The assets of Arricano Real Estate Plc (Cyprus) in Ukraine during 2023-2024 are under systemic pressure from law enforcement agencies, the company seeks to defend its assets, business and reputation in the legal field, using all existing legal instruments, according to an official statement of Arricano Real Estate Plc.

As reported, as part of the criminal proceedings, the City Mall (Zaporizhia) and Sun Gallery shopping centers in Kryvy Rih, owned by Arricano Real Estate PLC, were transferred to the Asset Recovery and Management Agency (ARMA) in March 2024.

"The company consciously avoided public communication on this matter, understanding that any public statement by a European investor about abuses or signs of corruption in the security forces could affect the attitude towards Ukraine by Western partners and their assistance, which is so necessary in wartime. We believed that Ukraine, aspiring to become an EU member, is a rule-of-law state and believed that our position that the case should be investigated in a civilized manner would be heeded. Nevertheless, the situation goes so far beyond the legal field and adequacy that we are forced to publicly declare: the assets of Arricano Real Estate PLC in Ukraine are being attempted to be taken by force using influence on law enforcement and judicial bodies," said Margus Kurm, Director of Arricano Real Estate Plc (Cyprus).

Arricano learned about the existence of criminal proceedings and, subsequently, about the seizure of all shopping and entertainment companies in September-October 2023, but they were able to get acquainted with the details of the case only in November. The key assumption of the prosecution (the Main Department of the Security Service of Ukraine in the city of Kyiv and Kyiv region and the Kyiv regional prosecutor's office) for the imposition of seizures is the alleged transfer of profits from the activities of four shopping and entertainment centers (SECs) in Ukraine to the aggressor state. The prosecution does not provide a single document to support this accusation. Aricano completely refuted this accusation and provided relevant evidence confirming that in the period from February 24, 2022 to October 16, 2023 (which is the period being investigated in criminal proceedings), the companies of the Aricano group in Ukraine a priori did not have any money transfers abroad.

The key moment when it became clear that the purpose of the security forces' actions were aimed at destroying or taking over the business, rather than investigating the case, was the submission of petitions to block the accounts of all Arricano companies in Ukraine; an unfounded attempt to transfer all key Arricano assets in Ukraine to third parties through ARMA.

"Blocking of accounts leads to a complete and unequivocal halt of the business, and transferring to management allows income from the shopping center during the entire investigation (which can last for years and in most cases ends with nothing) to go to third parties who have not invested a penny in the construction and development of the facilities," Kurm said.

Despite the accusations of transferring profits from the activities of four shopping centers in Ukraine to the aggressor state, not a single piece of evidence has been confirmed, and now decisions have been made to transfer two out of the four shopping centers – City Mall in Zaporizhia and Sun Gallery in Kryvy Rih – to the management of ARMA.

"These are illegal actions, directly contradicting not only the legislation but also common sense. Arricano will continue to challenge such illegal decisions by all possible legal means, both in Ukraine and at the international level," the company said in the statement.

Over all the years of work on the Ukrainian market, Arricano has invested more than $600 million in the Ukrainian economy and continues to invest. An attempt to block accounts and transfer key assets to the management of third parties through ARMA will entail a shutdown of business and investment in the restoration of a shopping center in Kryvy Rih, damaged by an enemy missile attack earlier this year, as well as investment in the construction of another retail facility in Lukyanivka district in Kyiv and improvement of existing Arricano shopping and entertainment centers in Kyiv and Zaporizhia.

"We are confident that the actions of the security forces and attempts to transfer our assets to ARMA are illegal and disproportionate. Such actions obviously harm the investment climate in Ukraine, as no foreign company will invest in a country where legislation and facts are manipulated to take over businesses. We continue to appeal against illegal actions and decisions in courts, and have filed complaints with all authorized institutions in Ukraine. n case of business blockade, Arricano company will use all available tools for international investment protection and compensation for the damage caused," Kurm said.