OREANDA-NEWS. April 06, 2010. BTA Bank considers the necessity to comment the court’s decision of the British Virgin Islands on the proceedings commenced by BTA Bank in November 2009. The proceedings relate to the terms of the assignment of BTA’s rights under the loan of USD 57,5mln.

This loan was made by BTA Bank to a Swiss company called Riroil Sarl in August 2008. Later the Bank became aware of documents according to which in January 2009 BTA’s rights under the loan were purportedly assigned to REUEL Limited, a BVI company. As it is known, till February 2009 BTA Bank was actually controlled by Mr. M.K. Ablyazov, Ex-Chairman of the Board of Directors of the Bank.

From the point of view of BTA Bank management, such a deal on the assignment did not take place and was an attempt of funds embezzlement by former management of the Bank as the commercial terms of this deal substantially violate the interests of the Bank. In fact, as a result of this assignment, in return for giving up its rights under an interest bearing loan, BTA received an unsecured promise of the offshore company Reuel Limited, which has no assets. In addition, the repayment period for the assignment was extended for two years.

Having every reason to believe that this deal was carried out illegally and in violation of Bank’s interests, BTA Bank filed a proper claim to the court of the British Virgin Islands, on the defendant’s place of registration. BTA Bank officially considers this deal as an attempt of funds embezzlement.

BTA’s claim contained four defendants, one of whom was Mr. M.K. Ablyazov, former Chairman of the Board of Directors of the Bank. Since Mr. Ablyazov is not resident in the BVI, BTA Bank during the preliminary hearing in November 2009 obtained permission from the BVI court to serve the proceedings on Mr. Ablyazov as a defendant, who is outside of the BVI jurisdiction.

Later Mr. Ablyazov appealed this pre-permission, and on March 24, 2010 the court of the British Virgin Islands granted the order that at this stage Mr. Ablyazov is not a necessary part of the proceedings. At present, BTA Bank is considering the issue of possibility and necessity to appeal against this order.

It’s also necessary to understand that this proceeding is still at a very early stage, in fact the case is not considered yet and no decisions regarding the participation or the role of Mr. Ablyazov in this deal issued by the BVI. This proceeding will be continued against the rest of defendants, and BTA Bank will be entitled to apply for inclusion of Mr. Ablyazov into the process as a defendant, as well as begin a new proceeding in connection with this deal in another jurisdiction.

It’s also necessary to note that the court order of the British Virgin Islands has no relation to the processes and claims of BTA Bank against Mr. Ablyazov filed by his location in London, and fraudulent schemes relating to the money withdrawal from the Bank under the guise of loans. To date, the amount of BTA claims against Mr. Ablyazov compiles several hundred million U.S. dollars, and now the Bank continues to work on its assets recovery.

Within the claim filed indeed by the High Court of England, the freezing injunction was issued against assets directly or indirectly controlled by Mr. Ablyazov, regardless of their location. According to the same order, the expenses of Mr. Ablyazov were cut down, and his passport was handed over to lawyers to avoid his departure from the UK. All these measures remain in force, and the order of the BVI court regarding the loan assignment of Reuel Limited does not relate to these measures.