Argentem Creek Partners: Legal Battles All over the World and Ties to the Russian Federation

Attempted Hostile Takeover

Over the past year and a half, numerous publications in foreign and Ukrainian media have covered the credit conflict between ACP and GNT Group.

GNT Group is a stevedoring and agricultural holding company with almost 30 years of history. It is known to the business community via its subsidiary, Olimpex Coupe International. GNT Group built a huge grain terminal in Odesa Commercial Sea Port. In 2019, they took a $75 million loan from the ACP, a foreign investment fund. In 2021, they took another related loan of $20 million from Innovatus Capital Partners.

According to GNT, the loan was secured with grain and the holding company’s corporate rights, which were valued as a multiple of the loan amount. The company was unable to settle its debt on time due to the all-out invasion of Ukraine.

After the grain corridor was launched, Sergiy Groza and Volodymyr Naumenko were very close to finding a strategic investor to develop the company and repay the debt. At that time, the loan restructuring was negotiated with the fund. Other Ukrainian companies had to do the same with their foreign creditors because of the war.

Unexpectedly for GNT owners, on December 20, 2022, ACP demanded that money be repaid within two hours and initiated debt enforcement. The directors of the Group’s foreign and Ukrainian companies were replaced with ACP’s lawyers. They also changed the legal domiciles of the Ukrainian companies operating in the Odesa port from Odesa to Lviv.

The holding owners stated that a hostile takeover of their business by the ACP was ongoing, with an attempt to devalue and re-sell it to a third party. Nevertheless, they confirmed both the existence of the debt and their willingness to repay it.

In turn, ACP accused GNT Group of operating in a non-transparent manner. Innovatus and ACP initiated criminal proceedings with the National Police over the alleged loss of the pledged grain.

The parties got bogged down in numerous claims, counterclaims, complaints, etc., in Ukrainian and foreign jurisdictions. The final decision will be made by the London Court of International Arbitration.

While everyone is waiting for a fair court decision, this story may seem to have come to a tentative stop. However, while proceedings are ongoing, Argentem was accused of making an attempt to take over the grain terminal’s assets and place them under Russian management. The creditor started with bankruptcy proceedings against Ukrainian companies that transshipped grain in the port under the “grain corridor” arrangement at that time.

Corruption or Investor Protection?

Apparently, ACP took advantage of legally moving the companies to Lviv then. Judges in Lviv made the most amazing decisions, favoring ACP. GNT’s lawyers managed to have appellate courts overturn some of them.

According to journalists, ACP’s interests in Ukraine were represented by the law firms Hillmont Partners, Melnyk, and Artsyshevskyi. Their lawyers have close ties with the Servant of the People party (some of whom became Members of Rada) and a number of Lviv judges. This situation gave the investigators a reason to claim that ACP has been leaving a corrupt trail in this dispute.

Also, Davyd Arakhamia, a Member of Rada and the chair of the Servant of the People faction, met ACP representatives in Vienna in November 2022. He said he met them as the chair of UkraineInvest’s (a.k.a. “investor nanny”) supervisory board. UkraineInvest responded to the Hubs’ inquiry and said they knew nothing about these meetings. Arakhamia did not respond to the journalists.

In December 2022, ACP started a credit dispute with GNT Group, relying on legal assistance from Hillmont Partners. Dubious court decisions on the conflict were accompanied by equally dubious decisions by the Ministry of Justice in ACP’s favor.

However, ACP made the largest litigation gains starting from fall 2023. In February 2024, John Patton even boasted to the media that“[t]he Ukrainian authorities know about our case and are interested in helping. The Office of the President has been very active, and we have had numerous meetings during which they have expressed their clear support in ensuring foreign investors can protect their interests in Ukraine. We have seen clear intent on the part of the General Prosecutor’s Office to make sure the criminal investigation is conducted thoroughly and efficiently.”

According to Latifundist, the U. S. Embassy also seems to be dealing with this issue.

It should be borne in mind that the conflict between the companies is a business conflict. Thus, its resolution should only be guided by principles of the rule of law.

Hubs reported that they submitted requests for information to ACP, the Office of the President of Ukraine, and the Office of the Prosecutor General of Ukraine regarding when and with whom Argentem had meetings with their officials. What kind of support did officials promise ACP? What did ACP managers discuss with Davyd Arakhamia in Vienna in 2022?

Only the Office of the Prosecutor General responded to the inquiries, stating that there were criminal proceedings based on facts of the “fraudulent acquisition of monies of American investors”. They also indicated ACP, a foreign investment fund, had a victim status in these criminal proceedings.

