U.K. Court Freezes Up to $5 Billion Tied to Alleged Kazakhstan Bank Theft
December 01 2020 - 5:41AM
Dow Jones News
By Bradley Hope
A U.K. civil court froze up to $5 billion in assets including
stakes in luxury hotels, cash in bank accounts in half a dozen
countries and a Burger King franchise, as part of an international
legal saga that ensnared Kazakhstan's richest businessmen,
according to court documents.
The Business and Property Courts of England and Wales issued the
asset freeze on Nov. 13, based on a petition from Kazakhstan's
state-owned BTA Bank, which has alleged for years that its former
bank chairman stole more than $6 billion and laundered it through
shell companies around the world. The freeze is among the biggest
granted by the court, according to lawyers who work there.
The case is part of a set of civil court disputes involving BTA
in the U.S., U.K. and more than a dozen other jurisdictions.
Defendants have long maintained BTA's accusations are false and
based on a political vendetta that pits political and business
elites against each other in Kazakhstan, an oil- and gas-rich
ex-Soviet state.
Both sides have spent tens of millions of dollars on top lawyers
and private investigators over more than a decade. BTA alleged that
the stolen money ended up in hidden bank accounts and assets around
the world including a shopping mall in Cincinnati.
A U.K. court in 2012 ruled in BTA's favor, issuing a $4.9
billion civil judgment against the former bank chairman, Mukhtar
Ablyazov, and Iliyas Khrapunov, his son-in-law. Mr. Ablyazov
refused to engage with the British courts, leading to him being
held in contempt. He resides in France.
Messrs. Ablyazov and Khrapunov deny the allegations, according
to their lawyers.
U.K. Judge Neil Calver ordered the new asset freeze based on
fresh allegations from BTA. The bank said Bulat Utemuratov, a
financier, former Kazakhstan government adviser and board member of
the International Tennis Federation, worked with 11 other
individuals and companies to help hide money stolen from the bank,
the court documents showed.
Mr. Utemuratov denied the allegations. "The claim was based on
false documents provided by BTA Bank JSC and its lawyers," said
Olga Abdrakhmanova, spokeswoman for Mr. Utemuratov and Verny
Capital, one of the defendants in the freezing order, where Mr.
Utemuratov is a lead investor. "We will make an application to have
this claim discharged."
A spokeswoman for BTA Bank said it welcomed the court's
decision, but declined to comment further.
The new order seeks to freeze assets including bank accounts at
institutions including UBS Group AG, Credit Suisse Group AG, EFG
International AG and DBS Group Holdings Ltd., and companies that
own stakes in the Ritz-Carlton-branded hotels in Moscow, Vienna and
Nur-Sultan, Kazakhstan. The Burger King franchise of Kazakhstan,
owned by a company controlled by Mr. Utermuratov, is also included.
Representatives of the banks declined to comment.
Mr. Ablyazov took control of BTA in 2004 after his business
partner died in a freak wolf-hunting accident. The bank was later
taken over by the Kazakh government, which alleged he and his
associates stole billions through a series of fraudulent loans.
A Facebook post under Mr. Ablyazov's name on Saturday responded
to the freezing order, denying the money laundering allegations and
saying that a top Kazakh intelligence official was trying to
"destroy Utemuratov physically and financially."
Mr. Khrapunov, who BTA has alleged played a pivotal role in
laundering money for Mr. Ablyazov, said in a statement provided by
his lawyer that the new allegations were "ridiculous and fictional"
and based on "fabricated documents." He said BTA Bank was bringing
the case against Mr. Utemuratov to take him out as a political
opponent.
"There is no better way in Kazakhstan to do so than by accusing
someone of assisting the regime's enemy No. 1, Mr. Ablyazov," Mr.
Khrapunov said.
BTA's focus on Mr. Utemuratov, a high-profile businessman, is
the latest twist in a case that brought together powerful players
in Kazakhstan's business and political spheres.
Mr. Ablyazov has said former Kazakh President Nursultan
Nazarbayev, who left office after nearly three decades in power in
2019, persecuted him for his efforts to push democratic reforms in
Kazakhstan.
The spokeswoman for Mr. Utemuratov played down local media
reports that the businessman was friends with the former president,
saying instead they were better described as associates.
Mr. Utemuratov is the world's 764th richest person with an
estimated fortune of $2.9 billion, according to Forbes. The
spokeswoman said his actual fortune was now worth $3.2 billion.
Write to Bradley Hope at bradley.hope@wsj.com
(END) Dow Jones Newswires
December 01, 2020 05:26 ET (10:26 GMT)
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