News report

Mortgages on Russian aircraft rental company settled on the day of the invasion

All mortgages registered against planes worth hundreds of millions of euros by a Dublin-based Russian leasing company were settled on the day Ukraine was invaded, according to documents filed by the company.

Satisfaction of the 48 mortgages, some dating back to 2011, and including a date of January 2022, was registered by SB Leasing Ireland Ltd, a subsidiary of Sberbank, majority-owned by the Russian government.

Documents filed at the Companies Registry Office show that the satisfaction of the charges was effective from February 24, the day of the Russian invasion. On the same day, the United States introduced sanctions targeting Sberbank.

A source said the mortgage satisfaction work had been underway for some time and it was a coincidence that the work was finalized on the day of the invasion.

Latest accounts from SB Leasing, which has a registered address at Maynooth Business Campus, Co Kildare, show that it does business with Sberbank Switzerland and AIB in Dublin.

The company’s solicitors in 2020 were Flynn O’Driscoll, of Lower Mount Street, Dublin, and its auditors were Ernst & Young (EY), Dublin, according to the accounts.

They show that SB Leasing incurred legal and professional fees of $278,086 (€253,033) that year and had assets under operating leases of $1.16 billion.

EY commentary

When asked for a comment on the matter, an EY spokesperson said: ‘We cannot comment on client specific issues. We assess existing and new mandates in light of new sanctions and a rapidly changing regulatory landscape.

During 2018, the company ordered new planes from Boeing which were to be delivered over the period 2021-2023, according to the accounts.

Ireland’s aircraft leasing industry, which includes Irish businesses that have leased aircraft from Russian operators, and Irish Russian-owned businesses, has been hit by sanctions announced following the attack on the ‘Ukraine.

A number of the companies are subsidiaries of VEB, or Vnesheconombank, a Russian financial development institution on which the EU has imposed sanctions.

VEB has a number of significant Irish aircraft leasing subsidiaries, some of which are owned through Luxembourg companies.

In its sanctions statement last week, the European Union said that VEB Chairman Igor Shuvalov (who is also subject to sanctions) is directly appointed by President Vladimir Putin and “takes instructions directly from him”.

Defense industry

VEB plays “an active role in the diversification of the defense sector of the Russian Federation and has projects with defense industry companies,” the statement said.

VEB has provided loans to companies in Crimea, which was annexed by Russia in 2014, and considers it a “priority region” as part of efforts to integrate it into the Russian Federation, he said. he declares.

The latest accounts from a number of these VEB subsidiaries show that they used the services of lawyers from Flynn O’Driscoll and Ernst & Young.

An Irish company with another sanctioned Russian parent company is involved in leasing a single Gulfstream business jet, according to public documents.

KRP Aviation Ltd, with an address at the offices of Flynn O’Driscoll on Lower Mount Street, Dublin, is a subsidiary of Russian Railways, which has been hit by EU and US sanctions.

The latest accounts filed for KRP, which are audited by EY, show it last year renewed a lease contract with Russian Railways for the jet, covering the period 2021-2026, for a total of 385,000 €.

The jet, a Gulfstream GV-SP, is registered in the Isle of Man under the name of the Irish company. The Dublin accounts indicate that the Russian company has the right to buy the plane for $1,000 (€910) if it chooses to do so.

Invitations to comment from Sberbank, VEB and Flynn O’Driscoll had not been answered at press time.