the maximum possible level of TEU turnover is

15 55,000 per annum, not 75, because of the area,

16 1.5 hectares. Again, he is right, isn’t he, Mr Popov?

17 That is a more reliable figure, isn’t it, Ms Simonova?

18 A. No, I disagree. The amount of containers that you could

19 turnover over the terminal depends on the ability of the

20 equipment that’s used on the terminal to have several

21 levels of containers, and it depends on how fast you

22 could overturn them, and in our days there are very

23 efficient equipment, high quality, that could be used to

24 do that turnover.

25 Q. And then if we go to {E5/18/20} paragraph

1 So the difference between 60 per cent and 67, I am

2 sorry, it’s very small.

3 Q. Ms Simonova, have you taken into account any of these

4 points that Mr Popov makes in relation to your

5 Onega Terminal DCF calculation? Have you considered

6 them and, for example, done a reworked calculation to

7 see what difference it would make if Mr Popov was right

8 about the assumptions?

9 A. I look at his report a long time ago, almost a year, and

10 really, really, I don’t remember managing a lot of

11 appraisal projects, and because this is not that

12 sufficient, I don’t remember that I really realised it

13 or not.

14 Q. And if you look at {E5/18/20}, Mr Popov looks at your

15 EBITDA margin, and in paragraph 5.30 on {E5/18/21}, he

16 suggests that a better benchmark is 39 per cent, rather

17 than your 51 to 58 per cent. Again, Ms Simonova, have

18 you given some thought to that opinion of Mr Popov? Do

19 you want to say whether you agree with him or not?

20 A. I completely disagree. The terminal business is very,

21 very profitable, and I don’t want to quote the analysis

22 of Global Ports, the company Global Ports, but the —

23 I don’t see the page, first of all, that you are

24 quoting, I don’t know where that came from, but

25 8 per cent EBITDA is very, very small for port

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1 businesses.

2 Q. And can you confirm this, Ms Simonova: is it right that

3 you haven’t done any sensitivity analysis in relation to

4 your DCF calculation for Onega Terminal?

5 A. Yes, I didn’t.

6 Q. So you can’t give his Lordship any opinion as to

7 the effect upon the valuation under your calculation if

8 any of your inputs were to vary?

9 A. Well, the sensitivity of this model is the standard

10 sensitivity. This is — there is almost nothing to

11 check, and we used very, very conservative numbers, and

12 so basically on the low end of the market value, the

13 market value always has a range, but we are always

14 trying in these kinds of projects to use the bottom.

15 Q. Can we go to your results for Onega Terminal, please,

16 {E8/26/98}. You valued Onega Terminal at $100 million

17 in December 2008, and at {E8/26/99} you valued it at

18 $212 million in March 2011, and US $201 million

19 in May 2015.

20 A. That’s absolutely true. I could explain why.

21 Q. No. If I may — you will be re-examined if you have

22 further points to make. I need to put some points to

23 you.

24 One of the points that Mr Popov makes is that you,

25 Ms Simonova, don’t seem to have allocated or

1 answer is translated into Russian, you remove the

2 headphones and don’t listen to it. I think it is

3 confusing you and it is slowing things down. So I would

4 recommend that you can listen to the question if you

5 like, and when you are answering remove the headphones

6 and just answer in English if that is all right.

7 I would suggest you do that. Thank you.

8 A. That’s true, I have to correct translation all the time.

9 Q. But you don’t need to. That’s not really your function

10 here and you are spending precious time on this. So

11 when you are answering, would you please remove the

12 headphones, please.

13 A. Yes, I will. I will.

14 MR JUSTICE HILDYARD: Thank you.

15 MR LORD: Ms Simonova, if you could look at {E5/18/22}, you

16 will see that Mr Popov comments on what he sees as

17 contradictions between your approach and that of

18 Mr Steadman. You will see what he says in

19 paragraph 6.6:

20 «Mr Steadman’s valuation of the Onega LLC business

21 relies upon the very cash flows projected by Ms Simonova

22 with respect to her [Onega Terminal] property valuation.

23 «In contrast to Ms Simonova who allocates the entire

24 value of $202 million to the subject property,

25 Mr Steadman splits the cash flows between business and

177

1 distinguished between any of the value attributable to

2 the business essentials as opposed to the real estate;

3 in other words, you seem to have ascribed all the

4 business value to the land. Is that right?

5 A. No. And the reason is because when you’re doing

6 business valuation, I already explained, you have to

7 appraise shares or you appraise the total invested

8 capital, and you take into consideration accounts

9 receivables, accounts payables, you take into

10 consideration this (inaudible) and the entire balance

11 sheet.

12 Here there is only sales minus cost, and then EBITDA

13 and we capitalise the EBITDA, and that’s how you

14 appraise the assets.

15 Q. If we go to Mr Steadman’s analysis at {E6/21/10}.

16 MR JUSTICE HILDYARD: When would be a good time for a break?

17 MR LORD: Probably now, my Lord.

18 (3.29 pm)

19 (A short break)

20 (3.42 pm)

21 MR STROILOV: My Lord, Mr Lord and I agreed that I should

22 make a technical suggestion to the witness which may

23 speed things up.

24 Ms Simonova, I think you will find it easier and

25 everything will go a little quicker if when your own

179

1 physical assets in a proportion of 75/25 respectively.»

2 Can you see that, Ms Simonova?

3 A. The point number 6.7?

4 Q. Yes. Can you see what Mr Popov is saying there?

5 A. Splits the cash flow between business and physical

6 assets. (Pause). No, no, I need to go to the other

7 page. And what is the question?

8 Q. Can you confirm to his Lordship that, unlike

9 Mr Steadman, you have not sought to allocate any of

10 the DCF value that you generate between business and

11 physical assets. You have attributed all the value to

12 the physical assets, haven’t you, to the land, to

13 the real estate?

14 A. Well, my assumption, based on the fact that these assets

15 generate income, and of course, business

16 always generates more income than assets; that’s why

17 Mr Steadman probably did this assumption.

18 Q. Can you look at {E5/18/16}, please. Paragraph 5.5,

19 Mr Popov makes this point: that the value, Ms Simonova,

20 that you arrive at for the land at Onega Terminal of

21 $202 million, that translates into a value of

22 US $35 million per hectare, and Mr Popov suggests that

23 that is 9 to 12 times higher than the value of any

24 industrial site in the St Petersburg region; do you

25 agree with that, that that is right?

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1 A. I already explained that the value or the market cost

2 offer price for any industrial land all over

3 Leningradskaya Oblast are not comparables to the land in

4 the big port of St Petersburg. In addition, this is the

5 complex of assets. I already stated that many, many

6 times. So this comparison is not sufficient.

7 Q. If we go to your valuation, please, {E8/26/98}, I’ve

8 taken you to that already, these are your various

9 valuations, and {E8/26/99}, and then if you go to

10 {E8/26/100}, I think, Ms Simonova, what you do on that

11 page is you just divide up the value of Onega Terminal,

12 as you have worked it out, between plots 1 to 5 and 6 to

13 7, don’t you?

14 A. Yes, we allocate value.

15 Q. And how did you allocate the value between those two

16 sites?

17 A. We decided that the most important element is, of

18 course, the land, and the location, location, location

19 of that land in the big port of St Petersburg. That’s

20 why we assign the value already mentioned, 40 per cent

21 to the first five assets, and 60 per cent to the two

22 remaining assets.

23 Q. But what effect would it have on your valuation of plots

24 1 to 5 if they didn’t have the benefit of

25 the 60 per cent land at numbers 6 and 7?

1 at 2015, which is the date, I think, you took for your

2 valuation, and he suggests a value of US $19 million in

3 contrast with your valuation of US $201 million. So

4 that would be, I think, for all seven plots; can you see

5 that?

6 A. Yes, I see.

7 Q. So he comes out with a figure of just under

8 US $20 million for Onega Terminal in 2015, and you come

9 out at a value about 10 times as big; that’s right,

10 isn’t it?

11 A. True.

12 Q. And can I suggest, Ms Simonova, that you have suggested

13 a value for Onega Terminal of US $200 million in 2015 on

14 the basis that this will be a container port facility,

15 although it does not have its own access to the sea or

16 a berth; that’s right, isn’t it?

17 A. Yes.

18 Q. You have suggested that someone would pay

19 US $200 million to run a container and a roll-on

20 roll-off facility without its own access to the water;

21 that’s what you have done, isn’t it, Ms Simonova?

22 A. And I stated on Friday that to my point of view, it’s

23 irrelevant, and even more efficient not to have the

24 berth inside the space.

25 Q. And I suggest, Ms Simonova, that it is utterly fanciful

181 183

1 A. Well, I listened and read and still will ask you to

2 please repeat the question.

3 Q. I’m asking you what would be the effect upon the value

4 of plots 1 to 5 if they did not have the benefit of

5 being part of a site that had the additional land we see

6 at numbers 6 and 7. What if it was only 40 per cent of

7 the site? How would that affect a DCF calculation of

8 a container port, of a container terminal, sorry?

9 A. Probably it could be less, but to tell you how much less

10 I have to do another market research and do the

11 calculations.

12 Q. And if you see Mr Millard’s market valuation for

13 Onega Terminal, if you get up {E6/23/31}, please,

14 Mr Millard valued the Onega Terminal plots 1 to 5 as at

15 1 June 2009 at US $3.8 million. That was a more

16 reliable assessment, wasn’t it, than those that you have

17 carried out, Ms Simonova?

18 A. I disagree and I already explained that Mr Millard used

19 the sales comparable approach, appraised only the piece

20 of land, didn’t take into consideration the synergistic

21 value, used the comparables that are not comparables,

22 used the 90 per cent adjustment that he explained from

23 analysis of the land in New Hampshire, and I consider

24 all that is insufficient procedures.

25 Q. And at {E7/24/43} Mr Millard looks at Onega Terminal as

1 for you to come forward with a value of $200 million in

2 those circumstances.

3 A. But this is what the cash flow and capitalised EBITDAs

4 gave us.

5 Q. Ms Simonova, before I move onto the other properties,

6 I just want to ask you a couple of follow-ups about

7 Western Terminal, if I may, quickly. I want to ask you

8 about the trade-related property tag for

9 Western Terminal, all right?

10 Would you agree, Ms Simonova, that when a purchaser

11 looked at the Western Terminal site in September 2012,

12 they would not see a container transshipment facility

13 trading there?

14 A. Not exactly. The investor who will buy this piece of

15 land with two berths will understand the only potential

16 that this piece of land has, and if he is ready to fully

17 utilise this piece of land, then he, of course, would

18 consider the container terminal in future, for this

19 place.

20 Q. But at the time, at September 2012, there was not in

21 existence a trade-related property on that side, was

22 there? There was just a prospective one, on your

23 evidence?

24 A. Wait a minute. If you are asking does the trade-related

25 property exist, it did, it was there, except it was

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1 utilised in — not in the most efficient way. What we

2 did is we have the huge table in our report that shows

3 how different type of utilisation will affect the value

4 of this terminal, and we came to the conclusion that

5 container gives the most profit, and this is so-called

6 highest and best use of the land.

7 Market value requires to consider highest and best

8 use of the land, and therefore the highest we analyse

9 different kind of use, of course for different type of

10 terminals, not for casinos or restaurants, we still

11 consider it is a trade-related terminal, and anybody who

12 will come there in 2008, in 2012 and in 2015, will see

13 the potential for container terminal business at that

14 place.

15 Q. I think, Ms Simonova, what I am putting to you is that

16 the point of something being a trade-related property is

17 that it becomes important to value the trading element

18 at that property; in other words, you need to look when

19 valuing the land, you have to take into account the

20 trade that’s being carried on from that site at that

21 time; that’s right, isn’t it? Isn’t that the purpose of

22 a TRP label?

23 A. What you are saying is we have to look only as is, and

24 if we look as is, it was a trade-related timber

25 terminal.

1 MR JUSTICE HILDYARD: Yes, I think you did.

2 MR LORD: I’m sorry, my Lord, I don’t mean to go back on it.

3 I want to make sure that I have not failed to put

4 something that I need to put. I am not going back over

5 it, I was trying to come quickly to the point to make

6 sure I had put the point to this witness —

7 A. Timber trade already there. Do you not consider timber

8 trade as a trade?

9 MR LORD: The point, my Lord, what I wanted to put to this

10 witness, really, to make sure that she had understood

11 the point, was the importance of the trade that you are

12 identifying being there at the time, because it is

13 the — I’m not saying your Lordship will or won’t accept

14 that, but I wanted to make sure that I put —

15 MR JUSTICE HILDYARD: It may be I have interrupted wrongly.

16 Ms Simonova, does the trade that you are measuring

17 the potentiality of have to be carried on at that time,

18 or is it sufficient that the land in question could

19 usefully undertake that sort of trade to the purchaser’s

20 advantages; which is it, first or second?

21 A. Market value requires to look at highest and best use,

22 and any potential buyer will look at that piece of land

23 from the point of highest and best use.

24 Does it possible to have that trade over there? The

25 answer is: yes, it’s already there. Is this the most

185 187

1 The other thing is the container terminal was much

2 more efficient, created much more profitable cash flow,

3 and that’s why we take that into consideration.

4 MR JUSTICE HILDYARD: Mr Lord, didn’t we deal with this on

5 Friday?

6 MR LORD: I just want to make sure I put that point.

7 MR JUSTICE HILDYARD: My understanding is the witness told

8 us, and partly by reference to the example I gave of

9 the land very close to Heathrow, that you can value land

10 as trade-related property if it has the potentiality to

11 be such, and when measuring the potentiality, you are

12 entitled to consider what the best trade potentiality

13 use would be, and a purchaser would assess that not

14 according to what’s already there, but according to what

15 that purchaser or other purchasers might consider might

16 be achievable on that land. That’s as I understood the

17 evidence to be.

18 A. Thank you very much, my Lord, that’s absolutely what it

19 is.

20 MR JUSTICE HILDYARD: Isn’t that right though? Are we going

21 back on this?

22 MR LORD: No, my Lord, I just wanted to make sure I had put

23 the contrary point which is that you have to have a

24 trade going on at the time. I wanted to make sure that

25 I had put that, that was all.

1 efficient trade to trade timber? No. What is more

2 efficient? Chemicals. Fertilisers.

3 MR JUSTICE HILDYARD: No, I think we have that point.

4 A. Sorry.

5 MR JUSTICE HILDYARD: No, I don’t mean to be rude, but

6 I know we have limited time.

7 MR LORD: I was only trying to capture that one element and

8 I was probably doing it too long-windedly, but I wasn’t

9 trying to go back over the ground.

10 Ms Simonova, it is right, isn’t it, that if a land

11 plot or a piece of real estate is sold in a forced or

12 distressed condition, in other words, there is a forced

13 sale, this is likely to depress the price achieved;

14 would you agree with that?

15 A. Yes, I agree with that. That’s in the standards called

16 a forced sale.

17 Q. Just one other point I need to clarify with you on your

18 Western Terminal valuation, {E8/27/40}, which is your

19 DCF calculation, table 19, and I will try and do it

20 shortly. I asked you a bit about the terminal value and

21 the reversion year calculation on Friday, and you have

22 a line in this table which says discounted cash flow,

23 and for reversion year it says US $284.64 million.

24 Ms Simonova, I think it would be right, wouldn’t it,

25 to say the US $284 million is not a discounted cash

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1 flow, it is the nominal terminal value, isn’t it? 1 the property taking into consideration the highest and
2 Wouldn’t that be a better way of describing it? It’s 2 best use analysis of that property, but that was the
3 not been discounted by the 0.5619, has it? It has been 3 market value. Property is investment property because
4 calculated, as you explained it on Friday, by taking 4 OMG company held it for the purpose to invest.
5 44 million and using 15.5 per cent and 100. I think you 5 Q. It is right, isn’t it, Ms Simonova, that you can’t, as
6 explained the calculation. So the 284 million is really 6 a valuer, assume that the investment valuation of
7 the nominal terminal value, isn’t it, before it has been 7 a property will be the same as its market valuation?
8 discounted down by 0.5619? 8 A. No. You are again equating investment appraisal, which
9 A. I’m sorry, Mr Lord, but you confused all the numbers. 9 is I don’t know what — what do you mean under
10 Q. I was only trying to help. 10 investment appraisal, and market value and investment
11 A. What is here is 44 million dividing 0155, which is the 11 property.
12 cap rate for the terminal period and we get to 12 Q. Let me explain, let me try and explain. I will try and
13 100,084.64, and this is the value in the terminal period 13 give you an example: that there could be an investment
14 which we then discount with the 0.5619, and we — and 14 valuation of a piece of land valued for $20 million,
15 then we add it to the sum discounted cash flow, and if 15 based upon how it could be developed and sold as luxury
16 we will multiply 284 and 0.5619, we will get 16 houses; all right? That could be the investment
17 159 million, and then 159 million plus 16 million, which 17 valuation; in other words, if an investor bought the
18 is the negative value, we get 143. Did I make it clear? 18 land, he could develop luxury houses and sell them and
19 Q. I am going to ask you now about some of the other 19 he would make a profit and that would be the value to
20 properties you valued. I want you to be shown 20 him of that acquisition.
21 {E8/26/10}, which is table 3 where you set out an asset 21 But that wouldn’t necessarily be the same as the
22 list, and you explain the basis and approach of 22 market valuation because if, in fact, that investor
23 valuation. I’m going to ask you, Ms Simonova, about 23 could buy that plot of land on the basis that it was
24 Sestroretsk, Tsvelodubovo and Seleznyovo, which are 8, 24 farm land, he didn’t need to pay a farmer some sort of
25 11 and 14, and I am going to ask you to confirm that as 25 premium based upon his development plans, you could see
189 191

1 you can see from the right-hand column, the basis of

2 your valuation of those three properties in each case is

3 that they are investment properties; is that right?

4 A. Yes, all three pieces of land are investment property.

5 Q. And if you could be shown {E7/24/102}, please, which was

6 a page I took you to on Friday, this is from the RICS

7 publication, VPGA 4, valuation of individual trade

8 related properties, can you see at 6.1 it says:

9 «There is a distinction between the market value of

10 a trade related property and the investment value — or

11 its worth — to the particular operator.»

12 Now, Ms Simonova, do you agree that it’s important

13 when you are carrying out a market valuation of

14 a property that you ensure that you do not slip into

15 carrying out what would effectively be a business

16 valuation of that property in the hands of a particular

17 investor or developer?

18 A. I would like you not to confuse between the investment

19 value and investment property. I was appraising all

20 three pieces of land as investment property, which means

21 that this property was bought not for the purpose of

22 resale or use in the ordinary business of the business.

23 Investment property means that it was bought for the

24 purpose to develop this property and maximise the profit

25 from its development. So that was the market value of

1 that the investment value would not be the same as the

2 market value; do you see the point there? Does that

3 make sense?

4 A. I’m sorry for saying that, but I think you — with all

5 due regard, you are confusing several definitions that

6 you should not confuse.

7 There are many, many gated communities everywhere in

8 the world, including Leningradskaya Oblast, and when

9 that gated communities are built, they are built on

10 a pure market value approaches and sold everything

11 market value. That’s not for some special investor.

12 Again, investment property is the definition on the

13 balance sheet, but the investment value is the

14 definition of value. The word «investment» is the same,

15 but these two definitions are very, very different.

16 It’s the different topics.

17 Q. And if we take that to the example of Sestroretsk, can

18 I suggest to you that the right approach to value

19 Sestroretsk would have been on the basis of comparable

20 plots of land, in other words, entire plots of land, but

21 that could be developed in the way that you suggest? In

22 other words for housing, not for luxury but for housing,

23 as Mr Millard did; isn’t that the right approach, to

24 take the sales comparable approach to see how much like

25 plots of land could be acquired for in order to develop

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1 them?

2 A. The sales comparable approach is a good, valid approach

3 that could be used in the case there will be sufficient

4 comparables. With all my regard to Mr Millard, when he

5 first appraised Sestroretsk he used one comparable in

6 the Kurotny region which is like 340 square kilometres

7 and there is not even address and nobody knew where is

8 that piece of land. There is no photos of comparables,

9 there is no neighbourhood. We didn’t know anything

10 about that comparable, and he used just one comparable

11 to appraise this land in Sestroretsk.

12 For the second time when he was doing that in — for

13 2015, he used two comparables, some good, some good.

14 Two comparables is a good way to do it, except one

15 comparable is 26 kilometres from Sestroretsk and another

16 one is 11 kilometres from Sestroretsk. I am sorry, but

17 does the land 26 kilometres from London have the same

18 value as the land in London? Sorry, that’s why the —

19 both times, and I know why he didn’t do that, he simply

20 couldn’t find the comparables.

21 Sestroretsk is a very prestigious area, even though

22 Mr Millard is denying that, but it is a very good area

23 where the entire St Petersburg elite have their homes,

24 and it’s not so easy to find comparables exactly in

25 Sestroretsk. That’s why the first time Mr Millard used

1 the Sestroretsk land plot was about 2.5 hectares, wasn’t

2 it, altogether?

3 A. Yes.

4 Q. And you have not valued any comparable land plots of,

5 say, 2.5 hectares, have you? What you have taken is the

6 value for the as-developed land?

7 A. Even Mr Millard didn’t find the sufficient comparables,

8 even though he was looking and looking. I was looking,

9 of course, but they don’t exist.

10 Q. And the point I am making to you, Ms Simonova, is that

11 is an invalid approach of yours, because you are not

12 looking at how much an investor or developer would have

13 to pay in the market in order to buy that sort of

14 development land; you are looking at the as-developed

15 land value per plot, not the market price of buying that

16 land to develop; do you understand the difference?

17 A. That’s not true. I would be happy to use the comparable

18 that is sufficient, but it has to be in Sestroretsk and

19 it has to have at least some close size of the piece of

20 land. But because that doesn’t exist, what I did is

21 I analysed what is the cost at best use of that piece of

22 land, and I came to the conclusion that

23 it’s residential, and then I create some — of course

24 that could not consider as a project, but it’s average

25 data that I found at the market, including these

193 195

1 some comparable in some Kurotny region, nobody know

2 where it is, and the second time he used two comparables

3 which are far away from Sestroretsk. I’m sorry, that’s

4 not comparables.

5 Q. And if we go to {E8/26/24}, which is one of your

6 reports, we can see the comparables that you have looked

7 at. You have comparable housing prices, and,

8 Ms Simonova, can you confirm to his Lordship that the

9 comparables you have looked at are the prices you say

10 are comparable for the sale of the individual developed

11 houses on the Sestroretsk plot?

12 A. Yes, I did, and there are five of them and they are all

13 in Sestroretsk and, by the way, the square metre is

14 around $5,000 sales price.

15 Q. Ms Simonova, it follows, doesn’t it, that what you have

16 not done as part of your valuation of Sestroretsk is to

17 look at a comparable value for a land plot of that size

18 as a whole; that’s right, isn’t it?

19 A. There is no need. It’s irrelevant. What would I look

20 at, what is the sizes of that land plot, and use the

21 same size for the — for my land plot, and therefore the

22 houses are sold on the basis of square metres for the

23 house. This is how it is done in that area.

24 Q. I hope I am making the point clearly enough,

25 Ms Simonova. The point I am asking you to consider is

1 comparables, which tells me for how much the buildings

2 at that area could be sold with the pieces of land,

3 because each one of these buildings has a piece of land.

4 But the — using the square metres of the building,

5 it’s some kind of proxy which everybody does at that

6 market, and so I did the same thing, and so I couldn’t

7 consider this a wrong approach, this is absolutely right

8 and the only one approach that could be used in this

9 situation.

10 Q. Could I take you, please, to Mr Millard’s opinion about

11 your approach. {E7/24/8}. Mr Millard considered some

12 of the assumptions that you make when carrying out your

13 DCF calculation. The first point he makes on that page

14 is that Sestroretsk is not a luxury destination, and he

15 goes on to explain on that page why he is of that

16 opinion; can you see? He identifies where the relevant

17 plot is, it’s number 3 on his map, and he shows where

18 the sought after areas were, and they are within the

19 green area, and he goes on to explain that the area that

20 this Sestroretsk plot is in, the relevant one, that that

21 is in an area where you can see what he says, that:

22 «… the property borders the Vodoslivnoy Channel.»

23 And he has an extract from Wikipedia, so-called

24 «rusty ditch». So the property that you are valuing in

25 this case seems to be bordering a channel known as the

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1 «rusty ditch»; is that right? Is he right about that?

2 A. First of all, Wikipedia is not a very good source of

3 information.

4 Second of all, what I did is I used the comparables,

5 and of course there are different images of luxury in

6 the world, and the luxury in some regions could go

7 sky-high, some individual homes in America or Britain or

8 somewhere in Europe, and this is just a standard

9 definition that Russian real estate agencies are using,

10 but this definition, it is basically is not that

11 important because I use the value, the sales price for

12 the square metre of the comparable houses, and I took

13 the average of that, and so you could call it not

14 luxury, or you could call it luxury, that is all

15 irrelevant. What’s relevant is the photos I take being

16 there.

17 You could see there is one national park next door

18 to that property, there is a national park across the

19 river from that property, and this canal is a very

20 beautiful — it looks like a beautiful river. It’s very

21 picturesque, you could see that on my photos, and so I’m

22 sure people who live in Sestroretsk, they consider that

23 very, very important, the fact that there is this

24 parking zones, the fact that the canal is picturesque,

25 and it’s irrelevant that he pointed out this green area

1 500 square metres.

2 So if we allocate another 50 square metres from each

3 land plot, multiply on 25, it’s 1,250, another

4 1,250 square metres for infrastructure. I don’t know

5 why do you need a 2.5 kilometres road for such small

6 piece of land which is, according to Mr Millard, like

7 150 metres long on one side, 100 metres. Why do you

8 need 2.5 kilometres road?

9 Q. And at {E7/24/9}, Mr Millard looks at the question of

10 the construction cost that you have taken in your DCF

11 calculation, and he suggests that you have taken

12 the construction cost for the building of the individual

13 houses, but you haven’t added any additional costs in

14 for design and permitting for the provision of

15 infrastructure to the site, and connection to

16 the individual dwellings; is that right, Ms Simonova?

17 Is it right that in your calculation you haven’t allowed

18 for those infrastructure costs?

19 A. That’s not true. If you will open {E7/24/12}, you will

20 see design and permitting cost, 10 per cent;

21 infrastructure cost, 15 per cent. So we take that into

22 consideration, plus I want to remind you that this piece

23 of land already like 1 metre levelled, they raised the

24 level of the space and that’s — you can find that on my

25 photos.

197

1 or red area. The value of the houses of $5000 per

2 square metres was used in my calculation. That’s it.

3 Q. The number of houses that could be built on the

4 Sestroretsk site. You say 25 houses. Mr Millard

5 suggests that you have not allowed sufficiently for

6 access roads and infrastructure, which he says as a rule

7 of thumb would be 30 per cent. Then he says that you

8 should further reduce the number of plots to take

9 account of the water protection zone, and Mr Millard

10 suggests that a maximum of 12 houses could be built, not

11 25.

12 Again, Ms Simonova, Mr Millard is right about that,

13 isn’t he? It should be 12, not 25, shouldn’t it?

14 A. You already mentioned a couple of times that the land

15 plot is 2.5 hectares, which is 25,000 square metres.

16 If you will take 30 per cent of that, it will be

17 7,500 square metres. If you will assume that the road

18 will be three metres wide, that means that they will be

19 2.5 kilometres on the roads. The question is, who needs

20 that much roads. That’s the first issue.

21 The second issue, my assumption that I allocate

22 1,000 square metres for each land plot, but in reality

23 the land plots in that area, for example, my first

24 comparable, is 800 square metres. When I’ve seen the

25 land, been there, I’ve seen people building houses on

199

1 The transformer power station is already there, and

2 that’s a very serious cost for every piece of land.

3 There is a fence surrounding the — and you can see that

4 on my photos, and this is how we determine this is the

5 investment property, because OMG was already developing

6 it, and so the amount of infrastructure cost that’s left

7 over are not that much, and we took that into

8 consideration.

9 The permissions and some other costs, they are all

10 inside the cost, the capital cost per cubic metre.

11 Q. If you go to {E8/26/27}, I think that is your

12 calculation for Sestroretsk.

13 A. I am sorry, yes, I maybe opened the wrong page.

14 Q. That’s all right. I think, to be fair to you —

15 A. But might he also say that for Sestroretsk and

16 Tsvelodubovo, so consider that answer already was given.

17 Look, infrastructure cost, 5 per cent.

18 Q. And are you saying that that’s a sufficient —

19 A. And so this is 5 per cent from the cost per year and

20 2.4 million, 5 million and RUB 5 million, which is not

21 that small for such piece of land. And when we are

22 talking about capital cost per cubic metre, that is

23 already taking into consideration the cost — some of

24 the cost to develop and design the properties.

25 Q. If we go to {E7/24/10}, Mr Millard is saying that the

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1 development would take longer than you are saying on the

2 basis it would take some time to get the necessary

3 permissions; can you see, under «Development Plan» he is

4 suggesting that it is going to take longer than you have

5 suggested to carry out the development; is he right to

6 say that?

7 A. Not exactly, but I could understand your question and

8 I disagree. And I want you to go back to my page

9 {E8/26/27} where I show that in the first year only five

10 houses will be built, but on the second year, 10 — and

11 then 10. So I assigned some time for design and

12 permissions, but it couldn’t be that much.

13 Q. And Mr Millard suggests that the right discount rate

14 would be 25 per cent, not the rate that you have taken.

15 I think you have taken a rate of 10.5 per cent, haven’t

16 you?

17 A. Yes, and that is an absolutely market discount rate

18 which were found on this website named Domodoran, and

19 my Lord I have to explain that the site Domodoran is a

20 well respected source of information used by all Big

21 Four all over the world, and on this site I found

22 information about three developer companies in Russia

23 who have that discount rate.

24 So that’s why I think that’s absolutely market data,

25 it’s a so-called data that took from the independent and

1 Q. And —

2 A. But I disagree with Mr Millard when he said that

3 somebody could buy a hectare of land in Sestroretsk for

4 that much money, because all his proof is based on one

5 comparable in Kurotny region, somewhere, he didn’t point

6 out where it is, no photos, no neighbourhood analysis,

7 none, zero, and therefore he couldn’t make such

8 a conclusion.

9 MR JUSTICE HILDYARD: Doesn’t he say, doesn’t he describe

10 where Kurotny is on page {E7/24/8}, and he says — and

11 I have no idea — but he says it is a superior district?

12 A. No, he doesn’t, he is just saying Kurotny region, and

13 this map of this red, even only part of Kurotny region,

14 can you imagine the size of that region? It’s

15 340 square — maybe I am confused, but it’s a huge

16 region, and how could you just use one comparable that

17 somewhere in that region to appraise the Sestroretsk?

18 Q. Ms Simonova, can I suggest that what you have done here

19 is not to carry out a market valuation of the

20 Sestroretsk property. You haven’t valued — you haven’t

21 compared any of the market evidence here, have you, the

22 actual value of like plots, as they might be bought and

23 sold at the relevant time?

24 A. But I took the real value of the houses that was sold

25 and on sale, and that’s very good comparable data.

201

1 reputable source, and that’s why I used that data.

2 Q. Ms Simonova, have you carried out any sensitivity

3 analysis for the DCF calculation you have done in

4 relation to the Sestroretsk asset?

5 A. Well, because all the data are market data, for

6 example —

7 Q. Sorry, Ms Simonova, sorry, just answer the question:

8 have you or have you not tested your DCF calculation of

9 value for the Sestroretsk land in this case through some

10 sort of sensitivity analysis?

11 A. No, and I think it’s not important.

12 Q. Could you be shown {E7/24/7}, please. Mr Millard looked

13 at your overall valuation for Sestroretsk at the top of

14 the page, and he calculates that on the basis of your

15 valuation of this property, you are valuing at

16 $9.465 million per hectare, and Mr Millard is of

17 the opinion that similar land is available for between

18 $1.15 million, and $1.5 million per hectare, and he

19 quotes a source.

20 Is it right, Ms Simonova, that your calculation of

21 Sestroretsk does place that value per hectare,

22 $9.465 million per hectare?

23 A. Yes, if you will take the result which is like

24 24 million divide into 2.5 hectares, you will get the

25 value of hectares $9 million.

