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UK court orders Ablyazov to pay out $400 million to BTA Bank

12:19 27/11/2013

MOSCOW, November 26 (RAPSI) - London’s High Court ordered fugitive ex-banker Mukhtar Ablyazov to pay damages Tuesday amounting to approximately $400 million. 

Ablyazov formerly served as the chairman of BTA Bank, which is described in Tuesday’s judgment as a major Kazakh bank that effectively nationalized in February 2009.

The bank has filed 11 separate sets of proceedings in England and Wales seeking to recover upwards of $5 billion – money that the bank claims was fraudulently misappropriated by Ablyazov when he was at the helm.

Specifically, the bank alleges that acting in concert with various other members of the bank’s former leadership, Ablyazov misappropriated funds for his own benefit by use of a network of offshore companies.

Tuesday’s judgment centered on the so-called AAA proceedings, which the court described as distinguishable from the other proceedings in terms of the general nature of the alleged fraud. 

All of the proceedings other than the AAA ones were launched in the Commercial Court. These proceedings have tended to center on enormous, unsecured loans that the bank signed off on for companies allegedly beneficially owned by Ablyazov.

The subject of Tuesday’s judgment, on the other hand, was described in the judgment as follows: “By contrast, the AAA proceedings concern a portfolio of ten holdings of AAA-rated securities with a market value of approximately US$300 million (hence the label attached to the proceedings) which was allegedly misappropriated for the ultimate benefit of [Ablyazov] by a series of linked transactions which took place in 2008 and early 2009.”

Holding in the bank’s favor, the judgment reads: “I consider that enough is now known about the transactions, on the evidence as it stands, to establish to the summary judgment standard that Mr Ablyazov must have been personally responsible for the misappropriation of the AAA Investments, and that the Bank has good causes of action under Kazakh law to hold him responsible accordingly.”

Accordingly, the court held that Ablyazov should pay the bank a principal sum of $294,138,715.27, with interest to be awarded at the rate of 7.3% per annum. The judgment doesn't explicitly state the total sum, including interest, but a BTA statement released Tuesday announced that the sum amounts to approximately $400 million.

In a statement, BTA Bank Managing Director Pavel Prosyankin lauded the judgment, saying, “We consider that the court's damning conclusions about Mr Ablyazov's fraudulent activities in this particular case - and its dismissal of his defence as a fabrication – further vindicate the Bank's continuing efforts to pursue Mr Ablyazov and his associates for the recovery of the assets stolen from the Bank during his tenure as its chairman."        

Ablyazov fled to the UK after the Kazakh government acquired a stake in BTA in 2009 and the bank came under the control of its sovereign wealth fund Samruk-Kazyna.

He was granted political asylum in Britain in 2011. However, according to the judgment – he has “remained a fugitive from justice since February 2012.”

His whereabouts remained unknown until he was detained on July 31 near Cannes, France. Kazakhstan, Russia, and Ukraine are all seeking his extradition. Kazakhstan and France do not have an extradition treaty and extradition to Russia may be hindered for procedural reasons, so Ukraine remains the prime destination.

While he has been held in contempt of court in England, civil contempt is not an extraditable offense. Thus the UK is not among the countries seeking his extradition.

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UK court orders Ablyazov to pay out $400 million to BTA Bank

12:19 27/11/2013 London’s High Court ordered fugitive ex-banker Mukhtar Ablyazov to pay damages Tuesday amounting to approximately $400 million. Ablyazov formerly served as the chairman of BTA Bank, which is described in Tuesday’s judgment as a major Kazakh bank that effectively nationalized in February 2009.
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