News Article CPIPG Cyprus Czech Republic Germany legal
by Property Forum | Report

As a result of a legal dispute between real estate tycoon Radovan Vítek's CPI Property Group and businessmen Marek Čmejla and Jiří Diviš, a Cypriot court has reportedly ordered banks to freeze CPI Property Group's assets worth almost CZK 13 billion (€553 million), according to the German economic newspaper Handelsblatt, cited by the Czech daily CPIPG, however, denies the German newspaper's information, saying that the interim measure is not in force and that no accounts have been seized or assets were frozen.

According to the newspaper, the decision concerns a dispute that CPI Property Group (CPIPG) informed investors about in January this year. The companies Investhold and Verali, which are demanding €535 million from CPIPG, have filed a lawsuit in a Cypriot court. The two investors and the owners of the firms turned to the Cypriot court after their claims were rejected by the US courts last autumn, saying they lacked local jurisdiction. However, they did not rule on the merits of the dispute.

CPIPG denies the German newspaper's information, saying that the interim measure is not in force and that no accounts have been seized or assets were frozen. In response to the court's move, however, the group told investors that the interim measure prohibits it from selling assets that would reduce the value of the group's assets below €535 million, the amount claimed by Cmejla and Divis. However, it does not affect the bank accounts or assets of CPIPG or Vitek himself.

The court's decision will not affect the operations of the property group. "CPIPG had a real estate portfolio worth €20.9 billion at the end of 2022. The frozen assets thus account for only 2.6 per cent of the company's total real estate portfolio," J&T Bank noted in a report to clients. According to it, this can only reduce the amount of assets that CPIPG can dispose of in other transactions. Germany's Handelsblatt also reports that judges will decide by the summer whether the money will remain frozen until the end of the litigation.

Investhold is suing CPIPG in different countries for providing it with more than CZK 8 billion to develop its real estate group between 2008 and 2016. In the US, it teamed up with hedge fund Kingstown, which was a shareholder in the Orco development group that Vítek hostilely took over. The plaintiffs point out that they participated in the growth of the entire CPI's assets, and lent money to it, but in the end, did not receive the agreed remuneration in the form of a half-share in the group, nor did they get all their money back, as they have previously stated in an interview with The takeover of Orco also ended in acrimonious disputes and was attacked in particular by the hedge fund Kingstown. Čmejla and Diviš then joined him. The former investors in Vítek's group Czech Property Investments, Charles Joory and family and Henry Charbit and family, certainly do not remember their cooperation well too.