However, ACP’s LinkedIn page mentions at least one John Patton’s meeting with Rostyslav Shurma, the deputy head of the Office of the President of Ukraine. The meeting took place about eight months ago (in September or October 2023).

According to the data gathered by the Chesno movement, Shurma was a member of both Party of Regions and Opposition Bloc parties, ran for the membership of the Rada, and worked as a manager for Rinat Akhmetov's companies. According to ACP, the “importance of protecting investments” was discussed at their meeting with Shurma.

Photo from ACP’s LinkedIn page: a meeting with Rostyslav Shurma, the deputy head of the Office of the President of Ukraine

Russia’s Provider in Ukraine

There is no information about what Patton could have discussed with the authorities behind the scenes. However, information about ACP’s cooperation with Russians became widely disseminated.

According to media reports, ACP tried to appoint Andrii Naumenko, a director of the above-mentioned Olimpex Coupe International, in late April. He is the CEO of Grain Invest Ukraine, a company with Vazha Enrikovich Jhashi as the UBO (after the scandal, the company was re-registered to Naumenko’s name).

Vazha Jhashi is a Russian and U. S. citizen, a CEO and owner of the Trans-Oil Group of Companies (Moldova). It is a food producer with assets focused on cultivating, storing, and processing oil and grain crops.

Trans-Oil made a statement to Moldovan media after the information leak about the transfer of some Ukrainian port infrastructure to the Russians. Purportedly, the group entered into a lease and management agreement with Argentem and Innovatus regarding the Olimpex port terminal (although the Ukrainian company was already in the process of bankruptcy).

At the same time, John Patton and Vazha Jhashi started spreading comments in the mass media, claiming they had no ties with Russia.

However, investigative journalists demonstrated that Vazha Jhashi had a Russian passport. Since 2005, he has been the founder of Nobil-Grain LLC (a grain-cultivating company) in Russia. It was liquidated in 2015.

In Ukraine, he owns Pvdtrade LLC and VAT Reni Elevator ALP. Previously, he was also listed as a UBO of Reni Line LLC, TD Mediana LLC, and Grain Invest Ukraine (the company mentioned above).

The history of pre-2018 changes in the Ukrainian public register mentions him as Reni-Line’s UBO and a citizen of the Russian Federation registered in 14-1 Staromarinskoye Shosse in Moscow. In 2019, Vazha was removed as a UBO registered in Russia from the details of Reni Elevator ALP; instead, a record was made that he owned the company as a citizen of the USA. See screen copies below.

Changes to Reni Elevator’s Registration Details

According to media reports, Vazha Jhashi and some of his firms in Ukraine are subject to a criminal investigation of the threat to Ukraine’s national security. Ukraine’s Security Service (SBU) has been investigating criminal proceedings No. 22023000000000306 since March 31, 2023. There, Vazha Jhashi is suspected under Art. 110-2 of Ukraine’s Criminal Code of financing actions were perpetrated with the goal of violently changing or overthrowing the constitutional order, seizing government power, and changing territory boundaries or the state border of Ukraine.

During a search raid of Reni Elevator premises, tens of thousands of dollars, euros, and hryvnias, as well as documents indicative of potential violations, were seized. According to the investigators, the cash could have been intended to finance illegal activities to undermine Ukraine’s constitutional system.

However, Vazha Jhashi’s ties to Russia run much deeper than his formal citizenship and company ownership before 2015, whatever both ACP and this Russian/American/Moldovan businessman do to deny it.

New information points toward Vazha Jhashi’s relatively close contacts with the Russian business community.

For instance, Vazha Jhashi received investments of at least EUR 20 million from 100% Russia-owned International Investment Bank (IIB) for the development of the Trans-Oil group in 2019–2021. “TransOil Group and IIB are active in the same markets, making our partnership quite fruitful,” Vazha Jhashi stated in 2021.

This bank was established by the USSR in 1970 with the formal involvement of its Soviet bloc vassals. It is effectively subordinated to the Russian government. In 2019, the Russians moved the bank’s head office from Moscow to Budapest (Hungary). In April 2023, the United States imposed blocking sanctions against the bank. The reasons for this are quite interesting.

According to the USA, the IIB’s presence in Budapest “enables Russia to strengthen its intelligence presence in Europe.” It also facilitates malicious activities in Central Europe and the Western Balkans, corruption, and the evasion of sanctions. David Pressman, the US ambassador to Hungary, told the press at the time that Washington had repeatedly shared information with the Hungarian counterparts about how Russia could use the bank to expand its influence, but to no avail.

