The hunt for Mukhtar Ablyazov: Banker, criminal, fugitive, victim?

Elliot Wilson
Published on:

What is the truth about Mukhtar Ablyazov? Is the former head of Kazakh bank BTA a fraudster on a par with Madoff and Stanford, as prosecutors from Russia and Ukraine to England and France claim? Or is he the persecuted victim of his home country’s political elite? One thing is for sure: the hunt for Ablyazov, and billions of dollars in assets he is alleged to have illegally appropriated, is one of the great sagas of our time.

The lavish life of Mukhtar Ablyazov – financial fugitive, convicted fraudster, political patsy, British jailbird-in-absentia – was all but over on July 13 2013.

Not that he knew it. Kazakhstan’s most wanted man, on trial in London on charges of eye-watering financial fraud – charges he continues to deny – was rather enjoying life on the run. Safely ensconced in a plush villa on the outskirts of Nice, he was awaiting the arrival of a very special guest.

Just over a thousand kilometres away, in the Rolls Building on Fetter Lane in the heart of London’s legal district, Ablyazov’s name, once unimpeachable, now scuffed and sullied, was suffering its latest bruising. Justice Nicholas Hamblen, just one of the many High Court judges to oversee one of the most sinuously winding cases ever heard in a British court, presided.

To one side of Hamblen sat the claimants, led by the London law firm Hogan Lovells, representing their client, BTA Bank, once Kazakhstan’s mightiest lender, now hobbled and humbled. The opposite bench, bearing the defence team, was empty bar a single person: a tall, slender, blonde Ukrainian woman in a tight, zip-up purple dress.

The bank’s argument was simple, and had been since bringing the case to the High Court in April 2009. BTA Bank was nationalized in early 2009 at the height of the financial crisis and restructured on two further occasions, and lost its creditors and the Kazakh state billions of dollars. The bank claimed it had failed because Ablyazov, during the course of five tumultuous years as chairman, had transformed it from a profitable and credible regional lender with a sturdy retail customer base into a de-facto Ponzi scheme.

Ablyazov and a select group of loyal fellow-travellers had bled his former bank dry, the claimant’s lawyers alleged, by assembling a mind-bogglingly complex network of offshore companies that stretched from Europe to the Caribbean, and from the US to the western Pacific Ocean, in which to house assets and capital once the purview of BTA.

The defence argument, advanced by Addleshaw Goddard, the third London legal firm hired by Ablyazov in four years, took a very different view of its client’s alleged culpability. His trial, and the tribulations he suffered, stemmed, the defence maintained, from two events outside his control. BTA’s collapse was caused not by its client’s financial delinquency, but by Kazakhstan’s decision to forcibly nationalize a perfectly healthy bank.

Second, the defence insisted, this was all part of a political power play. Ablyazov had long ago fallen out with the long-time Kazakh leader, Nursultan Nazarbayev, briefly spending time in jail for the temerity of forming an opposition party more than a decade before. Ergo, the trial was all merely a handy diversion, an elaborate way of publicly shaming a potential political opponent. A stretch in jail would, after all, deny Ablyazov the right to run for public office.

That July day, however, Addleshaw – which did not respond to repeated requests for comment from Euromoney – was nowhere to be seen. This part of the case involved a dispute over ownership of a share in the profitable Vitino Port on Russia’s White Sea coast near Murmansk. Hogan Lovells averred that the stake’s ultimate beneficial owner was Ablyazov. But they were stymied, as they had been before on several occasions, by the sudden appearance of a hitherto-unknown claimant – in this case the Ukrainian woman.

Hogan Lovells cried foul. This was the latest in a long series of obstructionist manoeuvres, they charged, designed to buy Ablyazov and his cronies more time, while adding new layers of complexity to an already insanely opaque case.

Advisers to BTA say that Ablyazov’s tactics had been simple: to stall and to rack up costs. Ablyazov appealed against everything, including procedural motions, and even sought to appeal against decisions made following appeals. Judges have complained about the court’s time being wasted.

Unable to rule due to a paucity of detail, Justice Hamblen brought an abrupt end to proceedings. The blonde woman, drinking in events from behind a pair of voluminous dark glasses, smiled broadly then departed swiftly – shadowed at a careful distance by a team that had been tracking her movements for months.

This surveillance team, hired by BTA and overseen by Hogan Lovells and John Howell & Co, a London-based risk and regulation specialist, had first come in contact with Yelena Tischenko in late 2012 when her name began appearing on legal documents. She claimed to be Ablyazov’s Ukraine lawyer (though no one with her name has ever been appointed to the bar in Kiev).

She had only recently left her husband – her divorce was made final the week after the July 13 hearing – and she spent increasing amounts of time on the 21st floor of Tower 42, a soaring office block on London’s Old Broad Street that housed Eastbridge Capital, an investment holding firm allegedly used by Ablyazov to shuffle money around the world.