Reverta, the private bank hired by Latvia to manage the country's delinquent borrowers, told BNE that the Khudainatov brothers – Eduard, the deputy CEO of the Russian oil company Rosneft, and his brother Zhan – have defaulted on loans totaling $78 million, despite having sold a subsidiary for $400 million in early 2012.
To avoid repaying their loan, the brothers obscured their financial holdings by liquidating the companies they used to borrow money from Latvia, and transferring those companies' assets and licenses to a new company that would not be on the hook for that outstanding balance, BNE reports. Then they sold the new company for $403 million and were able to pocket the entire profit.
Reverta filed a complaint of gross fraud against Zhan Khudainatov, who is listed as a director of the liquidated companies, in April 2012. In Russia, the charge carries a minimum sentence of five years, according to BNE.
Zhan Khudainatov became CEO of Severneft in 2004 when his brother Eduard, through yet another company he owned, took out a $40 million loan from the government to purchase Severneft. Severneft, which was one of the companies liquidated, possessed a lucrative drilling license, BNE reports. Eduard was a public official at the time serving as CEO of a subsidiary of Russian state-owned gas giant Gazprom.
