English judge says fugitive oligarch defrauded Kazakh bank BTA

LONDON, March 19 Tue Mar 19, 2013 3:04pm EDT

LONDON, March 19 (Reuters) - An English judge said oligarch Mukhtar Ablyazov, who has been in hiding since he was sentenced to jail for contempt of court last year, organised a complex fraud to embezzle billions of dollars from Kazakh bank BTA .

Judge Nigel Teare said on Tuesday that Ablyazov must have orchestrated or authorised false loans and "deceived" BTA's board by failing to disclose his interest in borrowers.

Ablyazov, 49, a former theoretical physics graduate, entrepreneur and Kazakh government minister, denies fraud allegations he says are designed to rob him and eliminate him as an opponent to Kazakhstan President Nursultan Nazarbayev.

In a judgment against three of Ablyazov's co-defendants, the High Court judge, who has presided over much of the tortuous case since it was brought in 2009, backed BTA's allegations that its former chairman committed one of the largest frauds ever tried in Britain.

"...there can be only one explanation for the fact that the very large sums of money which were advanced were immediately transferred to companies owned or controlled by Mr. Ablyazov, namely, that the original loans were part of a dishonest scheme whereby Mr. Ablyazov sought to misappropriate monies which belonged to the bank," Teare said.

Ablyazov has been debarred from defending himself against around $6.0 billion of fraud claims because he ignored court orders.

Teare, who awarded BTA an initial $2.1 billion damages in a default judgment against Ablyazov last November, granted the bank another $1.74 billion on Tuesday in three further claims against some of Ablyazov's allies.

He found that Zhaksylyk Zharimbetov, a former deputy chairman of BTA's management board who now lives in London, Ildar Khazhaev, former head of BTA's Moscow office and Cypriot company Usarel, which owns Vitino Port on the White Sea, knowingly helped Ablyazov misappropriate cash from BTA.

All three defendants had pleaded not guilty.

BTA expects the judge next week to hand down further damages awards against Ablyazov, whose attempt failed last month to halt proceedings by appealing to the UK Supreme Court to review a case he says denies him a fair trial.

Ablyazov fled oil-rich Kazakhstan after BTA was nationalised and declared insolvent in 2009, saying his life was in danger. He was granted political asylum in Britain in 2011, but has said he believes his security remains at risk and refuses to disclose his current whereabouts.

Because it does not expect him to heed the court's damages demands, BTA plans to begin the process of selling some of his more valuable UK properties held under a worldwide freezing order. These include his nine-bedroom former home in London and a 100-acre (40-hectare) country estate.

However, the bank's efforts to start liquidating assets it says belong to Ablyazov are complex because many are controlled via a chain of companies using trusted nominees and holding companies that are often registered in offshore jurisdictions.

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