Three bank managers were sanctioned as well. One of them is the former CEO Nikolai Nosov. As a diplomat, he worked in senior positions for the Ministry of Foreign Affairs of the USSR, the administration of the president of the Russian Federation, and as a banker at Vnesheconombank. One hardly needs any explanation of links between Russian diplomats and spies.

Other partners did listen to the USA regarding the threat to the national security of NATO countries and ceased to be the Russian IIB’s shareholders long before sanctions; they include Slovakia, Czechia, Romania, and Bulgaria. In 2023, Hungary had to do this as well. The IIB’s head office was returned to Moscow. Other than the Russian Federation, the IIB’s shareholders include Cuba, Mongolia, and Vietnam.

Vazha Jhashi’s family and partners are also firmly anchored in Russia. His son Tamaz Waja Jhashi, one of Trans-Oil’s top managers, is also the CEO of Unistars LLC (Russia), a software development company founded in March 2023. It hardly pursues any business. This company was founded by Timur Beslangurov, who works in the field of Russian immigration assistance. Thus, he can act as the Vazha Jhashi family’s proxy.

It is unknown if Tamaz Jhashi is a Russian citizen like his father. His TIN 971517932709 could have been obtained by a foreign citizen. According to some sources, he has US citizenship. However, he has the right to reside in the Russian Federation at the same address in Moscow, where his father is also registered (see screenshot below).

Vazha’s sister, Maryna Enrikоvna Jhashi, settled in the Russian Federation long ago. She is a Russian citizen, a sole entrepreneur engaged in cross-cultural communication consultancy. She used to be a presenter at the state-owned Voice of Russia radio and Russia Today propaganda TV channel.

One can only guess why the Jhashi family registered in Russia and ran business there during the war against Ukraine. Considering the criminal proceedings and their interest in the infrastructure of Reni and Odesa ports, they obviously need to be checked for ties to Russia's FSB.

Another person to check is Vazha’s partner, Mikhail Karaseni, Vice President of Trans-Oil and co-owner of Reni Line LLC in Ukraine; he is also subject to the SBU's criminal investigation. He was an economic advisor to Igor Dodon, Moldova’s pro-Russian politician. Moreover, Mikhail’s son, Vitaliy Karaseni, owns businesses in Russia. These include Agrofirma Soyuz Product LLC, Agrohoding Soyuz-Produkt LLC and APC Niva-Povolzhya LLC.

Furthermore, Vazha Jhashi has close ties to Vladimir Plahotniuc, a controversial pro-Russian Moldovan businessman and politician. In 2019, Dmitry Kozak, the deputy head of Putin's administration, stated that the leader of the Democratic Party, Plahotniuc, suggested reorienting Moldova towards Russia and settling the Transnistrian conflict by federalizing Moldova.

In 2023, Vladimir Plahotniuc was put on the EU sanctions list as a person implicated in numerous criminal cases in Moldova related to embezzling public funds and transferring them illegally from the country. Before that, the USA and the UK imposed sanctions on him.

What Is ACP Hedge Fund

Thus, it is worth looking closer at ACP due to its history of cooperation with Russian nationals.

Calling it a US fund is somewhat daring. In fact, Argentem Creek Partners LP is a private limited company incorporated in the UK. However, it does have a head office in New York and offices in other countries. The fund was actually founded by Americans – Daniel Chapman, together with colleagues from a Cargill subsidiary, Black River Asset Management – in 2015. By the way, Cargill, Inc. continued working in Russia after the all-out invasion of 2022 and paid RUB 6.9 billion in profit tax to Russia over the years 2022 and 2023.

The fund specializes in business lending in high-risk markets. Loans are provided through companies set up in offshore jurisdictions and controlled by the company. For instance, the company has such funds in the Cayman Islands. The ACP’s business is finding companies desperate for funding and holding valuable industrial assets. The lending terms are quite strict, with the collateral being several times as high as the loan granted.

If the debtor faces problems, they are not interested in having the loan restructured and repaid gradually. The Argentem’s strategy is to collect debt via the courts, for instance, by establishing control over the valuable industrial asset followed by its highly profitable resale.

In Ukraine, the Argentem is known as a creditor of the Mriya agroindustrial holding company.

Since 2013, ACP has aggressively acted as a creditor against Interpipe, a Ukrainian metals company (Victor Pinchuk). A year before the war, the company faced issues in the pipe rolling market due to restrictive measures taken by the Russian Federation. Creditors demanded early repayment of the bonds. At that time, they managed to restructure the debt.

