Ablyazov Associate Jailed in Cyprus for Contempt in BTA Case

Aug 10. Bloomberg

By Erik Larson

Ablyazov Associate Jailed in Cyprus for Contempt in BTA CaseA British man accused of helping former BTA Bank Chairman Mukhtar Ablyazov steal $290 million from the lender was sentenced by a court in Cyprus to two months in prison for failing to comply with search warrants.

Paul Kythreotis, who lives in Cyprus, was jailed for contempt of court in a case BTA filed to uncover more evidence of Ablyazov’s alleged fraud, the bank said in an e-mailed statement today. BTA was the biggest lender in Kazakhstan before it defaulted on $12 billion of debt in 2009.

Kythreotis, who helped manage some of Ablyazov’s offshore companies, is the first of the ex-chairman’s former business associates to be jailed since BTA accused him in U.K. lawsuits of siphoning billions of dollars from the bank. Ablyazov, who moved to London, is on the run after being sentenced in February by a U.K. court to 22 months in prison for lying under oath.

“We have pursued these committal actions to break the networks through which Mr. Ablyazov and his associates can improperly hide and disperse assets,” Pavel Prosyankin, BTA’s managing director overseeing the asset recovery process, said in the statement.  Kythreotis’s lawyer, Riccos Erotokritou, didn’t immediately return a call or e-mail seeking comment. Kythreotis has said he wasn’t aware of fraud and that he had to lie because of threats from other defendants.

Kythreotis was sentenced in October in a related case in Britain to 21 months in prison for lying in testimony and failing to turn over documents related to the alleged fraud. He didn’t attend the hearing and wasn’t in the U.K.

The U.K. Court of Appeal upheld Kythreotis’s sentence last year, saying he admitted his earlier evidence was false and that he had an “enormous” e-mail archive that he hadn’t disclosed.