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Kingstown Capital Management files RICO suit against Czech oligarch over $1bn fraud

Friday, April 12, 2019

Bailey McCann, Opalesque New York:

$1.4 billion hedge fund Kingstown Capital and Czech investment firm Investhold, have filed a Racketeer Influenced and Corrupt Organizations Act (RICO) suit against billionaire Radovan Vitek, a Czech real estate mogul with business interests throughout Europe, alleging that he used a series of shell companies to defraud investors of approximately $1 billion.

Vitek is the indirect owner of CPI PG a Czech real estate firm that manages a €7 billion portfolio throughout Europe. CPI PG is the largest commercial real estate landlord in Berlin, Germany and has a significant presence in the Czech Republic.

According to the complaint, after Kingstown Capital established a substantial interest in ORCO Property Group, Vitek "secretly took control of ORCO through a series of shell companies and straw owners." Individuals that are named as "straw owners" include ORCO's former Chief Executive Officer Jean-François Ott and Vitek's mother, Milada Mala. The indirect nature of the ownership, allegedly allowed Vitek to strip ORCO of "its most valuable real estate assets, using his effective control over the company to cause ORCO to sell real estate at distressed prices to other entities that Vitek secretly controlled." ORCO was eventually fully merged into CPI PG.

Vitek was aided by private Czech bank J&T Banka, which pr......................

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