Cypriot Authorities Open Criminal Proceedings into GNT Group
[New York City, 16 March 2023] – The Economic Crime Investigation Unit of the Cypriot Police has opened criminal proceedings against Sergiy Groza, Volodymr Naumenko, Dusan Denic, the Company Secretary and others, all associated with GNT Group, which owns the Olimpex Coupe Grain Terminal in Odesa, Ukraine.
This intervention by the Cypriot authorities follows international legal proceedings (including a criminal complaint in Ukraine) being brought by GNT Group’s U.S. based creditors, Argentem Creek Partners (“ACP”) and Innovatus Capital Partners (“Innovatus”), related to the unexplained dissipation of grain inventory worth at least USD 130 million, GNT Group’s failure to repay its lenders and major shortcomings of governance and transparency.
The criminal complaint in Cyprus was initiated by Chris Iacovides of the CRI Group. Mr. Iacovides was appointed as receiver manager of GN Terminal Enterprises Limited on 20 December 2022 as part of enforcement steps taken by Madison Pacific Trust Limited, in its capacity as security trustee for lending by ACP and Innovatus.
Enforcing under the comprehensive security package ACP and Innovatus have in place to protect their investment, they intend to introduce transparent business practices, ensure tax compliance, conduct reliable audits and establish clear management of the terminal enterprise.
John Patton, Portfolio Manager, EMEA & Asia at ACP said:
“Since inception, ACP has invested over $600 million into Ukraine. We remain optimistic about Ukraine’s investment environment today, and our ability to enforce our rights wherever that may be in the world when situations deteriorate, where governance breaks down or where we suspect fraud.”
Chris Iacovides of CRI Group, who was appointed Receiver Manager of GN Terminal Enterprises Ltd in December 2022 said:
“The immediate and positive response by the Cypriot Police’s Economic Crime Unit to investigate our complaint, following the evidence which I was able to provide, demonstrates the seriousness of the allegations. The sums involved are enormous – around 14,000 trucks of grain appear to have disappeared with the owners even today refusing to provide any transparency about what has really taken place. We look forward to the outcome of this investigation.”
Ana Firmato, Managing Director at Innovatus said:
“This action is a validation of our position to enforce our rights as secured creditors of the GNT Group. Alongside ACP, we look forward to working diligently to bring GNT back to a path of profitability, transparency, tax compliance and proper corporate governance.”
ACP and Innovatus have a long-standing history of investing in Ukraine. Both companies remain committed in ensuring that this grain terminal is managed correctly according to Ukrainian and international standards.