203

1 Q. And Mr Millard’s values — Mr Millard has used the sales

2 comparison approach, and his values are at {E6/23/19},

3 and I suggest, Ms Simonova, that Mr Millard is right

4 when he suggests the value of Sestroretsk in October —

5 sorry, in 2009 was roughly US $2.85 million?

6 A. Well, again, that value based on that one comparable.

7 Q. And he values the property in 2015 prices at {E7/24/7}

8 at around US $3 million, and again, I suggest,

9 Ms Simonova, that that is a much more accurate

10 assessment of Sestroretsk values?

11 A. And that number based on, as I already explained, on two

12 comparables that are 26 kilometres from the place.

13 Q. I’m going to ask you now, Ms Simonova, about your

14 valuation of Tsvelodubovo, and for your Lordship’s note,

15 Ms Simonova’s evidence is at {E6/26/48} and Mr Millard

16 is at {E7/24/23} and I am going to ask you, Ms Simonova,

17 about Mr Millard’s comments on your valuation, and I am

18 not going to put to you again that your DCF approach was

19 the wrong one.

20 A. Thank you.

21 Q. Sorry, by which I mean I am not going to put it to you

22 again: you may assume that the same criticism applies,

23 as far as we are concerned, that with Tsvelodubovo and

24 with Seleznyovo, the appropriate valuation is the sales

25 comparable approach that Mr Millard adopted rather than

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1 your discounted cash flow approach.

2 A. That’s your opinion. I disagree.

3 Q. And I’m going to raise with you some of the points that

4 Mr Millard makes at {E7/24/23}. He first makes the

5 point that the land at Tsvelodubovo is actually

6 currently characterised as agricultural land, doesn’t

7 he, where they have permitted use for a farm; can you

8 see that? Is that right?

9 A. Yes, I can see that, I know that he has such opinion.

10 Q. Is it right that the land at Tsvelodubovo is

11 characterised for agricultural use with a permitted use

12 for the organisation of a farm. Is that right? Is that

13 correct?

14 A. In my appendices, if you could open appendix 2(b)(ii),

15 can we open 2(b)(ii)?

16 Q. Can you answer the question first, and then we will go

17 to the appendix.

18 A. That appendices contain letters from Russian authorities

19 stating that all three pieces of land are land for

20 settlement.

21 Q. Could we have {E8/26.1/29.1} to see if that’s what you

22 are talking about. Is that what you are talking about?

23 A. Well, I didn’t see a translation made. I am familiar

24 with the Russian language.

25 Q. Would you go to the next page, could we have them both

1 Q. But it rather looks, doesn’t it, as if the Vyborg

2 district municipality administration think that they

3 have been corresponding with Ms Vinarskya, chairman of

4 the board of a dacha non-profit partnership. That’s the

5 way it looks from that letter, doesn’t it?

6 A. Well, they’re applying to Ms Vinarskya, which is

7 Solnechny Dom which is a gated community that occupied

8 some of these land plots, but the cadastral number for

9 that Vyborg region is included in this list of cadastral

10 numbers.

11 Q. But municipality administration are not writing, are

12 they, to Scandinavia Insurance to say: carry on and

13 develop it for profit, are they? It’s not addressed to

14 Scandinavia Insurance, is it?

15 A. That’s irrelevant. What’s important, that this piece of

16 land could be used for the building of some dachas,

17 houses, by the condominium association.

18 Q. And it’s right, isn’t it, Ms Simonova, that assuming the

19 land could be developed as you say, that the process of

20 getting the necessary permissions in place would take

21 some time, wouldn’t it?

22 A. Well, the most important permission already there. The

23 land could be used for that dachas. What they need now

24 is to hire the architect who will very quickly develop

25 the master plan and very quickly the reputable company,

205 207

1 on screen, please, at the same time {E8/26.1/30}.

2 A. Yes.

3 Q. Is that the letter in relation to Tsvelodubovo that you

4 are talking about?

5 A. Mm hmm. Mm hmm. Yes, I’m familiar with the document,

6 and this document says that the Russian authorities from

7 Vyborg — City of Vyborg, agreed that this land could be

8 used for dachas and non-commercial use, which is like in

9 the terms of western world is the gated community.

10 Q. But if you look at the letter, it looks as if the letter

11 has been — that what the authorities think that they

12 are possibly approving is use by a non-profit

13 association of citizens; isn’t that right? It talks

14 about a dacha non-profit partnership; can you see that?

15 It doesn’t look as if it is giving permission for

16 a commercial property developer to develop the land,

17 does it?

18 A. Yes, absolutely true, and I didn’t assume any commercial

19 use. I assumed that this will be used for homes, or you

20 could say dachas, you probably know that term, which is

21 popular in that part of the world, but what they mean is

22 nekommercheskia ob’yedineniya, we mean the condominium

23 association, and this is the same as everybody in

24 the world. A condominium association is the same as in

25 America or in Britain, they are all non-commercial.

1 the reputable developer with the sufficient licences

2 could do it very quickly. Time is money.

3 Q. But, Ms Simonova, this letter does not amount to

4 a planning permission, does it? It is simply saying

5 that the Vyborg district municipality administration has

6 no fundamental objection to the organisation of dacha

7 households on this plot, and they think they are writing

8 to a non-profit partnership. That’s not a planning

9 permission in the hands of a private property developer,

10 is it?

11 A. Well, this is the most difficult document to get.

12 Everything else, of course, when you are doing that in

13 America, you get permission in one hour. In Russia you

14 could get it very quickly, and I don’t see any problems

15 to get it.

16 MR JUSTICE HILDYARD: What I am finding difficult, and you

17 may be able to assist me, you can certainly tell me the

18 basis on which you proceeded, is whether this is in

19 effect provisional permission to what might, in England,

20 be called a social housing association, for houses which

21 are going to be built because of housing shortages but

22 which are not going to be very profitable centres,

23 that’s one possibility, and Mr Lord suggests to you that

24 the reference to dacha non-profit partnership would

25 suggest that.

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1 Or, as I understand it, your suggestion that,

2 actually, this is provisional permission for some rather

3 luxurious dachas which would all club together, under

4 the equivalent of a residents’ association, which might

5 itself not be profitable.

6 Now, can you tell me for sure which one it is, and

7 can you tell me for sure which one you assumed it to be

8 and why; do you see what I mean? It could be one or

9 other, as far as I can see — my Russian is imperfect,

10 even now.

11 A. Thank you, my Lord, for that question.

12 MR JUSTICE HILDYARD: Yes.

13 A. We came to the firm point that this piece of land will

14 become part of Vyborg settlement. Vyborg City is the

15 city where Gazprom has their new headquarters. If you

16 have heard about North Stream pipeline that goes on the

17 bottom of the Baltic sea from Russia to Germany, this is

18 the place where the pipeline started, and so over the

19 last years, the demand for land and developments and

20 houses was very high in that region. I was there, I’ve

21 seen that some houses already appearing next door to the

22 land that we are appraising, and it’s all in the photos

23 in my report and appendices. You can see that.

24 So we didn’t consider these super luxury houses. We

25 looked around and saw that the houses that are built

1 Now, can you explain why this plot wasn’t snapped up

2 by somebody if it had the sort of value that you are

3 suggesting? It’s still on the market, isn’t it, this

4 plot? Have you actually gone and checked out this

5 advertisement?

6 A. No, I look —

7 Q. Have you checked it out?

8 A. Yes, I did it. I did. I saw this announcement, but

9 I considered this — even though they say near

10 Tsvelodubovo, it’s not very close to Tsvelodubovo.

11 Tsvelodubovo is a very, very unique place, even

12 though we consider building there cheap enough housing,

13 like maybe $1,000 per square metre, it’s fewer dachas,

14 but the place it sits on, the bank of this beautiful,

15 beautiful lake, very picturesque, and that increases the

16 value.

17 Q. Sorry, Ms Simonova, take it that this is the same plot.

18 This is the plot you are valuing in Tsvelodubovo. You

19 can see that it was on the market still in August 2015,

20 {D174/2906/5.1}. Ms Simonova, I don’t want you to be

21 confused.

22 A. It says Vyborgsky District near the village of

23 Tsvelodubovo, but there is no address, and I don’t know

24 where it is.

25 Q. Well, Ms Simonova —

209 211

1 there sold for, like, 2,000 square metres, and so we

2 considered the same type of housing that people are

3 building there and selling there, and so the houses are

4 not for commercial use; they are residential, believe

5 me. So this is what the point we came from. This

6 permission is not permission to build the exact gated

7 community. I already said, it has to be developed by

8 the architect, via the reputable company, but as far as

9 I understand, the note from Mr Millard, he is saying

10 that the land is agricultural, and what I’m trying to

11 say is land already permitted to become the land of

12 settlement.

13 MR JUSTICE HILDYARD: Right.

14 MR LORD: Just one more question on this, Ms Simonova, just

15 in light of that.

16 If you could be shown {D173/2887/0.01}, please, this

17 is an extract from the Renord website which, amongst

18 other things, advertises the land plots at Seleznyovo,

19 which we will come to, probably tomorrow, I am afraid,

20 now, and Tsvelodubovo. You can see from this,

21 Ms Simonova — I know your English is good enough to

22 work with the English — you can see that the

23 Tsvelodubovo plot of 1.9 hectares was on the market

24 in March 2015 for RUB 2.5 million for the plot, and

25 that’s about US $37,000.

1 MR STROILOV: To speed things up, we accept these are the

2 very same two land plots, just to speed things up.

3 MR LORD: Thank you, Mr Stroilov.

4 MR JUSTICE HILDYARD: Thank you.

5 MR LORD: You see, Ms Simonova, I didn’t want you to go down

6 a wrong sort of avenue here. It has been accepted in

7 this case that the two website extracts I have shown you

8 are from the Renord website and, amongst other things,

9 this website is advertising for sale the Tsvelodubovo

10 site, 1.9 hectares, and the Seleznyovo site,

11 14.7 hectares, and the prices were RUB 2.5 million and

12 RUB 12 million respectively, and those were on the

13 market from March 2015.

14 I wondered if you had taken into account the fact

15 that these plots seem to have been available for sale

16 and not to have been bought.

17 A. Well, I didn’t see them on sale.

18 MR LORD: My Lord, I see the time. I am afraid I haven’t

19 finished, I am afraid.

20 A. Exactly this piece.

21 Housekeeping

22 MR LORD: I’m going to need probably about another 45

23 minutes, I am afraid. I had hoped it would take two

24 hours, but I’ve been a bit slower than I had hoped.

25 MR JUSTICE HILDYARD: Ms Simonova, I hope that is all right

210 212
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April 11, 2016 Day 36

1 for you to return tomorrow, and I am going to just

2 discuss with counsel what time we should start tomorrow.

3 Are you able to attend tomorrow?

4 A. What time?

5 MR JUSTICE HILDYARD: Well, we will discuss that.

6 We have a full day, I see, we have Mr Millard

7 tomorrow, I see Mr Milner in court. I imagine that he

8 is going to need …

9 MR STROILOV: I think I will be — perhaps if I could have a

10 minute. I think it’s subject to what Mr Milner can say

11 on the basis of his calculations. I think his

12 indication was that he assumes it’s going to be not much

13 longer than a normal court day with Mr Millard, rather

14 than a long day from —

15 MR JUSTICE HILDYARD: Anticipating his approved appearance

16 tomorrow, but not wishing to put him under any unseemly

17 pressure, Mr Milner, how long do you reckon you are

18 going to need?

19 MR MILNER: My Lord, I would think about a normal court day

20 would be fine, so in other words, 10.30 to 4.15. There

21 is no language issue, obviously, so it should be faster

22 than Ms Simonova.

23 MR JUSTICE HILDYARD: I’m grateful.

24 MR LORD: That’s very helpful, my Lord. That’s very helpful

25 of my learned friend.

1 re-examination, if any, of this witness, I leave to you

2 and Mr Milner.

3 So far as Ms Simonova is concerned, apologies, but

4 it will be at 9.30 am tomorrow for about one hour or so,

5 and you will then be free to go and we will then recover

6 the time that we had, with this exception: that we had

7 thought we would be having this afternoon for

8 housekeeping and at some point we will have to work out

9 when we do that; is that not right?

10 MR LORD: Yes, my Lord. It may be that we could — I don’t

11 know how — your Lordship has obviously had the notes

12 from both parties. I don’t know how much more

13 submission your Lordship requires from the parties.

14 MR JUSTICE HILDYARD: I will give you each an opportunity to

15 speak to them, but not for long, because they were full

16 and clear and I have had those.

17 Can I just ask you one question on that,

18 Mr Stroilov. Are you telling me that the root reality

19 is that you will not wish, unless the matter is

20 deferred, and because you are not able, to cross-examine

21 Mr Popov?

22 MR STROILOV: No, my Lord, I don’t think — I think, as

23 I indicated a few days ago, that’s no longer quite the

24 case because we have had a helpful indication from

25 Ms Simonova that she might, to some extent, try and

213

1 MR JUSTICE HILDYARD: So if we were to start early tomorrow,

2 with every regret in the world, we might be able to be

3 at the end of the day where we hoped to be?

4 MR STROILOV: My Lord, I think the only difficulty, that

5 I was hoping, really, to skip that day and to switch my

6 attention to Mrs Yatvetsky, and that obviously — well,

7 that may — I don’t think I have a lot of

8 re-examination. I think the best I can do, I will have

9 to discuss this with Mr Milner and see if there is

10 a long cross-examination or any cross-examination, and

11 then if there is I will try to persuade Mr Milner to do

12 it, and if not I will have to come in the morning.

13 I think that’s …

14 MR JUSTICE HILDYARD: Right. Well, I can give you time,

15 already I feel really quite an inordinate amount of time

16 in addition to the usual court days, but I can’t sort of

17 magic the end of a cross-examination, I am afraid. Do

18 you want to sit at 9.30 am tomorrow or not?

19 MR LORD: My Lord, yes, please, because it will give us

20 a chance of making sure Mr Milner has a clean start at

21 10.30 am.

22 MR JUSTICE HILDYARD: Right. Well, we will start at 9.30.

23 I do not know, because I haven’t seen how long Mr Milner

24 has been here today, but he certainly wasn’t here on

25 Friday, so far as I could tell. Who conducts the

215

1 assist us in preparing for that cross-examination. But

2 obviously, well, I would submit it still puts us at

3 a very unequal position. Basically, we need the expert

4 who has been chosen as Mr Popov’s opposite number to

5 help with preparing the cross-examination.

6 MR JUSTICE HILDYARD: I see. Ms Simonova would,

7 notwithstanding that she has already had to stay longer

8 than she envisaged, she would still be available.

9 MR STROILOV: My Lord, she may well have changed her mind

10 towards the end of this afternoon. Before she started

11 giving evidence and I could talk about the case, there

12 were optimistic indications, but it may be that having

13 got —

14 MR JUSTICE HILDYARD: I had better be informed as to that in

15 due course, but there we are.

16 MR LORD: So my Lord, yes, it may be that there are some

17 timetabling issues which we need to discuss as a

18 consequence, but I think Mr Stroilov did say that he

19 wanted to cross-examine Mr Popov, assuming that Mr Popov

20 was tendered by us to give his evidence.

21 MR JUSTICE HILDYARD: Yes. All right. We will have to

22 conjure up some time in which to do that, but it sounds

23 to me as if Tuesday the 12th, tomorrow, is going to be

24 quite a full day as it is and I am not sure that I will

25 have the puff to deal with it at the end of the day.

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April 11, 2016 Day 36

1 I should, perhaps, disclose that I would have wanted in 1 Mr Stroilov’s availability and so on, but I wanted to
2 any event to hear the cross-examination of Mr Millard 2 flag those up so Mr Stroilov could think about whether
3 before making a decision on it. 3 those would be dates that he might be able to do or
4 MR LORD: My Lord, I am not sure whether your Lordship has 4 whoever might be doing that.
5 thought about next week otherwise, by which I mean at 5 MR JUSTICE HILDYARD: I’m very grateful. I am worried about
6 the moment, at least provisionally, Mr Popov is down for 6 you in this sense, Mr Lord, that I know that your other
7 Tuesday, which is the last day of an interpreter, and 7 trial commences and the effect of all this will be to
8 the Russian law experts were down for Thursday and 8 push back the dates on which it is realistic to assume
9 Friday. I known your Lordship is sitting the following 9 that written submissions can be available and the
10 week. I don’t know whether there has been any thinking 10 subsequent oral exchange.
11 about whether, whatever the outcome of 11 MR LORD: I am grateful, my Lord. I am much obliged. If we
12 the Popov/Steadman decision — 12 could provisionally book these two slots, these two
13 MR JUSTICE HILDYARD: I have an unsettled feeling, that 13 weeks in May, and try to resolve the issue this week
14 I may take Mr Birt’s availability up to have 14 about these two expert evidence, then it will be very
15 Professor Maggs and Mr Gladyshev cross-examined later. 15 helpful to get through all the factual evidence by,
16 MR LORD: And I wonder with Mr Popov as well, whether he — 16 obviously, next Monday if we can, then leaving just the
17 MR JUSTICE HILDYARD: Sorry? 17 Popov/Steadman aspect and the Gladyshev/Maggs aspect,
18 MR LORD: Mr Popov is on Tuesday the 19th, and I don’t know 18 those would seem to be the only further bits of evidence
19 whether or not — it rather depends — it depends on 19 we have to plug in, so we would think there would be
20 your Lordship’s decision what, if anything, might need 20 a bit of definition coming in there.
21 to be either done ahead of time or factored into the 21 MR JUSTICE HILDYARD: Thank you for those indications.
22 reception of that bit of the evidence. 22 9.30 am tomorrow, then, the saga continues. Thank
23 MR JUSTICE HILDYARD: I think it is likely that we would 23 you.
24 have to move him off nearer the Russians than that, if 24 (5.02 pm)
25 you need a steer from me today. 25 (The court adjourned until 9.30 am on
217 219

1 MR LORD: That’s what we think, my Lord. We were just

2 thinking whether we should be getting, prudently, some

3 dates for those two experts in May, realistically.

4 MR JUSTICE HILDYARD: I think you need to think about that

5 with a view to some experts. I think Mr Birt was going

6 to think about when he might be able to do. I have

7 asked my clerk to tell me when I simply cannot do.

8 I cannot do 25, 26, 27, 28, 29 April, and I cannot do

9 Friday 6 May.

10 MR LORD: My Lord, could we be so bold as to provisionally

11 book your Lordship, obviously for this case, I mean,

12 for — I think 2 May is a bank holiday, so could we

13 provisionally book 3, 4 and 5 May as a slot for

14 an expert and could we provisionally book the following

15 week, so that is 9, 10, 11, 12, 13. I am not suggesting

16 we need all those times, but if, in fact, the

17 Popov/Steadman matter and the Maggs/Gladyshev evidence

18 goes back, as it looks like it might do, could we

19 provisionally try to tie down those two slots when we

20 could do —

21 MR JUSTICE HILDYARD: I will consult the powers that be

22 overnight and let you know, but it is helpful to me to

23 have those indications.

24 MR LORD: Thank you, my Lord. There is obviously issues

25 about who is doing the cross-examination and

218

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April 11, 2016 Day 36

1 INDEX
2 PAGE
3 MS GALIA KULLMANN, Interpreter ………………….. 1
4 (Sworn) ……………….
PROFESSOR SERGEI GURIEV (Affirmed) 1
5 Examination-in-chief by MR STROILOV ……….. 1
6 Cross-examination by MR LORD ……………… 3
7 Questions by MR JUSTICE HILDYARD …………. 81
8 MR MIKHAIL TURETSKY (Affirmed) …………………. 86
9 Examination-in-chief by MR LORD ………….. 87
10 Cross-examination by MR STROILOV …………. 88
11 Questions by MR JUSTICE HILDYARD ………… 144
12 Further cross-examination by MR STROILOV … 156
13 MS LUDMILA SIMONOVA (Continued) ……………….. 158
14 Cross-examination by MR LORD (Continued) …. 158
15 Housekeeping ………………………………… 212
16
17
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20

21

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23

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April 11, 2016 Day 36

A

AA2/8/73 (2) 65:3 91:7
AA2/8/74 (1) 91:20 AA2/8/78 (1) 65:12 AA2/8/80 (1) 65:18 AA2/8/87 (1) 67:15 ability (12) 21:25

63:13,17 83:10 85:11,13 103:8 112:4 150:13 152:15,20 174:19

able (27) 32:9 57:16 58:17 59:4 64:17 86:13 111:25 112:6 128:6 134:14 135:11 141:17 142:9 143:14 146:7 149:16 152:24 153:18 155:13 165:3,18 208:17 213:3 214:2 215:20 218:6 219:3

absence (4) 14:11,11

14:13 28:21 absolute (2) 106:8

153:5

absolutely (14) 13:10 23:3 37:14,20 74:2 106:5 147:13 161:20 177:20 186:18 196:7 201:17,24 206:18

absurd (3) 136:7,9 138:23

abundant (1) 14:6 academic (4) 3:22 8:2

12:23 22:18 accept (17) 80:6 90:3

96:8 101:13,15 102:6,9 108:21 109:1,18 131:23 135:24 139:25 142:10 149:25 187:13 212:1

acceptable (1) 72:8 accepted (2) 113:15

212:6 accepting (1) 166:7 access (4) 160:7

183:15,20 198:6 accommodate (3)
171:12 172:15,21 accompanied (1) 31:3 accompanying (1)

38:14 account (15) 75:3

118:4 153:13 161:1 161:16 162:18 163:15 165:1 167:22 169:9,11 176:3 185:19 198:9 212:14

accountancy (1) 153:6 accountant (1) 14:13 accounted (1) 152:5 accounting (9) 129:10

140:8 151:14 152:7 152:14,23 153:16 155:7,11

accounts (7) 78:23 144:18 152:1,2 154:1 178:8,9

accrue (5) 43:11 45:3 46:5 84:3,6

accruing (1) 55:4 accurate (1) 204:9 achievable (3) 170:24

170:25 186:16 advertises (1) 210:18 28:6,12 29:6,12,15 analysing (1) 101:9 161:12 170:5 162:12
achieve (3) 29:21 advertising (2) 4:8 29:17 30:2,4,6,10 analysis (21) 13:20 176:11 191:8,10 arrangements (34)
148:14 173:18 212:9 32:3,5,11 33:14 80:11 92:24 93:4 appraisals (1) 165:5 22:9 25:7,8 26:7
achieved (2) 172:6 advice (2) 37:18 34:7,11 35:18 36:8 96:17 120:24 appraise (6) 169:22 37:24 43:24,25
188:13 111:18 36:9 41:20 42:1,19 121:20,25 129:6 178:7,7,14 193:11 44:5 46:19 51:14
achieving (1) 68:15 advisable (1) 60:17 43:8,17 45:8,10,14 147:2 154:9 165:18 203:17 52:25 54:13,18
acquire (1) 83:9 adviser (1) 90:9 45:15 46:21 47:3 165:21 176:21 appraised (5) 168:3 64:9 76:20 84:18
acquired (4) 46:16 advisers (2) 89:17,18 51:9,10 52:4,11,12 177:3 178:15 169:15 170:3 84:23 85:15 105:20
150:3,4 192:25 advising (5) 88:14 52:16 53:25 62:9 182:23 191:2 202:3 182:19 193:5 106:4,11 108:19
acquisition (1) 191:20 89:1,5,11,23 70:13 77:20 79:18 202:10 203:6 appraising (3) 171:4 110:9 115:13
act (5) 3:7 29:4,10,23 advocacy (2) 131:17 80:12 82:18 84:1 analytical (1) 67:24 190:19 209:22 125:12 128:19
117:24 144:1 84:19 144:10,16 ancillary (1) 109:10 appreciate (2) 91:9 141:22 149:19
acted (1) 90:1 advocate (2) 143:18 147:19 148:4,15,20 anguish (1) 125:12 143:5 150:5 151:24,25
acting (12) 3:9,12 143:24 148:23,23 150:11 annex (2) 30:2,13 approach (25) 90:4 155:25 156:3,5
29:17,20 48:1,3 affect (3) 160:8 182:7 150:24 annexed (1) 30:11 120:11 122:10 arrive (1) 180:20
99:20,24 100:2,3 185:3 agreements (35) 9:24 announcement (1) 158:24 159:1 article (5) 71:10 72:1
119:1 129:11 affiliated (3) 8:9 73:3 24:24 25:10,16,22 211:8 162:22 166:3,5,7 72:4,22 73:10
action (2) 18:23 61:9 157:18 26:11,16,20 27:25 annulled (2) 52:4 54:1 179:17 182:19 artificial (1) 128:11
actions (2) 11:2 56:16 Affirmed (4) 1:13 28:2,15,22 33:18 annum (5) 170:21 189:22 192:18,23 as-developed (2)
active (2) 58:16 59:3 86:24 221:4,8 35:3,16 36:14,19 172:12 173:25 192:24 193:2,2 195:6,14
activists (2) 92:21 afraid (8) 82:13,14 36:20 37:13 38:14 174:15 175:2 195:11 196:7,8,11 ascribed (1) 178:3
94:12 123:12 210:19 38:16,22 39:10 answer (33) 39:5 204:2,18,25 205:1 asked (31) 18:10
activities (6) 11:19 212:18,19,23 40:6,7,10 42:4,5,6 58:12 67:5 78:2,15 approaches (1) 25:20 26:6,11,14
49:12,17,22 50:10 214:17 44:8 49:4 83:25 79:11 105:14 192:10 38:5 39:8 69:22
50:25 afternoon (2) 215:7 151:2,4 154:18 106:24 107:4 appropriate (6) 25:6 80:4 92:22 100:10
activity (3) 85:22 216:10 agricultural (4) 8:16 112:23 113:24 34:21 67:4 153:8 105:15 122:20
90:17 136:15 age (1) 149:15 205:6,11 210:10 115:14 122:1 164:25 204:24 127:17 128:16
actual (14) 7:11 18:22 agencies (1) 197:9 ahead (2) 13:14 125:22 128:20 appropriated (2) 129:4,13,16,17
19:8 26:11 38:17 agent (2) 89:5,11 217:21 129:14 130:10,19 45:12,13 130:13 156:17
57:21 98:8 114:19 agents (1) 65:21 aiming (1) 135:10 132:2,3 134:16 approvals (1) 14:11 159:18 160:22
135:20,21,25 Agentstvo (1) 41:18 Alexei (1) 72:3 140:22 141:14 approved (1) 213:15 162:18 164:15,18
148:25 151:1 aggregate (2) 104:1,2 Alfa (7) 93:20,21,23 162:24 163:5 approving (1) 206:12 165:17 166:16
203:22 aggregation (1) 113:11,25 116:15 164:20 165:20 April (3) 1:1 218:8 170:6 188:20 218:7
acute (2) 133:25 169:11 157:20 179:1,6 187:25 220:1 asking (19) 5:15 9:24
138:8 aggressive (5) 98:7 allegation (4) 80:19 200:16 202:7 Arbitrazh (4) 134:2,12 10:22 43:23 51:17
ad (1) 149:11 126:14,17 131:6,17 136:6 139:3,7 205:16 137:23 138:11 54:25 84:7 95:20
add (1) 189:15 aggressively (1) 126:7 allegations (14) 14:19 answering (5) 39:8 architect (2) 207:24 99:3 111:14 113:19
added (2) 172:20 ago (10) 94:4 115:16 61:2 67:2,14 75:13 129:25 132:11 210:8 116:4,7 158:21
199:13 126:2 142:16 97:6,9 98:3,11 179:5,11 area (17) 166:17 168:15 172:18
addenda (5) 38:16,22 161:23,24,24,25 123:7 132:24 answers (3) 127:18 167:7,8,9,9,14 182:3 184:24
39:3,10 99:6 176:9 215:23 135:19,23 139:1 128:20,25 174:15 193:21,22 194:25
addition (7) 11:16 agree (91) 13:17,19 alleged (4) 93:21 96:7 anti-corruption (12) 194:23 196:2,19,19 aspect (4) 60:2 160:7
12:19,25 90:8 14:18 18:8 19:5,9 98:16 113:13 65:14 67:22 91:15 196:21 197:25 219:17,17
159:25 181:4 19:11 30:9 31:17 allegedly (1) 156:22 92:21 94:8,12,25 198:1,23 aspects (3) 25:22 42:9
214:16 32:1 34:10 38:10 allocate (6) 170:5 95:2,4,6,7 113:10 areas (1) 196:18 149:18
additional (14) 11:3 40:5 42:1 43:2 49:6 180:9 181:14,15 anticipates (1) 123:15 argue (2) 135:2 140:3 assess (3) 13:3 95:5
13:3 31:16 43:21 51:8 54:13 56:10 198:21 199:2 Anticipating (1) argues (1) 127:6 186:13
44:13 45:17,21 56:11,12 57:5 allocated (2) 169:16 213:15 arguing (4) 120:22 assessing (1) 78:24
79:21 99:13 108:5 58:13 60:9 62:22 177:25 anybody (2) 5:19 122:5 126:15 assessment (7) 28:18
118:9 121:19 182:5 64:14 68:13 72:24 allocates (1) 179:23 185:11 156:15 28:19,21 37:5 90:1
199:13 73:22 74:21 90:1 allow (2) 152:16 apologies (3) 112:23 argument (3) 80:9 182:16 204:10
address (6) 42:11 90:13,16,19 91:3 165:25 125:1 215:3 135:7 148:18 assessments (1)
69:22 128:17 91:25 92:6,9,12 allowed (3) 151:2 apologise (2) 125:16 arguments (2) 130:5,6 165:13
130:14 193:7 95:10,13 96:6 198:5 199:17 154:14 arises (3) 10:13 81:20 asset (23) 11:18,19
211:23 104:7,9,23 105:23 alternative (3) 97:19 apparent (1) 155:20 82:22 15:11 22:13,15,22
addressed (1) 207:13 110:17 112:12 100:23 173:19 apparently (2) 9:1 arising (1) 156:8 22:23 23:6 24:4
adequately (1) 12:18 118:23 119:2,4 altogether (1) 195:2 26:17 Arkhangelsky (34) 44:25 52:16 102:21
adhere (1) 153:24 122:9 127:7 130:20 amateur (1) 96:10 appear (5) 33:6 82:14 3:13,25 4:1 5:6 112:4 117:6 132:17
adjourned (1) 219:25 131:13 136:20 Ameli (4) 5:23 6:10,11 86:12 95:8 154:15 6:12 7:19 29:13 154:25 155:23
Adjournment (1) 138:21,21 139:25 6:18 appearance (1) 31:11 32:5,9 48:2 163:8,9,15,16
125:9 140:11,15,19 142:2 amending (1) 43:16 213:15 51:10 52:5,14 57:7 189:21 202:4
adjudicated (2) 142:5 144:18,23 amendment (1) 44:20 appeared (1) 71:10 58:2,9,10 59:17 assets (107) 12:1,2
138:17,17 145:4,9 148:24 America (3) 197:7 appearing (1) 209:21 60:3,8 62:8 63:17 15:6,8,13,19,24,24
adjusted (1) 158:24 149:3,12,12 154:6 206:25 208:13 appears (6) 2:14 8:2 68:22 79:2 111:4 15:25 16:1,13,14
adjustment (1) 182:22 154:8,15,18,20 amount (11) 31:23 46:18 72:1 148:5 135:8,11 148:3,19 17:8,9,11,14,17
administration (3) 164:14,23 167:7,13 41:23 43:9 122:12 169:14 149:6,14 151:2,5 18:1,22 19:9 20:5,8
207:2,11 208:5 167:18 169:12,18 160:12 171:3,12 appendices (5) 173:1 Arkhangelsky’s (5) 20:16 21:10,24
admit (2) 116:13 170:3 176:19 174:18 200:6 208:3 173:11 205:14,18 6:24 32:7 38:1,6 23:11 28:19,22
136:3 180:25 184:10 214:15 209:23 68:20 34:22 37:5 40:15
adopted (2) 149:10 188:14,15 190:12 amounted (1) 20:16 appendix (2) 205:14 arm (1) 157:15 41:22 44:9,13,17
204:25 agreed (13) 3:7 29:10 Amurmetal (2) 114:6 205:17 arose (1) 14:1 45:17,21,25 46:5
advantage (3) 61:19 29:14 46:4 48:4 114:7 applicable (1) 70:5 arrangement (23) 46:12 47:4,9 50:24
155:12 169:11 51:7 69:15 70:1,7 analogues (1) 160:15 applied (1) 108:14 8:22 19:1,16 21:2 54:15,16,20,20,22
advantages (5) 23:4 79:21 112:13 analogy (1) 147:2 applies (2) 153:9 36:17 43:20 46:10 55:7 57:4 61:15
61:13,16 63:11 178:21 206:7 analyse (5) 47:7 204:22 61:20 63:11 78:13 63:18 68:14 69:1
187:20 agreement (69) 8:25 130:15,16,17 185:8 apply (1) 107:10 85:7 93:12 105:15 72:8 76:1,4,5,7
adversely (1) 125:1 10:5,12 25:1,12,13 analysed (7) 35:1,11 applying (1) 207:6 105:17 116:9 119:9 77:7 80:10 83:11
advertisement (1) 25:16 26:17 27:7 96:4,6 111:17,17 appointed (1) 135:11 120:1 141:7,9 83:20 84:24 107:17
211:5 27:12,17,23 28:2,5 195:21 appraisal (6) 161:10 142:5 143:12 145:9 111:16 116:8 117:4

