Company linked to oligarch fights to stay with Westpac
Targa Capital, which is linked to sanctioned Russian oligarch Alexander Abramov, has gone to the High Court seeking an injunction to stop Westpac from withdrawing its services.
Last year, Abramov was sanctioned by the New Zealand Government following the Russian invasion of Ukraine.
His assets in New Zealand include a luxury retreat in Helena Bay, Northland, on 320 hectares of farmland and native forest.
At the time of his local sanction, Foreign Minister Nanaia Mahuta said, although she was advised that his representatives in New Zealand insisted he had not played a role in the invasion and had not lived in Russia since 2016, “as a leading businessman with links to Russia’s political and economic elites, I expect he has the influence to speak up and be heard”.
Following the sanctions in November, Westpac withdrew from providing banking services to Targa Capital, which was finalised last month.
An extension was provided, but it was due to expire.
Targa Capital is owned by Endurance Capital, both of which are believed to be Abramov’s investment companies.
The companies directors are New Zealand-based Geoffrey Hosking and Christopher Seel as well as Ian Cochrane, whose address, according to the Companies Office, is in Moscow.
The application was heard in the High Court at Auckland last week before Justice Neil Campbell. Daniel Mclellan, KC, counsel for Targa Capital, and Stephen Hunter, KC, acting for
Westpac, made submissions.
Mclellan told the court Targa’s property developments were estimated to be worth about $750 million and the company employed 200 people.
He said Westpac terminating its relationship would have “significant effects”.
However, Hunter said Westpac’s decision to terminate the relationship had reached the top of the bank.
Mclellan reiterated multiple times that if the bank had serious concerns
about Abramov’s links to the company, it would have withdrawn its services at the time the sanctions were placed on him last year.
It was not realistic to bank through an overseas institution domestically.
Westpac terminating the relationship would prevent Targa from operating and would place serious risk on its investments and loans, Mclellan said.
He cited Gloriavale seeking an injunction against the Bank of New Zealand after it sought to terminate its banking services.
Mclellan said there were no reasonable grounds to believe Abramov retained control of the company. He was not a director, shareholder or beneficiary any longer.
Responding, Hunter said it was Westpac’s position that it did, however, have reasonable belief.
Abramov had tipped $260m into the company and it would “beggar belief” someone would do that without wanting oversight of the entity.
Hunter said managing the risk of international sanctions was important to Westpac and that shouldn’t come as a surprise.
He said the “alleged inconvenience” wasn’t consistent with property projects already being funded, some of which were “very near” completion, meaning workers had already received what they were owed.
The only downside risk was if third parties called for more money, Hunter said.
Certain aspects around third parties were made confidential.
Justice Campbell reserved his decision and noted Westpac had agreed to extend its banking services until a judgment was delivered.