BTA Bank Ex-Chair Ablyazov Says Georgian Stake Expropriated

Sept. 22. Bloomberg

By Peter Chapman, Heather Smith

BTA Bank Ex-Chair Ablyazov Says Georgian Stake ExpropriatedMukhtar Ablyazov, ex-chairman of Kazakhstan’s BTA Bank, asked a U.K. judge to order the lender to hand over documents explaining how his personal stake in the bank’s Georgian subsidiary was sold without his permission.

BTA, which has sued Ablyazov in Britain for fraud, “stood by” as the unit sold the former executive’s 27 percent stake to an entity with links to the Kazakh government, his lawyer, Charles Bear, said yesterday at a London court. The transfer is part of BTA’s attempt to expropriate Ablyazov’s wealth and may have violated a U.K. freezing order on his assets, Bear said.

The sale in April 2010, “does appear to be an instance exemplifying this campaign to steal my client’s assets,” Bear said at the hearing. The documents sought by Ablyazov could demonstrate BTA’s “complicity in the transfer,” he said.

BTA, which defaulted on $12 billion of debt before restructuring last year, filed a series of U.K. cases against Ablyazov and Roman Solodchenko, its ex-chief executive officer, over claims they siphoned money from the bank using fake loans. The men fled to London from Kazakhstan and deny the claims.

BTA Bank, based in Almaty, said in an e-mailed statement that there is no evidence to suggest the lender had any involvement in the transfer of Ablyazov’s shares in the Georgia unit to an energy company called Silk Road.

‘Unfounded and Irrelevant’

“This is yet another attempt by Mr. Ablyazov to distract the U.K. courts from the underlying fraud proceedings against him,” BTA said in the statement. “We are confident that, to the extent necessary, the court will conclude that these claims are unfounded and irrelevant.”

Ablyazov claims the case is politically motivated and that Silk Road is controlled by the son-in-law of Kazakhstan’s president, Nursultan Nazarbayev. Ablyazov’s lawyer with power of attorney over his stake in the bank was thrown out of a board meeting in Tbilisi, Georgia in April 2010, he said.

The U.K. court has previously rejected Ablyazov’s argument that the case should be dropped due to his alleged political dispute with Nazarbayev, which started after Ablyazov joined the democratic opposition in Kazakhstan. Nazarbayev has been in power for more than two decades.

BTA, the biggest Kazakh lender before its nationalization in 2009, says litigation against the men will benefit Royal Bank of Scotland Group Plc, Barclays Plc, Commerzbank AG and other creditors that financed its rapid growth before the global credit crisis.

Asset Disclosure

BTA asked a judge in May to jail Ablyazov for failing to fully disclose his assets under the freezing order. The bank said its forensic accountants uncovered evidence of more than 600 shell companies used by Ablyazov to hide his wealth. A hearing on the request is scheduled for November.

Ablyazov was previously accused of violating the freezing order by failing to reveal his ownership in a Moscow skyscraper project. The earlier dispute prompted the judge overseeing the case in August to place an estimated $5 billion in Ablyazov’s assets into receivership under the control of KPMG LLP during the case.

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