The Ablyazov files: peace on earth for people of bad will

Has Kazakhstan’s – and the world’s – leading champion swindler still any chance, as he hopes, to rank among the world’s outstanding political martyrs? Behind bars in France pending his eventual extradition, most probably to Ukraine, the culprit and his entourage have not stopped cherishing – or at least so they claim – their illusions of Ablyazov’s re-entry in the political arena under the limelight and in full legitimacy. But international mass media with some clout to speak of, including recently the Wall Street Journal, have started to cast doubt on Ablyazov’s self-proclaimed political martyrdom, which seems to be more and more considered a cover-up for his criminal acts. Both elected politicians and self-appointed “activists” not tend to point at possible ill-treatment should he ever stand trial in Kazakhstan, rather than enhancing his claim of “political oppression” of which he pretends to be the victim.


The Ablyazov files: peace on earth for people of bad willIn a lengthy article published on New Year’s day this year, the Wall Street Journal looked back (
) on the entire extraordinary sequence of events that eventually led to Ablyazov’s arrest and the outlook for him to stand trial – wherever that may occur and for exactly which charges. “Today, Mr. Ablyazov resides in a crowded prison south of Aix-en-Provence, while lawyers and judges debate where he should be sent,” the article reads. “To Ukraine, Russia or Kazakhstan, each of which wants him on fraud charges? To the U.K., where he is due to serve a prison sentence and from which he fled? Or nowhere at all? Behind the wrangling is a more vexing question: Is Mukhtar Ablyazov a hero or a crook?”

In rather diplomatic wordings, the article’s author tries to answer the last question himself – mainly by pointing at the flimsy and incoherent manner in which Ablyazov has tried to explain himself in various courtrooms over the last couple of years. “Fearing arrest, Mr. Ablyazov fled the country and won political asylum in the U.K.,” the WSJ reminds. “He traveled with bodyguards and lived behind gates. He broke his vow to stay out of politics. ‘Practically all opposition leaders visited him in London,’ says Yevgeniy Zhovtis, a human-rights campaigner in Kazakhstan. ‘He is one of the key political figures, even up to now.’ Mr. Ablyazov’s story of being a persecuted dissident on the run, however, is far from straightforward. Soon after he arrived in London in 2009, a battalion of BTA lawyers began pursuing him in English courts. The bank’s claim: Mr. Ablyazov took billions of dollars of cash raised by the bank and transferred the money to himself. ‘This is one of the largest corporate frauds the world has ever seen,’ says Chris Hardman of Hogan Lovells, the bank’s principal lawyer. BTA has filed 11 civil claims against Mr. Ablyazov in London, accusing him of a complex fraud with a basic method: He or his associates would instruct BTA to lend money. The money ultimately would end up in a shell company controlled by Mr. Ablyazov. The loan wouldn’t be fully paid back. ‘He stole billions of dollars from this bank,’ says Mr. Hardman. Mr. Ablyazov denies that he misappropriated any funds from BTA. In a witness statement, he said the cause of BTA’s downfall was its sudden nationalization, which he alleges was politically motivated. He also disputes control of some of the holding companies the bank says he used to steal assets, and says others were necessary to legitimately protect his assets.”

Abkyazov’s apologetic, though little explicit, stnd could get him as far as the European Court of Human Rights where he is reported to have filed a complaint… against England. “Richard Leedham, Mr. Ablyazov’s lawyer at the London firm of Addleshaw Goddard, says his client has had difficulty presenting his case because of ‘extraordinary pressure’ on anyone who might defend him,” the WSJ article notes. “‘He couldn’t get witness support, he couldn’t get documents to support his view of the case,’ Mr. Leedham says. Mr. Ablyazov has appealed to the European Court of Human Rights in Strasbourg, France, saying he didn’t get a fair trial. ‘The U.K. court system failed him,’ Mr. Leedham says. Human-rights groups have urged France not to deport.”

And how. “Between 2006 and 2008 BTA lent $1.4 billion to 17 companies incorporated offshore, which had few assets,” the WSJ’s article reminds. “One loan in November 2007 went to AstroGold Corp., a British Virgin Islands company that had been registered less than a year earlier with a single director, a man in Cyprus. Its balance sheet showed assets of $5,000. BTA lent it $45 million, according to the High Court. Over the next year, the loans to the 17 companies were partly repaid, but mostly were replaced with a new set of loans—$1 billion worth—to still more holding companies, the court said. That money never came back. The judge, Nigel Teare, concluded that the 17 companies, among them AstroGold, were ‘owned or controlled by Mr. Ablyazov.’ The evidence, he said, ‘strongly suggests’ that almost all of them were managed by Eastbridge.”