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223

April 11, 2016 Day 36

117:21 118:14,14 124:6 127:23 132:5 132:8 137:2 140:8 155:18 157:1 162:25 166:12,20 166:22,24,25 168:1 168:2,3,15,19 169:6,11,14,15,17 170:4,5 178:14 180:1,6,11,12,14 180:16 181:5,21,22

assign (1) 181:20 assigned (1) 201:11 assignment (1) 120:3 assist (5) 89:18

122:14 155:13 208:17 216:1 assistance (1) 37:23 associated (2) 55:12

129:12 association (6) 206:13

206:23,24 207:17 208:20 209:4

assume (45) 9:15 22:11 35:24,25 37:2 38:8 40:17,19 40:19,21 41:5 51:12,13,15,17,17 51:18,20,20 52:9 52:10,11,24 53:2,3 53:8,10,11,16,24 54:7,10,11,25 59:21 60:6,21,21 60:25 79:1 191:6 198:17 204:22 206:18 219:8

assumed (3) 25:9

206:19 209:7 assumes (1) 213:12 assuming (5) 36:21

40:6 129:1 207:18 216:19

assumption (7) 51:25 60:14 170:19,21 180:14,17 198:21 assumptions (4) 170:7

171:8 176:8 196:12 assure (2) 68:7 74:16 asylum (1) 3:18 attach (2) 55:4 148:24 attacking (2) 143:16

143:17 attempt (1) 143:11 attempts (1) 23:5 attend (1) 213:3 attention (2) 28:11

214:6

attest (1) 118:11 attorney (1) 143:21 attributable (2)

167:10 178:1

attributed (2) 2:17

180:11

auction (23) 42:13,14 42:25 43:7 68:14 68:15 69:21 70:9 70:18,22,24 71:3 71:16,18,19,19 72:14,14,21 73:2,3 73:13,18

auctioned (1) 44:25 audience (1) 6:19 audit (1) 72:2 auditing (1) 73:1 August (2) 24:9

211:19

authoritative (4) 92:5

92:14,15 95:8

authorities (3) 205:18

206:6,11 authority (4) 128:7

132:24 133:3 134:23

authors (4) 92:18,19 95:8,17

Auto (3) 89:7,16,18 availability (2) 217:14

219:1 available (14) 7:13

23:11 37:17 74:19 104:5 124:23 148:3 151:23 170:22 171:3 202:17 212:15 216:8 219:9

avenue (1) 212:6 average (3) 165:19 195:24 197:13

avoid (8) 11:11 23:21 77:1,15 79:6 84:25 140:7 157:6

aware (18) 6:13 13:8 17:16,20 25:10,24 26:17 38:13,17 72:13 73:15 97:1 98:16 135:18 156:1 156:3,22 164:10

B

b (5) 50:18,18 100:17 100:19 113:2
back (47) 14:3,4 26:5 30:7 31:22 47:4 52:22 53:5 55:2,17 83:6,9,16,18 96:19 103:7,7 104:15 107:16,17 109:20 112:9 118:12,21 125:13 131:24 146:18 147:6,12 148:20 149:1,6 150:15,18 151:3,5 151:8 158:11,15 161:6 186:21 187:2 187:4 188:9 201:8 218:18 219:8

bad (12) 15:8,11,14 16:6 18:19,24 19:6 19:7 24:2 145:5 150:22 157:3

bailiffs (1) 65:22 balance (15) 77:16,22

77:25 78:11 80:13 84:25 151:18 152:12 153:8 154:1 154:5,17 155:18 178:10 192:13

balances (1) 118:4 Baltic (1) 209:17 bank (245) 6:13 8:7

8:13,17,19 10:25 15:1,6,12,20,21 16:4,6,9,12,15,15 16:24,25 17:1,2,6,8 17:19,20 18:2,3,9 19:2,3,4,6,7,17,19 19:20,24,24 20:1,2 20:10,20,24 21:12 21:13,21 23:1,2,10 23:11,16,18,21,23 23:24 24:2 28:13 28:15 32:4,6 34:20 35:14 39:11,16 40:10 42:5,19 43:2 43:6,8,11,21 44:4 44:22 45:4,9,9,12 45:15,19 46:1,5,6 46:14,24 47:1,5,11

47:12 48:2,19 97:21,25 98:6,8 131:18 134:17 69:8 88:18 89:23 177:4,7 182:7
49:23 50:8,14,15 99:14,20 100:3 144:21 158:10 89:25 90:2,8,8,14 188:19,21 189:6
52:8 58:4,13,14,15 107:9 109:11 176:16 189:2 95:23 96:24 97:5 196:13 198:2
58:15 59:2,3,18,23 110:15 115:24 216:14 97:25 98:6 99:21 199:11,17 200:12
60:10,12,25 61:10 117:20 118:5 beyond (1) 106:6 99:23 100:2,25 202:3,8,20
61:13,16,17,21,23 128:16 130:14 big (8) 4:21 173:5,21 117:17 127:23 calculations (2)
61:24,25,25 62:2,3 133:20 134:14 175:23 181:4,19 128:3 132:5,14,18 182:11 213:11
62:6,8,10,23 64:11 136:11,12,13,16,24 183:9 201:20 132:22,23 133:21 call (14) 1:4 10:4,8
68:23 69:12 70:14 137:5,12,14 138:10 bigger (1) 141:10 133:23,25 134:18 51:15,20 73:24
70:16,16 71:16,17 140:17,25 141:2 biggest (1) 150:2 138:10 139:8,9 86:22 101:20
71:18 72:2,7,14 142:15 143:6,6,7 billion (3) 107:18,21 142:20 109:20 114:16
73:3 74:1,3,4,9,14 152:14 154:22,23 108:11 bottom (7) 67:16 89:4 136:21 160:11
74:23 75:2,14 76:4 157:1 binding (3) 34:8,9 98:18 119:24 197:13,14
76:6,9,15 77:2,8,13 banks’ (1) 130:15 150:11 129:16 177:14 called (11) 15:9 25:24
77:16,19,24 78:1,4 bargain (1) 152:5 Birt (1) 218:5 209:17 26:1 27:16 39:2
78:12,16,19,20,22 barking (1) 64:7 Birt’s (1) 217:14 bought (6) 153:15 90:18 91:14 110:12
79:1,10,16,17 based (12) 7:7 74:4 bit (19) 31:4 32:18 190:21,23 191:17 159:9 188:15
80:13,22,25 81:4 85:8 160:19 171:3 58:21 64:24 88:10 203:22 212:16 208:20
82:25 83:5,15 174:1 180:14 95:15 111:8 122:12 box (1) 119:13 calling (1) 119:15
84:15,19,23 85:11 191:15,25 203:4 124:9 125:14 126:6 brains (1) 151:14 calls (5) 3:23 9:13,21
85:16,18 86:1,3 204:6,11 126:9,25 130:5 break (5) 86:16,20 10:1 117:18
89:6 93:20,21,23 basic (3) 50:17,19 158:7 188:20 123:13 178:16,19 campaigner (2) 95:6,7
94:21 98:4 100:6 149:21 212:24 217:22 briefly (1) 161:5 campaigners (4) 94:9
105:25 109:22 basically (3) 177:12 219:20 bring (2) 103:5 173:14 95:1,2,4
110:3,5 111:1,4,20 197:10 216:3 bits (1) 219:18 Britain (2) 197:7 canal (2) 197:19,24
112:4,6,19,25 basing (1) 25:2 black (1) 140:18 206:25 cancelled (1) 54:1
113:11,14,25 116:3 basis (20) 3:16,20 9:1 blacker (1) 140:24 broad (2) 90:15 cap (1) 189:12
116:15 118:2,25 9:2 70:10 72:20 blank (2) 24:17 30:24 130:10 capacity (18) 88:14
119:2 120:8,8 86:12 108:2 136:19 board (14) 8:8,11,12 broadly (1) 130:2 170:17,19,24,25
121:12 122:23 152:14 183:14 8:16 62:6 66:12,13 brought (2) 11:17 171:3,21 172:11,19
129:12 135:1,4,7 189:22 190:1 66:17 67:19 72:12 113:9 172:20 173:18,23
135:12 136:7,18 191:23 192:19 72:19 73:9,12 build (1) 210:6 173:25 174:3 175:3
137:8,9,9 138:1 194:22 201:2 207:4 building (8) 64:17,17 175:17,19,24
143:4 147:8 148:1 202:14 208:18 boat (1) 168:8 196:4 198:25 capital (5) 9:11 77:17
150:4,9,10,23 213:11 boats (2) 171:11,11 199:12 207:16 178:8 200:10,22
152:14,15,20 bearing (2) 146:11 bodies (1) 65:21 210:3 211:12 capitalise (1) 178:13
153:12,12,13,15,18 153:23 body (6) 35:14 65:13 buildings (7) 159:2,2 capitalised (1) 184:3
154:2,16,22 155:16 beautiful (4) 197:20 66:3,3 91:14 168:7,12,16 196:1 capitalism (1) 136:21
155:22 157:10,20 197:20 211:14,15 151:16 196:3 capture (1) 188:7
211:14 218:12 becoming (1) 77:2 bold (1) 218:10 built (10) 149:14 car (9) 89:12 171:9
bank’ (8) 15:7,9,11,14 beg (2) 116:1 120:19 bona (1) 117:2 173:5,16 192:9,9 172:22,23,24 173:9
18:19,20,22,24 beginning (2) 55:24 bond (2) 89:15,19 198:3,10 201:10 173:14 174:4
bank’s (35) 17:24 18:5 67:19 bonds (2) 89:12,19 208:21 209:25 175:22
20:16 23:12 25:2,9 behalf (5) 31:13 51:10 bono (2) 3:7,12 bullet (2) 88:20 89:4 career (1) 60:20
26:16 38:10 62:14 62:25 82:20 119:1 book (5) 152:20 burning (1) 117:23 careful (2) 129:3
63:19 68:6 74:5,10 behave (2) 60:19 218:11,13,14 business (21) 60:18 160:14
74:11,16,18 76:2,3 136:22 219:12 60:20 61:9 62:9 carefully (5) 35:1 37:1
76:11 77:16,21 behaved (2) 93:22 books (1) 72:8 70:22 90:17 149:14 38:9,11 124:5
78:11 80:18 85:8 97:21 border (3) 159:10,20 159:13 176:20 carried (8) 48:20
85:25 91:23 101:9 behaving (1) 132:15 159:21 178:2,4,6 179:20 158:23 165:17
112:1 118:7 126:8 behaviour (3) 60:17 bordering (1) 196:25 179:25 180:5,10,15 167:21 182:17
126:16 127:6 135:4 97:24 137:5 borders (1) 196:22 185:13 190:15,22 185:20 187:17
140:8 154:9 believe (7) 3:13 26:13 borrower (76) 17:6,7 190:22 202:2
bank/bad (3) 15:1 29:22 90:7 99:13 17:11,14 21:17,23 businesses (2) 72:17 carry (6) 29:24 150:19
16:11 18:9 149:16 210:4 21:25 22:5,14,16 177:1 165:4 201:5 203:19
bank/borrower (1) bell (1) 92:20 23:2,5,10,13,24 businessman (2) 207:12
126:8 belong (1) 168:10 36:16 37:9,10,17 149:16,25 carrying (4) 154:25
bank/good (2) 16:6 belonging (2) 46:13 43:9 44:22 60:10 buy (13) 83:18 103:6 190:13,15 196:12
19:6 103:25 60:21,22 61:5 62:3 103:7,9 147:6 cars (13) 166:1 168:8
banker (1) 140:17 benchmark (2) 113:12 62:19,22 63:1,13 148:10 149:6 170:20 171:7,12
bankers (8) 92:21 176:16 64:9 69:3,7,10 150:15,17 184:14 172:21 173:6,8,10
94:9 96:23 103:1,1 beneficial (2) 145:24 70:11,12 73:24 191:23 195:13 173:11 174:2,7,10
117:15,23 132:16 146:1 74:21 75:4 88:23 203:3 case (117) 7:3,5,11,17
banking (15) 3:8 7:8 benefit (6) 14:12 89:2,7,9,13 97:20 buyer (2) 152:3 8:22 11:24 15:9,17
15:2 37:6 93:6 46:15 83:21 143:2 98:4 100:7 101:2 187:22 15:18,18 16:14,16
94:13 100:5 103:12 181:24 182:4 108:4 111:1,25 buying (2) 160:8 16:24 17:10 18:10
103:16 105:5 berth (3) 166:2 112:11,12,13,14,25 195:15 18:24 19:15 23:17
109:15,22 139:22 183:16,24 113:15 114:7,10 26:7 35:3 39:15,22
140:10,20 berths (1) 184:15 115:6 117:3,25 C 43:14 54:2 56:16
bankrupt (5) 118:1,2 bespoke (1) 148:13 118:1 128:5 134:6 c (4) 42:10 44:14 45:2 57:8 61:4 63:12
136:12,13 137:1 best (14) 6:6 60:3 134:9,22,25 143:9 64:7 65:23 66:5,15
45:20
bankruptcies (2) 74:5,16,18 117:19 145:18,19,24 147:5 66:20,21,23 67:15
cadastral (2) 207:8,9
11:11 136:14 185:6,7 186:12 147:10,12,17 67:18 74:10,23,25
cake (1) 84:24
bankruptcy (1) 128:15 187:21,23 191:2 borrower’s (2) 70:17 75:23 77:14,20
calculate (1) 175:24
banks (53) 8:8 10:21 195:21 214:8 101:7 80:24 84:4 87:5,10
calculated (1) 189:4
11:1,13 12:17 13:1 betoken (1) 26:9 borrowers (44) 10:22 93:17,19,20 95:1
calculates (1) 202:14
74:20 77:18 91:1 better (14) 1:11 61:24 11:1,23 12:23 102:14 103:20
calculation (18) 170:8
92:10,23 93:2,14 62:1 91:7 102:18 13:12,18 14:9,19 105:7,16 106:6,13
170:12 176:5,6
94:10 95:23 97:5 116:2 125:14 14:23 56:12,16 106:17 107:2,9,18

Opus 2 International transcripts@opus2.com
Official Court Reporters +44 (0)20 3008 5900

224
April 11, 2016 Day 36

107:19 108:1,8,15 214:20 156:13 communities (2) concealment (2) 69:8 70:17 112:1 Continued (4) 158:13

108:17,20 110:9,18 change (7) 10:9 21:20 close (3) 186:9 195:19 192:7,9 128:11 131:10 consenting (1) 69:3 158:14 221:13,14
110:20 113:3,10,25 21:22 35:2,5 122:5 211:10 community (3) 206:9 concentrate (2) 95:16 consequence (3) continues (3) 120:25
114:6 115:2,3,5,22 122:9 closely (1) 6:24 207:7 210:7 95:17 83:19 84:22 216:18 121:1 219:22
116:11,14,14,17 changed (10) 15:25 club (1) 209:3 companies (46) 9:14 concept (4) 103:15,21 consequences (1) contract (31) 21:23
118:16,17 125:24 16:1 17:21 21:14 co-signatures (1) 11:7 20:22 21:3,11 107:10 127:2 118:6 23:16 28:9,24,24
127:3,7 129:4 32:11 121:5,7 14:12 32:7 39:11 40:21 conceptually (2) 53:15 conservative (1) 28:25 29:10,25
130:11,17 135:22 131:5 166:20 216:9 CoFrance (3) 4:7,8 5:5 41:10,12,17,19,24 105:25 177:11 30:10,11,12,13,14
135:25 139:3,5,17 changes (3) 10:20 collapsed (5) 11:15,21 44:14 48:7 49:9,13 concern (6) 76:10 consider (26) 25:18 30:19,22 31:8 34:3
141:8 142:9,11,11 43:17 80:12 12:4,6,13 49:18,22,25 50:14 79:7,11,23,25 44:20 54:4,25 34:23,24,25 35:11
143:13 144:1 changing (1) 85:23 collateral (55) 10:6,6 50:16,21 51:2 84:14 73:13 81:18 92:14 38:12 42:11,18
147:11 151:23 channel (2) 196:22,25 10:9,20 11:5,25 54:22 55:2 61:14 concerned (12) 16:19 92:15 94:2 105:13 43:16 44:19,20
152:13 153:9 characterised (3) 94:7 12:5 17:6 19:2,23 63:21 77:1,24 23:10 31:5 41:11 161:23 165:5 62:10 83:24 161:5
157:16,20,20 205:6,11 20:1,10,11,16,21 78:21 83:12 84:16 79:24 85:4 123:14 182:23 184:18 161:7
161:15 190:2 193:3 charge (4) 17:14 20:25 21:15,16,18 113:2,21,22 129:11 136:6 147:18 185:7,11 186:12,15 contracted (1) 140:16
196:25 202:9 212:7 54:20 134:18,19 21:19,22,22 22:1,5 135:13 136:22 163:13 204:23 187:7 194:25 contracts (13) 28:17
215:24 216:11 charges (6) 102:19,25 22:6,7,21,25 23:6 137:15 151:3 215:3 195:24 196:7 31:22 32:3,13
218:11 116:3,6 133:24 23:17,18,19,25 153:24 154:17,21 concerning (1) 28:9 197:22 200:16 35:11 36:11 48:21
cases (30) 66:14,18 135:16 42:12,22 43:6,21 173:2 201:22 concerns (6) 76:6 209:24 211:12 48:25 49:4 62:8
73:16,17 88:20 charging (1) 173:13 44:24 45:17,22 companies’ (3) 50:23 79:12 85:3 101:1,3 considerable (2) 75:6 81:25 82:4
96:4,6 97:9 98:1,9 chattels (1) 103:5 47:1,5,13 59:24,25 61:15 77:15 101:4 107:6 144:17 contradict (1) 121:25
98:11,13,16 99:23 cheap (1) 211:12 59:25 60:11 68:7 companies(the (1) conclude (1) 65:16 consideration (12) contradictions (1)
100:1,3 112:24 check (2) 175:9 69:13 70:14,15,16 48:6 concluded (2) 9:1 25:19 78:1 165:8 179:17
113:23 114:2,3,23 177:11 74:19 107:25 company (25) 15:11 145:14 169:13 178:8,10 contrary (2) 9:10
116:7,17,18,21 checked (2) 211:4,7 151:25 22:16 46:12,13,15 conclusion (11) 66:22 182:20 186:3 191:1 186:23
135:18 142:8,8 Chemicals (1) 188:2 collateralised (2) 46:17 55:4,8 82:17 93:5 112:5 199:22 200:8,23 contrast (3) 110:21
143:14 157:23 chief (1) 14:12 11:22 23:6 110:13,16 116:9,20 130:3,4,5 175:11 considered (13) 31:5 179:23 183:3
cash (10) 140:18 choose (1) 6:6 collaterals (4) 11:15 117:4 132:8 136:24 185:4 195:22 203:8 35:4 39:14,17,18 control (24) 17:8,11
179:21,25 180:5 chosen (1) 216:4 11:21 12:13 13:2 137:2,2,3 145:8 conclusions (4) 92:16 87:24 100:9 145:5 17:25 20:8,11
184:3 186:2 188:22 chronology (1) 66:8 colleagues (3) 111:17 150:6 157:17 121:20 126:9,11 161:25 176:5 21:14,17,18,20,24
188:25 189:15 circumstances (10) 112:5 158:8 176:22 191:4 concomitant (1) 196:11 210:2 211:9 22:4 23:13,19
205:1 23:13 58:3 74:24 collection (1) 88:17 207:25 210:8 155:18 considers (2) 170:11 46:11 68:7 76:7
casinos (1) 185:10 99:9,16 103:22 column (4) 119:21,22 comparable (32) concurrent (1) 134:6 175:15 81:19 83:9,10
cast (2) 24:11 28:7 110:7 118:19 148:2 119:23 190:1 158:24 159:1 condition (2) 49:22 consists (2) 88:14 135:8,13 145:7
categories (2) 24:19 184:2 columns (1) 119:22 160:17,24 161:19 188:12 89:22 155:20 166:19
62:5 cite (5) 113:6,17,23 combination (3) 161:25 162:19,21 conditional (2) 32:6 consolidate (6) 77:15 controlled (1) 54:21
cause (2) 73:12 98:19 114:2 131:9 113:20,22 116:8 163:1,9 165:24 150:25 77:22 78:8 154:11 controls (1) 81:19
cell (1) 120:12 cited (1) 72:24 combined (1) 159:10 182:19 192:19,24 conditions (2) 148:9,9 154:17,23 conventional (7)
cells (1) 119:18 cites (2) 131:8,8 come (23) 5:4 16:19 193:2,5,10,10,15 condominium (3) consolidating (1) 105:16 107:1
cent (36) 71:4 73:7 citizens (1) 206:13 22:8,9 26:7 32:14 194:1,7,10,17 206:22,24 207:17 140:7 108:19 126:23,25
167:8,9,11 171:21 city (3) 206:7 209:14 52:22 62:14 86:13 195:4,17 197:12 conduct (1) 165:21 consolidation (8) 85:1 127:2 141:8
171:22,22,22 172:6 209:15 117:24 132:16 198:24 203:5,16,25 conducted (2) 79:3,12 129:15 151:13 conventionally (1)
172:9,16,19,20 claim (8) 6:6,25 128:6 146:7 147:12 204:6,25 conducts (1) 214:25 155:3,3,5,9 157:6 130:11
174:2,5 175:3,25 132:24 133:3,23 148:13,21 155:15 comparables (21) conference (10) 4:8 constitute (1) 85:13 conversation (1)
176:1,16,17,25 134:6,18 155:21 183:8 184:1 160:15,18,19 162:2 4:15,19 5:5,7,10,14 construction (2) 116:19
181:20,21,25 182:6 claimants’ (1) 2:10 185:12 187:5 181:3 182:21,21 6:16,17,23 199:10,12 convert (1) 168:18
182:22 189:5 198:7 claiming (1) 134:9 210:19 214:12 193:4,8,13,14,20 conferences (1) 5:20 consult (1) 218:21 conveyance (1)
198:16 199:20,21 claims (4) 7:22 56:13 comes (9) 20:5 46:14 193:24 194:2,4,6,9 confidential (5) 67:7 consulting (1) 73:1 111:23
200:17,19 201:14 56:17 128:4 47:3 55:17 103:3,4 195:7 196:1 197:4 109:11,16,18,25 contain (1) 205:18 conviction (1) 140:24
201:15 clarification (2) 51:24 112:17 128:19 204:12 confidentiality (1) container (12) 173:22 cooperation (1)
central (10) 8:14 138:4 183:7 compare (1) 122:18 109:24 173:24 175:10 112:11
77:16 86:1 120:8 clarified (1) 163:23 comfortable (2) 91:12 compared (6) 100:2 confirm (22) 2:16,20 182:8,8 183:14,19 copies (1) 148:3
122:23 152:14,15 clarify (12) 16:17 98:22 102:19 118:24 24:24 33:9,19 39:6 184:12,18 185:5,13 copy (5) 27:20 55:18
153:12,12,18 29:18 41:4 46:20 coming (4) 14:19 142:7,8 203:21 39:13 56:9 70:24 186:1 57:18,23 58:21
centre (1) 135:22 47:15 50:4 52:1 86:12 171:11 comparison (2) 181:6 71:2 87:9,14,16 containers (5) 174:6 corporate (3) 14:11
centres (1) 208:22 60:7,16 77:19 219:20 204:2 88:3,6 92:1 131:22 174:10,18,21 14:11 90:19
certain (17) 8:11 10:7 159:5 188:17 commences (1) 219:7 compelling (1) 110:1 137:17 177:2 180:8 175:10 corporates (1) 140:25
14:23 27:11 72:23 classic (1) 107:23 comment (10) 34:5,10 compensation (3) 189:25 194:8 contains (1) 148:22 correct (25) 2:4 3:11
85:7 101:25 111:22 clause (13) 49:6,15 42:9 96:9 119:25 5:15,16,19 confirmation (1) 64:7 contemplate (1) 46:3 16:22 19:18 20:19
112:12,13 113:2 50:3,5,7,20 51:11 120:3 121:6,17 complain (1) 70:11 confirmed (1) 167:17 contemporaneous (2) 23:9 31:20 35:13
140:24 146:17,22 82:12,23 83:4,13 122:21 123:8 complained (1) 98:6 conflict (1) 74:13 24:14 108:2 36:21 40:6,7 48:15
148:9,9 166:20 85:22 146:5 comments (3) 170:15 complete (3) 48:18 confuse (3) 175:19 content (4) 25:10 50:12 63:22 66:7
certainly (27) 27:15 clauses (1) 144:17 179:16 204:17 52:7 82:24 190:18 192:6 26:17 124:18,25 80:11 84:19 87:11
71:1 97:22 98:5,9 clean (1) 214:20 commercial (10) completely (6) 8:24 confused (4) 58:21 contents (2) 2:16 88:13 120:5 125:25
98:15 100:12 clear (16) 8:24 14:22 49:12,17,21 74:1 17:13 74:6 93:9,12 189:9 203:15 67:21 131:1 157:25 179:8
101:12 104:9 110:5 16:3 17:25 22:4 96:25 134:2 149:18 176:20 211:21 context (18) 8:21 9:5 205:13
110:19 112:22 73:15 74:6 93:19 206:16,18 210:4 completeness (2) confusing (5) 40:12 56:15 102:21 corrected (2) 81:22
113:25 116:15 144:13 150:5 152:1 commitments (2) 86:7 109:19 128:24 44:6 95:3 179:3 103:18 105:24 100:15
117:11,14,25 159:11,14 161:20 125:13 complex (3) 168:2 192:5 108:17,22 109:7 correctly (2) 25:13
118:11,18 121:19 189:18 215:16 Committee (3) 65:14 169:9 181:5 confusion (1) 47:3 110:14 130:23 82:7
126:1 130:6 139:5 clearly (5) 76:12 67:22 91:15 complicated (2) 32:2 conjure (1) 216:22 136:16 137:22 corresponding (1)
151:6,17 208:17 146:24 149:15 common (5) 14:22 66:22 connected (2) 76:9 145:4 155:17 157:2 207:3
214:24 157:5 194:24 107:1 126:23,25 complication (1) 77:24 157:6,8 corrupt (1) 65:20
chain (1) 175:22 clerk (1) 218:7 127:2 144:17 connection (2) 28:12 contexts (2) 103:13 corruption (5) 66:6,9
chairman (1) 207:3 client (2) 109:23,24 commonly (4) 105:16 complied (3) 70:9 199:15 156:5 73:14,16,17
challenge (1) 14:7 clients (10) 11:12 18:2 108:19 130:12 100:19,20 conscious (2) 64:25 continental (2) 6:7 cost (16) 178:12 181:1
challenged (1) 119:6 97:20 98:8 111:14 141:8 comply (2) 70:4 129:3 75:5 195:21 199:10,12
challenging (1) 14:10 114:22 118:3 communicate (2) 146:19 consensus (1) 100:5 continue (4) 53:19,24 199:20,21 200:2,6
chance (2) 109:12 143:23 155:22 66:16 72:25 comprises (1) 50:5 consent (4) 68:25 54:3 60:19 200:10,10,17,19,22

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225

April 11, 2016 Day 36

200:23,24 costs (3) 199:13,18

200:9 counsel (1) 213:2 counter (1) 148:6

counterparty (3) 37:9 61:18,18

country (5) 63:3,9 75:5 134:3 159:22

couple (5) 64:19 81:15 124:1 184:6 198:14

course (14) 22:6 60:17 70:15 76:23 160:11 180:15 181:18 184:17 185:9 195:9,23 197:5 208:12 216:15

court (33) 2:22 3:23 3:23 7:5,11,12,14 30:22 54:2 59:24 60:6 65:21 68:2 69:11 112:14,15 122:15 127:10 130:2 133:6 134:2 134:2,5,7,12 137:23 138:11 143:21 213:7,13,19 214:16 219:25

courts (3) 58:16 59:4 65:21

covenant (1) 10:11 covenants (1) 9:23 cover (1) 124:4 covered (2) 13:13

66:21 crash (1) 9:18
create (3) 60:11 79:21 195:23

created (4) 28:9 79:19 163:11 186:2

creation (1) 128:11 creature (1) 157:12 credit (1) 73:24 creditor (2) 62:20

68:6

creditors (1) 89:15 crime (1) 136:1 criminal (3) 61:11

63:2 90:17 crisis (5) 14:7 99:15

115:10 142:17 149:8

criticise (1) 26:6 criticising (1) 103:25 criticism (3) 108:21

109:2 204:22 criticisms (1) 101:25 crooks (1) 139:9 cross-check (1) 165:4 cross-default (1) 83:7 cross-examination (…

3:2 88:8 156:10 158:14 214:10,10 214:17 216:1,5 217:2 218:25 221:6 221:10,12,14

cross-examine (2)

215:20 216:19

cross-examined (1)

217:15 crucial (1) 42:1 crudely (1) 139:10 cubic (2) 200:10,22 curious (2) 154:8

155:14 curiously (1) 154:22 current (2) 48:22

118:4 currently (1) 205:6 customs (2) 159:12

168:20

CV (1) 8:2

D

D10/217.87/1 (1)

70:19

D106/1530/1 (2) 27:1 32:17

D106/1530/11 (1)

30:1

D106/1530/13 (1)

30:3

D106/1530/14 (1)

30:3

D106/1530/4 (2) 27:6 32:12

D106/1530/7 (3)

27:19 29:2 82:11

D106/1530/9 (1)

27:21

D106/1531/1 (1)

32:25

D106/1531/3 (1) 33:6

D106/1531/5 (1)

33:12

D106/1531/9 (1)

33:17

D107/1537/1 (2)

47:19,21

D107/1537/2 (2)

48:16 81:17

D173/2887/0.01 (1)

210:16

D174/2906/5.1 (1)

211:20

D192/2921/0.01 (1)

71:8

D192/2921/0.02 (1)

72:9

D192/2921/4 (1) 71:9 D192/2921/5 (1) 72:9 dacha (4) 206:14

207:4 208:6,24 dachas (6) 206:8,20

207:16,23 209:3 211:13

daily (1) 136:19 dare (1) 125:22 data (11) 104:5

160:19,20 173:2 195:25 201:24,25 202:1,5,5 203:25 date (28) 30:16,17,19 30:24 31:2,9,9,10

