Bloomberg News

BTA Bank Wins 18-Month Sentence for Ex-Chairman’s Brother-in-Law

June 27, 2011

(Updates with judge’s comment in third paragraph.)

June 27 (Bloomberg) -- Syrym Shalabayev, the brother-in-law of ex-BTA Bank Chairman Mukhtar Ablyazov, was sentenced to 18 months in a U.K. jail in connection with an alleged fraud at the Kazakh bank that defaulted on $12 billion of debt.

Shalabayev, whose whereabouts are unknown, failed to reveal his assets or cooperate in the case, Justice Michael Briggs ruled today in the High Court in London. An arrest warrant was issued against him last month and today he received two 18-month sentences to run concurrently, and a conditional six month sentence if he continues to fail to comply with court orders.

“This is a very serious case of total non-compliance,” Briggs said in his ruling. “It’s a case where the claimants continue to have a pressing need for Shalabayev to comply.”

BTA, Kazakhstan’s biggest lender before it was nationalized in 2009, has sued Ablyazov and ex-Chief Executive Officer Roman Solodchenko in the U.K. over claims they siphoned money from the bank through fake loans to offshore shell companies as early as 2005. Shalabayev allegedly helped create false documents to hide Ablyazov’s ties to the entities.

Shalabayev previously had 200 million pounds ($319 million) of his assets frozen. The Almaty-based bank last week asked Briggs to force Shalabayev’s lawyers to reveal his contact details.

Ablyazov, who fled from Kazakhstan to London to escape prosecution, separately faces a possible prison sentence after BTA claimed he violated a freezing order by hiding some of his assets, including a stake in a Moscow skyscraper development and about 600 shell companies.

BTA says litigation against the men will benefit Royal Bank of Scotland Group Plc, Barclays Plc, Commerzbank AG and other creditors that financed the lender’s rapid growth before the global credit crisis.

--Editors: Christopher Scinta, Peter Chapman

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

To contact the editor responsible for this story: Anthony Aarons at aaarons@bloomberg.net.


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