Two asset freeze attempts, two refusals: Strategic Advocacy Bar Association protected a foreign businessman’s property

An asset freeze covering real estate and corporate rights in criminal proceedings can effectively bring a business to a standstill before a court has established any wrongdoing. In one of its cases, the Strategic Advocacy Bar Association succeeded twice in preventing such a freeze and kept the client’s assets free of encumbrances.

The Association’s client is a foreign businessman who co-owns two well-known restaurants in Kyiv and the Kyiv region. The threat to the business came to light when the company’s director was summoned to court for the hearing of the investigators’ application to freeze the property of the two restaurants and the corporate rights of the companies that own them.

A lawyer from the Strategic Advocacy Bar Association reviewed the application materials. The investigators claimed that the assets were only nominally registered in the client’s name, while their real owner was a businessman linked to the Russian Federation.

The defence set about verifying these claims against the documents. In particular, the lawyers obtained information from the Cyprus registers confirming that the client had owned the companies in question from the very beginning and that no Russian citizens featured among their owners.

The evidence gathered by the investigation deserved particular attention. One of the key arguments was the testimony of a witness who claimed that a Russian businessman secretly owned the restaurants. As proof of this link, the witness pointed to the fact that the same lawyer had allegedly represented the businessman and three companies connected with the restaurants under a specific power of attorney.

The lawyers examined the document the witness had referred to and found a material discrepancy: the power of attorney listed two companies, not three, as the testimony claimed.

The Strategic Advocacy Bar Association prepared objections, submitted the documents it had gathered to the court and set out the client’s position. Following the hearing, the investigating judge refused to impose the freeze.

However, the story did not end there. Just two days later, the investigator applied to the same court for a freeze once again. In the defence’s view, the new application essentially repeated the previous one and contained no new circumstances that could justify restricting the owner’s rights.

The Strategic Advocacy Bar Association team again took part in the hearing, this time presenting its position to a different investigating judge. The outcome was the same: the court refused to impose the freeze for a second time.

As a result, the restaurants’ property, the real estate and the companies’ corporate rights are not subject to these encumbrances, and the client has retained the ability to manage his assets in full.

This case shows how important it is to scrutinise not only the investigation’s overall theory but also every piece of evidence it rests on. Sometimes a single discrepancy in a document can cast doubt on the reasoning the state relies on in trying to restrict an owner’s rights to substantial business assets.