Andrei Cotofan, a young entrepreneur who started an agricultural business in Moldova together with a British investor, in a news conference at IPN reported a swindling scheme by which his company SRL Favoris Grup lost its property to the value of 9 million lei for a debt of 700,000 lei.
According to Andrei Cotofan, in 2013 Favoris Grup borrowed 380 tonnes of food wheat to the value of 950,000 lei from SRL Crown. The wheat was afterward delivered to a company that went bankrupt and Favoris Grup ran into financial difficulties, but managed to pay 250,000 lei of the debt to SRL Crown. However, this company sued Favoris Grup and, profiting from particular clauses from the contract, claimed 4.7 million lei from Andrei Cotofan’s company. He managed to reach an amicable agreement with the creditor, in the presence of the judge, and agreed to pay 1.6 million lei. “We pledged to repay the debt and agreed a debt rescheduling timetable. We accepted certain penalties and compensations for the given company. This shows that we never intended to avoid paying the debts,” stated Andrei Cotofan.
Lawyer Igor Litvinenco said that despite this agreement, the next day, on June 10, 2014, SRL Crown got a sequestration order for the property of Favoris Grup, which was assessed at only 4.3 million lei without an expert assessment, at a time when the real value of the property on the market is twice higher. Afterward, the bailiff announced an auction to sell the sequestrated property. Favoris Grup found out about this only on November 27 as the creditor and the bailiff intentionally sent the relevant documents to the company’s legal address mentioned in the foundation documents, not to the location address, to the head office. Though Favoris Grup managed to challenge in court the legality of the sequestration order and of the auction and the trial goes on, the bailiff continued to organize the auction. Moreover, Andrei Cotofan wanted to pay another 100,000 lei of the debt, but the transfer could not be made because the property was sequestrated.
According to the lawyer, the creditor admitted itself that only companies affiliated to SRL Crown were to take part in the auction. Thus, four of the five companies taking part in the auction withdrew and the number of participants was insufficient. Therefore, the bailiff had the right to transfer directly the farmland and the adjoining building owned by Favoris Grup to SRL Crown. “This scheme is well coordinated. We got the impression that we took part in a theater play as the whole procedure was orchestrated. Notwithstanding our actions, the bailiff and the creditor knew what the ending will be,” stated Igor Litvinenco.
Veaceslav Balacci, an associate member of the Public Association “Reality and Truth”, said that SRL Crown earlier ‘bought’ anther debt of Favoris Grup to a bank branch located in Edinet. “Such a step is strange when you want to recover the money from a debtor. It’s evident that the goal of the creditor in this case was not to recover the debts, but to take over the property of Favoris Grup. It should be noted that this property includes 255 hectares in the districts Edinet and Briceni, plus an adjoining building. Can you imagine losing 225 hectares of land and a building for 380 tonnes of wheat?” he asked.
“Besides ruining a business that pays taxes to the state and provides work to people in rural areas, which are the most disadvantaged areas in Moldova, a bad example is given as foreign investments were made in this company.”
Favoris Grup called on the Prosecutor General’s Office to examine the actions of those involved in this case and to determine, in concert with the Ministry of Justice, the legality of the actions taken by the bailiff. The representatives of the company also asked the Ministry of Agriculture and the Ministry of Economy to become involved so as to reinstate the agricultural producer.