31:16 32:13 33:8,8 36:21 40:6 82:1,14 138:4,4 146:17 161:5,6,9,20,21 170:4,5 171:7 183:1

dated (5) 24:15 31:17 33:6 34:2 82:6

dates (5) 31:4 112:8 218:3 219:3,8

day (20) 32:22 102:22 103:8 107:22 124:23 127:4 139:12,13 141:19 162:6 165:7 213:6 213:13,14,19 214:3 214:5 216:24,25 217:7

day-to-day (1) 136:17 Day15/59:22 (1) 57:8 Day15/61:1 (1) 68:19

Day15/61:18-19 (1) defence (1) 151:11 191:15 192:21 90:11 122:13
68:21 defendants (1) 65:3 194:10 207:19 129:19
Day35/149:1 (2) defer (1) 112:16 210:7 discussion (5) 66:17
164:5,9 deferred (1) 215:20 developer (6) 190:17 92:12 93:20 140:9
Day35/150:1 (1) define (1) 151:16 195:12 201:22 154:19
164:10 defined (2) 10:5 206:16 208:1,9 dishonest (5) 56:16
Day35/150:19-25 (1) 152:25 developing (1) 200:5 56:18 100:7 110:25
164:12 definitely (2) 162:9 development (6) 132:23
Day35/180:1 (2) 172:15 190:25 191:25 dishonestly (4) 99:24
162:16 164:17 definition (7) 69:12 195:14 201:1,3,5 100:2,3 133:4
Day35/181:14 (1) 136:7 192:12,14 developments (1) disincentive (1) 81:13
164:18 197:9,10 219:20 209:19 dismiss (1) 101:4
Day35/181:22 (1) definitions (2) 192:5 differed (1) 158:8 dispense (1) 148:19
163:20 192:15 difference (10) 16:11 disposed (1) 62:2
Day35/182:6 (1) defraud (4) 62:20 16:16 94:14 104:16 disposition (1) 44:24
163:21 80:23 81:1,5 106:15 118:6 dispute (1) 128:6
days (6) 79:13 139:14 defrauded (1) 57:4 150:21 176:1,7 disputes (6) 88:16
158:17 174:22 defrauding (1) 76:2 195:16 95:23 96:21,22
214:16 215:23 degree (2) 90:7 differences (1) 143:5 97:1,5
DCF (14) 166:4,8 169:20 different (37) 27:24 disputing (2) 105:8
170:8,11 176:5 delinquent (1) 103:7 44:22 49:14 51:22 134:1
177:4 180:10 182:7 deliver (1) 107:25 51:22,25 54:21 disrespect (1) 94:14
188:19 196:13 delivered (1) 107:22 58:22 61:8,11 63:5 disrespectful (1)
199:10 202:3,8 delivers (2) 107:15,15 74:9,15,25 95:12 53:23
204:18 demand (3) 151:3,6 96:12 102:4 103:22 dissimilar (1) 103:20
deadline (1) 81:11 209:19 105:22 109:1 dissipate (3) 23:11
deal (12) 28:22 34:25 demands (1) 10:1 110:22 130:1,2 63:6 110:24
35:7 36:6 51:7 demonstrate (1) 131:8 141:12 143:6 dissipating (1) 23:5
73:21 79:22 162:25 105:19 150:10 157:12,17 dissipation (5) 57:4
165:8,10 186:4 demonstrates (1) 157:19 159:4 185:3 127:23 132:5,8,17
216:25 138:7 185:9,9 192:15,16 distinction (2) 96:15
dealing (2) 60:22 deny (1) 133:3 197:5 190:9
149:9 denying (2) 133:5 difficult (13) 13:3 distinguished (1)
dealings (1) 41:15 193:22 15:22 60:24 90:24 178:1
deals (4) 13:11 80:3 department (1) 72:2 94:17 107:5 137:14 distressed (1) 188:12
93:11 114:20 depend (2) 54:20 138:14 142:11 distribution (2) 42:2
dealt (4) 25:17 38:16 74:22 149:18 160:5 43:18
164:3,4 depends (7) 22:7,22 208:11,16 district (4) 203:11
debate (1) 56:2 47:11 174:19,21 difficulties (4) 108:4 207:2 208:5 211:22
debt (12) 17:15 21:23 217:19,19 110:12,14,16 ditch (2) 196:24 197:1
22:2 23:16,24 depict (1) 151:18 difficulty (3) 40:19 diverged (1) 74:12
43:15,16 45:8 61:8 depositors (1) 76:3 41:7 214:4 divide (2) 181:11
69:10 83:15 114:11 depress (1) 188:13 digesting (1) 122:15 202:24
debtors (2) 11:14 13:8 describe (8) 15:5 16:7 diligently (1) 139:13 dividends (1) 41:13
debtors’ (1) 11:18 23:20 45:2 102:13 direct (3) 48:24 86:2 dividing (1) 189:11
debts (4) 11:1,13 160:13 164:24 97:3 division (1) 15:1
13:19 14:21 203:9 direction (3) 53:3,4 document (29) 27:4
deceive (2) 75:14,17 described (3) 16:12 124:3 27:10 28:8 33:10
December (12) 9:2 34:4 114:8 director (2) 66:25 33:11 34:12 35:21
24:15 33:22 34:3 describes (4) 14:2 72:2 39:14 40:8 63:8
36:3 47:20 58:3 19:9 127:24 128:18 directors (2) 135:14 65:3,6,7,11,11,13
91:18 145:13,22 describing (1) 189:2 135:15 67:25 81:24 133:6
161:10 177:17 description (2) 8:3 disagree (20) 17:4 133:7 142:22
decently (1) 57:16 47:23 26:13 49:7 77:6 147:16 148:8,14,22
deception (1) 80:20 deserves (2) 3:13,16 80:7,8,11 96:14 150:8 206:5,6
decide (4) 74:3 90:12 design (4) 199:14,20 110:19 120:24 208:11
116:4 142:19 200:24 201:11 121:9 123:2 133:8 document’ (1) 34:8
decided (5) 5:9 25:20 designed (5) 23:1 172:14 174:18 documentary (1)
68:2 72:6 181:17 37:1 38:9,11 77:17 176:20 182:18 39:21
decision (4) 74:1 desk (1) 101:17 201:8 203:2 205:2 documents (39) 7:1,2
217:3,12,20 despite (1) 134:9 disagreement (1) 24:6,9,10,14,22
decisions (4) 8:7,9,12 destination (1) 196:14 96:24 25:24 28:17,23
8:18 destruction (2) 128:10 discharged (1) 72:7 31:2,6,16 32:24
decisive (1) 35:23 131:10 disclose (3) 5:18 33:1 38:24 39:3,9
declares (1) 60:10 detail (4) 92:8 95:24 110:6 217:1 56:13,17 61:2,9,10
decline (1) 9:12 125:21 127:21 disclosing (1) 109:25 63:3,25 85:8,20
decrease (1) 22:21 details (3) 8:25 13:10 discount (4) 189:14 115:14 120:9 128:4
default (16) 23:2,18 84:17 201:13,17,23 128:8,11 131:10
46:11,24 47:16 determine (2) 144:4 discounted (6) 188:22 140:8 143:24
61:17 68:6 69:18 200:4 188:25 189:3,8,15 146:15,24 157:16
69:25 70:13 73:24 determined (1) 165:7 205:1 167:2
73:24 74:21 102:23 deterring (1) 137:11 discuss (7) 2:19 41:16 doing (14) 81:2
114:10 117:18 develop (9) 6:8 41:19 213:2,5 107:14 118:11
defaulted (3) 18:20 190:24 191:18 214:9 216:17 121:16 122:14
19:8 145:18 192:25 195:16 discussed (7) 65:9 135:9 161:10,11
defaulting (3) 60:9 200:24 206:16 66:15 79:5 80:9 178:5 188:8 193:12
61:8 142:20 207:13,24 94:22 100:21 150:2 208:12 218:25
defaults (3) 143:9 developed (8) 99:14 discusses (1) 41:15 219:4
147:5,17 130:24 149:8 discussing (4) 42:20 Dom (1) 207:7

Domodoran (2)

201:18,19

door (3) 160:1 197:17 209:21

doubting (1) 72:21 downside (1) 137:5 dozens (7) 95:25 96:1 96:4,6,20 97:2

99:22

Dr (15) 6:12,24 7:19 48:2 57:7 58:2,9,10 59:17 60:3,8 68:20 68:22 148:3,19

draft (1) 123:1 drafted (2) 146:15,16 draw (1) 96:15

drive (3) 166:1 168:8 173:12

drives (1) 121:14 driving (2) 130:3

131:12 drop (1) 10:15 drove (1) 173:8

due (4) 147:5 170:22 192:5 216:15

duties (1) 100:15 duty (2) 3:22 127:10 dwellings (1) 199:16

E

E2/10.1/1 (1) 2:1 E2/10.1/3 (1) 101:21 E2/10.1/5 (1) 109:20 E2/10.1/8 (1) 2:5 E2/10/1 (2) 1:19 3:4 E2/10/10 (1) 75:20 E2/10/14 (1) 76:18 E2/10/15 (1) 139:18 E2/10/16 (2) 33:24

42:7

E2/10/17 (3) 34:12 55:18,23

E2/10/18 (1) 55:13 E2/10/21 (1) 73:20 E2/10/22 (1) 68:5 E2/10/23 (1) 68:10 E2/10/28 (1) 1:23 E2/10/30 (1) 8:1 E2/10/39 (1) 24:8 E2/10/7 (1) 9:4 E2/10/8 (1) 14:25 E2/10/9 (2) 75:9,12 E2/11/1 (2) 2:8 87:19 E2/11/4 (1) 119:16 E2/11/7 (1) 69:15 E2/11/8 (2) 2:13

87:22

E2/8/1 (1) 87:4 E2/8/10 (1) 101:19 E2/8/12 (1) 131:25 E2/8/14 (1) 110:11 E2/8/15 (2) 109:4

114:18

E2/8/16 (1) 114:25 E2/8/17 (1) 97:16 E2/8/18 (1) 98:24 E2/8/2 (2) 88:11 89:3 E2/8/29 (1) 87:7 E2/8/60.1 (1) 133:18 E2/8/61 (1) 133:12 E2/9/1 (1) 87:12 E2/9/2 (1) 18:6 E2/9/3 (1) 120:19 E2/9/4 (1) 80:2 E2/9/5 (4) 13:24

39:20 62:16 120:17

E2/9/6 (1) 120:16

E2/9/8 (1) 87:14

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E5 (1) 171:25 97:10 98:12 144:24 Equity (1) 155:3 36:23
E5/18/16 (2) 170:10 217:21 equivalent (3) 32:25 example (19) 13:13
180:18 elaborate (3) 95:15 33:12 209:4 24:1 47:19 52:8
E5/18/17 (1) 170:16 102:11 148:21 especially (4) 14:8 66:4,5 76:2 82:10
E5/18/18 (1) 172:7 elaborated (1) 163:19 86:6,12 160:15 93:11,13 105:3
E5/18/19 (1) 174:13 element (4) 114:9 essentially (15) 89:16 142:1,2 176:6
E5/18/20 (3) 174:25 181:17 185:17 114:20 119:25 186:8 191:13
175:15 176:14 188:7 121:14 128:20 192:17 198:23
E5/18/21 (1) 176:15 elements (1) 130:25 129:14 131:14 202:6
E5/18/22 (1) 179:15 elite (1) 193:23 132:13 134:4 137:7 examples (18) 93:9,10
E6/21/10 (1) 178:15 else’s (1) 162:8 139:6 145:19 147:3 99:22 103:19 106:9
E6/23/19 (1) 204:2 emanating (1) 15:2 157:15,23 113:7,17 114:5,20
E6/23/31 (1) 182:13 eminently (1) 117:1 essentials (1) 178:2 114:21 127:25
E6/26/48 (1) 204:15 emphasis (1) 108:10 established (3) 69:11 131:8,19 141:18,21
E7/24/10 (1) 200:25 empire (1) 149:14 70:12,25 141:24 157:9,11
E7/24/102 (1) 190:5 employed (1) 109:11 estate (28) 11:22,25 exceed (1) 175:2
E7/24/12 (1) 199:19 employees (1) 118:7 12:3,7,9,10 55:25 Excellent (1) 133:18
E7/24/23 (2) 204:16 enable (1) 149:5 57:3 63:5 69:17,24 exception (2) 99:20
205:4 enabled (2) 84:23 70:2 110:22,24 215:6
E7/24/43 (1) 182:25 153:13 111:21,22,24 113:1 excerpt (1) 133:14
E7/24/7 (2) 202:12 enclosed (1) 24:10 113:20 114:1 115:4 excess (3) 43:7,9
204:7 encountered (1) 116:19 117:3 132:7 45:12
E7/24/8 (2) 196:11 142:18 178:2 180:13 excessive (1) 172:9
203:10 endeavours (1) 188:11 197:9 excessively (1) 12:24
E7/24/9 (1) 199:9 116:24 estimate (3) 112:18 exchange (3) 103:18
E8/26.1/29.1 (1) ended (1) 90:9 172:8,10 110:7 219:10
205:21 enforce (8) 111:1,4,11 estimates (1) 170:24 exchanged (1) 41:22
E8/26.1/30 (1) 206:1 112:7,19,20 133:21 estimation (1) 171:2 exclude (1) 141:1
E8/26/10 (1) 189:21 134:15 Europe (3) 6:7 8:14 executed (1) 30:24
E8/26/100 (1) 181:10 enforced (1) 111:8 197:8 execution (1) 30:18
E8/26/24 (1) 194:5 enforcement (19) evaluate (1) 159:1 executives (6) 17:24
E8/26/27 (2) 200:11 8:18 18:23 56:23 event (3) 72:13,16 18:5 25:3,9 26:16
201:9 58:17 59:5 63:20 217:2 76:12
E8/26/80 (1) 166:11 65:21 68:4 69:17 events (3) 115:9 exempt (1) 157:14
E8/26/81 (1) 166:10 69:23 70:2,4 138:9 145:21 exercise (3) 32:9
E8/26/95 (3) 171:17 102:23 112:14,17 eventual (1) 148:25 145:7 150:15
171:25 173:23 134:1,8 135:9,16 eventually (3) 13:13 exercised (1) 46:11
E8/26/98 (2) 177:16 enforcing (6) 30:21 22:1 135:12 exhibit (3) 133:10
181:7 60:12 62:19 110:13 everybody (2) 196:5 137:20,21
E8/26/99 (2) 177:17 110:16 134:5 206:23 exhibited (2) 65:4
181:9 engage (2) 63:13 everyday (3) 49:12,17 157:22
E8/27/40 (1) 188:18 137:14 49:21 exhibits (1) 157:25
earlier (7) 14:4 123:19 engaged (1) 140:18 evidence (40) 2:22 7:4 exist (4) 170:4 184:25
161:18 163:9,16,24 England (2) 151:15 7:10,11,16,21 9:4 195:9,20
165:2 208:19 36:12 55:12 57:7,9 existence (2) 91:21
early (3) 112:9 117:15 English (9) 27:19 33:5 58:2,9 64:3 65:8 184:21
214:1 71:15 91:9,12 68:20 93:14 99:17 existing (2) 45:22,25
easier (1) 178:24 133:15 179:6 129:20 144:1 expect (5) 42:11
easily (2) 79:15 137:4 210:21,22 147:24 149:12 44:15 97:24 100:8
eastern (1) 8:14 enormous (1) 106:5 161:2,14 162:17 116:14
easy (3) 122:18 137:8 ensure (1) 190:14 163:6 164:2,8 expectation (1) 3:9
193:24 ensuring (1) 129:11 165:11 184:23 expected (1) 43:2
eat (1) 84:24 entered (4) 8:23 186:17 203:21 experience (11) 9:10
EBITDA (4) 176:15,25 27:25 49:5 77:20 204:15 216:11,20 88:12 89:22 90:5
178:12,13 entering (2) 37:23 217:22 218:17 94:10,13 95:22
EBITDAs (1) 184:3 77:13 219:14,15,18 97:22 99:18 143:17
economic (3) 5:2 9:18 entertain (2) 121:16 exact (6) 13:22 47:23 155:12
152:10 145:6 95:20 102:20 experienced (3)
economist (1) 8:3 enthusiastic (1) 141:4 163:17 210:6 135:17 143:2
economy (1) 91:24 entire (4) 178:10 exactly (38) 7:14 149:25
edited (1) 94:15 179:23 192:20 10:18 13:4 20:4,4 expert (43) 2:10 3:8
editors (2) 91:19 94:2 193:23 23:19 47:6,10,10 3:22 22:12 25:5,19
effect (9) 10:21 25:7 entirely (1) 71:3 63:22 76:13,16 26:6,18 32:24
51:14 83:4 177:7 entities (2) 14:9 78:10 79:18,20 38:10 64:3 76:15
181:23 182:3 167:19 83:23 96:16 100:22 87:10,15 88:4 92:2
208:19 219:7 entitled (4) 50:15 103:16 105:10 95:11 96:11,14
effectively (6) 28:9 85:15 147:9 186:12 107:8,24 108:24 100:9,10,11,16,16
33:19 75:17 89:1 entity (3) 22:14,24 121:14 131:4 101:2,3,7,16 113:6
126:3 190:15 155:24 134:17 135:10,14 120:6 125:19 126:2
effects (2) 83:7 84:8 envisage (2) 124:15 138:3,9,12,21 126:21 131:18
efficient (7) 103:2 146:9 148:7,11 184:14 132:10 139:19
174:23 183:23 envisaged (2) 49:6 193:24 201:7 143:18 144:2
185:1 186:2 188:1 216:8 212:20 149:13 155:7 216:3
188:2 envisaging (1) 43:10 exaggerate (1) 108:18 218:14 219:14
efforts (1) 29:24 episodes (1) 13:16 exaggerated (1) expertise (3) 8:4
eight (1) 142:16 equally (1) 34:21 104:23 94:16 143:17
either (12) 18:20 19:8 equating (1) 191:8 Examination-in-chie… experts (13) 70:1 94:3
23:25 37:23 41:7 equipment (2) 174:20 1:17 87:2 221:5,9 100:4 101:8,13,15
44:1 52:13 58:13 174:23 examined (2) 35:22 122:15,22 127:9

158:6 217:8 218:3 218:5

expiration (1) 32:11 explain (24) 45:7

89:13 92:13,17 97:22 100:24 105:9 111:8,10 116:24,25 120:24 130:23 132:12 143:12 168:1 177:20 189:22 191:12,12 196:15,19 201:19 211:1

explained (17) 58:12 59:9 108:22 115:15 146:8,10 153:5 163:12 164:10 165:25 178:6 181:1 182:18,22 189:4,6 204:11

explaining (4) 12:19 70:21 108:25 110:14

explains (1) 18:8 exposed (1) 12:17 expressed (3) 97:20 101:1 157:5 expressing (1) 97:15

extend (2) 73:23 74:21

extensions (1) 38:13 extensively (1) 111:18 extent (3) 64:2 67:6

215:25 external (2) 85:17

86:1

extra (5) 42:23,24 115:11,12 125:14

extract (4) 4:7 24:8 196:23 210:17 extracts (1) 212:7 extreme (1) 142:19 extremely (6) 3:19

62:7 103:15 141:15 152:8 160:14

eye (2) 24:11 28:7

F

face (4) 31:14,23 32:1 43:19
faced (4) 9:9 130:14 132:1 142:18

facie (2) 34:23 138:22 facility (3) 183:14,20

184:12

facing (2) 13:15 61:17 fact (44) 16:24 22:13 27:24 35:24 36:2

36:12 37:9,11 46:9 49:3,4,5 70:9 73:2 76:4 79:8,10 85:5,6 92:25 95:10 106:7 107:10 111:13 125:15 132:10 143:12,21 144:10 145:1 149:10 150:3 151:24 156:21 157:4 164:3 169:14 173:16 180:14 191:22 197:23,24 212:14 218:16

factor (3) 9:8 35:23 137:11

factored (1) 217:21 factors (2) 9:12 75:2 factory (2) 89:12

160:1

facts (7) 93:3,12,25

101:10 108:14 139:5,15

factual (3) 117:9 171:9 219:15
factually (1) 92:24 failed (1) 187:3 failure (1) 151:8 faint (1) 32:19

fair (21) 3:24 8:3 9:17 12:5 14:21 88:16 89:20,21,23 94:3 94:10 101:4 116:12 120:4 122:12 126:5 130:21 132:25 136:8 144:22 200:14

fairly (1) 101:11

faith (6) 29:5,11,15,20 29:23 60:19

falls (1) 150:6 false (4) 132:24

135:19,23 139:1 familiar (9) 9:5 67:15

80:24 94:18 125:19 129:2 139:14 205:23 206:5

family (1) 118:2 fanciful (1) 183:25 far (17) 16:19 79:23

90:10 98:8 136:6 147:18 152:18 154:9 156:24 163:13 164:13 194:3 204:23 209:9 210:8 214:25 215:3

far-reaching (1) 136:2 farm (3) 191:24 205:7

205:12 farmer (1) 191:24 fast (1) 174:21 faster (1) 213:21

fault (4) 82:11 155:13 164:5,6

favour (11) 15:19 16:15,25 17:1,18 20:24 21:11,12 23:1 61:15 125:3

FBK (2) 72:2,25 feature (7) 36:15 37:3

67:14,14 118:23 119:2 124:6
features (7) 72:23 105:7 127:3 141:13 142:3,6,10

featuring (1) 72:13 feel (4) 10:19 162:11 162:13 214:15

feeling (2) 10:10 217:13

feet (1) 117:23 fell (1) 9:8

felt (10) 10:2 121:16 122:24 123:1 132:17 134:3,14 135:7 138:11 155:13

fence (4) 160:3 168:5 168:5 200:3

fences (1) 168:7 Fertilisers (1) 188:2 fewer (1) 211:13 fides (1) 117:2 field (1) 100:9 figurative (1) 60:5 figure (20) 17:13

95:20 96:2 103:25 104:6,7,12,14,17 104:22 105:12,13 105:17,18,19,21

108:11,18 174:17 183:7

figures (4) 102:3 105:2,3 173:22

file (2) 6:6 150:16 filed (1) 151:7 files (2) 7:13 134:6 final (5) 56:25 81:11

81:11 145:15,19 finally (1) 129:21 finance (2) 12:23

143:22 financial (17) 12:2

14:7 32:6 40:18 41:7,22 51:2 77:22 78:25 85:8 89:18 99:14 102:5 103:11 103:17 108:4 145:23

financially (2) 12:17 41:12

financing (6) 58:18 59:6 106:4 144:14 145:1,7

find (23) 34:20,21 36:14 37:8 62:12 82:9 85:23 87:12 91:10 96:4,17 114:3 118:8 133:11 142:9,21 155:14 165:3 178:24 193:20,24 195:7 199:24

finding (1) 208:16 finds (1) 53:10

fine (2) 127:5 213:20 finish (6) 123:20

124:1,17,20 137:8 175:17

finished (1) 212:19 Finland (3) 173:6,9,12 fire (3) 9:13 11:7,12 firm (4) 72:25 73:1

143:3 209:13 firmament (1) 124:7 firms (2) 18:1 94:23 first (71) 1:7,19 2:2,9 3:6 17:16 19:10

24:7 27:4 28:2 32:5 32:13 33:4 34:24 41:12 42:8,16,17 42:17 53:3,4 55:13 71:16,18 72:14,18 75:6,8,12 80:16 83:13 87:5,10 88:10 102:2 103:2 103:11 104:5 109:8 122:6 123:1 126:20 127:16,22 130:8,13 134:24 137:1 142:17 143:21 159:7 161:3 164:7 172:16,17,18 173:4 173:17 174:1 176:23 181:21 187:20 193:5,25 196:13 197:2 198:20,23 201:9 205:4,16

first-hand (1) 116:13 firstly (2) 102:2

130:14

fits (2) 129:4 130:17 five (15) 75:9 92:18 113:17 141:18,24

142:8 143:14 157:9 157:23 161:24 172:17,18 181:21 194:12 201:9

Opus 2 International transcripts@opus2.com
Official Court Reporters +44 (0)20 3008 5900

227

April 11, 2016 Day 36

five-fold (1) 9:12 fixed (1) 111:16 flag (1) 219:2

flow (8) 131:13 180:5 184:3 186:2 188:22 189:1,15 205:1

flows (3) 9:11 179:21 179:25

fluent (1) 91:9 follow (7) 50:13 70:3

72:6 127:9 130:12 130:18,25

follow-ups (1) 184:6 followed (2) 6:24 7:4 following (9) 14:3

40:5 48:7 65:18 68:6 69:18,25 217:9 218:14

follows (2) 48:4 194:15

foot (1) 13:25 force (1) 64:9

forced (4) 38:1 188:11 188:12,16

forcing (1) 65:15 forecast (4) 172:16

174:4 175:18,23 foreclose (1) 112:7 foremost (1) 75:7 foresaw (2) 45:8

70:13 foresee (1) 46:7 foresees (1) 21:23 forfeited (1) 54:9 forge (2) 63:8,25

forged (11) 56:13,18 61:3,10 63:3 64:10 64:11 128:4 134:23 134:25 135:3

forgeries (6) 135:19 135:20,21 136:3,4 136:5

forgery (14) 14:15,15 56:19 64:12 132:24 135:20,23,24,25 136:7 138:16 139:1 139:3,17

forges (1) 64:16 forget (3) 19:10 147:25 149:8

forging (2) 61:9 63:23 form (8) 16:20 30:4

33:18 95:24 115:18 126:16 151:19,20

formal (9) 27:17 28:23 29:9 30:6,10 34:24 40:8 155:25 156:5

formally (2) 10:4,11 formed (1) 38:14 forms (1) 109:10 formulate (1) 79:15 forward (1) 184:1 found (4) 114:14

195:25 201:18,21 founded (1) 71:20 four (12) 75:9 88:22

113:6 114:3 122:15 130:13,20 131:15 141:17 142:7,8 201:21

fourth (1) 89:4 France (1) 3:19 fraud (4) 64:13 75:22

80:17 137:14 fraudulent (2) 97:24

111:23

free (3) 162:11,13 215:5

Frenkel (1) 140:17

Friday (14) 160:16 161:2 162:6,12,17 165:17 183:22 186:5 188:21 189:4 190:6 214:25 217:9 218:9

friend (3) 2:25 123:14 213:25

friend’s (1) 123:18 friendly (1) 61:17 friends (1) 155:19 friendship (1) 62:5 frivolous (1) 112:16 front (4) 57:20 87:4

87:20 131:22 frustrate (1) 63:19 fulfil (1) 50:14 fulfilled (1) 49:23 fulfilment (3) 48:18

52:7 82:24 fulfils (1) 50:8

full (10) 2:18 21:18 98:18 99:3,3 145:25 171:7 213:6 215:15 216:24

fully (9) 15:10 23:15 38:10 64:14 137:20 138:14 140:4 153:3 184:16

function (3) 18:19 19:6 179:9 functioning (1) 15:7 functions (1) 19:7

fund (1) 71:21 fundamental (1)
208:6 funds (1) 74:19

further (27) 6:1 11:12 37:11,12 40:20 89:14 94:1 108:23 109:5 114:24 128:2 128:5,9,14,18,21 128:23,25 129:6,7 156:10 161:11 164:2 177:22 198:8 219:18 221:12

future (1) 184:18

G

GALIA (2) 1:10 221:3 gambling (7) 11:16
12:20,22 13:6,8,15 60:23

gap (1) 10:14 gated (5) 192:7,9

206:9 207:7 210:6 gathering (1) 159:18 Gauci (2) 6:3,11 Gavrilov (1) 31:10 Gazprom (1) 209:15

Gazprombank (2)

157:16,18

Gelios (1) 41:17 general (13) 19:13

92:8 110:14 129:5 130:18,19 135:14 135:15 136:17 139:21 140:9 141:10 156:25

generally (6) 19:12 95:20 114:4 120:5 129:2 140:19

generate (6) 40:15 41:22 42:21 84:6 180:10,15

generated (2) 40:24 41:9

generates (2) 172:11

180:16 47:10 53:19,20,20
generating (2) 43:20 57:15 60:24 67:6
168:2 67:11 76:17 78:17
gentlemen (1) 6:14 79:15 83:6,9
genuine (1) 68:15 106:12,23 117:13
genuinely (3) 36:5,16 117:18 127:20
36:16 142:13,14 146:10
Germany (1) 209:17 157:21 163:22
getting (6) 37:18 166:3 170:7 186:20
94:17 117:9 154:15 186:24 187:4
207:20 218:2 189:19,23,25 201:4
give (26) 4:16 13:10 204:13,16,18,21
86:7 88:4 92:24 205:3 208:21,22
100:10 103:18,25 212:22 213:1,8,12
104:12,13,25 105:3 213:18 216:23
108:18 114:19 218:5
125:13 129:14 good (38) 1:3 15:1,7
141:12 165:18 16:11,20 18:8,20
166:17 170:1 177:6 18:22 29:4,11,15
191:13 214:14,19 29:19,23 60:19
215:14 216:20 69:3 73:4 86:16
given (21) 6:3 7:4,10 101:16 111:13,19
7:11,17,19,21 13:7 112:1 125:7 129:10
20:6 93:9 94:20 158:11 160:17
105:12 108:10,23 162:15,21 163:11
113:15 124:4 173:3 178:16 193:2
131:18 171:19 193:13,13,14,22
172:10 176:18 197:2 203:25
200:16 210:21
gives (8) 62:17 65:23 government (1)
105:1,21 127:24 157:15
129:14 134:11 government-issued …
185:5 144:25
giving (9) 24:4 25:6 granted (2) 19:3,23
37:12 58:2 99:17 grappling (1) 144:11
105:3 161:2 206:15 grateful (4) 125:16
216:11 213:23 219:5,11
glad (1) 86:13 great (2) 92:8 127:21
Gladyshev (1) 217:15 green (2) 196:19
Gladyshev/Maggs (1) 197:25
219:17 grey (1) 140:23
glance (1) 109:12 grossly (1) 75:17
glass (2) 162:7,8 ground (2) 137:25
Global (3) 144:16 188:9
176:22,22 Grounds (1) 14:10
go (86) 4:13 5:8,9,10 group (9) 48:1,7 49:23
9:4 13:14 14:2,4,25 50:8 52:7 54:7
24:7 27:18 30:1 84:16 150:14
32:17,25 33:12 155:24
34:15 42:7 47:11 group’s (3) 48:18
48:16 53:24 55:11 82:24 83:5
55:17 59:24 64:1 guess (1) 142:16
64:25 65:12,18 guidance (4) 127:9
68:10 71:25 75:8 134:3,4 137:22
75:20 76:18 81:16 guidances (1) 134:13
88:10 91:6 93:18 guise (1) 145:8
96:19 97:16 101:18 Guriev (74) 1:5,13,18
102:22 105:6 109:3 1:19 3:3 4:6 6:10
110:10 114:15,17 16:18 20:15 21:20
119:16 120:19 22:8,19 25:19,23
127:12,14 128:2,4 27:2,22 30:9 34:17
128:9,25 131:24 38:25 39:5,25 43:1
133:6,13 137:19 45:16 47:18,22
142:1 159:15,18 51:5 52:15 53:19
160:2 161:6 170:16 53:22 55:14,19,23
171:4,24 172:7 57:11,17 60:9
173:23 174:12,25 64:25 65:2 66:11
177:15 178:15,25 67:8,20 71:9 72:20
180:6 181:7,9 73:22 75:12 77:12
187:2 188:9 194:5 78:19 79:7 80:16
197:6 200:11,25 81:8,10 86:11
201:8 205:16,25 87:19,21 101:21,24
212:5 215:5 104:4 105:1,21
goes (10) 52:21 55:6 106:25 107:6
71:24 107:17 118:1 109:20 114:17
118:2 196:15,19 116:23 118:22
209:16 218:18 119:8,15 122:11
going (51) 4:8,16 123:2 139:19 140:1
22:10 28:8 31:22 140:11 141:12

156:15 221:4

Guriev’s (10) 102:8 103:24 104:13 119:19,23 120:22 121:18,25 123:6 140:19

GVA (1) 175:21

H

half (6) 82:4 115:15 123:25 124:13 126:2 139:12

halfway (2) 9:7 18:17 Hampshire (1) 182:23 hand (3) 15:23,24

35:20 handle (1) 172:3

handling (4) 170:17 172:22 173:22,24 hands (9) 15:25 16:2

20:12 123:18 124:8 125:2 150:6 190:16 208:9

happen (12) 10:23,24 11:6 22:20 53:18 64:19 91:1,4 95:12 136:3,10 137:16

happened (21) 10:17 13:20 14:22 15:19 16:8 45:9 54:14 56:19 66:9 71:24 71:24 103:20 107:18 108:1,8 113:4 120:8 127:2 137:17 138:10 151:9

happening (3) 133:20

141:19,20 happens (4) 41:13

47:16 104:19 127:4 happy (4) 51:23

102:10 163:24 195:17

hard (13) 55:18 57:18 57:22 58:21 60:19 95:14 96:1 98:5 100:10 117:12 118:7 140:22 149:24

harder (2) 13:2 63:6 harsh (1) 98:7 hazard (1) 12:22 hazy (1) 151:15 headed (1) 55:24 heading (3) 99:5

