Spanish National Court has ruled it necessary to proceed investigating the Russian magnate Mikhail Fridman, currently the largest shareholder of the DIA supermarket chain, to establish his role in the fate of Zed Worldwide, the Spanish telecommunication company. This ruling has revoked the provisional dismissal decreed by Judge Manuel García Castellon end of December last year.

On February 25, the judge supported the provisional dismissal of the investigation into Mikhail Fridman’s involvement if the bankruptcy of ZED, due to the lack of proof of his alleged orchestration of ‘suffocation’ of the telecom company.

Yet in the papers circulated by the court in early July, there is a passage that says ‘it cannot be ruled out’ that Fridman has played a certain role in the potential insolvency of ZED, “in an indirect way in the position of a person, formally placed in the background, yet with obvious powers of making decisions“.

The Court considers it possible that Fridman, by the use of “illegal operations contrary to the rules of the free market”, and with “defrauding opacity” had an influence over “the economic ruin” of ZED.

Therefore, Mikhail Fridman’s involvement in the insolvency of ZED can’t “hastily be ruled out”, since coherent documentation and numerous statements “place him in the centre of strategic business decisions adopted for the sake of that insolvency”.

The Court considers Fridman’s conduct as potentially relevant to such crimes as being part of a criminal group, unfair administration, misappropriation, insolvency and corruption in business.

The case dates back to 2016, when the founder of ZED Javier Prez Dolset filed his claim to  the Prosecutor, declaring that a number of privately and corporately made decisions and actions performed by the company and its business partners, including the structures associated with and managed by Fridman, might represent an illegal takeover of the company.

Billionaire Fridman first faced questioning in this case end of October 2019, over allegations that he had illegally laid “economic siege” to ZED World Wide.

The anti-corruption prosecutor suspected that Mr Fridman had broken the country’s criminal code in 2016 in an attempt to take control of ZED by causing its insolvency. In a submission to the court, prosecutor José Grinda González described the alleged attack on ZWW as a “raid”, noting that “the word ‘raider’ is used in the realm of organised Russian crime to describe the theft of a business. Either through violence, killing or economic strangulation.”

The Russian businessman was a shareholder and creditor for Zed, and according to the National Court had ‘a privileged position for any type of decision in the group’. He also controlled Vimpelcom, a huge mobile phone operator that by altering contracts with Zed caused a significant drop in its revenue, which in its turn made it impossible for Zed to handle a €140-million loan, in part provided by one of the banks that Fridman controls.

After the company applied for bankruptcy in June 2016, Fridman’s people bought it for €20 million, ‘much less than its value when blockage maneuvers controlled by Mr. Fridman started,’ claim the prosecutors.

Fridman has all this time maintained that his accusation in the case is based on ‘false or completely unfounded allegations’. Regarding the statements against him made by the Anti-Corruption Prosecutor’s Office, the Russian magnate insists that “he did not orchestrate or have anything to do with an illegal siege plan of Zed”. He also complained that his imputation in the Zed case has caused him “reputational damage due to social discredit”.

The magnate currently controls another Spanish business, the chain of Dia supermarkets, that he gained control of through his holding company LetterOne in 2019, after the retailer’s market value fell by 90% in 2018. The story of that acquisition is controversial just as well.