Former GNT Owners Sentenced to 21 Months in Prison for Contempt of Court

In a significant ruling that underscores the gravity of contempt of court, Sergiy Groza and Volodymyr Naumenko, the former ultimate beneficial owners of Ukrainian import-export business GN Terminal Enterprises (GNT), have been sentenced to 21 months in prison by Mr. Justice Bryan of the English High Court. The sentence, handed down on October 4, 2024, comes as a result of the defendants' failure to comply with a worldwide freezing order (WFO) and subsequent asset disclosure requirements.

The case stems from a $118 million WFO issued against Groza and Naumenko's assets in January 2023, obtained by Madison Pacific Trust Limited on behalf of GNT's secured lenders, Argentem Creek Partners (ACP) and Innovatus Capital Partners. The order was upheld in February 2024 despite challenges from the defendants. In April 2024, an additional disclosure order was issued to ensure compliance with the WFO, requiring Groza and Naumenko to provide detailed information about $97 million in dividends received over a decade, nominees holding their assets, and the funding of their legal fees.

The defendants' active refusal to comply with the disclosure order led to their committal for contempt of court. Mr. Justice Bryan, in his sentencing, emphasized the ongoing prejudice suffered by the claimant due to the defendants' continued non-compliance. The judge issued warrants of committal, meaning Groza and Naumenko face arrest upon entering the United Kingdom.

This case has significant implications for international business and finance. It demonstrates the willingness of English courts to impose severe penalties on individuals who disregard court orders, particularly in cases involving large-scale financial disputes. The ruling sends a clear message about the importance of transparency and compliance in global financial transactions.

The sentencing also highlights the challenges faced by creditors in enforcing debts across international borders. ACP and Innovatus provided loans totaling $95 million to GNT Group, which the company failed to repay. The subsequent investigation revealed an alleged asset dissipation scheme, prompting the creditors to take legal action to protect their interests.

Daniel Chapman, CEO of Argentem Creek Partners, called for businesses and government entities to cease working with Groza and Naumenko, characterizing them as "bad actors" who are "flagrantly breaking the law and ignoring court orders." This statement underscores the potential reputational risks for entities associated with individuals found in contempt of court.

The case also has broader implications for Ukraine's business environment and its efforts to attract foreign investment. John Patton of Argentem Creek Partners noted that at a time when Ukraine needs companies to pay taxes and support the country's war effort, the defendants are allegedly hiding millions of dollars offshore.

This ruling is part of a larger legal battle involving Groza and Naumenko, with ongoing criminal investigations into alleged fraud and asset stripping. The case serves as a cautionary tale for business owners and highlights the importance of adhering to legal and financial obligations, especially in cross-border transactions.

As the legal proceedings continue, this case will likely be closely watched by international investors, legal professionals, and businesses operating in emerging markets. It underscores the complexities of global finance and the serious consequences that can arise from attempts to evade legal and financial responsibilities.