170:16,18 headphones (3) 179:2

179:5,12 headquarters (1)

209:15 hear (1) 217:2 heard (5) 113:24

119:12 133:22 156:13 209:16 hearing (1) 126:1 hearings (1) 88:2

Heathrow (1) 186:9 heavily (1) 145:5 hectare (7) 165:19

180:22 202:16,18 202:21,22 203:3

hectares (10) 167:15 174:16 195:1,5 198:15 202:24,25 210:23 212:10,11

held (5) 79:8 84:25,25 152:21 191:4

help (10) 55:19 82:3

106:12,23 111:10 134:14 140:2 147:25 189:10 216:5

helped (2) 6:11,14 helpful (8) 53:20 105:18 141:13

213:24,24 215:24 218:22 219:15

helpfully (2) 57:21 113:9

helping (1) 173:9 helps (1) 105:14 high (3) 172:23

174:23 209:20 high-profile (1) 95:6 higher (1) 180:23 highest (7) 134:2

185:6,7,8 187:21 187:23 191:1

highlight (1) 25:22 highly (5) 62:25 75:1 117:16 141:9

170:22

HILDYARD (126) 1:3,6 1:9,11,14 46:9,23 46:25 47:8,14 64:2 64:6,22 81:9,13,14 81:15,22 82:2,8,10 82:17,20 83:3,17 83:19 84:8,11,22 85:10 86:5,11,16 86:25 96:20 97:7 102:12 106:2,18,22 107:3 123:21 124:10,13,18,22,25 125:7,11 137:19 138:6,14,24 141:3 141:21 144:8,9,24 145:4,12 146:3,5 147:19,22,24 148:11 149:7 150:2 150:19 151:10,22 152:11 153:3,22 154:7,12,24 155:6 155:10,25 156:2,4 156:7 157:3 158:3 158:5,7,11,15 162:11 163:19,25 178:16 179:14 186:4,7,20 187:1 187:15 188:3,5 203:9 208:16 209:12 210:13 212:4,25 213:5,15 213:23 214:1,14,22 215:14 216:6,14,21 217:13,17,23 218:4 218:21 219:5,21 221:7,11

hire (2) 90:12 207:24 hired (3) 89:16,17,17 hiring (1) 90:9 historical (1) 9:5 historically (1) 116:2 history (1) 145:11 hmm (25) 18:16 19:13

24:18,21 30:5,8 33:21 34:18 37:7 47:25 56:24 59:19 68:11 69:19 81:21 82:16 92:1 99:10 111:12 117:8 127:19 139:24 174:11 206:5,5

hoc (1) 149:11 hold (6) 18:20 19:8

61:21 78:4 120:11 134:8

holders (4) 15:25 84:4 89:15,19
holding (3) 17:25 62:1 157:17

holds (3) 52:10 78:7 84:5

holiday (1) 218:12 homes (3) 193:23 197:7 206:19

honest (2) 56:18

100:6

honestly (2) 31:2

99:20

Honour (1) 141:6 hope (7) 1:14 64:19

64:21 71:11 86:25 194:24 212:25

hoped (4) 158:17 212:23,24 214:3

hopefully (1) 125:5 hoping (1) 214:5 host (1) 4:9 hostile (1) 61:18 Hotel (1) 4:12 hour (4) 115:16

124:14 208:13 215:4

hours (4) 123:25 124:1,21 212:24

house (13) 68:14 70:18,22,25 71:3 71:19 72:14,21 73:2,3,13,18 194:23

households (1) 208:7 housekeeping (4)

123:16 212:21 215:8 221:15

houses (20) 191:16,18 194:11,22 197:12 198:1,3,4,10,25 199:13 201:10 203:24 207:17 208:20 209:20,21 209:24,25 210:3

housing (7) 192:22,22 194:7 208:20,21 210:2 211:12

huge (4) 144:19 173:7 185:2 203:15

Hundreds (1) 95:25 hurdles (1) 112:8 hypothetical (1) 43:5

I

I18&19/18/230.67 (1)

4:5

I18&19/18/230.68 (1)

4:13

idea (4) 102:24 132:16 134:11 203:11

identifies (2) 127:23

196:16

identify (3) 141:17

142:3 143:14 identifying (2) 66:4

187:12

IFRS (7) 151:17 153:4 153:9,11,11,25 154:1

ignore (1) 140:6 ii (2) 18:21 24:17

ill-conceived (1) 93:10 illegible (5) 32:18,21 32:22,24 36:21

illiquid (1) 11:13 illustrate (1) 131:19

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228

April 11, 2016 Day 36

images (1) 197:5 218:23 219:21 119:17,24 140:9
imagine (4) 59:21 indictment (2) 61:11 143:19 146:25
64:15 203:14 213:7 63:2 160:8,9
immediate (2) 118:2 individual (8) 38:15 interesting (4) 106:23
154:2 39:11 94:24 190:7 113:12 131:21
immediately (3) 93:1 194:10 197:7 165:6
123:13 173:17 199:12,16 Interestingly (1) 41:13
impact (1) 137:20 industrial (5) 12:1 interests (2) 74:5,11
impartial (2) 101:2 165:19,21 180:24 interfere (3) 49:11,16
144:2 181:2 50:15
imperfect (1) 209:9 industry (6) 103:16 interference (3) 49:21
implemented (2) 19:1 105:5 109:22 50:10 85:22
19:16 139:22 140:10,21 international (6)
implicated (1) 91:2 inexpert (1) 95:11 160:13,25 161:15
implies (1) 43:13 inflation (1) 128:12 162:24 163:7,14
imply (1) 50:18 influenced (3) 90:3,5 interpret (1) 146:23
importance (2) 35:10 130:7 interpretation (2)
187:11 informal (5) 27:9 94:10 147:1
important (15) 30:14 28:14 40:11 81:18 interpreted (1) 83:14
42:3 61:7 108:12 85:7 interpreter (4) 1:7,10
124:2 161:22 171:8 informality (1) 142:5 217:7 221:3
181:17 185:17 information (10) 67:7 interrupted (1)
190:12 197:11,23 68:1 96:13 116:10 187:15
202:11 207:15,22 116:13 157:23 interrupting (1)
impose (1) 29:15 165:6 197:3 201:20 175:16
impossible (3) 17:13 201:22 intervene (2) 50:16
47:6 160:5 informed (1) 216:14 138:12
imprecise (1) 18:4 infrastructure (7) intervened (1) 16:1
impressive (1) 143:11 198:6 199:4,15,18 intriguingly (1) 24:17
improper (9) 55:3 199:21 200:6,17 inure (2) 83:21,22
75:17 77:9,13 initial (10) 65:9 73:6 inures (1) 46:15
78:23 119:10 120:1 146:1 150:9,12,14 invalid (3) 134:7,10
122:2 136:9 150:23,25 151:6,7 195:11
improperly (2) 93:22 initially (1) 46:21 invest (3) 168:18,22
97:21 inordinate (1) 214:15 191:4
inaccurate (1) 93:17 inputs (1) 177:8 invested (1) 178:7
inaudible (2) 18:2 insert (1) 172:4 investigate (1) 66:17
178:10 inside (2) 183:24 investigated (1) 73:16
incentive (3) 12:21 200:10 investigation (1)
21:25 22:23 insisted (1) 114:11 25:15
incentives (1) 11:17 insolvent (5) 40:20,21 investment (19) 190:3
include (7) 12:3 27:12 41:7,8,12 190:4,10,18,19,20
28:17 39:10 43:17 inspected (1) 85:20 190:23 191:3,6,8
45:10 92:3 inspecting (2) 159:16 191:10,10,13,16
included (4) 11:22 168:19 192:1,12,13,14
14:10 77:21 207:9 instance (2) 114:7 200:5
includes (1) 67:6 131:9 investor (6) 184:14
including (7) 24:14 instances (4) 90:10 190:17 191:17,22
45:11 63:9 75:14 112:10,12 136:10 192:11 195:12
94:9 192:8 195:25 instruction (1) 24:9 invited (3) 5:6,9,19
income (10) 40:16,24 instructions (7) invites (1) 5:10
41:9 42:2 44:9 84:3 106:25 121:8,10 involve (2) 141:22
84:5 168:2 180:15 122:21,24 123:9 144:24
180:16 126:22 involved (24) 5:16,16
inconceivable (1) instrument (1) 148:25 8:6,11,18 36:2,13
147:8 insufficient (1) 182:24 37:6,12 72:17 73:3
inconsistencies (1) Insurance (24) 17:17 94:21 96:21 97:9
27:12 20:17 33:1 40:18 98:2,11,13 99:23
inconsistent (1) 112:9 41:6 44:2,10 45:18 106:2,18 110:8
incorporate (1) 126:3 46:1 48:10,23 50:3 116:18 135:2
increase (3) 11:18 50:11 52:13 53:1 137:13
22:20 23:14 54:9,16 77:23 78:5 involvement (3) 91:23
increased (1) 174:5 78:21 166:25 97:3 143:2
increases (1) 211:15 167:11 207:12,14 involves (1) 65:20
indebtedness (2) 83:8 Insurances (1) 78:9 involving (1) 27:8
146:6 integrity (2) 72:21 irregularities (2) 27:11
independent (6) 143:16 141:1
28:19,21 37:4 77:7 intended (2) 34:7 irrelevant (11) 110:18
101:2 201:25 75:14 122:2,3 132:9
independently (3) intention (4) 62:20,23 133:2 165:5 183:23
168:9 169:1,5 80:18,25 194:19 197:15,25
INDEX (1) 221:1 intentional (1) 79:19 207:15
indexes (1) 175:22 intentionally (2) 40:11 irrevocable (2) 145:16
indicated (2) 126:13 80:14 146:22
215:23 interaction (1) 90:7 issue (14) 34:9 69:22
indicating (1) 137:23 interest (7) 22:1 23:12 121:5 126:8 134:3
indication (2) 213:12 74:13,16,18 85:2 134:12 138:8,16
215:24 145:24 140:7 158:8 198:20
indications (3) 216:12 interested (8) 99:6 198:21 213:21

219:13

issues (9) 18:10 47:24 56:23 83:25 84:2 132:10 137:11 216:17 218:24

item (2) 49:10 85:21 items (8) 166:21,22 167:4,10 169:4,22

172:17,18 itinerary (2) 4:14 5:22 Izhevsk (3) 89:7,16,18

J

January (3) 4:9,16 6:2

Jeffrey (1) 6:3

job (2) 15:12 68:6 joint (20) 2:9,17,22

69:14 80:19 87:17 87:23,24 119:19 121:3,20,24 122:6 122:13,14,19,25 123:2,4,9

Jolly (1) 106:22 judge (2) 56:17 62:4 judging (2) 25:1 72:22 judgment (2) 125:15

139:16

July (2) 138:5,8

June (5) 66:13 82:5,6 161:11 182:15 justice (130) 1:3,6,9

1:11,14 3:14,15,17 46:9,23,25 47:8,14 54:2 64:2,6,22 81:9 81:13,14,15,22 82:2,8,10,17,20 83:3,17,19 84:8,11 84:22 85:10 86:5 86:11,16,25 96:20 97:7 102:12 106:2 106:18,22 107:3 123:21 124:10,13 124:18,22,25 125:7 125:11 137:19 138:6,14,24 141:3 141:21 144:8,9,24 145:4,12 146:3,5 147:19,22,24 148:11 149:7 150:2 150:19 151:10,22 152:11 153:3,22 154:7,12,24 155:6 155:10,25 156:2,4 156:7 157:3 158:3 158:5,7,11,15 162:11 163:19,25 178:16 179:14 186:4,7,20 187:1 187:15 188:3,5 203:9 208:16 209:12 210:13 212:4,25 213:5,15 213:23 214:1,14,22 215:14 216:6,14,21 217:13,17,23 218:4 218:21 219:5,21 221:7,11

justified (2) 99:15 117:6

justify (1) 132:6

K

keep (5) 53:20 78:20 78:22 149:22 171:24

kept (1) 158:16 key (10) 16:11,16

92:20 102:15,17

130:23 132:14 193:17,18 194:17 lent (1) 108:2
135:6 136:20 138:3 194:20,21 195:1,4 lesser (2) 124:6,6
killed (1) 140:15 195:6,14,15,16,20 let’s (14) 22:11 35:24
killing (2) 140:13,16 195:22 196:2,3 35:25 54:2 60:21
kilometres (8) 193:6 198:14,22,23,25 60:21,22 64:19,21
193:15,16,17 199:3,6,23 200:2 130:10,13 164:25
198:19 199:5,8 200:21 202:9,17 171:4 175:19
204:12 203:3 205:5,6,10 letter (9) 24:8 93:2,23
kind (20) 27:18 34:4 205:19,19 206:7,16 150:14 206:3,10,10
34:12,12 55:15 207:8,16,19,23 207:5 208:3
90:16 96:25 100:5 209:13,19,22 letters (1) 205:18
102:4 108:20,25 210:10,11,11,18 level (2) 174:14
126:8 132:6 136:17 212:2 199:24
145:1 149:4 160:14 landmark (1) 72:13 levelled (1) 199:23
165:23 185:9 196:5 language (4) 18:4,4 levels (1) 174:21
kinds (1) 177:14 205:24 213:21 liabilities (2) 155:1,18
knew (5) 105:5,9 large (4) 8:10 99:5 liable (1) 141:3
107:8 108:13 193:7 104:15 114:7 libel (1) 93:4
know (62) 4:2 6:10 largest (4) 8:8,13 licence (3) 137:6,7,10
7:3 32:2 42:24 106:11,12 licences (1) 208:1
57:18 64:6 67:11 late (4) 8:23 117:15 life (1) 60:24
69:2 76:14,17 91:7 138:18 161:12 lifetimes (1) 142:18
95:14,24 99:21 laundering (1) 140:18 lifted (1) 114:12
101:16 103:16 law (13) 8:10 30:22 light (2) 27:10 210:15
104:14,20 109:22 34:9 65:21 68:2 lightly (1) 134:13
110:3,4 112:24 69:11 72:7 75:6 likewise (1) 101:8
113:3 115:2 116:7 94:23 112:11 limited (1) 188:6
118:18 123:14,17 138:19 143:2 217:8 line (10) 58:8,10
124:22 129:25 lawsuit (1) 151:7 59:11 119:17
131:12 133:14 lawyer (5) 88:15 120:12 122:21,21
139:2 141:10 151:8 135:17 143:22 162:17 164:21
152:4 153:23 152:4 155:13 188:22
157:18,19,24,24 lawyers (15) 35:1,4,6 line-by-line (2) 155:4
163:25 173:7 35:12,22 36:1,13 155:9
176:24 188:6 191:9 36:22 37:12 92:19 lines (3) 57:14,20 72:4
193:9,19 194:1 94:8,12,15,24 95:4 link (2) 28:14 42:4
199:4 205:9 206:20 leading (3) 9:13 11:7 linked (2) 10:7 37:10
210:21 211:23 131:16 liquid (3) 12:10,11
214:23 215:11,12 leans (1) 145:5 104:19
217:10,18 218:22 learned (4) 2:25 liquidate (3) 11:5 24:1
219:6 123:14,18 213:25 59:25
knowledge (6) 7:7 leave (5) 81:11 103:6 liquidity (1) 157:13
66:24 95:21,22 139:15 144:4 215:1 list (12) 7:1,6 24:10,11
97:3 113:8 leaving (2) 47:22 24:22 48:13 89:8
known (3) 103:15 219:16 91:19 92:18 166:15
196:25 217:9 led (3) 36:2,13 132:16 189:22 207:9
Kommersant (1) left (4) 6:22 119:21,22 listed (5) 48:5 51:11
71:11 200:6 152:17,25 153:14
Kozlov (2) 140:13,15 legal (25) 14:14 18:22 listen (5) 21:6 40:25
KULLMANN (2) 1:10 19:8 22:23 31:6 174:9 179:2,4
221:3 35:21 37:18,22 listened (1) 182:1
Kurotny (6) 193:6 62:5,10 63:23 70:5 listing (1) 110:7
194:1 203:5,10,12 70:10 85:13 89:17 litigation (2) 6:12,25
203:13 90:9 120:9 140:4 little (11) 64:24 89:14
142:22 145:25 95:15 109:5 111:8
L 150:13,24 155:24 125:13 126:9,25
label (1) 185:22 166:19 168:10 128:25 137:4
legally (4) 34:8,9 55:7 178:25
lack (3) 128:7 132:24
70:16 live (2) 7:11 197:22
133:3
legislation (2) 70:3 LLC (1) 179:20
Lair (1) 165:13
112:8 loaded (1) 173:6
lake (1) 211:15
lend (2) 13:2 15:14 loan (27) 10:14 11:4
land (108) 12:5,7,8
lender (7) 10:10 15:7 18:21 23:17 28:13
72:17,18 117:22
23:8 45:4 57:3 38:13,22 39:10
159:2,3 164:20
62:18 89:13 43:7,17 44:20 45:8
165:19,21,23,23
lenders (12) 9:22,25 62:9 69:18,24
166:2 167:8,12,19
10:1,19,21 11:23 70:13 74:17,17
168:6,9,10,11,25
88:17,23 89:23 94:22 107:14
169:2,4 170:22
90:2,13 132:1 109:15 110:3,5
171:3,20 172:14
lending (18) 8:6,9,11 115:7 118:24 134:6
178:4 180:12,20
9:23 10:5,11 11:15 151:4
181:2,3,18,19,25
12:13,16 60:10 loans (19) 18:20 19:1
182:5,20,23 184:15
62:23 74:1,3,23 19:8,17,18,20
184:16,17 185:6,8
75:2 88:15 90:4 20:25 38:17,18
185:19 186:9,9,16
102:5 48:5,14 74:21
187:18,22 188:10
lends (2) 17:6 23:17 83:15 109:24 110:1
190:4,20 191:14,18
lengthy (1) 121:1 118:21 128:12
191:23,24 192:20
Leningradskaya (3) 154:21,23
192:20,25 193:8,11
165:22 181:3 192:8 location (3) 181:18,18

Opus 2 International transcripts@opus2.com
Official Court Reporters +44 (0)20 3008 5900

229
April 11, 2016 Day 36

181:18 144:7,23 150:8,21 M2/41/14 (1) 128:22 master (3) 82:17 147:21 misleading (4) 81:6 name (1) 157:19

logic (5) 50:19 107:7 152:6 155:22 156:9 M2/41/15 (1) 128:24 144:16 207:25 Memorandum’ (1) 104:18 108:17 named (1) 201:18
118:11 130:25 158:4,4,6,10,10,14 M2/41/16 (1) 129:6 material (1) 51:1 34:2 122:23 names (2) 92:19
131:13 158:21 159:6 M2/41/17 (1) 129:8 materials (1) 39:21 memory (2) 100:14 misleadingly (1) 90:18 94:19
logical (3) 50:17 117:1 162:16 163:19,22 M2/41/18 (1) 129:19 Matovnikov (17) 151:14 misled (2) 84:12 85:6 narrower (1) 63:17
117:4 164:1,6 178:17,17 M2/41/19 (1) 129:22 38:10 76:15 79:4 mention (6) 12:25 misrepresents (1) national (5) 65:14
London (3) 6:3 193:17 178:21,21 179:15 M2/41/6 (2) 127:13 79:20 125:20 126:4 30:13 37:3 92:11 78:17 67:22 91:14 197:17
193:18 186:4,6,18,22,22 127:15 126:20,22 127:8,13 123:15 125:11 missed (1) 14:15 197:18
long (21) 18:2 29:13 187:2,2,9,9 188:7 M2/41/8 (1) 128:2 127:17 128:5 mentioned (11) 37:4 missing (5) 14:12 nature (4) 66:16
63:4,4 80:10 83:4 189:9 201:19 macroeconomic (3) 129:25 131:1 54:19 63:23 66:20 32:23,23 34:14 109:11,16,18
83:14 84:4 112:23 208:23 209:11 11:16 13:1,5 132:22 140:3 139:4 142:23 147:15 near (4) 31:9,10 211:9
123:14,22 134:16 210:14 212:3,5,18 Maggs (1) 217:15 154:13 156:18,20,21 mistake (1) 50:17 211:22
141:11 161:23 212:18,22 213:19 Maggs/Gladyshev (1) Matovnikov’s (9) 34:4 181:20 198:14 mistaken (2) 88:22 nearer (1) 217:24
176:9 199:7 213:14 213:24,24 214:4,19 218:17 76:14 125:23 126:6 mentioning (1) 35:19 113:23 nearly (1) 100:6
213:17 214:10,23 214:19 215:10,10 magic (1) 214:17 126:12,14,23 127:6 mentions (1) 113:10 mistrusted (1) 148:2 necessarily (5) 89:21
215:15 215:22 216:9,16,16 main (7) 28:24 30:12 131:15 met (4) 4:1 6:18,20 misunderstood (1) 110:3,4 116:11
long-windedly (1) 217:4,4,16,18 30:12,14 31:8 68:6 matter (13) 7:3 8:14 151:11 115:19 191:21
188:8 218:1,1,10,10,24 126:21 25:17,18 32:2,19 methods (1) 128:19 mm (27) 18:16 19:13 necessary (3) 121:6
longer (12) 17:11 218:24 219:6,11,11 MAIR (1) 65:23 45:14 53:8 88:5 metre (6) 194:13 24:18,21 30:5,8 201:2 207:20
22:13 64:23 80:24 221:6,9,14 major (7) 11:12 72:16 138:19 158:8 197:12 199:23 33:21 34:18 37:7 need (43) 1:6 11:24
90:23 117:21 Lordship (60) 1:4 5:13 85:21 89:12 94:21 215:19 218:17 200:10,22 211:13 47:25 56:24 59:19 39:5 47:12 63:24
158:16 201:1,4 24:25 33:9 39:2,13 94:23 161:13 matters (1) 2:19 metres (16) 167:15,16 68:11 69:19 81:21 64:3 82:3 92:7
213:13 215:23 51:12 53:10 54:1 majority (1) 99:23 maximise (1) 190:24 194:22 196:4 198:2 82:16 92:1 99:10 102:22 112:22
216:7 54:24 57:7 58:12 making (11) 10:1 maximum (8) 15:13 198:15,17,18,22,24 111:12 117:8 122:8 115:11,18 120:3
look (77) 3:3 5:22 6:1 59:9 64:14 67:20 52:24 76:10 121:4 68:15 170:24,25 199:1,2,4,7,7 210:1 127:19 139:24 121:17 123:11,19
8:1 11:24 18:7,10 67:23 70:24 71:2 121:23 130:3 139:6 171:22 172:2 metric (1) 105:4 151:10 174:11 123:23,24,25 124:4
18:17 19:14 24:22 80:6,23 83:13,23 194:24 195:10 174:14 198:10 Mikhail (3) 86:24 206:5,5 128:25 133:19
25:15 30:12,16 85:4 86:22 87:9 214:20 217:3 MDM-Bank (6) 89:1,5 125:20 221:8 model (4) 15:5 16:6 155:8 177:22 179:9
31:8 32:12 38:20 88:3 92:13 102:10 manage (3) 22:5 89:7,11,16,17 military (2) 159:10 16:12 177:9 180:6 185:18 187:4
40:11,13 47:18,19 102:15 106:14 59:25 63:17 mean (43) 7:14 10:1 160:1 modelled (1) 131:14 188:17 191:24
49:14,19 55:11,15 111:7 124:19 125:3 management (8) 12:19,20 13:4 Millard (30) 158:23 modelling (1) 166:9 194:19 199:5,8
57:6 62:16,16 65:2 125:4,18 133:9 15:11 17:9 20:14 30:18,19 45:7 161:11 182:14,18 modest (1) 152:7 207:23 212:22
66:8 68:21 72:22 138:3,13 139:7,13 32:10 49:9 50:21 49:25 52:4 74:9 182:25 192:23 Mojaev (1) 67:16 213:8,18 216:3,17
73:10 80:2 82:2,8 139:16 141:17 135:10 136:15 83:1,12 89:10 96:8 193:4,22,25 195:7 moment (8) 35:24,25 217:20,25 218:4,16
87:4,12,17 92:18 144:4 145:10 manager (1) 93:23 96:22,23 107:19 196:11 198:4,9,12 40:17,19 47:12 needed (2) 11:13
92:25 95:18 97:12 146:13,25 154:6,8 managers (2) 74:11 114:6 118:16 132:6 199:6,9 200:25 55:6 156:19 217:6 118:14
101:22 103:23 164:1,15,18 177:6 85:23 132:10 136:9,20 201:13 202:12,16 Monday (2) 1:1 needlessly (1) 98:6
120:15 127:12 180:8 187:13 194:8 managing (2) 16:1 140:5 142:15,25 203:2 204:1,3,15 219:16 needs (3) 64:25
132:19 133:10 215:11,13 217:4,9 176:10 154:21 157:8 161:1 204:25 205:4 210:9 money (16) 41:23 146:23 198:19
137:22 139:18 218:11 map (3) 111:3 196:17 162:5 163:12,17,23 213:6,13 217:2 46:14 107:13,16,16 negative (4) 79:6
146:6 159:19 161:6 Lordship’s (5) 123:18 203:13 187:2 188:5 191:9 Millard’s (4) 182:12 107:24 112:22,23 111:19 112:1
163:8 164:11 124:8 156:25 March (4) 166:21 204:21 206:21,22 196:10 204:1,17 118:12,20 138:18 189:18
166:23 171:5,21 204:14 217:20 177:18 210:24 209:8 217:5 218:11 million (37) 162:19 140:18 168:18,23 negotiations (1) 41:16
173:17,22 175:10 lose (8) 12:24 52:5 212:13 meaning (3) 59:13 177:16,18,18 203:4 208:2 Negresco (2) 4:12 5:4
175:13 176:9,14 60:24 61:5,8 103:8 March/April (1) 60:14 61:8 179:24 180:21,22 monies (1) 138:1 neighbourhood (2)
179:15 180:18 112:21 118:4 145:23 means (14) 10:4 182:15 183:2,3,8 monitor (1) 85:8 193:9 203:6
185:18,23,24 loses (1) 147:5 margin (7) 9:13,21 12:23 13:1 18:1 183:13,19 184:1 month (2) 32:22 neither (1) 62:4
187:21,22 194:17 losing (1) 137:7 10:1,4,8,13 176:15 20:9 29:22 99:22 188:23,25 189:5,6 171:14 nekommercheskia (1)
194:19 200:17 loss (2) 18:21 137:10 marine (2) 48:1 173:4 102:18,19 127:24 189:11,17,17,17 months (2) 79:14 206:22
206:10,15 211:6 lost (9) 51:14,19,20 mark-to-market (1) 162:13 190:20,23 191:14 200:20,20 156:14 net (1) 10:21
looked (12) 25:8 53:10 54:9 107:17 153:2 198:18 200:20 202:16,18 moral (1) 12:21 never (11) 4:1,2 39:2
26:10,20 35:7 39:3 120:18 123:16 market (66) 9:9 10:7 meant (13) 12:16 202:18,22,24,25 morning (8) 1:3 4:17 39:6,14 73:16 81:4
54:14,18 184:11 145:24 10:19 12:10 75:15 31:22 81:4 82:13 204:5,8 210:24 4:24 26:8 54:14,18 83:9 156:18,20,21
194:6,9 202:12 lot (11) 100:12 111:14 75:18 76:13,16 97:4,16 126:19,20 212:11,12 54:19 214:12 nevertheless (1)
209:25 114:8 115:8 125:23 78:24 79:6 80:20 145:17 147:3 Milner (9) 213:7,10,17 mortgage (13) 110:22 125:15
looking (14) 19:21 139:8 165:22 86:4 102:12 106:4 151:16,18,19 213:19 214:9,11,20 111:11,15,16,20,24 new (7) 43:16 44:19
26:5 45:17 98:21 168:20 171:8 106:12,19 120:2 measure (1) 85:2 214:23 215:2 134:5,7,7,17,19 45:15 137:2 149:8
119:21 139:11 176:10 214:7 141:23,25 145:5,5 measuring (2) 186:11 mind (14) 52:2 54:11 137:24 138:2 182:23 209:15
166:8 167:7 174:4 low (2) 92:20 177:12 147:9 153:1,20 187:16 59:18,23 60:15 mortgages (14) Nice (1) 4:9
195:8,8,8,12,14 low-key (5) 94:8,12 160:11,12,14,19,20 media (3) 13:14 66:21 75:24 118:17,20 102:20,25 111:8 night (1) 111:15
looks (16) 4:16 29:9 94:15 95:2,6 160:20 161:22 68:1 124:19 144:11 114:8,12 115:8,10 nominal (8) 27:14,16
30:9 49:4 51:5 lower (1) 172:10 162:4 164:24 165:7 meet (1) 143:23 146:11 153:23 115:24 116:3 28:17 31:19 34:23
70:20 125:12 LPK (3) 167:4,12,16 169:24 174:4 meeting (2) 58:3 157:4 216:9 133:21,24 134:9 142:4 189:1,7
170:19 176:14 LUDMILA (2) 158:13 177:12,13 181:1 156:16 minds (1) 117:13 135:16 137:22 non-building (1)
182:25 197:20 221:13 182:10,12 185:7 meeting’ (1) 34:6 mindset (1) 108:13 Moscow (1) 91:18 167:9
199:9 206:10 207:1 lunch (2) 6:16,22 187:21 190:9,13,25 meets (1) 162:4 mine (1) 35:8 move (2) 184:5 non-commercial (2)
207:5 218:18 Luncheon (1) 125:9 191:3,7,10,22 member (7) 8:8,12,16 minus (1) 178:12 217:24 206:8,25
Lord (115) 1:8 3:1,2,3 luxurious (1) 209:3 192:2,10,11 195:13 62:6 72:12 73:9,12 minute (8) 14:4 22:10 moved (2) 53:4 62:7 non-performing (3)
47:18 64:5,19,25 luxury (9) 191:15,18 195:15,25 196:6 members (1) 8:11 47:22 51:12,13 multiple (3) 9:13,21 15:8,13 16:13
77:19 81:7,9 82:9 192:22 196:14 201:17,24 202:5 memorandum (32) 52:9 184:24 213:10 9:25 non-profit (5) 206:12
82:11 86:9,10,17 197:5,6,14,14 203:19,21 210:23 9:2 24:15 27:14 minutes (10) 34:6 multiply (2) 189:16 206:14 207:4 208:8
86:17,22 87:2,3 209:24 211:3,19 212:13 33:23 34:6 35:19 65:1 75:9,9 81:11 199:3 208:24
88:7 92:7 97:4 market-worked (1) 35:20,21,25 36:1 81:12 94:4 123:12 municipality (3) 207:2 non-security (1)
98:22 99:3 109:22 M 144:17 36:18,25 37:24 124:14 212:23 207:11 208:5 106:10
113:6 115:15 117:9 M2/41/10 (1) 128:10 marketable (2) 144:25 38:2,8,9,11 40:9,11 mirror (1) 83:7 mustn’t (1) 74:3 non-transparency (4)
123:11,24,24 153:10 47:19,20 52:10 misbehaviour (3) mysteries (1) 138:20 20:5 79:19,22
M2/41/11 (1) 128:13
124:15,18,19,24 marketing (1) 110:2 69:14 81:17 85:19 11:18 136:11 85:25
M2/41/12 (1) 128:14
125:3,16,16 127:8 markets (3) 81:6 87:17 129:7 146:6 137:12 N non-transparent (2)
M2/41/13 (1) 128:18
141:24 143:19 102:5 103:11 146:12 147:20,21 misheard (1) 95:1 17:23 80:14

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230

April 11, 2016 Day 36

non-trivial (2) 41:23 41:25
normal (8) 15:6 17:5,7 23:20 34:11 129:17 213:13,19

normally (3) 15:7 18:19 68:13

North (1) 209:16 note (6) 34:4 56:23

82:13 153:8 204:14 210:9

notes (1) 215:11 notice (2) 146:17

174:8 noticeable (1) 91:24 notwithstanding (3)

