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. Last Updated: 07/27/2016

Irish Firm Aims to Reopen Supermarket

The Irish partners in the embattled joint venture that runs the Garden Ring supermarkets say they hope to reopen soon a store forced to close Oct. 5 because of a complex, months-long turf war between partners.

The chairman of the Irlasto Irish-Russian joint venture, Kieran Walshe, said in a statement issued late Friday that the company hopes to reopen the Park Place Garden Ring market at 113 Leninsky Prospekt "over the coming weeks."

For the first time, Walshe also laid out in public his version of events that led to the seizure of the store's inventory by MOST-Bank as part of a joint effort to wrest control of the Garden Ring stores from estranged Russian partner Dmitry Kishiev.

But several sources close to the dispute say Walshe on Friday also submitted his resignation as chief executive officer of Irlasto, though he retains the post of chairman unless the board of directors decides otherwise.

A contact at Irlasto in Limerick, Ireland, said Monday that Walshe was on vacation this week and that board members were not available for comment.

Kishiev has been in de facto control of Irlasto's supermarkets since the Irish partners fled the country in July because of what they say were threats against them.

In his statement, Walshe alleged that a detailed financial investigation of Irlasto's supermarket business revealed that "substantial organized theft of stock was taking place without the knowledge" of supermarket manager Colm Fitzsimons.

The Irish partners then attempted a buyout of Kishiev's 10 percent interest in the various businesses. When negotiations broke down in mid-July, "Kishiev had his security staff remove Irlast's personnel ... the company no longer had access to its businesses," Walshe contends.

He said the allegations against Kishiev are documented in 800 pages of statements that have been turned over to Moscow police.

Walshe said the police assisted the company and MOST-Bank, a creditor, in reclaiming old Irlasto stock remaining in some stores. He also said the police have launched a criminal probe, although a press spokesman for Moscow's General Directorate of Internal affairs said Monday he had no knowledge of an investigation.

Walshe said Irlasto had raised $3 million in financing for the expansion of what seemed to be a thriving retail operation. "The business ... was geared for expansion until problems began to emerge in its supermarket business in mid-1995," Walshe said in his statement.

Kishiev, for his part, has contended that the financing figures were never clear, and has spoken of accounting irregularities.

"He [Kishiev] never received any documents to read the terms and conditions of agreement, terms of loan and type of investment," said his interpreter, Natalia Lizuonova.

As for the alleged theft of stock, "many times Dmitry [Kishiev] suggested that we put some special equipment and cameras and so on," she said.

She also attributed the discrepancies in part to differences between Western and Russian accounting systems. Moreover, "when we checked accounts outside Russia we found a lot of things that were unclear, and we had no authorization to use this money from outside Russia."

On Monday, John McCarthy, a major Irlasto shareholder, confirmed that Walshe had submitted a letter of resignation to the board, but he would not elaborate.

Fitzsimons, who now works directly for Kishiev, said Walshe's resignation could help smooth the way for fence-mending negotiations.

Some other parts of Irlasto's complex corporate structure appear to have run into financial difficulties. The Irlasto joint venture includes nearly a dozen offshore Cyprus- or Ireland-based holding/supply companies. One of those, Irlasto holding company Joe Walsh Holdings Ltd., was acting as a major Irlasto purchasing agent until it was placed in liquidation last Friday.