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By John Helmer, Moscow

Is Vladimir Kekhman going to lose his bananas because the Joint Fruit Company (JFC) he owns, Russia’s banana trade leader, cannot, or will not, pay $16.2 million in commercial damages awarded since August by the UK High Court in London?

Kekhman, who doubles as director of the Mikhailovsky Theatre in St. Petersburg, was recently named Man of the Year in the Theatre Producer category by Russia’s GQ Magazine. In March, he won the Izvestia Celebrity of the Year award in the Culture category (Good Deed was the other category). The year after next, Kekhman said at the March award ceremony, he plans bicentennial celebrations for Wagner and Verdi. Until then, it’s a case of la forza del destino – though not the one commissioned from Verdi by the old Bolshoi Kamenny Theatre in St. Petersburg.

Kekhman recently resigned from the official chairmanship of the JFC group board, but he appears to retain shareholding control. The tale of how he tried to lower JFC’s operating costs by eliminating the company’s fleet and ship chartering arrangements, and ended up in a High Court action by London-based refrigerated fleet operator, Star Reefers, started more than a year ago. Here’s what has happened so far. The case throws unusual light on the trading tactics and financial schemes which deliver to the table one of Russia’s staple fruits – the indicator of consumer prosperity in Soviet times.

In this week’s fresh news, JFC was ordered by the High Court to disclose all of its worldwide assets and trade and cargo agreements to Star Reefers. The court action and order, signed by Justice David Mackie on November 10, identifies nine companies in Kekhman’s banana-trade network, based in Russia, Ecuador, Cyprus, and the British Virgin Islands. JFC is 80% owned by Kekhman through Cyprus and BVI entities, Huntleigh and JFC Group Holdings. Bank of St. Petersburg owns a 20% stake.

Another JFC entity, Whilm Management Ltd, is the registered manager of 96 refrigerated containers which Star court action in the US state of Massachusetts has also arrested. In their current condition, they have a resale value of at least half a million dollars.

Star has won earlier UK High Court judgements imposing $16.2 million in penalties, plus interest and legal costs, for JFC’s premature termination of three vessel charter agreements. The Star boats were operated by JFC to ship bananas from Ecuador to St. Petersburg, dropping smaller banana cargoes for sale at ports along the way. JFC did not appeal the judgement and award, claiming the jurisdiction should be in the Russian courts. Enforcement action by Star is also under way in Cyprus and Luxembourg.

What makes the terms of this week’s London court order embarrassing for Kekhman is that it risks exposing financial details of his global business, including the collateral he reportedly pledged for loans to pay for real estate purchases and asset speculation, and which he has been obliged to repay since the bust in 2008. According to Justice Mackie, Kekhman’s companies must identify “all of the Defendant’s assets worldwide exceeding USD25,000 in value, whether in its own name or not, whether solely or jointly owned, and whether the Defendant is interested in them legally, beneficially or otherwise, and giving the value, location and details of all such assets.” He must also hand over records of “all payments or other transactions involving the transfer of assets in the last 12 months with a value exceeding USD25,000 at the time of payment or transfer, made by the Defendant to any other company or companies within the JFC group of companies, or received by the Defendant from any such company or companies, including (but not limited to) the following companies and any other companies identified as JFC group companies in the consolidated financial statements of the JFC group for the year ended 31 December 2009 and published on the website www.jfc.ru.”

That website provides no operating or financial reports; beyond identifying an auditor called BDO Unicon Northwest in St. Petersburg, it has kept all its financial data confidential. JFC’s last rouble bond subject to an outside agency rating was paid off last month. The S&P bond rating was negative.

Last year, JFC’s movement of banana-filled containers from Ecuador to St. Petersburg ran into trouble of a different sory. The boxes on board the MSC Nora were reported by Russian Customs officers to have carried concealed cocaine cargo. A similar case was reported to have occurred at Novorossiysk port, when the Alameda Star was the carrier.

JFC spokesman Andrei Semyonov declined to respond to requests for comment.

In an interview last month in the Russian GQ, celebrating this year’s accolade, Kekhman said he had been spending time on board his yacht in Sardinia and the French Riviera. Asked how he felt working with artists, compared to businessmen, Kekhman said: “Not harder, and not easier. More interesting.” As for his theatre business, Kekhman added, “we don’t overpay. We give the artist the chance to receive what is impossible in other opera or ballet houses. That is the most significant merit of [my] management.”

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