17:2 154:19 216:7

November (1) 87:14 number (32) 24:12 26:9 49:10,10

65:14 66:14 75:13 90:10 98:16 104:22 104:25 105:1 107:5 107:6 108:23 126:3 136:13 137:12 160:9 167:16 170:7 172:4 175:9,12,20 180:3 196:17 198:3 198:8 204:11 207:8 216:4

numbers (10) 95:25 166:16 167:21 168:25 175:21 177:11 181:25 182:6 189:9 207:10

O

oath (4) 7:17 25:12 158:16,19
ob’yedineniya (1)

206:22 objection (1) 208:6 objections (1) 112:15 objective (3) 122:14

122:19 148:14

Oblast (3) 165:22 181:3 192:8

obligation (6) 50:14 86:14 110:6 146:10 148:6,20

obligations (11) 29:5 29:12,16,24 48:19 49:23 50:8 52:8 82:24 83:5 146:20

obliged (3) 134:3 138:11 219:11 observe (1) 74:25

obstruct (4) 133:22 135:9,12,15 obstructing (1) 134:1

obtained (2) 18:23 46:12

obvious (2) 52:2

61:19

obviously (25) 21:10 25:25 34:3 81:10 88:14 89:10 101:24 103:23 104:7 119:18 123:13 129:1 135:17 137:12,17 141:10 141:11 142:25 213:21 214:6 215:11 216:2 218:11,24 219:16

occasion (3) 56:12 80:17 137:25

occasionally (1)

136:10 occasions (2) 5:21

155:23 occupied (2) 173:17

207:7 occur (3) 82:25

107:20 136:4 occurred (3) 107:2,20

136:11 occurs (1) 161:23 October (2) 71:11

204:4

offer (2) 150:19 181:2 offered (1) 150:17 offering (2) 37:10

117:19

offers (2) 160:20,21 office (1) 143:23 official (1) 7:22

oh (3) 103:3 108:5 153:19

oil (1) 9:8

okay (23) 26:4 32:16 38:21 39:1 40:1 41:2 46:24 52:10 53:7,7,12,14 54:11 55:20 57:24 58:1,5 60:4 61:1 75:11 78:6 133:13 171:15

old (6) 106:7 161:3,3 161:4 165:5,9

OMG (84) 6:12 16:9 17:11 18:25 19:10 19:15 20:6 22:4 28:13,15 34:22 35:12,14,18,22 36:1,5,16,22,23 37:22 39:11,16 40:9 42:4,14,18 43:3,4,13 44:4,5,17 45:3,8,9,13,14 46:13,21,24 47:2,3 47:5 48:8 50:8,13 51:6,6,11,14 52:5,7 53:4,10 54:7 55:1,5 62:7 76:8 79:24 80:23 81:1,5 83:14 83:21 85:14,18,20 86:3 107:18,21 120:10 121:12 146:17,17 149:11 150:11,11,13,13 160:23 191:4 200:5

OMG’s (3) 35:4 36:13 53:1

OMGP (5) 28:3,10 29:10 30:7 31:22

omitted (1) 42:2 once (1) 172:19 Onega (29) 158:22,25

159:8,16 162:22 165:24 166:4,12,15 166:20 168:25 169:4 170:9,12 171:5 173:4 176:5 177:4,15,16 179:20 179:22 180:20 181:11 182:13,14 182:25 183:8,13

ones (2) 94:22 144:12 opaqueness (1) 85:10 open (9) 71:18 93:1

93:23 147:9 168:11 171:24 199:19 205:14,15

opened (1) 200:13 opening (1) 65:4 openly (1) 49:8 operates (1) 103:5

operating (1) 155:16 operation (1) 136:18 operational (1) 85:22 operations (1) 145:1 operator (1) 190:11 opinion (44) 2:19 3:21 3:23 9:15,16 11:8 12:5 16:18 17:2 22:12,18 25:6 26:6 26:18 35:2,5,17

36:4 62:17 70:8 80:25 93:8 95:12 95:25 96:11,12 100:11,11,18 113:6 119:10 131:18 140:19 144:2 165:18 170:1 174:14 176:18 177:6 196:10,16 202:17 205:2,9

opinions (7) 2:17 88:4 92:22 96:13 100:16 100:17 119:20

opponent (1) 6:7 opportunity (1)

215:14

opposed (6) 97:5,25 112:22 130:20 137:15 178:2 opposing (1) 97:11 opposite (2) 147:7

216:4

opt (1) 132:12 optimistic (2) 158:17

216:12 option (1) 153:16 options (2) 44:22

58:13

oral (2) 9:1 219:10 order (9) 11:11 13:19

14:20 23:7 48:5 77:15 157:6 192:25 195:13

ordinarily (1) 144:14 ordinary (2) 96:24

190:22

organisation (2)

205:12 208:6 organise (1) 68:15 organised (2) 5:5

71:19

original (26) 15:6 16:2 16:9 20:6,7,12 21:4 21:17 22:5 27:20 41:20 43:9,17 44:5 44:20 45:7 76:8 79:9 81:3 82:21,21 84:15,20 146:11,19 148:23

originally (5) 18:23 19:1,16 31:25 108:2

Oslo (1) 48:1 ostensibly (1) 77:7 ought (6) 25:23,25

26:5 146:21,21 149:22

oughtn’t (1) 26:1 outcome (4) 43:10 138:23 154:8

217:11 outline (2) 100:17

110:15 outlined (1) 54:12 outrageously (1)

131:17

outset (2) 107:20,21 outside (6) 34:11

74:10 103:17 120:2

159:17,21 outsider (1) 17:5 outsider’s (1) 17:12 outstanding (1) 83:5 overall (6) 90:4 93:5
106:24 167:9,14 202:13

overlooked (1) 82:13 overnight (1) 218:22 overoptimistic (3)

170:22 171:2,19 oversight (1) 146:14 overturn (1) 174:22 owed (2) 52:8 89:19 owned (15) 15:10

20:17 21:10 22:15 61:25 70:25 71:4 79:2 140:17 152:22 153:17 166:24,25 167:4,19

owner (2) 70:15 76:8 owners (1) 48:22 ownership (7) 53:2

55:7 102:21 146:1 152:10 166:19 167:3

owns (1) 47:11

P

page (78) 1:20 2:2,9 4:6,10,13 13:25 14:2 24:19 33:4 34:14,15,16 42:8 42:18 44:3,7 48:16 57:20,25 59:10,10 59:11 66:1 67:2 68:22,24 71:13,25 87:20 88:20,21 89:1,3 91:19 98:19 101:18 110:10,11 114:15,17,19 120:17,20,25 127:22 128:2,5,9 128:13,14,18,21,24 129:6,8,16,19 133:16,16 139:18 163:24 164:16 166:11,18,18 176:23 180:7 181:11 190:6 196:13,15 200:13 201:8 202:14 203:10 205:25 221:2

pages (4) 107:5,6 109:5 164:17

paid (4) 69:10 107:16 146:7 164:20 pamphlet (1) 96:10

paper (2) 98:21 144:25

papers (1) 87:3 paragraph (82) 3:6 9:6

11:10 13:24 14:25 16:7,12 18:7,11 29:3,19 33:24 34:5 34:19 36:18 38:20 39:22,24 40:3,13 42:8,17,17,17,20 44:14 45:2,20 48:17 55:14,22,23 56:8,9,14,21,22 57:1 62:17 68:5,10 73:21 75:20,25 76:22 77:5 88:11 98:17,24 99:1,2,7 99:11 101:5,22,25 102:8 103:24

104:25 108:16 59:23 143:10 147:5 physically (1) 53:15
109:7,9,13 114:18 173:20 183:18 pick (3) 97:8 124:5
114:19 119:24 191:24 195:13 151:13
120:12,23 121:1,2 payables (1) 178:9 picked (1) 164:15
132:4,19 139:20,23 paying (2) 60:16 picture (1) 90:15
170:11,13 174:13 173:2 picturesque (3)
174:25 175:1 payment (1) 173:20 197:21,24 211:15
176:15 179:19 payments (1) 7:22 piece (23) 111:21
180:18 peculiar (2) 137:6 144:1 168:6,8,11
paragraphs (9) 9:6 154:7 182:19 184:14,16
75:21 76:18 80:4 people (32) 3:20 184:17 187:22
102:1 105:8 119:7 83:22 94:2,8,9,18 188:11 191:14
144:20 170:18 95:11 96:3,7,12 193:8 195:19,21
parameters (1) 123:21 98:14 100:12 196:3 199:6,22
pardon (2) 116:1 102:17 103:5,12,16 200:2,21 207:15
120:20 103:21 108:13 209:13 212:20
pare (1) 124:3 117:10,13 118:17 pieces (9) 11:25 12:7
park (3) 168:9 197:17 125:1 132:12,17 12:7 166:2 168:10
197:18 136:22 137:13 190:4,20 196:2
parked (1) 155:23 146:15 149:9,17 205:19
parking (3) 155:19 197:22 198:25 pipeline (2) 209:16,18
157:1 197:24 210:2 place (15) 67:21 71:17
part (27) 4:14 6:15,17 perfect (1) 149:2 104:19 122:25
6:23 16:18 19:10 perfectly (1) 77:25 161:18 165:12,14
19:21 20:25 25:18 performance (2) 29:5 184:19 185:14
30:14 32:3,21 36:8 29:11 202:21 204:12
38:14 43:24 53:25 period (6) 110:15 207:20 209:18
77:1 99:15 111:3 135:3 140:21 211:11,14
127:17 132:2 145:22 189:12,13 places (2) 164:4,9
163:15 182:5 permission (10) placing (1) 35:10
194:16 203:13 159:23 206:15 plain (2) 141:14,14
206:21 209:14 207:22 208:4,9,13 plan (2) 201:3 207:25
participants (1) 72:5 208:19 209:2 210:6 planning (2) 208:4,8
participate (2) 5:4,6 210:6 plans (1) 191:25
participated (2) 4:19 permissions (5) Plant (3) 89:7,16,18
6:15 159:15 200:9 201:3 please (94) 1:4,18 2:8
participating (1) 6:23 201:12 207:20 2:13 3:3 4:5,13 8:1
participation (1) 70:22 permits (1) 111:7 8:21 13:22,24 14:2
particular (19) 5:14 permitted (3) 205:7 14:25 18:6 21:6
11:24 13:13 17:10 205:11 210:11 24:6,8,11 26:25
36:5 56:19 66:21 permitting (2) 199:14 27:1,18,21 29:18
69:20 79:1 83:20 199:20 33:22,23 39:20,22
93:11 107:11 person (8) 3:13 46:16 39:24 40:14 42:7
111:16,21 133:23 85:14 95:14 103:9 47:15 50:4 51:25
136:10 148:1 136:25 149:22,22 52:1 55:11,15 57:6
190:11,16 personal (1) 4:3 57:8,11 58:10
particularly (2) 94:19 personally (3) 94:18 59:12 62:16 65:2
164:17 96:21 118:18 65:12 68:4,19
parties (38) 8:10,22 persons (1) 18:3 69:14 70:18 71:8
25:11 26:15 29:4 perspective (3) 110:2 71:25 75:8,12 78:3
29:23 30:23 31:14 110:2 153:6 80:2 86:22,23 87:3
41:10 43:2 46:3 persuade (1) 214:11 87:12,17 88:9 91:6
47:20,23 49:20 Petersburg (36) 6:13 92:17 96:19 101:18
68:13,15 75:6 15:20,21 16:9,24 109:3 110:10
76:19 77:2,14 78:4 16:25 17:1,19,20 125:18 133:13
79:3,9,16 88:15 19:19 20:20 21:12 139:18 144:5 162:6
113:14 119:1 135:2 28:13 48:2 52:8 162:16 164:17
140:7 142:4 150:4 58:4 71:17,21 166:8,10,14 170:9
150:10 156:13,17 77:13 78:1,4,22 170:13,16 174:9
156:22 157:1 79:1,10 105:25 175:19 177:15
215:12,13 152:20 154:22 179:11,12 180:18
parties’ (1) 34:2 165:20 173:5,15,21 181:7 182:2,13
partly (1) 186:8 175:23 180:24 190:5 196:10
partnership (4) 181:4,19 193:23 202:12 206:1
206:14 207:4 208:8 Petersburg’s (3) 77:24 210:16 214:19
208:24 80:22,25 pleases (2) 92:13
parts (2) 2:21 148:22 phone (1) 122:12 102:10
party (10) 14:13 37:10 photocopying (1) pleasure (1) 142:12
52:5 62:1 78:12 32:15 pledge (22) 14:1
79:17 128:12 photos (11) 159:17,19 17:21 22:25 23:4
146:12 150:7,9 160:3 173:11 193:8 55:13 57:2 69:17
passed (1) 53:1 197:15,21 199:25 69:24 70:2 106:9
Pause (7) 13:23 27:10 200:4 203:6 209:22 110:21,22 111:2,11
39:25 59:12 139:23 phrase (2) 95:3 113:1,20 115:3,18
164:22 180:6 117:22 115:21 116:19
pausing (2) 19:18 phrased (1) 138:21 117:1 132:7
91:21 physical (6) 22:23 pledged (34) 15:19,20
pawn (3) 103:4,4,6 168:11 180:1,5,11 15:24 16:14,15
pay (9) 31:24 41:12 180:12 17:7,18,19 20:7,24

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231

April 11, 2016 Day 36

21:10,11,12,21,22 176:14,18 177:24 preponderance (1) problematic (2) 72:8 properties (7) 165:13
21:24 22:13,15 179:16 180:4,19,22 144:19 72:24 184:5 189:20 190:2
45:19,22 46:1,5 215:21 216:19,19 present (3) 3:9 42:5 problems (6) 90:4 190:3,8 200:24
47:1 54:15,16,23 217:6,16,18 142:9 128:17 130:14,15 property (38) 14:13
61:15 62:19 63:20 Popov’s (3) 170:10 presentation (2) 4:17 132:1 208:14 14:14 71:21 160:8
68:23 76:5 80:10 172:7 216:4 6:4 procedure (6) 69:16 179:22,24 184:8,21
110:24 116:8 Popov/Steadman (3) presented (2) 4:19 69:20,23 72:6 99:5 184:25 185:16,18
pledger (2) 113:21 217:12 218:17 5:24 138:19 186:10 190:4,10,14
116:20 219:17 presently (1) 83:22 procedures (3) 70:2 190:16,19,20,21,23
pledgers (1) 113:3 popular (1) 206:21 preserve (3) 15:6 23:6 137:13 182:24 190:24 191:1,2,3,3
pledges (18) 16:20,25 port (8) 173:5,21 77:18 proceed (1) 134:8 191:7,11 192:12
20:16 55:25 71:16 175:23 176:25 preserved (1) 23:7 proceeded (1) 208:18 196:22,24 197:18
71:18 72:14 110:13 181:4,19 182:8 press (1) 114:21 proceeding (2) 58:17 197:19 200:5
110:16 113:16 183:14 pressure (2) 142:19 59:5 202:15 203:20
114:1,8,12 115:8 Ports (5) 146:17 213:17 proceedings (9) 1:20 204:7 206:16 208:9
115:10,25 116:6 150:11,13 176:22 prestigious (1) 193:21 2:3,11,23 3:8 proportion (2) 117:17
133:21 176:22 presumably (9) 11:21 102:23 113:12 180:1
plot (24) 72:18,18 pose (1) 149:11 12:16 13:7 59:17 130:2 138:1 propose (3) 11:4
167:8,17 188:11 posed (1) 106:24 68:8 99:22 134:22 proceeds (3) 43:18 34:10 53:18
191:23 194:11,17 position (14) 6:8 138:15 154:21 44:24 45:11 proposition (1) 19:10
194:20,21 195:1,15 61:24 62:1 77:16 presume (1) 135:12 process (7) 36:2,13,22 proprietary (1) 155:20
196:17,20 198:15 77:22 95:5 114:5 pretending (1) 61:9 37:12 70:3,9 prosecuted (1) 63:4
198:22 199:3 208:7 117:16 118:8 136:4 pretty (7) 36:19 49:8 207:19 prospect (3) 42:21
210:23,24 211:1,4 136:8 153:23 170:1 66:14 90:15 118:3 produce (3) 63:2,25 75:22 137:6
211:17,18 216:3 126:24 143:14 64:15 prospective (1)
plots (20) 166:15 positive (1) 112:3 prevalence (1) 105:20 produced (1) 123:1 184:22
167:11 168:25 possession (3) 47:16 prevalent (1) 105:4 produces (1) 66:3 prospects (1) 73:21
169:18 181:12,23 61:14 102:21 prevent (2) 23:5 professional (2) 2:18 protect (1) 23:1
182:4,14 183:4 possibilities (1) 45:11 46:19 22:18 protection (6) 102:19
192:20,20,25 195:4 possibility (6) 42:12 previous (6) 9:10 professions (1) 94:20 109:10 111:19
198:8,23 203:22 43:5 44:21 45:1,5 42:22 89:1 133:16 Professor (78) 1:5,13 112:2,3 198:9
207:8 210:18 212:2 208:23 165:1 174:1 1:18,19 3:3 4:6 protections (1) 99:13
212:15 possible (8) 15:13 previously (2) 19:3,23 6:10,11,18 16:18 prove (1) 133:6
plug (1) 219:19 56:3,23 60:25 64:4 price (18) 10:7,9,19 20:15 21:20 22:8 provide (2) 3:22
plus (5) 154:4 162:1 166:13 174:14 27:14,16 31:18 22:19 25:19,23 152:15
165:9 189:17 187:24 34:24 73:6,7 142:4 27:2,22 30:9 34:17 provided (5) 14:9 39:9
199:22 possibly (5) 85:1 146:19 164:19 38:25 39:5,25 43:1 46:18 72:7 146:19
pm (9) 123:22 124:11 106:7 148:2 149:10 165:19 181:2 45:16 47:18,22 providers (1) 14:7
124:25 125:7,8,10 206:12 188:13 194:14 51:5 52:15 53:19 provides (1) 82:23
178:18,20 219:24 potential (6) 68:23 195:15 197:11 53:22 55:14,19,23 providing (1) 50:7
Po (1) 41:18 76:22 160:24 price’ (1) 72:8 57:11,17 60:9 provision (6) 14:8
point (66) 16:4,6 17:5 184:15 185:13 prices (9) 9:8,12 28:18 64:25 65:2 66:11 29:20 81:18 83:7
17:12 28:11 49:14 187:22 41:19 48:20 194:7 67:8,20 71:9 72:20 84:9 199:14
49:15 71:4 73:10 potentiality (4) 194:9 204:7 212:11 73:22 75:12 77:12 provisional (5) 28:6
102:2,16,17 109:19 186:10,11,12 prima (2) 34:23 78:19 79:7 80:16 28:24 33:14 208:19
116:5 119:21 187:17 138:22 81:8,10 86:11 209:2
121:11,15 127:5 potentially (7) 52:22 principally (1) 77:18 87:19,21 101:21,24 provisionally (6)
130:23 132:22 61:17 62:24 63:12 principle (6) 13:15 102:8 103:24 104:4 217:6 218:10,13,14
135:5,6 136:20 63:19 73:25 132:21 22:22 34:7 61:5 104:13 106:25 218:19 219:12
138:3,15 139:6,21 power (1) 200:1 63:2 84:3 109:20 116:23 provisions (2) 18:21
144:9 145:13,14 powers (1) 218:21 prior (6) 20:15,20 118:22 119:8,19,23 29:3
146:14,16,22 147:8 practically (1) 57:3 114:13 125:25 120:22 121:25 proxy (1) 196:5
149:7 151:12 153:6 practice (21) 13:8 136:14 140:21 139:19 140:1,11,19 prudently (1) 218:2
156:12,16 159:18 14:6 23:20 34:11 prison (1) 63:4 141:12 156:15 public (7) 42:12,25
164:9,16 171:6 46:8 69:16,20,23 private (2) 13:11 217:15 221:4 43:6 67:25 69:20
180:3,19 183:22 74:20,22 91:5 98:2 208:9 profit (4) 185:5 73:2 110:9
185:16 186:6,23 109:25 115:17 privy (1) 115:13 190:24 191:19 publication (1) 190:7
187:5,6,9,11,23 116:21 130:4,18 pro (2) 3:7,12 207:13 publicised (1) 114:23
188:3,17 192:2 140:3,5 143:20 pro-borrower (1) profitable (4) 176:21 publicly (1) 7:13
194:24,25 195:10 145:6 101:14 186:2 208:22 209:5 published (3) 91:18
196:13 203:5 205:5 practices (4) 13:18 probably (27) 6:19 profits (1) 59:14 93:1,24
209:13 210:5 215:8 70:1 129:5 140:12 12:7 30:12 32:22 project (1) 195:24 puff (1) 216:25
pointed (3) 28:20 practising (1) 135:17 55:9 65:1 72:5 projected (1) 179:21 purchase (9) 28:6
88:20 197:25 precedence (1) 90:21 96:1 98:15 projects (3) 12:25 30:4 48:6,19,21,24
points (21) 80:4 96:24 142:21 112:6,20 123:12,16 176:11 177:14 148:4,5 151:2
104:4 124:4,5,8 preceding (1) 91:22 126:21 127:10 prominent (1) 94:20 purchased (3) 49:12
126:4 131:4,19 precious (1) 179:10 130:22 144:18 promises (1) 51:11 49:17 77:1
137:23 145:10 precipitated (1) 9:12 167:2,6 178:17 prompter (1) 139:11 purchaser (5) 154:3
155:11 161:22 precisely (1) 149:4 180:17 182:9 188:8 pronouncement (1) 154:16 184:10
169:8,12 170:14 precision (1) 140:23 206:20 210:19 138:14 186:13,15
176:4 177:22,22,24 preliminary (1) 148:23 212:22 pronunciation (1) purchaser’s (1) 187:19
205:3 premium (1) 191:25 problem (20) 11:14 154:14 purchasers (38) 16:2,2
policies (1) 137:13 prepare (2) 125:24 12:21,22 30:21 proof (1) 203:4 16:10 20:7,8,12
polished (1) 131:16 143:24 42:1,3 83:23 85:19 propagation (1) 11:12 21:4 32:4 35:15,18
political (1) 5:3 prepared (8) 1:20 2:3 85:21 86:3 90:20 proper (6) 35:20 41:21,21 44:6 48:6
Popov (25) 170:11,19 2:9 7:8 37:1 123:6 91:24 92:10 93:7 36:22 77:25 131:18 48:22 49:11,16
170:25 171:18 125:4 133:2 107:19 111:9 154:14 157:10 50:1 79:9 82:21
172:22 174:3,13,16 preparing (5) 92:2,23 116:25 127:22 properly (2) 134:19 84:15,21 129:11,18
175:1,14 176:4,7 123:5 216:1,5 152:13 172:21 143:1 146:2,3,11 150:10

150:12,14,23,25 151:7,8 154:2,3 160:10 186:15 purchasers’ (1) 77:8

purdah (1) 158:9 pure (1) 192:10 purely (1) 34:23 purpose (10) 22:25 80:22 103:14

104:25 105:2,19 185:21 190:21,24 191:4

purposes (8) 2:11 24:7 54:4 77:9 88:1 122:25 123:4 145:7

push (1) 219:8 put (34) 4:8 22:10

24:1 30:24 32:18 47:15 51:12 93:6 105:14 117:16,25 123:3 125:12 127:5 139:10 148:16 149:5 159:12,14 168:4 173:7 174:12 177:22 186:6,22,25 187:3,4,6,9,14 204:18,21 213:16

puts (1) 216:2 putting (3) 54:24

122:22 185:15

Q

quality (1) 174:23 question (79) 7:15
15:22 16:17 21:6 23:15 26:2 29:18 38:5,19 40:25 41:4 41:9,25 43:22 44:15 50:4 51:13 51:23,24 54:5 67:5 73:23 74:6,8 75:3 77:19 78:2,14 84:11 85:3 97:1 98:1,13 105:15 106:24 107:5 111:13 113:18 116:2 117:10 122:23 126:21,21 127:17 129:8 130:10,20 134:20 141:11,14 150:17 150:22 155:15 156:25 157:3 159:11,12 160:4 161:17 162:21 163:3,20 164:18 167:20 168:14,24 174:9 179:4 180:7 182:2 187:18 198:19 199:9 201:7 202:7 205:16 209:11 210:14 215:17

questions (26) 3:1 25:20 26:14 39:8 44:7 58:8 75:10 81:10,14,16 86:7 122:16,20 129:1 130:1,13 131:16 132:11 144:7,8 156:8,17 158:22 166:9 221:7,11

quicker (2) 82:9 178:25

quickly (14) 28:7 57:16 72:1 80:5 124:7 127:12 137:4 173:19 184:7 187:5

207:24,25 208:2,14 quite (24) 4:21 16:10

75:13 77:9 89:10 89:25 90:10,21,22 113:18 115:17 122:17 125:23 127:6 138:23 140:14 141:6,19 142:16 144:9 149:7 214:15 215:23 216:24

quote (4) 13:22 72:1 108:16 176:21

quotes (1) 202:19 quoting (1) 176:24

R

RAD (1) 71:19 raided (2) 98:9,14 raiding (11) 90:19

91:23 92:10 93:6 93:14 96:8,23 97:6 97:10 98:3,12

raise (2) 112:15 205:3 raised (2) 73:7 199:23 raising (1) 75:22 range (4) 100:16,17

162:3 177:13 rank (1) 136:5 ranking (1) 136:5 rare (1) 3:19

rate (6) 189:12 201:13 201:14,15,17,23

ratio (1) 100:6 rationale (3) 62:14

77:21 111:5 re-examination (3)

81:9 214:8 215:1 re-examined (1)

177:21

re-read (4) 98:17,17 99:2 109:7

reach (1) 135:5 reached (2) 87:18

98:18 reaches (1) 72:19 reacted (1) 143:6 reaction (1) 79:6

read (49) 7:1,24 17:23 18:13 25:3,21 26:14 34:2 38:6 39:8,22,24 49:7 57:14,15 58:6 59:10,13 65:6,7,11 66:1 68:22 71:25 80:5 92:6,7 93:15 99:3 101:6,24 117:11 118:17 121:13 125:21 126:23 130:8 134:4 139:22,24 147:16 147:19 150:8 151:1 152:19 157:4 164:3 164:21 182:1

reading (15) 32:24 38:8 101:4 108:8 115:5,9 123:6 128:1,23 129:3 138:12 142:12 147:16 149:12 157:24

reads (1) 34:6 ready (2) 141:23

184:16

real (34) 11:22,25 12:3,7,9,9 55:25 57:2 60:6 63:5 69:17,24 70:2

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232
April 11, 2016 Day 36

110:23 111:21,22 records (1) 7:13 related (6) 9:23 28:24 9:19 14:20 15:17 reported (1) 140:16 respectfully (1) 90:14 154:15 158:23