The paragraph refers to the case known as the AAA case, on which we reported earlier. On 28 July 2010, BTA filed UK proceedings regarding a number of of offshore companies believed to be affiliated to Ablyazov and company, in this case bearing the names of Celina Investment Holdings Limited, Shoreline Investment Holding Limited, Nafazko Investments Limited, Olofu Investments Limited, Mymana Holdings Investments Limited Mabco Inc, Calernen Finance Inc, Astrogold Corp and Grundberg Inc. The case was to be dubbed AAA after the ratings of the bonds used as fake liabilities in the asset diversion scheme that must have taken place between mid-2008 and early 2009 – just weeks before Ablyazov’s exposure, downfall and flight. “The Bank’s claims allege the misappropriation from the Bank of US$295 million in AAA-rated investments and/or their value as part of a scheme that was implemented between June 2008 and January 2009, whereby the investments held by the Bank were transferred into an offshore account and then used as security for a contract whereby Celina, Shoreline, Nafazko and Olofu and Mymana (the ‘Receiving Companies’) agreed to sell to an investment house, Alfa Equity Investments, investments that matched the description of those held by the Bank,” a UK court document related to the case was to read. “These Receiving Companies were paid US$295 million in June 2008 in return for a commitment to supply investments by the end of the year. The Bank’s case is that a security arrangement must have been put in place using the Bank’s investments to allow these monies to be paid to Receiving Companies (who provided no security of their own and did not appear to have any assets). The monies were then paid on by the Receiving Companies to the other corporate defendants. In January 2009, the Bank transferred its investments to the Receiving Companies. It is understood that the Receiving Companies used those investments to comply with their obligations under their contracts with Alfa Equity Investments.” The AAA case has been among those which led to Ablyazov conviction to 22 months in an English jail for “contempt of court” – or perjury.

The WSJ journalist also describes Ablyazov’s attempt of a coup-de-théâtre in his appearance in the French court room. “Early last month, Mr. Ablyazov was brought from prison to the appeals court in Aix-en-Provence for a hearing on possible extradition to Ukraine, where BTA also has operations,” the WSJ artcle concludes.. “He is a short man, bald on top with dark hair dusted silver. He wore a blue V-neck sweater and stood in the defendant’s dock amid a gaggle of lawyers in robes and dark suits. The judges and lawyers wrangled over whether Ukraine’s paperwork amounted to a proper arrest warrant. The presiding judge asked Mr. Ablyazov if he had anything to say. Speaking animated Russian, he asked the court to hurry up and hear his case. “You understand that the Kazakh government stole my family,” he said. The matter was postponed, and Mr. Ablyazov was taken back to the prison. According to his lawyer, the guards there call him ‘the minister’, and he spends his days alone in a cell.” A court decision is scheduled for January 16, but the issue can easily drag on through the rest of the year, pending appeals. And even then, it will be possible that the French government overrules the final rule, arguing that extradition would be “politically inopportune”.

A similar struggle between Montesquieu’s three pillars of a state, namely judicial, legislative and executive powers, has recently been signaled in Spain, related to the eventual extradition to Kazakhstan of Ablyazov’s former security chief Alexander Pavlov, who has been charged with multi-milliontheft from BTA and preparations of a terrorist campaign in Almaty. “The Spanish government has not reached any agreement with Kazakhstan to extradite Alexander Pavlov, bodyguard of a Kazakh opposition leader whose extradition Astana demands,” the Spanish periodical Publico ( wrote in a report published over the New Year, mentioning a number of political parties, varying from radical-left Izquierda Unida to the Catalan nationalist party CiU, and “various humanitarian organisations”. But this does not mean that Pavlov can sit back in peace. “In a written reply to UPyD deputy Irene Lozano, the government of Mariano Rajoy expressed its confidence that Kazakhstan’s ‘standards in respect to human rights are guaranteed’ – proof of which can be found in the existence of a bilateral convention for extradition between the two countries.”

In how far, though, such conventions actually function remains subject to doubt, since in many countries, most of all but not only the USA, Cold War feelings of old tend to prevail, haling anyone from the former Soviet Union at odds with his home country’s authorities for whatever reason as Christmas angels. Thus, in an exhaustive report ( posted on a Spanish reel on December 9 last year, an author named María Alvárez noted that “many [in number] are the corrupt officials, including persons linked to terrorism in Russia, Kazakhstan and other countries of the [FSU] zone [who] have found refuge and liberty in EU countries.” She also noted that “Europeans interpret international extradition treaties in a way that is only beneficial for them.” Delinquents tend to abuse that attitude simply “creating a political opposition party in their country of origin, with the aim to have an excuse to demand refuge in Europe when the time is due.”