19.02.2010

LTech premises raided

Russian newspapers and other news sources, have published reports of an investigation into one of the country’s largest access rental companies - LTech.

According to the reports, the Russian Federal Customs Service (FCS) carried out a raid on the company’s Moscow offices and took owner and managing director Mikhail Malvinsky in for questioning. He was released some considerable time later after questioning and making a formal statement.

The search of the company’s offices and rental yard was carried out by investigating officers from FCS chief administration for customs investigation accompanied by a dozen armed men.

The reason for the raid concerns access equipment imported for Ratnik JSC, one of Ltech’s suppliers and involves the undervaluation of the equipment for import purposes, in order to reduce custom charges. The case is still under investigation and as far as we understand no formal charges have been issued so far.

LTech has also been fighting a decision handed down by the Dordrecht district court in the Netherlands, regarding claims by Rentpool for unpaid debts “exceeding €6.2 million” and for the return of 533 aerial lifts that have not been paid for.

Having heard the case, the court ordered Ltech to return all of the units to Rentpool and pay its legal costs. The court also set a daily penalty for any period of delay in returning the equipment along with a substantial fine.

The Dutch court’s decision has apparently been confirmed by the Moscow Region Arbitration Court and Russian Federation Supreme Arbitration Court. As a result the Khimki District Bailiffs Department was enlisted at the end of last year to assist with the recovery of the assets, but according to representatives of the claimant, so far this has not happened.
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(L-R) Dmitry and Mikhail Malvinsky

LTech chief financial officer Dmitry Malvinsky says that the company is disputing the Dutch Courts decision. He is quoted following the raid as saying: “The company is operating normally and we are ready to answer any questions law enforcement authorities might ask. We are a lawful company and we have nothing to fear”.

LTech also says that it has responded with a counter suit against Rentpool claiming fraudulently including assets in its legal actions which it should not have done, and this may have helped prevent the successful execution of the original court decision?

Vertikal Comment

The Malvinsky brothers built LTech into a leading player in the Russian access and telehandler sales and rental market at a remarkable pace. The company appears to run a very professional operation in terms of the way the equipment was looked after and the manner in which it solved challenging access problems.

It is clear though that it was doing much of it using other peoples money and has not co-operated with its creditors since the Russian market collapsed in 2008 to 2009.

The case against LTech has taken a long time to reach this point and from what we hear may still have some way to go. Several reports suggest that Mikhail Malvinsky has gone to ground and has not been seen at the company's offices for some time.