Bloomberg News

BTA Bank Wins Jail Term for British Man in Ablyazov Fraud Case

November 01, 2011

Oct. 31 (Bloomberg) -- A British man in Cyprus who’s accused of helping former BTA Bank Chairman Mukhtar Ablyazov steal $290 million from the Kazakh lender was sentenced to 21 months in a U.K. prison for contempt of court.

Paul Kythreotis, 44, lied in testimony and failed to turn over documents related his role in the alleged fraud, the Court of Appeal in London ruled Oct. 28. Kythreotis, who wasn’t in court and hasn’t been arrested, said he had to lie because of threats from other defendants, according to the ruling.

“Kythreotis admitted that his earlier evidence had been false” and “that he had an ‘enormous’ e-mail archive, which he had not previously disclosed,” a panel of three judges wrote. The lies related to Kythreotis’s role as nominee for British Virgin Islands-based companies used in the alleged fraud.

BTA, which defaulted on $12 billion of debt before restructuring last year, filed a series of U.K. cases against Ablyazov and ex-Chief Executive Officer Roman Solodchenko over claims they siphoned money using fake loans. The lender says litigation against the men, seeking about $5 billion so far, will benefit Royal Bank of Scotland Group Plc, Barclays Plc, Commerzbank AG and other creditors that financed its rapid growth before the global credit crisis.

An e-mail to Kythreotis wasn’t returned and a call to his phone in Cyprus wasn’t answered. Kythreotis has denied the allegations and said he wasn’t aware of the alleged fraud.

A London court last year froze $68.3 million of Kythreotis’s assets, while BTA said new evidence was uncovered through raids of an office and home in Cyprus and a storage facility in London.

The case is JSC BTA Bank v. Solodchenko, A3/2010/2730, Court of Appeal (London)

--Editors: Christopher Scinta, Anthony Aarons

To contact the reporter on this story: Erik Larson in London at

To contact the editor responsible for this story: Anthony Aarons at

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