BTA Ex-Chairman Ablyazov Gets 22 Months for Contempt After Hiding Assets

Mukhtar Ablyazov, the former chairman of Kazakhstan’s BTA Bank, was sentenced to 22 months in a U.K. jail for breaching a court-ordered freeze on his assets and lying under oath in a $5 billion fraud lawsuit.

The violations were “deliberate and brazen” and require that Ablyazov be placed in immediate custody, Judge Nigel Teare said today in London. Ablyazov, who fled to Britain to escape prosecution in his home country, failed to appear at the hearing. BTA’s lawyer said the ex-banker may be fleeing again.

“Mr. Ablyazov has lied to his own lawyers and lied to this court,” Stephen Smith, a BTA lawyer, said before the sentencing. “He has had plenty of opportunities to tell us the truth and has continually evaded doing so.”

BTA, the biggest Kazakh lender before defaulting on $12 billion of debt in 2009, filed a series of civil suits against Ablyazov and ex-Chief Executive Officer Roman Solodchenko claiming they took more than $5 billion from the Almaty-based bank using fake loans, back-dated documents and offshore companies. Both men have denied the claims.

Lawyers for BTA, which restructured its debt after being nationalized, said Ablyazov violated a 2009 court order by failing to reveal all his assets, including a house in the British countryside and a London mansion, each valued at 20 million pounds ($31.6 million), two apartments in the U.K. capital worth 1 million pounds each, and an offshore firm that allegedly carried out a $300 million fraud against the bank.

Delay Request

Ablyazov’s lawyer, Duncan Matthews, said he didn’t know his client was planning to skip the hearing and there’s no reason to believe he’s fleeing the country. Teare denied his request to delay sentencing so he could advise Ablyazov on “the consequences of his course of action.”

“The judgment should serve as a signal to Mr. Ablyazov’s associates that the full force of the law will be pursued to ensure court orders are obeyed,” Nikolay Varenko, a deputy chairman at the bank, said in an e-mailed statement.

A call to Ablyazov’s spokesman, Locksley Ryan of RLF Partnership Ltd. in London, wasn’t answered and an e-mail didn’t receive an immediate response.

The former chairman has said the bank is pursuing the case because he was part of the democratic opposition to Kazakhstan President Nursultan Nazarbayev, who has ruled the country for more than two decades.

Safeguard Wealth

At the trial, defense lawyers said Ablyazov’s fear of Nazarbayev forced him to use offshore firms and back-dated documents to protect assets, and that such practices are common among Kazakhs seeking to safeguard wealth from government theft. Ablyazov also said he didn’t understand how the asset freeze worked.

An earlier dispute over Ablyazov’s asset disclosure in the case resulted in an order placing an estimated $5 billion of his wealth into receivership. Ablyazov may serve only half the sentence imposed today under U.K. rules, Teare said.

BTA has said litigation against he and Solodchenko will benefit Royal Bank of Scotland Group Plc, Barclays Plc, Commerzbank AG and other creditors that financed it to become the biggest Kazakh lender before its 2009 nationalization.

To contact the reporter on this story: Erik Larson in London at elarson4@bloomberg.net

To contact the editor responsible for this story: Christopher Scinta at cscinta@bloomberg.net

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