However, the fund refused to restructure GNT Group’s debt amidst the war against Russia. According to GNT, debt enforcement and bankruptcy proceedings have had an extremely negative impact on operations of the Group’s companies.

As reported earlier by Volodymyr Naumenko, GNT co-owner, some contracts with international counterparties were lost in January and February 2023. They terminated contracts to transship at least 0.5 million tonnes of grain via GNT Group’s terminal.

The Group’s top managers said the problems were exacerbated in 2023 and 2024. Most of the staff resigned due to salary arrears. Two key businesses, Olimpex Coupe International and Metalsukraine Corp LTD, are undergoing bankruptcy procedures. This provoked other creditors (banks) to seize part of GNT's technology assets.

As a result, only 15 people are still working for Olimpex, instead of the earlier 180. The company is currently able to provide only grain storage services at some of its grain elevators (100,000 tonnes instead of 180,000 tonnes before ACP’s arrival). It is unable to load vessels with agricultural products.

According to media reports, the State Property Fund terminated lease contracts with ZPK Inzernoexport due to many months of arrears. The company does not operate and has debt for utility services.

In late May, ACP attempted to take over part of the Odesa terminal using fake documents. Bohdan Khomiak, a Canadian citizen of Ukrainian origin, acting on behalf of the Swiss company Omega Terminal SA (part of the GNT Group holding), tried to lease the company's property to a company registered only three months ago.

However, Khomiak is not authorized to act on Omega’s behalf. ACP did try to appoint him CEO back in 2023, but a Swiss court blocked this decision. A manager appointed by GNT Group is listed as a legitimate director in the Swiss Commercial Register.

The ACP is very experienced in pursuing such conflicts in foreign courts. In particular, there were disputes of this kind in respect of the assets of Grupo Virgolino de Oliveira, a Brazilian sugar and ethanol producer, and Tristan Oil, a Kazakh oil and gas producer.

The Kazakh company’s case is particularly interesting. There were numerous legal disputes between Kazakhstan and Moldovan businessmen Anatol and Gabriel Stati over Tristan Oil Ltd, which produced oil and gas in Kazakhstan and was brought by Stati to default. ACP’s current founders took Stati’s side. They financed Tristan Oil while still managing Cargill’s subsidiary.

In 2020, Kazakhstan sued ACP and its CEO, Daniel Chapman, in the Southern District of New York, accusing them of complicity in a massive fraud by the Stati oligarchs. It appeared from e-mails that Chapman was interested in Stati’s operations and was aware of their fraud involving the Kazakh business.

It cannot be ruled out that his projects with the Moldovan oligarchs served to establish contacts between ACP and Vazha Jhashi. However, a different version is also possible. ACP’s regional director, John Patton, who focuses on the EMEA markets, including Eastern Europe, has long-standing and close ties with Russia and its business community.

What is Known about John Patton

John Patton’s CV says he has over 28 years of experience investing in special situations, primarily in Russia and Ukraine. From 1992 to 1993, he traveled through Russia as a scholar, studying the Russian Orthodox Church and its political links.

In 1988-1992, he studied at Davidson College and graduated with a degree in Political Science and Russian Studies. A large part of his career is connected with the Russian business circles.

From 1997 to 1999, he was a vice president and an analyst in the Russian division of Credit Suisse First Boston (a branch of the Swiss bank). From 2009 to 2012, he managed the Russian branch of Deutsche Bank. He worked for other financial and investment entities, overseeing developing markets, including the Russian one.

In the 1990s, most Western portfolio investments into Russian businesses were channeled via CS First Boston’s branch in Russia. The company’s clients included Lukoil and Norilsk Nickel.

Patton is likely to have established close contacts with some businessmen close to Putin’s entourage back then. In 2023, ACP invested in the Philippine company Salmon.

Salmon’s co-founder, Russian businessman Pavel Fedorov, co-chaired the management board of Tinkoff Group, served as the Senior Vice President of Norilsk Nickel, and was Vice President of Rosneft. Having left Rosneft, he remained an advisor to its CEO, Igor Sechin, one of Putin’s henchmen. Patton keeps in touch with Fedorov on LinkedIn (see screenshots below).

Were the Ukrainian authorities or the US Embassy aware that Argentem, pretending to act as a foreign investor, was going to place elements of the strategic infrastructure under Russian control? Do they know about Patton’s other ties with Russian businessmen?

ACP’s management may not be aware of all the details of Patton’s cooperation with Russian citizens in Ukraine. However, by acting this way, he frames both the Ukrainian authorities and his American partners.