Ablyazov was siphoning off money of Russian AMT Bank to U.S. via Kazakhstan

Ex-chairman of BTA Bank Mukhtar Ablyazov was siphoning off the funds of Russian AMT Bank to the U.S. via Kazakhstan, KazTAG reports citing Russian business magazine RBC daily. According to the magazine, new details of money siphoning from Russian AMT Bank have been made available. During the crisis of 2008 the bank received several collateral-free loans from the Central Bank for over 27 billion rubles (around $915 million). The majority of this money was almost immediately transferred to two American banks, JP Morgan Chase Bank and American Express, via a chain of companies. “According to the document, 24.2 billion rubles ($819 million) received from the Bank of Russia as collateral-free loans were immediately transferred by AMT Bank as funding to a group of companies connected with Ablyazov. Around 11 billion rubles ($372 million) out of these funds were returned by the companies to Kazakhstan’s BTA Bank as a debt payment. After that the money were transferred to an account in American Express via nostro account of AMT Bank in JP Morgan Chase Bank,” the article in the magazine states. According to the author, “the remaining part of the collateral-free loan from the Central Bank, apparently, also settled in JP Morgan Chase Bank. In particular, according to the Central Bank, from October to December 2008 AMT Bank transferred 18.8 billion rubles ($638 million) to support its nostro account in JP Morgan Chase Bank. The money was transferred for purchase of the foreign currency for client payments.” “Ablyazov’s representative did not deny the fact of siphoning the funds from AMT Bank to American credit organizations, but noted that such transfers were made by the clients and the bank was just acting on their orders,” the magazine writes. According to the magazine, at the moment of the license recall AMT Bank’s debt to the Central Bank made around 7 billion rubles ($237 million) and the debt to the depositors made 15 billion rubles ($508 million). “People will get over a half of this amount not from the compulsory deposits insurance fund but after the bank’s property is sold. That’s for the deposits of over 700 thousand rubles ($23 thousand). However, the property may not be enough for all creditors, as the bank’s total debt is estimated at 30 billion rubles ($1 billion),” the magazine states. Formally all the loans were given to the companies related to Ablyazov on security of the lands in Domodedovo region of Moscow oblast. However, Russian Central Bank discovered many violations in evaluation of the pledged lands. “Currently the market cost of the land (3.2 billion rubles or $107 million) is 10 times lower than their assessed value in the security agreements (31.5 billion rubles or $1.05 billion). Most probably, these loans will be unlikely returned, as the debtor would rather give in over-estimated land than cold cash,” the magazine writes. The Central Bank’s documents state that AMT Bank mainly used the assessments of two independent appraisers, Yusta Invest and Spetsfinconsulting, for assessment of the collateral value of the land provided as security under loan agreements. However, Ablyazov’s legal representative referred to Finekspertiza company that assessed the property under the contract with the Central Bank and did not discovery any serious discrepancies in the property value. “The bank currently owns around 2 thousand hectares of Domodedovo lands under security agreements. According to Finekspertiza, their value is 36 billion rubles ($1.2 billion) and the total loan value is 30 billion rubles ($1 billion). That means that the bank covers all debts with Domodedovo lands only. Meanwhile, the bank owns many other assets,” Ablyazov’s representative stressed. Deposits Insurance Agency is currently submitting the documents to declare AMT Bank bankrupt. Ablyazov is unavailable for comments. In 2009 Kazakhstan General Prosecutor’s office initiated the criminal case against former chairman of BTA Bank Mukhtar Ablyazov in suspicion of major fraud and siphoning money off via dummy companies. According to the experts, Ablyazov and his associates siphoned off up to $10 billion from Kazakhstan via offshore companies and unsecured loans. After initiation of the case the banked fled a lawsuit to a British court. In February 2012 Ablyazov was sentenced by London’s Court to 22 month for contempt of court by the London court. According to some information, Ablyazov secretly fled to France. AMT Bank OJSC was a former subsidiary company of BTA Bank that was taken beyond BTA’s control in 2009 after nationalization of Kazakhstan bank. BTA Bank still owns less than a blocking stake, 22.26 percent of shares in the bank’s capital. Distancing from the problems of Kazakhstan bank, Russian loan company officially registered a new name, AMT Bank, in March 2010.