111:24 113:1,20 recover (5) 15:13 77:2 128:12 190:8 16:14,23 17:2 reports (12) 2:17,21 respective (1) 119:20 164:1 166:7,24
114:1 115:3 116:19 74:19 83:10 138:1 190:10 18:25 19:16 20:1 65:10 68:1 87:24 respectively (2) 180:1 167:23 169:1,5
117:3 132:7 135:19 215:5 relation (13) 6:12 7:21 20:15,20 21:2 22:9 120:18 122:17 212:12 171:1,20 172:13
139:2 151:18 recovered (4) 42:13 14:1 33:1 76:19 24:23 25:1,7,15 126:4 140:8 156:16 response (4) 107:7 174:16 176:7 177:2
175:18,21 178:2 43:3 44:16 138:18 80:18 87:10 88:4 26:7,11 27:24 157:24 194:6 125:11 150:23 178:4 179:6 180:25
180:13 188:11 recovers (1) 43:7 88:15 176:4 177:3 29:17 33:2 35:3,3 repos (27) 15:18 163:20 183:9,16 184:9
197:9 203:24 recovery (1) 68:16 202:4 206:3 35:16 36:11 37:24 16:23 20:2,15 28:1 responses (3) 122:15 185:21 186:20
realisation (3) 56:3 recycled (1) 125:23 relationship (14) 4:3,4 42:9,19,21 43:20 36:23 102:4,5,6 130:15,16 188:10,24 190:3
68:23 69:8 red (2) 198:1 203:13 28:14 35:14 40:9 43:22,24,25 44:4,8 103:2,15 105:5,10 responsibility (1) 191:5,16 192:18,23
realise (4) 60:11 103:1 reduce (4) 23:13 42:4 44:3,23 62:9 46:10,10,16,19,21 106:1,15 107:1,1 131:23 194:18 196:7 197:1
103:12 117:20 63:12 160:9 198:8 84:14 85:16,18 47:3,8 49:22,25 107:12,24 108:6,6 responsible (1) 25:5 197:1 198:12
realised (3) 108:3 reduced (2) 9:11 86:3 121:12 52:11,12,16,25 109:15 118:24 restaurants (1) 185:10 199:16,17 200:14
122:17 176:12 112:21 relationships (1) 54:18 63:11 64:8 127:1 133:2 156:14 restored (1) 24:2 201:5,13 202:20
realising (1) 114:9 reduces (1) 22:15 65:20 77:14 81:25 82:25 156:22 restrict (1) 81:16 204:3 205:8,10,12
realistic (4) 171:19 refer (14) 26:18 38:22 relative (1) 142:4 85:15 93:12 99:7 repossess (2) 69:12 restricted (1) 160:7 206:13 207:18
172:10,24 219:8 41:14 65:8,9 66:20 relatively (1) 111:22 102:12,17,20,24 74:18 restructure (3) 11:4 210:13 212:25
realistically (1) 218:3 76:19 95:2 101:7,8 release (3) 86:14 103:10,21 104:2,18 repossession (1) 15:12 108:7 214:14,22 215:9
reality (5) 104:22 102:3 105:8 144:20 115:24 116:5 104:21 105:4,7,15 70:13 restructured (1) 110:5 216:21
148:21 172:17 157:8 released (1) 158:4 105:20 106:16 represent (4) 2:18 7:2 restructuring (8) right-hand (2) 166:17
198:22 215:18 referable (1) 74:4 relevance (3) 121:5,11 107:8,10,23 108:7 25:13 92:22 38:15,16 43:15,16 190:1
really (45) 4:2 17:22 reference (10) 28:18 139:5 108:19,24 109:14 representation (3) 89:5,11,19 117:19 rightful (1) 70:15
28:16 30:23 41:3 48:1 71:12 88:20 relevant (18) 18:9 111:5,10 113:2,7 88:17,25 89:2 result (5) 20:2 63:1 rightly (3) 90:6 96:3
55:17 62:12 63:24 92:3 93:16 96:5 22:16 25:14,18 113:16,16,20 114:1 representations (1) 138:23 147:7 153:4
66:16 69:6 84:17 99:15 186:8 208:24 70:9 88:12 89:22 114:9,11,13,20 89:9 202:23 rights (4) 14:13
93:3 99:17 102:3 referenced (1) 93:2 104:8 105:21 108:9 115:1,12,17,19,21 represented (2) 89:25 results (1) 177:15 112:24 145:20
105:14,18 106:3 references (1) 151:4 110:20 161:18 115:24 116:4,9,19 90:13 resurrection (6) 12:21 150:15
109:8 110:24 referred (5) 28:21 164:19 175:12 117:3 118:10,23 representing (1) 89:7 12:22 13:6,9,16 ring (1) 92:20
112:10 113:11 65:10 76:11 92:5 196:16,20 197:15 128:19 129:4 repurchase (30) 26:20 60:23 rise (3) 86:8 123:22
121:22,23,24 122:1 99:2 203:23 130:11,16,17 132:2 27:7 28:10 31:18 resurrection’ (1) 124:10
122:4 123:17 referring (3) 35:6,13 reliable (4) 67:24 132:6,7,13,14,16 32:5,10 33:18 47:4 11:17 risk (8) 57:3 60:12
124:20 125:2,14 38:24 115:17 174:17 133:4 134:17,20,21 49:3 51:15,21 53:5 retaining (1) 85:1 85:14 132:8 137:10
127:5 128:23 refers (2) 14:3 47:8 182:16 134:22,25 135:3,9 53:25 54:8 81:20 retains (1) 153:7 137:10 150:2,6
141:13 145:6 151:5 refinance (1) 11:13 reliance (2) 67:21 141:7 142:23 81:24 106:3,4,11 retransferred (1) riskier (2) 11:15 12:14
153:19 165:11 refinancing (3) 58:19 165:13 143:12 144:14 106:18,19 141:22 30:25 risks (12) 11:16,18
176:10,10,12 179:9 59:6 73:22 relies (1) 179:21 145:6,11,17,23 144:16 145:8 147:3 return (4) 35:15 43:8 13:1,5 14:1 55:12
187:10 189:6 214:5 reflect (2) 152:2,22 rely (4) 67:23 75:6 146:15 147:2,3,18 147:4 148:4,6,15 43:8 213:1 56:4 62:18,23
214:15 reflection (2) 26:1 112:10 170:14 148:7 151:23,24 154:18 returned (10) 32:8 149:11,24 150:1
reappropriate (1) 63:6 120:21 remain (6) 17:3 54:22 152:10,16,16,21,24 repurchased (1) 52:17 42:14 43:4,13,14 risky (3) 12:24 62:25
reason (19) 67:8 94:6 refreshed (1) 88:1 76:5 80:10 83:5 152:25 153:14,20 repurchasing (10) 44:17 45:3 46:14 63:9
102:20 103:8 refuse (1) 60:16 138:20 154:4 157:2,5,8 36:19,20 40:10 83:11,20 river (2) 197:19,20
109:17 110:1,8 refusing (1) 59:23 remainder (1) 98:23 repo’ (1) 77:2 42:5 52:4,6 77:20 returning (1) 117:18 ro-ro (3) 166:1 168:21
127:8 132:14 regard (7) 27:25 85:25 remained (8) 15:20,24 repoed (3) 46:13,15 79:17 80:12 83:25 revenue (1) 175:13 173:21
135:13 138:22,25 86:1,6 164:19 16:14 17:1,19 20:7 50:16 reputable (5) 68:14 reverse (4) 48:20,21 road (3) 198:17 199:5
139:2 155:8 161:13 192:5 193:4 21:12,18 report (131) 1:20,22 202:1 207:25 208:1 82:25 148:24 199:8
172:15 173:3,19 regarding (4) 44:23 remaining (1) 181:22 1:24 2:2,6,22 3:7 210:8 reversion (2) 188:21 roads (4) 173:12
178:5 70:4 84:2 85:20 remains (2) 135:8 7:1,6,9 8:1,25 14:4 reputation (1) 60:18 188:23 198:6,19,20
reasonable (2) 29:23 regardless (1) 159:2 152:10 16:6 17:16 18:7,14 reputed (1) 73:1 reviewed (3) 125:25 robust (2) 111:14
154:11 regime (3) 155:17 remarkably (1) 129:24 23:20 24:7 25:2 require (5) 58:15 59:2 126:1 148:15 112:5
reasonably (3) 29:4 159:24 160:2 remember (15) 67:18 27:9 34:5,15 38:20 70:17 146:18 reworked (1) 176:6 role (1) 13:7
29:11,20 region (12) 104:3 82:7 93:18 96:5 42:8 55:14 62:11 169:23 RICS (1) 190:6 roll (1) 51:25
reasons (9) 69:4 76:23 180:24 193:6 194:1 106:19 119:8 66:4 67:17,22,24 required (1) 125:14 right (147) 2:3,11,12 roll-off (4) 170:17,20
77:6 90:11 129:10 203:5,12,13,14,16 144:21 158:18 68:5 75:8,13 80:3 requirements (7) 70:5 2:14,15 3:8,14 4:18 171:3 183:20
129:10 131:9 203:17 207:9 159:3 161:2,5,9 80:16,19 81:3,3,4 70:10 77:17 129:13 10:2 11:8 15:17 roll-on (4) 170:17,20
132:13,17 209:20 171:13 176:10,12 87:5,10,13,15 157:13,14 162:5 16:21 18:14,15 171:2 183:19
reassuring (7) 36:4,7 regions (1) 197:6 remind (1) 199:22 88:10 91:14,22 requires (3) 185:7 19:25 22:8,12 rooms (3) 168:17,19
36:15 37:8,13,14 registered (12) 16:20 remove (4) 111:5 92:2,3,4,9,14,23,24 187:21 215:13 24:24 26:12 27:7 168:21
37:16 16:25 55:12 57:2 179:1,5,11 92:25 93:2,6,13,15 resale (1) 190:22 31:7,7,18 32:9 33:4 root (1) 215:18
recall (2) 117:14 64:18 110:21 removed (6) 19:3,24 93:22,24 94:15,23 research (3) 158:7 35:12 39:7 40:2,21 Rosselkhozbank (1)
158:12 111:11,20,24 113:1 20:6,10 22:3 95:8 96:9,17,19 169:24 182:10 40:24 41:1 42:23 8:17
recalls (1) 72:4 115:3 132:7 131:15 97:12 100:22,23 reservation (1) 68:25 43:4 47:4 51:14,16 roughly (2) 167:8
receivables (1) 178:9 regret (1) 214:2 remunerated (1) 3:10 101:6,10,11,19,20 reserve (2) 73:6 51:18,20 52:5,15 204:5
received (3) 3:18 regular (6) 16:7 90:22 renegotiate (1) 45:10 102:1,8,11 103:19 157:13 53:2,3,5,11 54:7 round (2) 109:14
31:24 107:21 136:17 137:15 Renord (12) 46:22 104:13 105:6,14 reserved (3) 126:10 55:1 58:6 59:21 117:5
reception (1) 217:22 143:20 152:9 47:2 49:25 52:14 108:24 109:4 127:1 130:5 63:14 66:6,12,19 route (1) 64:1
reckon (1) 213:17 regulation (1) 141:5 54:21 55:8 84:5,6 110:11 111:6 reserves (1) 78:23 67:5 69:9,12 70:8 RUB (12) 27:15 31:19
reckons (1) 72:9 regulations (1) 152:19 84:16,20 210:17 113:10 117:6 120:6 residential (2) 195:23 74:24 81:19,23 32:10 104:3,6,14
reclaim (1) 146:8 regulator (13) 75:15 212:8 120:7,15,20 121:4 210:4 82:5,20 83:3,16 107:18,21 200:20
recognise (1) 154:25 75:18 76:13,16 Renord-Invest (2) 121:14,17,18 122:7 residents’ (1) 209:4 86:5 89:8 90:16 210:24 212:11,12
recognised (1) 3:18 78:17,24 79:24,25 46:12,17 123:5,7 125:19,21 resides (1) 55:7 92:6 93:16 94:1,5 rude (1) 188:5
recognising (1) 155:11 85:6,9,17 86:4 repaid (4) 74:17,17 125:24,24 126:2,6 residual (1) 145:20 94:14 96:1 97:4 rule (3) 45:1,5 198:6
recollection (1) 97:23 120:1 83:8,15 126:11,12,14,24,25 resolve (1) 219:13 100:4 101:17 rules (5) 151:14
recommend (2) regulators (4) 80:20 repay (4) 17:14 22:1 127:6 129:2,24 resort (1) 56:12 104:17 106:21,24 152:14,15,23
115:23 179:4 81:6 84:12 141:3 45:8 150:20 130:6,10 131:14,15 resorted (1) 13:18 108:12 109:3 153:13
reconsider (1) 44:23 regulatory (3) 110:2 repeat (2) 80:21 182:2 131:23,24 133:10 respect (6) 6:14 27:23 114:25 119:14,23 run (5) 21:25 22:13
reconvene (2) 123:19 137:10 155:17 repeating (1) 141:10 136:21 139:2,19 83:20 112:3 141:23 120:11 126:3,10 62:18,24 183:19
124:16 reiderstvo (2) 90:18 replaced (1) 20:14 170:10 172:5,7 179:22 130:22 137:16,21 run-in (1) 58:8
record (1) 34:11 91:2 replacing (1) 135:14 173:1 175:21 176:9 respectable (1) 96:11 138:6,12,23 141:6 runs (2) 22:7,22
recorded (1) 42:2 relate (1) 102:4 repo (151) 8:21,22 185:2 209:23 respected (1) 201:20 147:5 149:24 Russia (23) 7:23 8:13

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233

April 11, 2016 Day 36

27:16 56:19 63:10 71:17 72:15 73:2 90:20 92:10 93:7 105:9,17 107:8 108:20 134:5 135:18,22,25 141:9 201:22 208:13 209:17

Russian (62) 5:2,3 7:8 8:8,10,16 9:9,11,14 11:7,23 12:9 27:6 27:20 30:17,22 33:5 34:9 46:8 70:3 70:18,22,24 71:3 71:11,19 72:13,21 73:13,18 78:25 89:6,12 90:17 91:8 91:11,24 99:14 100:4 110:15 117:22 128:16 133:19 136:12,13 138:19,19 139:8,8 139:21 140:10,20 152:13 159:10,20 179:1 197:9 205:18 205:24 206:6 209:9 217:8

Russians (1) 217:24 rusty (2) 196:24 197:1

S

safe (2) 64:12 91:10 safer (1) 102:18 saga (1) 219:22 sailed (1) 147:14 sake (2) 93:16 148:18 sale (41) 28:3,3 34:23

43:18 44:16,24 45:12 46:4 48:19 48:21,24 50:22 55:6 68:25 72:17 72:18 146:18 148:23,24,25 151:1 151:3 160:22 161:3 161:3,16,17,21,23 162:3 163:9,16 164:11 165:1 188:13,16 194:10 203:25 212:9,15,17

sales (13) 9:13 11:7 11:12 69:21 158:24 178:12 182:19 192:24 193:2 194:14 197:11 204:1,24

Saturday/Sunday (1)

159:5

savage (1) 136:21 save (2) 143:4 157:21

Savelyev (1) 48:3 savings (1) 118:4 saw (9) 15:23 65:10

85:19,21 142:15 153:4 175:20 209:25 211:8

Sawyer’s (1) 175:21 saying (47) 10:18

35:13 43:1 44:12 44:14,21 50:7 56:22 60:14 66:24 67:3 69:8 78:16 79:15 80:7 85:12 93:3,17 96:10,12 96:16 100:22 108:23 114:4 115:20 119:12 126:18,24 127:1 139:10 140:1,11

153:19 163:10 53:21 71:25 120:12 200:3 201:3 205:8 189:24 192:17,19 178:19 181:10 182:17
169:10 172:2 174:3 121:11 122:4,7 205:9,21,23 206:14 193:5,11,15,16,21 shortages (1) 208:21 183:12,21,25 184:5
180:4 185:23 187:20 193:12 208:14 209:8,9,23 193:25 194:3,11,13 shortly (2) 62:15 184:10 185:15
187:13 192:4 194:2 197:4 198:21 210:20,22 211:19 194:16 195:1,18 188:20 187:16 188:10,24
200:18,25 201:1 201:10 212:5,17,18 213:6 196:14,20 197:22 shot (1) 141:4 189:23 190:12
203:12 208:4 210:9 secrecy (1) 109:23 213:7 214:9 216:6 198:4 200:12,15 shout (2) 57:11 98:19 191:5 194:8,15,25
says (43) 18:17 19:11 section (11) 55:17,24 seeing (2) 34:24 43:12 202:4,9,13,21 show (7) 7:24 13:22 195:10 198:12
19:22 39:21 40:2 56:2 97:12,15,18 seeking (1) 153:24 203:3,17,20 204:4 28:8 67:13 91:6 199:16 202:2,7,20
40:14,15 47:12 100:21 102:11 seemingly (1) 26:10 204:10 170:6 201:9 203:18 204:3,9,13
48:3 49:8,10 50:20 110:12 119:19,24 seen (33) 7:13,16,19 set (14) 40:10 70:3 showed (3) 32:14 204:16 207:18
64:10 65:19 68:24 secure (3) 23:25 48:5 7:21,25 27:4,13 76:23 88:11 103:22 97:4 161:4 208:3 210:14,21
71:15 72:5 112:11 118:8 28:2 33:10,11,15 105:9 111:6 119:20 showing (3) 28:5 211:17,20,25 212:5
119:8 127:13 128:3 secured (5) 10:6 33:19 35:16 37:25 120:12,22 131:25 36:15 171:13 212:25 213:22
134:4,24,25 139:11 12:18 17:3 107:14 40:3,4 46:8 49:3 137:2 166:11 shown (30) 1:18 2:1,8 215:3,25 216:6
161:16 163:7 112:25 57:9 67:17 71:13 189:21 4:5 13:24 18:6 24:7 221:13
170:12,12,21 172:8 securities (9) 69:21 71:14 73:15 91:4 sets (2) 65:13,14 26:25 27:1 33:23 Simonova’s (1) 204:15
174:13 179:18 104:19,21 107:13 92:2 115:14 149:3 setting (2) 34:24 39:20 44:8 57:8 simple (1) 52:24
188:22,23 190:8 118:9 144:25 150:16 157:1 70:21 68:19 69:14 70:19 simplifying (2) 50:7
196:21 198:6,7 145:20,25 153:10 198:24,25 209:21 settled (1) 113:14 71:8 87:4,20 88:9 52:19
203:10,11 206:6 security (41) 10:7,14 214:23 settlement (3) 205:20 153:25 154:4 162:6 simply (15) 11:5 93:6
211:22 10:15,16,22 11:3 sees (3) 10:25 23:24 209:14 210:12 166:10 170:9 96:10,23 108:17,18
Sberbank (23) 8:12 14:7,8,8,10 16:20 179:16 seven (4) 166:15 189:20 190:5 110:23 115:17
13:7,11,12,15 15:9 22:25 23:12 37:11 seize (4) 11:5 23:18 168:1 170:4 183:4 202:12 210:16 127:6 139:2 151:19
15:10 65:23 66:5 52:21 56:3 62:19 47:12 59:24 severing (1) 73:13 212:7 155:19 193:19
66:12,25 67:13,16 63:20 64:11 68:23 Seleznyovo (4) 189:24 Sevzapalians (5) 28:4 shows (2) 185:2 208:4 218:7
70:20 71:1,3,5,20 69:9,17,24 70:4 204:24 210:18 28:10 29:10,16 196:17 simultaneously (1)
72:12,16,16 73:9 74:18 76:4 102:5 212:10 31:25 side (27) 15:23 37:6 48:24
73:12 102:18 106:8 sell (12) 50:23 64:17 shades (1) 140:23 47:22 51:7 91:10 single (1) 148:8
Sberbank’s (1) 70:21 107:15,16 108:3,5 68:13 69:13 71:18 share (4) 28:6 30:4 97:10,10,11,24 sir (1) 83:13
Sberbank-Capital’ (1) 108:7 109:14,15 111:25 147:9,12 100:13,24 98:12,14 101:12 sit (9) 1:14 86:25
15:10 113:8 115:7,18 148:9,20 151:8 shared (1) 100:8 107:13,13,15,15 124:25 125:4,5
scale (1) 141:20 118:24 145:18 191:18 shareholder (1) 62:6 122:19,19,22,22 143:23 151:15
scan (4) 33:1 107:22 see (192) 2:13 3:6 4:6 seller (5) 82:21 152:2 shareholders (11) 126:8,16 148:4 158:18 214:18
127:25 128:23 4:10,12,14,15 5:22 152:10 153:6,24 46:14 74:10,14 152:5 166:17 site (11) 180:24 182:5
Scan’s (1) 167:16 5:24 6:2,4,8 9:4 seller’s (1) 152:12 75:15,18 76:3 80:1 184:21 199:7 182:7 184:11
Scandinavia (25) 14:2,16 15:2,15 sellers (1) 50:21 80:21 85:17 86:1 sides (2) 90:15 101:11 185:20 198:4
17:17 20:17 40:18 17:10,21,24 18:11 selling (1) 210:3 136:15 sign (6) 36:4 38:2 73:4 199:15 201:19,21
41:6 44:2,10 45:18 18:12,12 20:10,13 sells (2) 43:6 70:16 shares (114) 20:21,24 73:8 87:7 128:7 212:10,10
46:1 48:10,23 50:3 21:16 24:10,12,20 seminar (1) 5:1 21:2,3,7,8,9,14,21 signatory (1) 128:7 sites (1) 181:16
50:11 52:13 53:1 25:16 26:11 27:2,6 Senatorov (5) 93:21 22:3 27:8 28:3,3,10 signature (16) 1:24,25 sits (3) 160:1 165:22
54:9,16 77:23 78:5 27:14,20,23 28:7 113:11,13,25 30:7,25 31:21 32:8 2:6,7,14,15,15 211:14
78:9,21 166:25 28:12,18 29:2,7 116:15 41:17 46:11,16 29:13 31:10,11,15 sitting (3) 139:13
167:4,11 207:12,14 30:1,3,4,16 31:2,3 send (2) 73:9 150:14 47:8,12,17 48:6 36:24 40:7 87:16 159:8 217:9
scenario (7) 52:1,1 31:8,9,12,15,15,15 sense (31) 16:3,5 51:15,21 52:6,16 87:21 133:3 situation (32) 5:2 17:5
53:18,25 54:11 32:7,12,17,21,25 17:12,23 20:9 52:25 54:8 55:1,2,4 signatures (3) 31:3 17:7,10,22 18:25
117:19,20 33:4 35:22 37:4 21:16 22:4,6 28:14 55:7 61:14,21,22 128:6 133:24 19:7,11,15 21:17
scenarios (2) 51:22,25 38:11 40:13 42:15 28:19 30:21 31:4 61:25 62:2,7 63:15 signed (17) 9:2 30:2 22:3 23:23 46:3,7,9
scene (1) 51:23 42:16,16 47:21 38:7 41:25 44:6 63:24 78:5,7 79:2,8 30:19 31:13 36:3,5 51:2 64:16 80:13
sceptically (1) 139:7 48:8,13,16 49:1,2 62:4 63:5,5 74:13 79:16 83:6,16,18 36:10,14 47:20 89:15 90:11 105:24
scheme (2) 65:15,20 49:23 51:3,4 55:24 76:9 79:18 89:6 83:22 84:4,5,5,25 48:21 51:9 87:13 105:25 107:11
schemes (2) 65:15,15 56:2,8,21 58:10,20 106:2 117:23 85:2,15 107:22 87:18 120:10 133:5,25 134:13
scientific (4) 90:24 61:21,22 62:20,21 142:13 144:10 110:13,16,21 134:19,21 145:17 139:21 140:10
93:4 95:18 96:17 65:12,16,18,24,25 147:13 168:10,11 111:10 113:2,21 significance (1) 120:9 151:19 155:14,16
scope (1) 120:2 68:5,17,24 69:4,4 192:3 219:6 115:1 116:9,20 significant (10) 105:2 196:9
screen (17) 27:22 69:15,21 70:6,7,19 sensitivity (5) 177:3,9 117:2 118:25 132:8 105:22 106:17 situations (2) 46:8
32:19 57:17,22 71:9,15,22 72:3,10 177:10 202:2,10 134:20 135:1,3,4,8 115:6,7 117:17 90:8
58:22,23 71:12 72:11 75:16 76:22 sent (5) 24:23,23,25 141:23,25 146:8,18 137:11 146:14 size (8) 92:11 104:2
94:3 101:20 114:15 77:3,10,14 79:17 25:1 151:6 147:6,9,13 148:18 149:11,14 171:20 175:9
114:17,24 119:16 82:25 83:12 84:19 sentence (13) 12:20 149:6,20,21,23 significantly (1) 18:9 194:17,21 195:19
133:17 162:16 86:2 87:5 88:20,24 19:14,21 56:15,25 150:3,15,18 151:5 signing (3) 36:17 99:6 203:14
166:13 206:1 89:4 90:21 91:17 75:24,25 109:8 151:23 152:3,17,21 121:3 sizes (1) 194:20
scroll (21) 1:23 2:5,13 91:17,19 94:3 115:1 139:20 140:6 152:24,25,25 153:7 signs (2) 36:7 37:14 SKIF (3) 54:22 55:8
88:21 89:3 91:19 98:23 103:24 163:11,17 153:14,14,15,17,19 similar (9) 103:19 84:20
98:23 105:6,11 104:15 116:23 separate (7) 28:1 153:21,25 154:4,10 105:21 126:11 skimmed (1) 117:11
109:4 114:24 120:23 121:22 78:22 85:17 167:19 155:4,19 157:10,17 129:24 131:13 skip (1) 214:5
120:17,25 127:21 127:16,22 131:22 168:4 169:23 170:2 178:7 141:18,19 143:15 Sklyarevsky (4) 25:11
128:13,17,21 129:5 149:25 153:3,22 separately (2) 169:19 sheer (1) 137:12 202:17 41:15 79:5,20
129:7,18,21 156:4 162:17 169:23 sheet (14) 77:16,25 Simonova (76) 123:15 Sklyarevsky’s (3) 25:4
scrolled (2) 98:19,24 164:12 166:11 September (2) 184:11 78:11 80:13 84:25 123:20 124:22 41:18 49:7
scrupulously (1) 167:15 170:10,18 184:20 151:18 152:12 158:11,12,13,21 sky-high (1) 197:7
136:23 170:23 172:20 sequence (4) 46:10,20 153:8 154:1,5,17 160:7 162:16 164:1 sleep (1) 111:15
scrutiny (1) 136:18 173:11 175:14 47:15 115:9 155:18 178:11 164:8,21 165:12 slight (1) 118:6
se (1) 40:5 176:7,23 179:16,18 SERGEI (2) 1:13 221:4 192:13 166:3,23 167:18 slightly (6) 49:14
sea (2) 183:15 209:17 180:2,4 182:5,12 serious (6) 9:17 26:9 sheets (1) 77:23 168:24 169:8 171:1 90:18 103:22
seal (3) 31:12,15 183:4,6 184:12 40:18 41:7 75:13 shifted (1) 76:8 172:13 173:24 120:18 130:1
36:20 185:12 190:1,8 200:2 ship (1) 147:14 174:6,17 175:4 149:11
sealed (2) 31:13,17 191:25 192:2,24 service (4) 11:1 23:24 shop (4) 103:4,5,6 176:3,17 177:2,25 slip (1) 190:14
second (17) 9:9 19:21 194:6 196:16,21 65:22 114:10 106:9 178:24 179:15,21 slot (3) 4:21 5:23
28:5 33:13 51:18 197:17,21 199:20 Sestroretsk (30) short (3) 86:20 141:11 179:23 180:2,19 218:13

Opus 2 International transcripts@opus2.com
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234
April 11, 2016 Day 36

slots (2) 218:19 93:10 110:7 113:20 statement (28) 2:9,18 struggle (3) 58:16 183:2 198:5,10 95:21 97:17 101:14 165:1,2,24 166:1,4

219:12 118:17 132:11 17:4 29:22 32:1 59:3 149:16 199:11 201:13 104:18 107:24 166:12,15,20
slower (1) 212:24 136:16 155:23 35:16 40:5 68:8 studied (1) 173:14 204:4 208:23 112:4 114:6 115:24 168:21,25 169:4
slowing (1) 179:3 157:2 170:14 80:19 87:23,24 study (5) 65:23 143:8 suite (2) 33:1,13 116:4 119:6 122:20 170:9,12 171:5,6
small (7) 136:13 specified (4) 48:20 103:14 119:19 162:3 165:9 167:2 sum (1) 189:15 124:7 139:7 144:9 172:14 173:4,4,16
140:17 160:12 81:24,25 82:22 121:3,20,24 122:6 style (2) 126:17 131:5 summarised (1) 152:8 149:7 154:10,24 173:17 174:19,20
176:2,25 199:5 specify (2) 83:24,25 122:13,14,19,25 subject (20) 97:15 summary (5) 88:16 155:3 159:18 160:3 176:5,20 177:4,15
200:21 speed (5) 113:19 123:2,4,10 129:22 109:24 116:9 120:5 94:4 120:4 132:25 161:1,16 163:15,22 177:16 179:22
smarter (1) 153:12 124:5 178:23 212:1 136:2 144:20 170:3 120:7 121:8,19 136:8 165:1,8 169:9,10 180:20 181:11
Smirnov (2) 25:3,11 212:2 statements (8) 26:18 123:8 138:2 145:8 super (1) 209:24 169:13 178:8,9 182:8,13,14,25
snapped (1) 211:1 spelled (1) 146:24 38:3 44:7 76:10 146:5 151:25 153:7 superior (2) 102:24 182:20 185:19 183:8,13 184:7,9
so-called (4) 20:6 spend (2) 79:13 81:5 117:11 142:13 154:18 155:25 203:11 186:3 192:17,24 184:11,18 185:4,11
185:5 196:23 112:19 149:13 157:12,13 158:18 supplemental (15) 2:2 196:10 197:15 185:13,25 186:1
201:25 spending (1) 179:10 stating (1) 205:19 179:24 213:10 18:7,14 80:18 81:4 198:8,16 199:21 188:18,20 189:1,7
social (1) 208:20 spends (1) 107:6 station (1) 200:1 submission (1) 215:13 87:13,15 101:20 201:1,2,4 202:23 189:12,13
sold (13) 42:12 52:16 spent (2) 107:5 statistical (1) 105:4 submissions (1) 219:9 102:1 120:15 121:4 207:20 211:17 terminals (4) 159:4,8
111:23 166:20,22 122:12 statistics (2) 105:12 submit (2) 90:14 121:14,17 122:6 212:23 217:14 173:21 185:10
188:11 191:15 split (1) 167:17 108:16 216:2 123:5 taken (20) 8:19 20:2 terminology (1)
192:10 194:22 splits (2) 179:25 180:5 stay (4) 29:2 137:25 subsequent (11) 16:2 support (1) 3:14 36:12 40:8 61:13 169:21
196:2 203:23,24 spoiling (1) 63:13 144:5 216:7 16:9 20:12 41:21 supporting (3) 101:7,9 82:12 109:6 154:23 terms (16) 22:9 25:15
210:1 spring (1) 145:15 Steadman (4) 179:18 84:15,20 129:18 126:7 162:18 164:4 170:8 34:25 35:7 36:15
Solnechny (1) 207:7 spurious (3) 56:13,18 179:25 180:9,17 146:1,11 154:3 suppose (3) 141:3 173:20 176:3 181:8 62:18 63:4 92:9
solution (1) 142:21 128:3 Steadman’s (2) 219:10 154:12 155:15 195:5 199:10,11 94:16 95:21 100:5
solvent (1) 11:14 square (18) 167:14,16 178:15 179:20 subsequently (1) supposed (3) 27:16 201:14,15 212:14 100:12 126:15
somebody (10) 24:4 193:6 194:13,22 steer (1) 217:25 18:24 59:16 143:3 takes (3) 17:8 43:6 147:17,20 206:9
37:6 61:22 62:10 196:4 197:12 198:2 step (2) 159:21,21 subsidiaries (1) Supreme (4) 134:1,12 155:17 territory (1) 94:17
64:16 76:8 162:8 198:15,17,22,24 stock (4) 9:12 79:6 129:12 137:23 138:11 talk (7) 15:1 42:18 tested (1) 202:8
162:10 203:3 211:2 199:1,2,4 203:15 103:18 110:7 subsidiary (1) 77:8 sure (44) 5:18 6:15,19 43:15 75:5 120:6 testify (1) 25:12
somewhat (2) 81:18 210:1 211:13 stop (2) 50:25 137:8 substance (11) 7:2 7:14,15 9:5 12:11 131:11 216:11 testimonies (13) 7:6,7
112:9 St (39) 6:13 15:20,21 stop’ (1) 9:9 25:13 95:18,18 13:10 20:9 24:2 talked (2) 59:18 17:24 20:13 25:2,4
soon (1) 166:21 16:9,24,25 17:1,19 storage (1) 167:14 122:1 126:17,18 36:19 42:24 56:20 100:12 25:21 26:15 27:13
sorry (46) 14:15 18:3 17:20 19:19 20:20 store (1) 35:10 131:2,5,6,19 59:1 61:4 64:2 talking (28) 5:1,2 38:1,6 49:8 76:11
21:6 39:5,5 41:4 21:12 28:13 48:2 stored (1) 175:10 substantial (1) 11:17 66:14 67:5 76:13 36:18,24 38:18 testimony (1) 41:14
47:21 52:15 53:19 52:8 58:4 71:17,21 story (3) 74:15 137:7 substantive (2) 82:22 89:10 101:16 44:3,4,9,12,18 testing (1) 154:12
53:22 55:23 58:21 77:13,24 78:1,4,22 147:18 119:18 151:20 113:18 123:19 45:21,22 50:2 TEU (2) 174:14 175:7
58:24 59:1 68:21 79:1,10 80:22,25 straight (3) 93:22,25 sudden (1) 9:9 135:10 142:5 68:22 94:25 114:22 TEUs (3) 173:25
78:19 120:17 105:25 152:20 127:14 suddenly (4) 117:16 153:11 160:18 126:16 128:10,14 174:10 175:2
127:14 134:16 154:22 165:20 strange (6) 35:17 36:9 117:17,18,19 162:2,4,9 186:6,22 132:4 139:1 140:6 thank (59) 1:11 2:25
140:2 155:10 173:5,15,21 175:23 36:10 62:13 153:23 suffered (1) 110:15 186:24 187:3,6,10 174:6,9 200:22 27:18 30:15 34:17
156:20,24 158:16 180:24 181:4,19 154:24 suffice (1) 82:10 187:14 197:22 205:22,22 206:4 39:19,24 41:4 45:6
162:7 164:4,6 193:23 strategies (3) 62:25 suffices (1) 86:7 209:6,7 214:20 talks (4) 13:25 68:25 48:13 55:10,22
172:1 174:8 175:16 stability (2) 77:18 63:1,23 sufficient (13) 25:21 216:24 217:4 131:10 206:13 57:13 68:3 73:20
176:2 182:8 187:2 78:25 strategy (2) 6:7 63:9 26:14 90:7 95:24 surely (2) 25:17 61:16 tariff (2) 172:22 173:3 81:7,7 86:9,11,15
188:4 189:9 192:4 stage (2) 26:21 105:9 Stream (1) 209:16 123:4 176:12 181:6 surplus (14) 42:13,21 taste (1) 126:18 86:15 88:7 92:1
193:16,18 194:3 stages (1) 19:5 strip (1) 169:19 187:18 193:3 195:7 43:3,11,12,21 tea (1) 162:12 101:18 102:9,15
200:13 202:7,7 stake (1) 136:19 stripping (1) 11:19 195:18 200:18 44:16 45:2 46:4,15 technical (2) 152:20 104:9 106:14
204:5,21 211:17 stand (4) 2:22 9:16 Stroilov (70) 1:4,8,17 208:1 55:3,9 83:11,20 178:22 108:22 109:21
217:17 35:17 68:8 1:18 2:25 67:12 sufficiently (2) 84:1 surprised (2) 118:19 technically (1) 152:18 110:19 111:7,12
sort (16) 4:17 45:2 standard (14) 21:23 81:25 82:6,9 86:10 198:5 125:22 techniques (1) 132:23 113:5 117:8 122:11
52:21 61:19 62:18 23:16,23 69:7,16 86:18 88:8,9 92:1 suggest (26) 25:23 surprising (3) 34:20 tell (15) 5:13 13:12 125:16 133:18,18
66:5 155:17 165:3 69:23 74:20,22 95:15 97:8 101:6 26:9 37:16 77:12 34:22 41:8 57:15 67:6 80:6 141:16 143:19
165:4 187:19 130:4 151:24 102:9 103:23 104:9 92:9 94:21 98:8 surrounding (2) 58:3 146:9 159:7 161:12 144:5 152:6 156:7
191:24 195:13 161:15 163:7 177:9 104:15 108:15,22 100:25 108:10 200:3 173:3 182:9 208:17 156:9 158:2,3,20
202:10 211:2 212:6 197:8 109:21 110:19 109:13,16 117:6 suspect (1) 127:8 209:6,7 214:25 171:5 179:7,14
214:16 standards (8) 160:13 111:7,12 113:5,9 119:15 124:16 swaps (2) 106:5,20 218:7 186:18 204:20
sorts (2) 14:19 112:15 160:25 161:20 115:23 117:8 127:13,20 173:24 swear (2) 1:6,12 telling (4) 84:13 209:11 212:3,4
sought (3) 128:17 162:5,25 163:5,14 122:11 123:11 179:7 183:12,25 Swedish (1) 15:2 114:22 159:3 218:24 219:21,22
180:9 196:18 188:15 124:12,15 125:18 192:18,21 203:18 switch (2) 58:23 214:5 215:18 thanks (1) 133:8
sounds (2) 151:10 standing (1) 163:6 129:25 130:22 204:3,8 208:25 Sworn (2) 1:10 221:3 tells (1) 196:1 theoretical (2) 172:4
216:22 stands (1) 121:13 131:21 133:8 suggested (9) 27:9 sympathise (1) 3:24 tend (1) 101:3 175:20
source (4) 197:2 start (13) 35:24 58:14 134:24 136:2 40:23 94:1,6,7 synergistic (3) 169:13 tender (1) 149:15 theory (3) 22:20 91:4
201:20 202:1,19 58:14,17 59:2,4 138:25 140:15,22 175:13 183:12,18 169:20 182:20 tendered (1) 216:20 131:21
sources (2) 95:22 120:22 122:4 137:9 141:7,16 142:1 201:5 system (4) 5:3 7:8 tends (1) 149:7 thing (11) 61:7 74:24
157:22 213:2 214:1,20,22 143:19 144:5 suggesting (21) 41:5 15:2 78:25 Terekhov (3) 72:3,5 85:12 118:13
space (4) 168:12 started (9) 66:13 156:10,11,24 157:4 69:2,6 75:21 89:20 72:24 136:24 138:16
175:11 183:24 103:1,2,12,17,21 157:21 158:2,12 90:23 93:5,7,24 T term (7) 12:22 18:2 142:14 147:22
199:24 150:21 209:18 178:21 212:1,3 99:25 100:1 104:1 table (17) 166:12,16 63:4 66:13 67:19 150:22 186:1 196:6
speak (2) 101:17 216:10 213:9 214:4 215:18 115:23 127:25 90:21 206:20 things (26) 11:6 13:20
166:21,22,23
215:15 starting (8) 57:25 215:22 216:9,18 128:22 129:3 130:9 terminal (89) 17:17 26:8,10 40:22 51:7
167:10 169:6 171:4
speaking (2) 95:21 59:18 75:25 99:11 219:2 221:5,10,12 171:18 201:4 211:3 20:17 27:8,24 51:11 61:12 74:10
171:6,13,15,24
100:14 114:18 120:23 Stroilov’s (1) 219:1 218:15 40:17 41:6 44:1,10 75:7 76:12 124:3
173:23 185:2
special (11) 29:3 48:5 125:5 139:20 strong (1) 111:19 suggestion (3) 80:21 45:18,25 48:10,23 126:10 130:8 131:7
188:19,22 189:21
144:11 159:9,15,23 starts (2) 19:14 59:8 structurally (2) 106:1 178:22 209:1 50:2,11 52:13,25 131:11 136:9,10
tactics (2) 14:23 63:14
160:2 173:7,9,10 state (4) 100:18 106:17 suggestions (1) 96:22 54:8,15 77:23 78:5 137:16 155:1
tag (1) 184:8
192:11 123:21 140:20 structure (6) 18:9 suggests (19) 91:22 78:8,21 107:22 178:23 179:3
take (61) 23:18,25
specialised (3) 168:16 163:5 129:23 130:12,19 104:17 128:5 149:4 111:2 158:22,25 210:18 212:1,2,8
39:2 47:1,5 49:15
168:20,21 stated (5) 8:24 148:1 149:2,10 149:15 170:23 159:8,13,16,17,25 think (256) 1:6 3:19
57:16 59:14 75:2
specific (13) 25:20 160:16 181:5 structured (1) 16:4 172:9,22,23 175:1 159:25 160:6,23 3:20,22 4:9 11:20
80:23 92:8,15
26:13,18 84:2 183:22 structures (1) 130:24 176:16 180:22 162:4,19,22 164:20 14:18 25:5,9,14

