Mukhtar Ablyazov’s united kingdom: a tale of four files/II

From his hideout in one of London’s boroughs, former BTA president and largest single individual shareholder Mukhtar Ablyazov keeps “doing business” in his usual noisy manner. Apart from lamenting the “injustice” inflicted upon him by the government of Kazakhstan and his vow to return and reclaim his “property” once the regime may have changed, he claims to retain control over a number of assets. Recuperating those assets could bring some of the money, estimated in the ragen between 10 and 12 billion US dollar, back to the bank’s deposit holders. But whether this weighs against the liabilities that are bound to come along in the process still remains to be assessed. Four cases are pending at the High Court of London concerning so-called “stays” of assets belonging to entities under control of Ablyazov and a number of associates who have seen their accounts frozen (but for some generous pocket money) and their passports taken. The first one, dubbed the Chrysopa case, leads to The Netherlands. The second, known as the Drey file, digs deep into diversion schemes carried out in the Russian Federation.

by Charles van der Leeuw, KZW senior contributor

Mukhtar Ablyazov’s united kingdom: a tale of four files/IIIn a report published on Aprl 12 this year and quoted earlier, the Evening Standard refers to a company called Drey Associates Ltd as “…a tiny firm based in Guildford apparently run by a British family but controlled by Ablyazov”. But in reality, the enterprise hides sums behind its modest profile that are a lot more impressive than its looks would suggest. “Anthony Stroud, 76, his schoolteacher daughter Sarah Wilson, and her husband, John, 47, were all directors of Drey Associates when Ablyazov transferred $295 million from BTA’s coffers to it in 2007,” the article reads. “At the time, BTA told the Kazakhstan stock exchange that Drey Associates owned 9.8 per cent of the shares in BTA Bank, which were worth hundreds of millions of pounds. But according to documents registered at Companies House, the firm’s declared assets were worth just 46,000 pound in 2007 and 38,000 in 2008. The Wilsons live in a surprisingly frugal manner considering they are directors of a firm that presides over multi-million-pound deals. The couple have two mortgages taken out on their modest 250,000 Sterling home in Welwyn Garden City. Mr Wilson is listed as an electrical engineer at Companies House. The couple, whose assets were frozen and passports seized pending the outcome of the Ablyazov case, refused to speak to the Evening Standard and directed all enquiries to leading Soho law firm Magrath, which also declined to comment.”

The current status of Drey’s stake in BTA proper remains unclear. The Almaty Stock Exchange mentions only the National Welfare Fund of Kazakhstan Samruk Kazyna has a consolidated shareholder, accounting for 81.48 per cent in the bank, with the rest of the shares floating. It can therefore be concluded that the 9.8 per cent referred to by the Evening Standard has been part of the stock declared forfeit in the process of the bank’s bail-out in early 2009, along with the stock held by Mukhtar Ablyazov and a number of his associates. But Drey’s role in the network preserved by Ablyazov and now under dispute stretches far beyond Kazakhstan. In data compiled by one of Russia’s corporate watchdogs Slavinvest which keeps record of corporate conglomerates’ ownership structures in the Russian Federation including theri offshore connections, Drey Associates Ltd. controls the company DeltaTorg LLC, which holds 19.7706 per cent in AMT Bank LLC, the former Russian subsidiary of BTA which changed its name and brand in 2010. According to Slavinvest, Drey Associates is held by another firm called Powermatic Data Ltd., in turn under control of Intercon Ltd., with the latter standing under personal control of Mukhtar Ablyazov. In the track list, the names of the Wilson couple are not mentioned. They are, however, noted as the owners of a company named Interfunding Facilities Ltd., which in turn controls Rikas (or Ricas) Finance LLC, which owns 19,3920 per cent in AMT Bank.

Two other shareholders in the Moscow-based bank are AMK-Invest, described as a “project and construction company”, and TuranAlem Capital LLC. AMK, which has a stake of 18.988 per cent in AMT Bank, stands under control of AHA Management Inc., in turn owned by Squarecut Trading Ltd., in turn controlled by a firm called Multiserve Ltd., behind which the name of Ablyazov’s longstanding associate Rinat Batyrgareyev is found. Behind TuranAlem Capital, which holds 19.5905 per cent in AMT, sticks a company called Solent Management Ltd., owned by three individuals called Stanley Edward Williams and Monique-France Kellee, and Nurgali Berkinbayev – the latter being yeat another member of Ablyazov’s inner circle. He currently lives in Vilnius, and has Lithuanian nationality. All this leaves BTA Kazakhstan with a share of no more than 22.2589 per cent in MTA, sharing the Moscovite bank’s boardroom with the very representatives of the man who emptied its coffers to the amount of 10 to 12 billion US dollar.

Towards the end of 2009, meaning more than half a year after Ablyazov’s exposure and subsequent downfall in Kazakhstan, news popped up that more than half of BTA-Kazan, the bank’s subsidiary operating in the autonomous Russian federal republic of Tatarstan, had been “sold” to three Russian enterprises hardly anyone had ever heard of. No amount involved in the transaction was ever mentioned. There was a company called Nayad Development and Bashpromreserve, both 100 per cent owned by individuals and supposedly engaged in project development and real estate management respectively. The third one was called Rusneftekhim behind which sticks the name of 34 years-old businessman from Moscow Maxim Pukhlikov – a name encoutered in the Chrysopa file in connection with the oil and gas terminal of Vitino. The BTA-Kazan affair came under public attention after a member of the Russian State Duma, Sergey Muravlenko, sued the bank in court after he had been trying in vain to withdraw money from his account, in the order of 26 million US dollar, since August 2009.

