Mukhtar Ablyazov
Mukhtar Ablyazov (born 16 May 1963, Galkino Village, South-Kazakhstan) is a Kazakh businessman, former banker, and co-founder of the Democratic Choice of Kazakhstan (DCK), opposition political movement. He is currently the subject of a legal investigation in the UK High Court after he allegedly embezzled billions of dollars out of BTA Bank between 2005 and 2009.[1]
Career history
In 1992 Ablyazov established Astana Holding in Kazakhstan, a multi-sector private holding company.
In 1998, together with a consortium of Kazakhstan investors, he acquired shares in Bank TuranAlem, which later became known as BTA Bank, for $72 million[2] in a privatization auction.
Ablyazov was appointed as head of the state-owned Kazakhstan Electricity Grid Operating Company in 1997 and in 1998 was appointed as Minister for Energy, Industry and Trade.[3]
Political career
In November 2001, Ablyazov co-founded the Democratic Choice of Kazakhstan (DCK), an opposition political movement challenging the current president, Nursultan Nazarbayev.
The DCK included a combination of existing politicians and major businessmen and called for decentralisation of political power, a strong legislature and an independent judiciary to balance the power concentrated in the executive branch.
In July 2002, Ablyazov was convicted of ‘abusing official powers as a minister’ and sentenced to six years in prison. These charges were considered by many to be politically motivated, including the European Parliament [4] and Amnesty International [5]. The trial failed to meet international fair trial standards.[6]. It is alleged that he was subject to torture, beatings and other ill-treatment whilst he was in prison. [7] After pressure from the international community, including Amnesty International and the European Parliament [8] he was released in May 2003 after only serving ten months, on the condition that he renounce politics.[9]
Ablyazov moved to Moscow in 2003 to rebuild his business ties and in 2005 became the Chairman of the Board of Directors of BTA Bank.
BTA Bank
Ablyazov served as the Chairman of the Board of Directors of BTA Bank from 2005 to 2009. During this period the bank grew rapidly and won numerous awards under his Chairmanship, including 2007 'Best Managed Banks in Central & Eastern Europe and Central Asia' by Euromoney, and Best Bank Award in 2008 from Global Finance. [10]. However growth in loans was not matched by equivalent growth in deposits with led to latent credit risks. Between 2003 and 2007 BTA's outstanding loans grew by 1,100%.[11]
In 2009, Kazakhstan's Sovereign Wealth Fund, Samruk-Kazyna, injected significant funds and became the majority shareholder in the bank.[12]
In 2009 BTA Bank commenced civil proceedings against Ablyazov in order to recover assets lost during his leadership.[13] Since August 2009 the High Court in London has found sufficient cause to freeze Ablyazov’s assets and confiscate his passport.[14]
Ablyazov's defence papers argue that the takeover of BTA by Samruk-Kazyna in February 2009 was "the culmination of the campaign by the president [Nazarbayev] and his allies to wrest ownership and control of [BTA] from [Ablyazov]". [15]
Exile and litigation
UK litigation and asset recovery
In 2009 BTA Bank launched legal proceedings against Ablyazov in the English High Court as a part of its restructuring agreement with creditors to recover assets allegedly misappropriated by Ablyazov during his tenure at BTA Bank.[16][17] The cases involve companies registered in the Netherlands, Cyprus, the UK, Switzerland, Russia and the British Virgin Islands, among others.[18]
Ablyazov is the subject of five legal claims in the English High Court totalling $2bn (£1.3bn). In October 2010 Ablyazov lost a legal fight to prevent his assets from being subject to a receivership order, this came after Justice Teare ruled that Ablyazov "cannot be trusted" not to dissipate assets prior to trial.[19][20]
In a judgement from July 2010 Justice Teare stated that "consideration of [Ablyazov's] conduct with regard to disclosure of his assets in August/September 2009 … has left me unable to trust him not to deal with his assets in breach of the freezing order."[21]
Arrest warrant in Kazakhstan
Kazakh prosecutors accused Ablyazov of money laundering and fraud in March 2009, issuing a warrant for his arrest. Following the Kazakh arrest warrant Ablyazov fled to the UK [22][23][24][25]
Arrest warrant in Russia
The Russian Interior Ministry's Investigative Committee also requested a warrant for Ablyazov's arrest in Russia where he has been charged on four counts of financial crime, including a $5 billion fraud. He is currently on an international wanted list in Russia.[26]
Appeal for UK asylum
Ablyazov has appealed for asylum in the UK.[27] However, Kazakhstan’s Prosecutor General’s Office have requested his extradition from the UK. The British government has reportedly not yet replied to the extradition request. [28]
References
- ^ Living in fear in London: the exiled Kazakh banker accused of $2 billion fraud - The Evening Standard, Paul Cheston, 25 August 2010
- ^ Kazakhstan's Bank Lending Frozen in Subprime Squeeze - Bloomberg, Elliot Blair Smith, 21 December 2007
- ^ BBC Timeline: Kazakhstan - BBC chronology of key events, 11 March 2010
- ^ [1] - European Parliament Resolution on Kazakhstan
- ^ [2] - 'Amnesty International Report on Kazakhstan 2003
- ^ [3] - 'Amnesty International Report on Kazakhstan 2003
- ^ Amnesty International Report 2004 - Kazakstan
- ^ Living in fear in London - Evening Standard, 25 August 2010
- ^ BBC Timeline: Kazakhstan - BBC chronology of key events, 11 March 2010
- ^ [4] - BTA Bank Awards
- ^ Kazakh Bank Lost Billions in Western Investments - New York Times, Landon Thomas Jr., November 27, 2009
- ^ Kazakh bank BTA signs debt restructuring MOU - Reuters, 22 September 2009
- ^ Lessons to be learnt from Kazakhstan - The Financial Times, Gillian Tett, 3 June 2010
- ^ Glitnir Among Lenders Winning Asset Freezes in U.K. - Bloomberg Businessweek, Erik Larson, 3 August 2010
- ^ [5] - The Guardian, December 2, 2010.
- ^ Taxpayers set for cash boost in banker case - Press Association, Sam Marsden, 21 July 2010
- ^ BTA sues Kazakh over '£1bn fraud' - The Scotsman, 22 July 2010
- ^ BTA Bank Restructuring Plan Information Memorandum - 28 May 2010
- ^ Kazakh Banker Loses Courtroom Battle Over Assets - The Guardian, Simon Goodley, 3 December 2010
- ^ Ablyazov Loses U.K. Appeal Over Control of $5 Billion - Bloomberg Businessweek, Erik Larson, 8 December 2010
- ^ Royal Court's of Justice, Neutral Citation Number: [2010 EWHC 1779 (Comm), JSC BTA Bank vs Mukhtar Ablyazov]
- ^ Fugitive Kazakh Banker Accuses Government - Reuters, 11 March 2009
- ^ Taxpayers set for cash boost in banker case - Sam Marsden, Press Association, 21 July 2010
- ^ Fugitive Kazakh Banker Accuses Government - Reuters, 11 March 2009
- ^ - Vedomosti, Page 6
- ^ Russia to enter ex-head of Kazakh bank on intl wanted list - Interfax, 5 July 2010
- ^ Ex-bank chief in 'world's biggest fraud' case must surrender £4bn - The Evening Standard, Paul Cheston, December 10, 2010
- ^ Kazakhstan seeks Ablyazov’s extradition from the UK - Silk Road Intelligencer, January 30, 2011