In December of 1991, as the world watched aghast the disintegration of the mighty Soviet Union into 15 small countries, a couple of employees of the country's Trade Representation office in Mumbai saw an opportunity to make a pile of money, reports Mumbai Mirror.
The opportunity was the Trade Representation office itself — over 15,000 square feet of prime property at Malabar Hill, neighbouring Varsha, the chief minister's official bungalow.
The property, Marine House, was worth around Rs 45 crore then. With their country plunged into chaos — Valentin Lessi and Andrea Stepanchco — thought they could usurp the property and get away with it. They did, for 17 years. A year or two after the Soviet Union's break-up, Lessi and Stepanchco quietly set up Svofracht, a shipping company and began operating out of Marine House.
Though Svofracht is a listed company in Russia and is part-owned by the Russian Federation, the two made sure that their government did not get even a whiff of the company's India operations.
In 2005, Lessi and Stepanchco sold Marine House –which is now worth Rs 100 crore – for around Rs 45 crore to Dawood Moinuddin, a Dubai-based businessman. The deal was between Svofracht and Dawood. Papers were forged to show Svofracht as a privately owned company.
At that point, Marine House, a ground-plus-three structure surrounded by lush green trees with a spacious front yard and a lawn at the back, was worth anything between Rs 60 and Rs 65 crore. Lessi and Stepanchco, for obvious reasons, didn't mind selling cheap.
The duo disappeared soon after with all the moolah.
So impeccable was Lessi and Stepanchco's paperwork that the Russian Federation is now having a tough time securing the building back from Dawood Moinuddin.
Not that the Consulate itself can escape blame. It woke up to the fraud only in April 2006 when Consul General Alexander Mantytsky went visiting the property and was denied entry. The consulate then filed a complaint with the Malabar Hill police station.
The Malabar Hill police gave the Dubai businessman a clean-chit because he had all the papers in place. Based on the police report, a magistrate's court declared that Dawood was a "bonafide purchaser" of Marine House.
The Russian Federation then went into appeal before the Sessions court, which set aside the magistrate's order and directed the Russian Federation be heard afresh. Additional Sessions Judge S G Deshpande said the sale did not appear bonafide and the speed with which the money moved out of India was suspicious too. The judge also said that the police report filed cannot be taken on its face value and that the purchaser's role needs to be investigated further.
The sessions court upheld the appeal, but Dawood's lawyers opposed this in the High Court on the grounds that the appeal was moved over a year after the magistrate's order, while time limit for filing an appeal is three months.
The HC has now stayed the proceedings in the lower court.
In November 2006, Dawood was arrested at the Mumbai international airport. He was granted bail in February 2007 by Additional Sessions Judge P V Bhavsar and released on a bond of Rs 1 Lakh with one or two sureties.
Meanwhile, Lessi and Stepanchco's luck ran out sometime in late 2008, when they were arrested by the Russian police. The arrest followed an Interpol alert issued against them on Mumbai police's request.
Whether the money they made running a shipping company out of a property owned by the Russian government and then selling the property itself has been recovered from them is not known. The Russian consulate in Mumbai is extremely tight-lipped about the case.
Understandable. There must certainly be many red faces in the consulate. Senior counsel Ashok Mundergi, who is representing the Russian Federation in the HC, and senior counsel Amit Desai, who is appearing for Dawood, refused to comment. The HC will hear the case on September 29.