BTA-Kazan resulted from the takeover of a local bank in the Tatar capital called Volzhko-Kamsky in summer 2005 by BTA (Kazakhstan). Within months following the revelation of the new ownership structure, BTA-Kazakh started building up a new credit portfolio exceeding 2 billion rouble in construction and real estate business. Whether in part it included the development of a new logistics park known as Biyek Tau, the roof part of the walls of which collapsed in early March this year due to half-finished construction and neglect, remains unclear, since the main operator of the project was Eurasia Logistics, financed through Ablyazov’s network with money diverted from BTA, and also responsible for similar projects near the Moscow airport of Domodedovo, Yekatarinaburg and other locations in the Russian Federation. As the table below shows, BTA Kazakhstan has a larger share in BTA Kazan than in MTA, but is nonetheless sided by the same structures under control of Ablyazov and associates.

There is also at least one link to Kyrgyzstan, thereby confirming the often-heard suggestion that those who look for the funds distracted from the country’s accounts by former President Nurmanbek Bakiyev and his son Maxim should take a close look at Ablyzov’s networks before looking much further. In 2008, the name of Nurgali Berkinbayev, shareholder in BTA-Moscow later to become MTA, appears on the board of BTA-Kazan while that of his peer Rinat Batyrgareyev appears among the ranks of boardholders of BTA-Kyrgyzstan. Previously, BTA, then still largely known as Bank TuranAlem, had been buying into Kyrgyzstan’s banking business by taking over the latter’s Ineximbank for a sum below the equivalent of 50 million US dollar – a remarkable cheap deal even for an undersized and undercapitalised economy such as that of Kyrgyzstan.

In late December that year, a delegation led by the then all-powerful president of BTA Mukhtar Ablyazov on a visit to Bishkek where he met President Bakiyev, PM Danyar Usenov and a number of other top officials promised an extra capital injection for his bank’s Kyrgyz subsidiary in the order of $70 million, the local news agency the time. At stake were a number of real estate projects, a new cement factory under construction, coal mines, transportation infrastructure and power generation facilities, food industry projects and a fund meant to grant soft credits to small and medium enterprise in Kyrgyzstan. In reality, the money can be believed to have been funneled ouf of the country through Solent Management and/or TuranAlem Capital to be added to the latter’s portfolio.

In Georgia (and Belarus) BTA seems to have secured its shares in affilated banks from the claws of Ablyazov and his network. But in Ukraine, both BTA’s parent company in Kazakhstan and local minority shareholders only recently found out to ther distress that a court of law in the course of 2010 has recognised the 50.069 per cent rightful ownership of BTA Ukraine to six companies, all of which appear to be somehow under control of Mukhtar Ablyazov. The case remained under further investigation at the time of writing. Also in Armenia, questions tend to rise who is behind the second- and third-largest shareholder after BTA Kazakhstan, which officially holds 48.9 per cent in its Armenian namesake: Mobilex Energy Ltd. and ZRL Beteiligung AG, based in Austria. The fact that the smallest shareholder is no one less than Rinat Batyrgareyev’s AMK Invest leaves at least some room for suspicion concerning the backgrounds of the other two.

The Drey file’s total assets at stake, counted “only” in hundreds of millions Sterling (though on a broader level there might be much more connected with it), looks modest in comparison with the billions represented by the assets related to the third “stay” case on the London judge’s desk, with the company Tekhinvest at its centre. The Tekhinvest case takes us back downtown Moscow, and involves, among other projects, the Moscow City Tower – the one that in a court hearing last year Mukhtar Ablyazov “forgot” to mention when asked to declare all his assets connected with the file – prompting a High Court judge to decide that “Mr. Ablyazov apparently cannot be trusted”. Hardly anything new to Kazakh taxpayers whose money has been required to fill part of the hole Ablyazov left on BTA’s balance sheet and western banks who had to watch much of the rest go up in smoke.

PRESENT-DAY OWNERWHIP ASSESSMENT OF (FORMER) BTA SUBSIDIARIES AND AFFILIATES

enterprise co-owners share
MTA (former BTA Russia) Delta Torg (Mukhtar Ablyazov) 19.77%
  AMK Invest (Rinat Batyrgarayev) 18.99%
  Ricas Finance (Sarah and John Wilson) 19.39%
  TuranAlem Capital (Nurgali Berkinbayev) 19.59%
  BTA KAzakhstan 22.26%
BTA Tatarstan DeltaTorg 8.35%
  TuranAlem Capital 14.81%
  AMK Invest 19.69%
  BTA Kazakhstan 47.32%
BTA Kyrgyzstan D.T. Usenov 15.42%
  D.Dh.Isayeva 13.32%
  BTA Kazakhstan 71.00%
  others 0.26%
BTA Georgia Silk Road Financing Group (Gyorgy Ramishvili) 51.00%
  BTA Kazakhstan 49.00%
BTA Armenia LLC AMK Invest 3.70%
  Mobilex Energy Ldt. 16.30%
  ZRL Beteiligung AG 31.10%
  BTA Kazakhstan 48.90%
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