Sergei Bakeshin has commented on Business FM St Petersburg on an initiative of the Central Bank of the Russian Federation on combating the withdrawal of assets by owners of financial organisations 

Sergei Bakeshin Senior Associate

The Central Bank has proposed the creation of a new legal mechanism that will allow it to block accounts and transactions with property of the owners of financial institutions before the court decides to recover losses from them. The existing procedure of the Central Bank of the Russian Federation is not adequate, since it is applied after a license is withdrawn from a company or a bank or they undergo a restructuring procedure, and during this time their beneficiaries can withdraw their assets.

Sergei Bakeshin, Head of Maxima Legal Dispute Resolution and Insolvency Practice, expressed concern about the appropriateness and reasonableness of the option proposed by the Central Bank.

“At the moment, if a bank is already undergoing some insolvency procedures, creditors or the Deposit Insurance Agency may apply for controlling persons to be subject to subsidiary liability, including the so-called shadow beneficiaries, and at the same time file an application for interim measures in the form of an arrest on property and funds held in accounts. Practice follows this path, because, as a rule, in such cases the courts approve such applications and introduce interim measures – this happens the next day after the submission of such an application. If the Central Bank proposes to introduce some kind of similar mechanism before filing for insolvency, perhaps, some statements of claims for damages from a person, then it is not very clear on what basis and under what conditions he is going to do so”, Sergei explained on the air with Business FM St Petersburg.

You can listen to the broadcast on the website (in Russian) on the Business FM St Petersburg website >>>