Opus 2 International transcripts@opus2.com
Official Court Reporters +44 (0)20 3008 5900

235

April 11, 2016 Day 36

26:5,22,24 27:5 157:1 186:7 143:25 219:7
28:20 30:6 32:12 thirdly (1) 104:17 tomorrow (11) 210:19 tried (3) 15:22 41:4
32:14,23 33:21 thought (19) 7:2 213:1,2,3,7,16 142:23
35:15 36:4 41:25 34:20 60:23 74:23 214:1,18 215:4 triggered (2) 10:8,11
44:6 49:7 53:23 79:7 84:23 115:11 216:23 219:22 trilateral (1) 32:3
54:24 56:3,21,25 115:20 117:10 top (4) 57:20 65:18 trillion (14) 104:3,6,10
57:21,21 58:24 121:6 123:3,7 126:19 202:13 104:11,14,16,16
60:3,5,7 62:12,15 126:9 148:16 149:5 topics (2) 124:2 106:16,16,20
64:14 66:4,8,9 67:4 155:8 176:18 215:7 192:16 107:12 108:11,11
67:18,25 69:7 217:5 total (1) 178:7 108:25
70:21,25 71:4,10 thoughts (1) 122:4 totally (1) 102:4 trillions (1) 144:13
72:3 74:6,7 75:21 thousands (1) 118:3 touches (1) 146:13 trouble (2) 155:10
78:14,18 80:3,9,12 threatens (1) 143:10 trace (1) 37:4 157:21
81:1,11,22,25 82:4 three (14) 9:8 27:24 trade (16) 107:14 troubled (1) 106:3
82:4,5,6,9 85:16,17 28:1 92:20 112:19 160:6 185:20 TRP (1) 185:22
85:19 86:2,6,18 112:23 148:22 186:12,24 187:7,8 trucks (2) 173:8,10
87:18,21 88:11,19 157:9 190:2,4,20 187:8,11,16,19,24 true (13) 2:18 20:4
88:19,25 90:14 198:18 201:22 188:1,1 190:7,10 24:3 106:7 150:8
91:21 92:6,7 93:9 205:19 trade-related (7) 158:1 163:18
93:12,13 94:1,6,25 throughput (3) 172:8 184:8,21,24 185:11 177:20 179:8
95:5,15 96:3 97:1 172:11 175:1 185:16,24 186:10 183:11 195:17
97:12 98:7 99:17 thumb (1) 198:7 traded (2) 141:25 199:19 206:18
99:21 100:14,15,21 Thursday (2) 6:2 153:14 trust (1) 75:7
101:6,11 102:1,2 217:8 trading (2) 184:13 trusted (3) 18:3 68:14
102:15 103:3,4 tidy (1) 58:24 185:17 75:3
104:1,17 105:20 tie (1) 218:19 Traktornye (4) 115:1,5 truth (1) 129:22
106:14,20 107:11 ties (1) 73:13 115:22 116:11 try (21) 3:21 13:19
108:9,12 109:12,19 timber (4) 185:24 transaction (20) 16:3 23:10 31:8 59:24
110:10,12 113:6,11 187:7,7 188:1 16:8 28:16 47:6 63:19 68:13 120:6
113:22 114:2,2,4 time (84) 9:18 10:24 62:13 65:16 72:6 124:16 133:16
114:12,14,18,25 11:11,23 12:6,10 72:23 73:11 74:7,8 135:2 165:3 168:4
115:15 116:17,22 13:18,21 14:20 79:3,12,14,21 169:22 188:19
117:9 118:22 119:5 18:25 19:15 27:4 80:14 83:21 145:6 191:12,12 214:11
119:12 120:7,16,16 27:22 30:11 35:4 147:4,4 215:25 218:19
120:16,19,21 121:7 41:11 47:16,17 transactional (2) 219:13
121:8,13,18 122:11 53:16 56:19 57:16 152:4 155:12 trying (27) 16:5 41:3
122:13 123:11,17 58:18 59:5 66:10 transactions (20) 8:10 60:10 79:14 81:5
123:24,24 124:13 72:12 86:14,16 13:11 32:6 48:19 96:4,8,15,15
126:6,13,15,20,24 97:2 99:8,14 106:7 79:5 94:22 103:18 112:19 114:3
127:5,14 128:25 107:8 111:13 104:2,18,21 105:4 118:12,20 132:12
129:14 130:2,22 112:17,21,22 116:5 105:23 109:14,23 133:11,20,22,23
131:11 133:8 117:10,14 118:15 132:2 143:22 142:20 148:12,13
135:21 139:19,22 121:23 122:12 144:14,19 160:12 177:14 187:5 188:7
140:22 141:11,17 123:6 129:3 133:20 160:20 188:9 189:10
142:1,2,4,7 144:21 138:11 139:22 transcript (3) 57:19 210:10
145:10 146:13,14 143:2,21 145:14 58:24 59:22 Tsvelodubovo (15)
146:23 148:7,12 146:7,16 148:3 transfer (7) 17:25 189:24 200:16
151:12,15 152:6,7 149:6 153:13 41:17 46:11 110:25 204:14,23 205:5,10
152:13 153:11 161:23 175:11 129:17 137:2 206:3 210:20,23
154:13,20 155:2,2 176:9 178:16 179:8 148:25 211:10,10,11,18,23
156:11,14 157:2,4 179:10 184:20 transferred (15) 15:8 212:9
157:9,10,16,22 185:21 186:24 16:13 18:24 19:2 Tuesday (4) 216:23
158:21 160:22,24 187:12,17 188:6 19:17,19,20 21:3,8 217:7,18 220:1
162:8 163:19,23 193:12,25 194:2 21:9 30:7 34:22 tunnel (1) 63:6
164:9 165:12,17 201:2,11 203:23 61:22 77:7 118:25 tunnelling (2) 11:19
167:14,17 169:10 206:1 207:21 208:2 transferring (2) 41:18 117:7
171:10 172:14 212:18 213:2,4 149:20 Turetsky (35) 2:10
173:23 178:24 214:14,15 215:6 transfers (3) 106:8 13:17,25 18:8,17
179:2 181:10 183:1 216:22 217:21 149:21 153:5 19:6 20:9 28:20
183:4 185:15 187:1 times (7) 104:22 transformer (1) 200:1 39:21 40:2,14,23
188:3,24 189:5 180:23 181:6 183:9 translated (2) 90:19 62:17 65:10 80:7
192:4 200:11,14 193:19 198:14 179:1 86:23,24,25 87:3
201:15,24 202:11 218:16 translates (1) 180:21 88:9 95:10 102:12
206:11 207:2 208:7 timetable (1) 4:14 translation (8) 27:19 105:13 108:15
213:9,10,11,19 timetabling (1) 216:17 30:17 32:18 33:5 114:15 120:20
214:4,7,8,13 timing (1) 81:23 71:10,15 179:8 121:23 125:19
215:22,22 216:18 tirelessly (1) 118:7 205:23 129:23 138:25
217:23 218:1,4,4,5 title (4) 14:14 19:9 translator (1) 173:10 141:7 143:16 144:9
218:6,12 219:2,19 64:16 91:17 transmit (1) 50:23 156:12 221:8
thinking (7) 3:16 83:3 titles (2) 18:22 63:24 transparent (2) 16:7 Turetsky’s (2) 18:6
92:3 118:13 137:21 today (14) 2:16 35:17 16:10 80:3
217:10 218:2 119:12 123:16,20 transshipment (5) turn (2) 87:3 131:25
thinks (1) 74:4 123:22 124:1,20,23 159:13 160:6 174:5 turnover (5) 104:2
third (21) 14:13 28:25 131:22 133:22 175:23 184:12 171:9 174:14,19,24
33:17 76:19 77:14 156:18 214:24 treat (1) 67:25 twice (1) 171:11
78:4,12 79:2,9,16 217:25 treated (1) 98:10 two (54) 2:16,21 6:14
119:1 135:1 139:20 today’s (2) 88:1 126:1 treats (1) 101:11 8:8 15:18 16:23
140:7 142:3 150:4 told (5) 18:19 155:22 tree (1) 64:8 20:21 21:2,11 28:1
150:7 156:13,17,22 159:19 168:16 trial (4) 139:12 143:20 40:21 41:10 44:14

50:16 52:24 55:2 58:13,15,18 59:3,5 61:11 63:20 89:8 92:19 112:19 119:22 122:22 123:25,25 124:20 145:10 147:11 155:2 164:3,9 167:19 171:11 181:15,21 184:15 192:15 193:13,14 194:2 204:11 212:2 212:7,23 218:3,19 219:12,12,14

type (6) 106:10 107:2 160:12 185:3,9 210:2

types (1) 112:13 typical (2) 128:3 175:9 typically (6) 10:16

75:4,5 94:23 109:11,16

U

ultimately (4) 55:1 73:23,25 154:12
unable (2) 108:4 114:10

uncertainty (1) 13:4 underlying (2) 10:20

116:8 undermines (1) 60:18 undersecured (1) 10:2 understand (41)

15:23 23:15,22 29:19,21 35:21 43:22 59:13,15,16 59:17,21 60:13,13 78:14 79:14 81:7 85:5 96:9,14,16 108:12 116:2 127:10 135:6 138:15 143:7 144:15 149:17,18 149:19,22 151:11 154:9 155:7 159:20 184:15 195:16 201:7 209:1 210:9

understandable (1)

101:1 understandably (1)

114:21 understanding (23)

37:21,22,25 49:20 50:5 51:6 59:22 60:1 84:13 91:25 102:16 115:16 116:25 145:21 149:13 150:1 151:17,22 152:3,7 152:9 153:15 186:7

understood (10)

45:16,20 79:7 113:18 137:20 152:18 153:4 156:24 186:16 187:10

undertake (7) 11:2 12:24 29:4 49:11 49:16 50:22 187:19

undertaken (1)

144:15 unequal (1) 216:3 unethical (1) 97:24 unfolding (1) 138:9

unfortunate (1) 118:3 unfortunately (1)

66:15

unhappy (1) 98:10 unheard (1) 91:2 unique (4) 141:15 142:11 144:10

211:11

units (5) 170:20,23,25 171:23 172:11

university (1) 143:9 unlisted (2) 141:25

152:21 unloaded (1) 173:6 unnecessary (2) 91:9

119:7

unrealistic (1) 112:18 unscrupulous (2)

132:18 137:5

unscrupulously (1)

132:15 unseemly (1) 213:16 unsettled (1) 217:13 unspecified (2) 84:17

85:2

untoward (2) 43:20 55:3

unusual (24) 16:10 24:5 25:22 28:16 36:8 62:12 75:1 79:4 80:15 85:24 105:7 117:16 118:23 119:2,9 127:3 141:9,13,15 142:2,6,7,9 143:13

upsetting (1) 118:1 urgency (1) 117:24 use (39) 67:11 76:19

80:17 102:17 103:3 103:12,17,21 132:12 142:3,4,22 147:1 160:4,5 168:17,22 169:20 177:14 185:6,8,9 186:13 187:21,23 190:22 191:2 194:20 195:17,21 197:11 203:16 205:7,11,11 206:8 206:12,19 210:4

useful (1) 162:14 usefully (1) 187:19 uses (1) 78:4

usual (4) 147:2 148:6 148:7 214:16

usually (3) 111:18 144:15 165:5

utilisation (5) 171:21 172:9 173:18 175:24 185:3

utilise (1) 184:17 utilised (1) 185:1 utterly (2) 110:18

183:25

V

v (6) 65:23 67:16 113:11,25 114:6 116:15

vague (1) 148:20 valid (2) 133:7 193:2 validity (1) 137:24 valuable (6) 12:1,1,2,8

12:9 108:6 valuation (40) 112:13

153:20 158:22 160:13,25 161:15 161:21 162:24 163:7,14,16 164:25 167:21 177:7 178:6 179:20,22 181:7,23

182:12 183:2,3 188:18 189:23 190:2,7,13,16 191:6,7,14,17,22 194:16 202:13,15 203:19 204:14,17 204:24

valuations (3) 153:1

165:15 181:9 value (108) 10:6,16

11:14,20,24 12:6 12:13 13:2 15:14 21:15,15,22 22:6 22:15,21,22 23:7 24:2 28:22 31:19 42:13,22,24 43:7 44:16 45:13 54:19 55:3,9 112:21 113:15 124:6 152:2 153:7,25 155:4 161:22 162:21 165:7,14 166:16 167:19 169:13,16 169:18,20 170:1,9 177:12,13 178:1,4 179:24 180:10,11 180:19,21,23 181:1 181:11,14,15,20 182:3,21 183:2,9 183:13 184:1 185:3 185:7,17 186:9 187:21 188:20 189:1,7,13,18 190:9,10,19,25 191:3,10,19 192:1 192:2,10,11,13,14 192:18 193:18 194:17 195:6,15 197:11 198:1 202:9 202:21,25 203:22 203:24 204:4,6 211:2,16

valued (11) 166:4 167:22 168:25 169:4 177:16,17 182:14 189:20 191:14 195:4 203:20

valuer (1) 191:6 values (5) 12:4 204:1

204:2,7,10 valuing (8) 158:24

163:8,15 166:4 185:19 196:24 202:15 211:18 variety (1) 132:15 various (19) 24:14

38:13 42:9 45:11 48:14 56:23 63:13 74:14 76:22 80:17 88:15 90:11 99:13 109:10 128:18 129:19 132:16 137:13 181:8

variously (1) 6:11 vary (1) 177:8 vast (2) 144:13,19 VEB (5) 114:6,7,11

115:6,7 vehicles (1) 144:14

version (6) 91:8,11,12

98:21 133:15,19

Vested (1) 146:3 victims (1) 96:7

view (29) 16:4 17:5,12 40:3 52:17,22 62:14 83:14 92:4 97:15,19 100:8,13 100:23,24 101:8,9

Opus 2 International transcripts@opus2.com
Official Court Reporters +44 (0)20 3008 5900

236

April 11, 2016 Day 36

101:11,14 102:25 120:11,23 121:5,7 121:7 158:10 161:17 183:22 218:5
views (3) 90:5 122:22 141:12

village (1) 211:22 Vinarskya (2) 207:3,6 violation (1) 85:21 virtually (1) 113:1 virtue (1) 152:23 vis-a-vis (1) 120:1 visited (1) 146:10 Vitaly (1) 5:6

vividly (1) 117:14

Vnesheconombank …

115:2 157:11

Vodoslivnoy (1)

196:22 void (1) 54:1

volume (1) 106:10 voluminous (1)

122:18 voluntarily (1) 51:9 voted (1) 8:9 voting (1) 145:7 VPGA (1) 190:7 Vyborg (7) 206:7,7

207:1,9 208:5 209:14,14
Vyborgsky (1) 211:22

W

wait (3) 51:18 53:21 184:24
want (34) 2:21 13:14 27:20 40:23,25 51:23 55:11,19 57:14 58:6 63:25 93:19 95:16 109:8 135:15 159:5,7 164:2,21 166:9 170:13 171:6 176:19,21 184:6,7 186:6 187:3 189:20 199:22 201:8 211:20 212:5 214:18

wanted (18) 64:12 67:12,13 108:5 136:25 137:1,21 138:7 148:17,18 151:5 186:22,24 187:9,14 216:19 217:1 219:1

war (12) 58:14,14 59:2,18 60:2,2,6,6 60:10,14 62:3,4

warring (1) 61:18 wasn’t (21) 8:23 9:18

12:11 22:4 25:1 41:10 74:8 108:1 132:10 141:19,20 148:12 150:25 156:3 163:11 164:19 182:16 188:8 195:1 211:1 214:24

waste (1) 53:16 water (5) 1:15 87:1

162:14 183:20 198:9

way (37) 34:10 36:9 51:1 52:21,22 60:5 69:9 79:4,13 98:3 104:23 106:8 112:8 116:23 117:5,6

118:8 121:22 127:11 138:21 144:13 146:15 148:17 149:3 155:1 159:4 165:25 168:14,16 170:2 173:12 185:1 189:2 192:21 193:14 194:13 207:5

ways (2) 132:15 155:2 weak (2) 160:11

164:24 weapons (1) 168:17

website (9) 4:7 70:20 92:25 93:24 201:18 210:17 212:7,8,9

Wednesday (2) 4:15

6:16

week (6) 158:17 171:11 217:5,10 218:15 219:13

weeks (3) 64:20 79:13 219:13

weight (2) 150:19 165:14

Welcome (1) 158:15 went (3) 5:13 90:10

98:8

weren’t (7) 10:22 21:4 24:25 31:21 146:12 167:1,4

western (39) 17:17 20:17 27:8,24 40:17 41:6 44:1,10 45:18,25 48:10,23 50:2,11 52:13,25 54:8,15 77:23 78:5 78:8,21 107:22 111:2 159:8,25,25 160:23 162:4,19,22 164:20 165:1,2 184:7,9,11 188:18 206:9

whatsoever (1) 98:3 whilst (1) 85:1 whiter (2) 140:24,25 wholesale (1) 64:12 wide (2) 141:20

198:18 widened (1) 10:15

widespread (7) 90:16 90:20 134:11,13 135:24 136:1 140:12

Wikipedia (2) 196:23

197:2 willing (1) 23:21

wish (2) 77:21 215:19 wishing (1) 213:16 witness (12) 1:12 25:5

82:12 117:11 119:13 142:12 144:20 178:22 186:7 187:6,10 215:1

witnesses (5) 7:6 26:15,19 96:7 142:15

wonder (4) 27:1 80:5 87:19 217:16 wondered (1) 212:14 word (5) 56:15 60:13

74:9 80:17 192:14 worded (1) 36:9 words (20) 9:25 10:14

28:1 35:8 37:9 38:25 52:21 76:14 99:9 157:7 169:1,5 169:10 178:3

185:18 188:12 191:17 192:20,22 213:20

work (4) 142:23 169:14 210:22 215:8

workable (1) 147:22 worked (2) 118:7
181:12 working (3) 89:6

126:2 168:13 works (1) 102:16 world (9) 136:5 148:5

192:8 197:6 201:21 206:9,21,24 214:2

world’s (2) 106:11

135:22 worried (8) 31:16

62:7 64:24 73:6 74:12 85:9 117:2 219:5

worry (2) 18:12 137:19

worrying (2) 73:7 140:20

worsen (1) 51:1 worst (1) 117:20

worth (3) 31:21 92:11 190:11

wouldn’t (50) 9:22 13:9 14:18 17:3 23:12 29:16 36:4 36:17 37:8,13,17 41:8 43:19 49:20 61:19,24 66:10 67:20,23 75:4 76:6 78:1 79:23 91:24 92:7 94:2 95:10,13 96:8 101:10 102:2 109:18 110:3,4 112:18 122:9 136:9 143:24 149:2,17 152:24 153:18 160:9,10,23 164:24 188:24 189:2 191:21 207:21

writing (2) 207:11 208:7

written (9) 9:1 25:8 25:15 28:9 62:11 75:6 84:19 150:5 219:9

wrong (21) 22:11 64:7 78:11,16,18,20 81:2,23 89:21 92:24 93:3,7,13 100:15 127:14 133:24 145:22 196:7 200:13 204:19 212:6

wrongdoing (1)

113:13

wrongly (3) 90:6 96:3 187:15

wrote (2) 17:16,22

X

Y

yards (1) 158:25 Yatvetsky (1) 214:6 year (24) 32:23 82:4

104:5,20 105:22 126:2 136:4 147:11 161:4,4,24 171:10 171:23 172:16,21 173:13 174:1,2 176:9 188:21,23

200:19 201:9,10 years (13) 9:10 58:16

59:3 91:23 112:19 112:23 142:16 147:11 161:18,24 161:24 165:2 209:19

years’ (2) 58:18 59:5 Yesterday (1) 71:16 young (2) 142:16

149:9

younger (1) 142:17

Z

Zavody (4) 115:2,5,22

116:11

Zelyenov (2) 41:16,23

Zelyenov’s (2) 41:17

41:24

zero (2) 9:11 203:7 zone (4) 159:9,10,11

198:9

zones (1) 197:24 zoom (1) 119:17

0

0.5619 (4) 189:3,8,14 189:16
0155 (1) 189:11

1

1 (20) 65:15 166:16 166:25 167:10,21 167:22 168:25 169:6,19,22 170:2 181:12,24 182:4,14 182:15 199:23 221:3,4,5

1-5 (1) 166:21

1,000 (2) 198:22 211:13

1,250 (2) 199:3,4

1.07 (1) 125:8

1.15 (1) 202:18

1.3 (1) 88:11

1.45 (6) 124:16,25 125:4,5,7,10

1.5 (6) 104:11,16 106:16 108:11 174:16 202:18

1.6 (2) 119:17 120:13

1.9 (2) 210:23 212:10

10 (10) 81:11,12 88:20 101:18 161:24 183:9 199:20 201:10,11 218:15

10.30 (2) 213:20 214:21
10.5 (1) 201:15

100 (4) 71:4 177:16 189:5 199:7
100,084.64 (1) 189:13

11 (5) 1:1 102:1 189:25 193:16 218:15

11.0 (2) 4:20,21

11.44 (1) 86:19

11.56 (1) 86:21

12 (7) 88:25 180:23 198:10,13 212:12 218:15 220:1

12.0 (1) 158:16

129 (1) 172:23

129,429 (2) 171:23 172:21
12th (1) 216:23

13 (2) 88:23 218:15

14 (4) 88:22 89:8 110:11 189:25
14.7 (1) 212:11

143 (1) 189:18

144 (1) 221:11

15 (1) 199:21

15.5 (1) 189:5

150 (1) 199:7

156 (1) 221:12

158 (2) 221:13,14

159 (2) 189:17,17

16 (1) 189:17

180 (1) 164:16

182 (1) 164:16

19 (5) 9:6,6 59:11 183:2 188:19

1990s (2) 112:9 136:23

1990s/early (1) 90:22 19th (1) 217:18

2

2 (17) 3:6 48:17 49:6 65:15,15 82:23 83:4,13 88:25 104:10,16 106:16 107:12 108:11,11 108:25 218:12

2(b)(ii) (2) 205:14,15 2,000 (1) 210:1 2.15 (1) 124:17

2.3 (1) 18:7

2.30 (1) 125:6

2.4 (1) 200:20

2.5 (9) 195:1,5 198:15 198:19 199:5,8 202:24 210:24 212:11

2.85 (1) 204:5

20 (6) 9:6 11:10 65:1 87:14 183:8 191:14

200 (3) 183:13,19 184:1

2000s (1) 90:22
2006 (1) 140:16
2007 (6) 160:23 161:8
161:9 162:19
164:20 171:10
2008 (20) 8:14,17,23
9:2 12:11 24:15
33:22 34:3 36:3 47:21 66:10,13 117:15 145:13,22 161:10 164:13 166:19 177:17 185:12

2008/2009 (1) 97:23

2009 (16) 8:17 66:10 71:1,6,11 82:5 117:15 138:5,8 145:15,23 161:12 165:20 170:21 182:15 204:5

201 (2) 177:18 183:3

2010 (4) 66:10 104:4
104:10 105:1
2011 (7) 82:6 91:18
91:22 146:17
150:18 166:21
177:18
2012 (4) 164:13
184:11,20 185:12
2013 (2) 5:21 140:21
2014 (8) 4:9,16 5:21
6:2 8:15 104:1,10
105:1
2015 (13) 5:21 24:9
87:14 177:19 183:1

183:8,13 185:12 193:13 204:7 210:24 211:19 212:13

2016 (2) 1:1 220:1

202 (2) 179:24 180:21

21 (7) 166:12,16,21 166:22,23 167:10 169:6

212 (2) 177:18 221:15

22 (7) 4:16 14:25 16:7
16:12 58:8,10
164:21
23 (2) 6:2 138:5
24 (1) 202:24
240 (1) 172:1

240,000 (6) 170:20

171:17 172:1,2,15
175:18
25 (9) 57:14,20 65:1
198:4,11,13 199:3
201:14 218:8
25(d) (1) 75:16
25,000 (1) 198:15
26 (5) 24:9 193:15,17
204:12 218:8
27 (4) 71:11 171:15
173:23 218:8
28 (4) 75:20,21,25
218:8
284 (3) 188:25 189:6 189:16

284.64 (1) 188:23

29 (2) 75:21 218:8

3

3 (15) 49:10,10,15 50:3,5,7 65:15 85:21,22 120:20 189:21 196:17 204:8 218:13 221:6

3.29 (1) 178:18

3.4 (1) 120:23

3.42 (1) 178:20

3.5 (2) 80:4 121:2

3.6 (2) 80:4 121:2

3.8 (3) 39:24 40:3 182:15
3.9 (1) 40:13

30 (7) 24:15 34:3 47:20 123:11 145:22 198:7,16
31 (3) 171:21 172:16 174:2
33,000 (2) 175:2,5

34,500 (1) 167:16

340 (2) 193:6 203:15

35 (2) 162:6 180:22

35,000 (1) 172:11

36 (2) 139:12,14

37,000 (1) 210:25

38 (1) 172:9

38,041,951 (1) 175:18

39 (3) 104:6,14 176:16

4

4 (8) 50:20 51:11 65:15 71:13 107:18 107:21 190:7 218:13

4.1 (1) 69:22

4.15 (1) 213:20

4.2 (2) 13:24 62:17

4.3 (1) 62:17

4.30 (4) 5:23 123:22 124:11,23

4.45/4.50 (1) 125:13

40 (9) 123:11 124:14
162:19 167:8,9
171:22 172:19
181:20 182:6
41 (1) 76:18
42 (1) 76:22
43 (2) 76:18 77:5
44 (2) 189:5,11
45 (4) 139:20,23
171:22 212:22
47 (1) 42:17
47(c) (2) 42:8,20
48 (1) 33:24
49 (2) 34:19 36:18
49,000 (1) 175:19

5

5 (20) 73:7 120:17 166:25 167:10,21 167:23 168:25 169:6,19,22 170:2 181:12,24 182:4,14 200:17,19,20,20 218:13

5,000 (1) 194:14

5.2 (1) 219:24

5.1 (1) 127:16

5.13 (1) 132:4

5.15 (3) 14:3 132:19 172:7
5.2 (3) 82:12,14 128:16
5.20 (2) 98:25 174:13

5.22 (2) 109:7,13

5.23 (2) 109:9 114:18

5.24 (1) 175:1

5.25 (8) 97:12,18 98:17 99:1,4,11,11 100:21

5.27 (1) 175:14

5.28 (1) 175:14

5.3 (2) 128:24 129:4

5.30 (1) 176:15

5.5 (2) 129:17 180:18

5.6 (1) 102:13

5.7 (5) 101:22 102:13 108:16 167:15 170:11

5.8 (1) 170:18

5.9 (2) 170:19,23

50 (1) 199:2 50(a) (1) 38:20 500 (1) 199:1 5000 (1) 198:1

51 (1) 176:17

52 (1) 55:23

54 (5) 56:8,9 171:22 172:6 174:5
55 (4) 55:14 56:21,22 57:1
55,000 (1) 174:15

55.1 (1) 34:5

56 (1) 144:21

57 (1) 144:21

57,000 (1) 167:14

58 (1) 176:17

59 (2) 57:20,25

6

6 (13) 166:24 167:4 167:16,22 169:2,4 169:19,23 170:2 181:12,25 182:6 218:9

6-7 (1) 166:22

6.1 (3) 29:3,19 190:8

6.6 (1) 179:19

6.7 (1) 180:3

Opus 2 International transcripts@opus2.com
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237
April 11, 2016 Day 36

60 (7) 59:10 167:11
172:20 175:3 176:1
181:21,25
61 (1) 59:11
62 (1) 73:21
630 (1) 106:20
64.6 (1) 104:3
65 (1) 68:5
67 (2) 175:25 176:1
68 (1) 68:10

7

7 (14) 102:1 162:17 166:17,24 167:4,22 169:2,5,19,23 170:2 181:13,25 182:6

7,500 (1) 198:17

75 (1) 174:15

75,000 (5) 171:10 172:17 173:25 174:12 175:17

75,500 (1) 174:2 75/25 (1) 180:1

8

8 (6) 102:8 133:10 137:20,21 176:25 189:24

800 (3) 173:13,20 198:24

81 (2) 166:18 221:7

86 (1) 221:8

87 (1) 221:9

88 (1) 221:10

9

9 (5) 24:12 103:24 180:23 202:25 218:15

9,900 (3) 27:15 31:19 32:10

9.00 (1) 4:17

9.30 (6) 1:2 214:18,22 215:4 219:22,25

9.465 (2) 202:16,22

90 (2) 172:24 182:22

92,000 (3) 170:23,25 171:19

Opus 2 International transcripts@opus2.com
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