BTA Bank, the bailed-out Kazakh lender seeking to recover assets for international creditors, can continue its $4 billion fraud lawsuit against ousted Chairman Mukhtar Ablyazov, a U.K. judge ruled.
Judge Nigel Teare in Bristol, England, today rejected Ablyazov's claim that the case is a veiled attempt by Kazakhstan President Nursultan Nazarbayev to eliminate political rivals. Nazarbayev was re-elected last month with 95.5 percent of the vote, adding five more years to his two-decade rule.
"If the consequence of that case succeeding is that the president of Kazakhstan is assisted in eliminating Mr. Ablyazov as a political opponent," then it is a "natural consequence" of the lawsuit, Teare said in the judgment.
BTA, whose creditors include Royal Bank of Scotland Group Plc (RBS), Barclays Plc (BARC) and Morgan Stanley (MS), claims Ablyazov conspired to siphon money from the bank through a series of fake loans and share sales before fleeing from Kazakhstan to London. The Almaty-based lender was nationalized in February 2009 and later defaulted on $12 billion of debt.
"Ablyazov maintains that the bank was nationalized purely for political reasons, as the bank was sound at the time," his spokesman, Locksley Ryan of London-based RLF Partnership Ltd., said today in a phone interview.
Recovery Notes
BTA last year issued 10-year "recovery notes" to creditors for about $5 billion of bad loans as part of its debt restructuring. The lender will share with creditors, on a 50-50 basis, recoveries from impaired assets, including damages from the U.K. lawsuits.
Other creditors that stand to benefit from the case include Wells Fargo & Co. (WFC), Bank of America Corp. (BAC), Standard Chartered Plc, Commerzbank AG (CBK), HSBC Holdings Plc (HSBA), Credit Suisse Group AG (CSGN) and New York-based Goldman Sachs Group Inc. (GS), which in July 2009 quit as BTA's restructuring adviser.
BTA in December won a U.K. appeals court ruling forcing Ablyazov to place his assets, estimated at $5 billion, into receivership. The bank said Ablyazov didn't disclose all his business deals, including ownership in a Moscow skyscraper project.
Ablyazov's lawyers claim BTA's takeover was motivated by their client's membership in the "democratic opposition" to Nazarbayev. Similar conspiracy claims were dismissed by Teare in February.
'Power and Influence'
The defendant's renewed attempt to dismiss the case focused on an alleged concerted strategy by Nazarbayev to remove the "power and influence" of the country's oligarchs, according to the ruling. Teare said evidence of the scheme was circumstantial, and that the financial crisis was a more likely reason for the takeover.
Ablyazov was arrested in 2003 and imprisoned on "trumped up" charges that resulted in the seizure of his assets, his lawyers have said. He was also tortured in custody and survived two assassination attempts, they say.
Kazakh prosecutors issued arrest warrants for Ablyazov and Roman Solodchenko, BTA's one-time chief executive officer, in March 2009 on suspicion they embezzled money and laundered it through loans to fake companies. Both men denied the charges.
The case is: JSC BTA Bank v. Mukhtar Ablyazov, [2011] EWHC 1136 (Comm), Royal Courts of Justice (London).
To contact the reporter on this story: Erik Larson in London at
To contact the editor responsible for this story: Anthony Aarons at
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