Is Miratorg safeguarding its offshore chastity? | Latest news The Moscow Post
18 May 2021

Is Miratorg safeguarding its offshore "chastity"?

What can Linnik brothers do to get off the journalists' radar?

Lawyers of Miratorg are ready to change their claims against The Moscow Post in order to prove that the journalists have discredited the holding.

The next session was held at the Arbitration Court of St. Petersburg and the Leningrad Region, at which Miratorg Agribusiness Holding tried to prove its dishonored business reputation. The owners of the holding, Viktor and Alexander Linnik, filed a lawsuit against The Moscow Post, accusing journalists of publishing inaccurate and defamatory information.

At the next hearing on the case of a linguistic examination, lawyers from Miratorg were actually ready to take a break and use it to alter their claims so that the linguistic expert could sense the negative tone of the article. But one would have to try very hard to see it…

The journalist for The Moscow Post attempted to find out what the Linnik brothers mistook as the "malicious intent" of independent journalists.

The dispute broke out over one of the articles of three lawsuits that the Linnik brothers filed against The Moscow Post. In this case, it was about the publication "One deal from the world ...", in which the author spoke about the construction of the Miratorg complex on the site of military burials.The place, where in 1943 the Battle of Kursk, the greatest battle of the Great Patriotic War,broke out, can soon become a shambles.

However, the Linnik brothers merely raised their eyebrows at this information. The whole "hysteria" rose around other phrases. In fact, all the indignation of Miratorg lawyers boils down to the fact that the author of The Moscow Post allowed himself to note that the beneficiaries are hiding behind offshore companies and the business is being financed by state banks.

Perhaps, the lawyers themselves were clueless about what to "dig into." It seems that all litigation is just an act of pressure on independent journalists. For instance, as Alexei Kozlov, the editor-in-chief of The Moscow Post, said, even before the trial, some people who claimed to have represented the Linnik, demanded either money or the name of the customer for the article. Later, their demands changed to half a million to solve the "problems".

After futile attempts to “intimidate” journalists and find a non-existent “customer”, The Moscow Post was hit by a lawsuit to protect business reputation. Now, the Linnik brothers demand 500 thousand rubles “to each” through the court. Also, businessmen insist on the removal of objectionable publications and a rebuttal.

A week ago, on June 3, the Arbitration Court of St. Petersburg and the Leningrad Region clarified the expediency of a linguistic examination. The stumbling block was two or three phrases from the article, which, in fact, can be "interpreted" without special experts. But Miratorg holds to its own position on this.

As a result, today, on June 10, the Arbitration Court ruled on the appointment of an examination. But the Miratorg lawyers were not entirely satisfied. Lawyer Mikhail Emelyanov (the same, who, according to the journalists of Readovka, tried to force them to remove the mention of the Linnik brothers) asked that the insulting phrases indicated by the holding be considered in context. No one seems to understand how this should look from a legal standpoint …

Offshore companies in terms of Miratorg

The holding’s protest prompted an “offshore issue”, which the plaintiffs demanded to consider “in the context of the article”. The fact is that Miratorg Agribusiness Holding is managed by Cypriot companies. The Moscow Post journalist dared to draw attention to this, noting that offshore companies can be used to move funds from Russia and conceal partners.

The founding companies of Miratorg are indeed registered in the Republic of Cyprus, and offshore companies can indeed be used as an economic tool for laundering. Both that and the other are indisputable facts. Is it needed to say that no allegations are hidden behind these statements?

Miratorg, for sure, understands this. However, the desire to be offended is so great that now the company's advocates are trying to prove that the phrase about the withdrawal of money certainly refers to them. In other words, if the shoe fits, wear it.

At a meeting held on June 10, the lawyer was so desperate to convey his idea that he even offered to leave for a break or even postpone the hearing to adjust his claims. Like, the phrase about the offshore company should be considered in the context of the entire article.

But even if you challenged these statements as a whole, then something inaccurate or defamatory would probably be difficult to detect.

Judge Polina Raguzina said that there would be no “context”, thereby curbing Miratorg’s attempts to evade its own demands.

It seems that the whole trial was started solely because of this phrase about the offshore company. Emelyanov devoted a good share of his speech on it at the last meeting.

Then the representative of Miratorg said that President Vladimir Putin pointed to the negative nature of offshore companies. This led the lawyer to conclude that the Moscow Post journalists also negatively paint the activities of the company, managed by offshore companies. As the Miratorg lawyer said, however,  they have no complaints against Putin …

Although there is one against journalists

The judge drew attention to the fact that the lawyers were fixated on one proposal. As a result, it seems that the company representative understood that there was no sense or reason to change the claims.

The Miratorg lawyers' agitation is quite perplexing. Media constantly claims that the company has again sued someone. That is, the lawyers of the holding are constantly busy - they are certainly not inexperienced.

