Former GNT Owners Sentenced to Prison for Breaching Asset Disclosure Order

In a significant ruling that underscores the importance of compliance with court orders in international business disputes, Sergiy Groza and Volodymyr Naumenko, former ultimate beneficial owners of Ukrainian import-export business GN Terminal Enterprises (GNT), have been sentenced to 21 months in prison by an English High Court judge.

Mr. Justice Bryan found Groza and Naumenko in contempt of court for breaching an asset disclosure order made in support of a US$118 million worldwide freezing order (WFO) over their assets. The disclosure order, issued in April 2024, was intended to allow Madison Pacific Trust Limited to monitor the defendants' compliance with the WFO.

The sentencing, which took place on October 4, 2024, follows a committal hearing on August 30, where the Ukrainian businessmen were found to have actively refused to comply with the disclosure order. Mr. Justice Bryan issued warrants of committal for both Groza and Naumenko, meaning they will be arrested if they enter the United Kingdom.

This case stems from a US$75 million loan provided by Argentem Creek Partners (ACP) to GNT Group in 2019, and a subsequent US$20 million working capital facility from Innovatus Capital Partners in 2021. GNT's failure to repay these loans at maturity in December 2021 led to investigations that allegedly revealed an asset dissipation scheme worth millions.

The ruling has significant implications for international business and finance. It demonstrates the willingness of English courts to enforce compliance with asset disclosure orders and worldwide freezing orders, even against foreign nationals. This sends a strong message to business leaders about the consequences of attempting to hide assets or evade court orders in cross-border disputes.

Furthermore, the case highlights the challenges creditors face in recovering debts from companies operating across multiple jurisdictions. The aggressive enforcement action taken by ACP and Innovatus, including obtaining the WFO and pursuing criminal charges, illustrates the lengths to which creditors may go to protect their interests in complex international cases.

As this legal battle continues, with ongoing criminal investigations into alleged fraud and asset stripping, the business community will be watching closely. The outcome could have far-reaching effects on how international loans are structured and enforced, particularly in emerging markets with less predictable legal environments.