According to Alexander Changli,the lawyer of The Moscow Post, all that is happening is just a demonstration of preparedness. In his opinion, all the actions committed by the plaintiffs, in fact, lead to a delay in the trial.

"The behavior of the plaintiffs indicates that they are too prepared. Now they are trying to, so to say, " muddy the water" - concoct the information that may be recognized by the court as untrue and in some way affect their business reputation. But there is no such information in the articles - the journalists of the publication are quite serious in writing such articles and all statements are legally verified, " Changley told The Moscow Post.

The "concealed meaning" of loans

Let's delve deeper. It’s no secret that Miratorg’s structures are well-credited. 100% of Miratorg-Belgoro LLC's, a "subsidiary" of the holding company,shares are pledged to Sberbank. Miratorg's share in Bryansk Broiler LLC is pledged to Gazprombank. Credit lines have opened since 2010. The shares of the APH's subsidiary - the “ Bryansk Meat Company” - are under encumbrance of VEB.

This is what the author of The Moscow Post tells about, allowing himself such comment: "What competitors of the Linnik brothers' company can we talk about when they receive virtually unlimited state funding in the form of loans. The competitors never dreamed of this." Quite a defamation!

In their statement, the Linnik brothers claim that “this statement indicates that Linnik V.V. and Linnik A.V. as managers and beneficiaries of Miratorg Agro-Industrial Holding LLC receive unreasonable benefits from interaction with VEB.RF, which indicates dishonesty in carrying out business activities. The specified negative information unkindly characterizes their activities, indicating their use of unfair competition means. "

However, the conclusions of the lawyers are not in line with  what the article said. It seems that the defenders of the holding are trying to see the meaning that was not enclosed in the article. Should Miratorg’s lawyers perhaps talk less about “what the author wanted to say”?

The contested phrase contains only an indication that a private company receives state loans for business activities - not a word about it being illegal or unethical.  

Moreover, the author expresses his admiration for the Miratorg's success and the entrepreneurial abilities of businessmen by saying "the competitors never dreamed of it". It turns out, however, that the Linnik brothers are as "humble" as it gets.

Entrepreneurs did not particularly enjoy the remark about the state bank being in cahoots with a private structure that conducts business, as the author thinks, at the expense of state taxpayers, subsequently selling back to them. A solid statement, as it seems, appeared offensive for Miratorg.

What is so offensive about the usual narration of business tactics? Does Miratorg not like that someone revealed them? Normally, if nothing is to be ashamed of, there should be no ground for disturbance …

How the Linnik brothers fight off journalists

But the Linnik brothers love cutting up rough. In court, Miratorg also defended its “subsidiary” - the “Bryansk Local Company” - in front of the Readovka portal. It turned out that The Moscow Post reporters were not the only ones to be interested in the financial performance of the company.

In June 2019, Readovka announced the possible bankruptcy of the Bryansk Meat Company. Such conclusions were based on the company's financial statements for 2017-2018, according to which, for 2 years, the company's net assets were kept at a negative level. Miratorg  wasn't fond of this information, and he filed a lawsuit against the portal, demanding it to refute this information.

However, according to the authors of Readovka, after six months of proceedings, the holding’s lawyers were unable to prove the company's financial stability in court.

Following that, in 2019, the Bryansk Meat Company urgently carried out work on errors and recalculated the land assets that are registered with the company. In early June, Miratorg Agribusiness Holding solemnly reported on the "subsidiary's" exit from the period of losses. For the first time in the last 2 years, the company received a net profit of more than 3 billion rubles.

Thus, the Bryansk Meat Company seemed to have avoided the threat of bankruptcy. But, as the authors of Readovka note, Miratorg representatives continue to violate the Civil Code - the company's authorized capital is 10 times the value of its net assets. At the same time, a decrease in the authorized capital may presumably cause concern for VEB, which has pledges for shares in the Meat Bryansk company.

The fact is that both loans are preferential - the state pays interest on them for an agricultural holding. In the event of a sharp reduction in the authorized capital, or bankruptcy of the company, the owners of the Linnik brothers will have to face questions - by both VEB and the government.

It comes as no surprise that lawyers are trying hard to "squelch" journalists through legal proceedings. After all, if publications are recognized as anything but defamatory, will something have to be done? Revaluation of assets or, God forbid, withdrawing from offshore holdings will have to take place.

The Linnik brothers seem to be genuinely uncomfortable with the journalists showing interest in their business. According to Alexander Changli, all these confrontations with the media agencies may be buttressed by completely different motives than defending dignity: “We think  the point of the trial is not to somehow safeguard our reputation, since it is not hurt, but to put pressure on the media through mass lawsuits, to ensure that certain topics would be left untouched and journalist would steer clear of what is socially significant."

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