Kazakhs take control of another 50% of the Ukrainian subsidiary

Kazakh BTA Bank has begun to establish control over its Ukrainian subsidiary. As part of the execution of the decision of the High Court of London, almost 50% of the shares of the Ukrainian BTA Bank will be seized from six companies previously owned by the former owner of the Kazakh bank Mukhtar Ablyazov, and transferred to the Kazakh BTA Bank. This will allow him to independently decide the future fate of his “daughter.” If the Ukrainian market turns out to be non-key for the Kazakhs, the bank may be sold, market participants believe.

Kazakh BTA Bank managed to take away shares of a Ukrainian bank from the detained Mukhtar Ablyazov only through the court
Photo: Dmitry Lebedev, Kommersant / buy photo

The parent structure of the same name from Kazakhstan is trying to establish full control over the Ukrainian BTA Bank. Yesterday, the Antimonopoly Committee gave the institution permission to purchase shares of the Ukrainian BTA Bank, which “will ensure that it exceeds 50% of the votes in the highest management body” of the bank. Now the Kazakh institution owns 49.9883% of the Ukrainian bank. The remaining shares are distributed in blocks of less than 10% among the following six companies: Investment and Industrial Group Eurasia-Ukraine, MP Invest, Jupiter Trade, Absolut Investment, Afina Trade, Drobo Trade Investment. These companies were previously owned by the former head of the board of directors of the Kazakh BTA Bank, Mukhtar Ablyazov, explained Roman Marchenko, senior partner of the law firm Ilyashev and Partners (legal support of the case on the side of the Kazakh bank).

In February 2009, BTA Bank, which found itself in a difficult financial situation, was nationalized by the authorities of Kazakhstan. And Mukhtar Ablyazov, fearing arrest, fled to the UK, where he received asylum. BTA Bank filed nine lawsuits in the High Court of London, demanding that Mr. Ablyazov return $5 billion stolen from the Kazakh BTA Bank. In February 2012, the High Court in London sentenced Mukhtar Ablyazov to 22 months in prison for contempt of court. Mr. Ablyazov fled from British justice to Italy, but he was detained only on July 31 of this year in the south of France. Now Ukraine and Russia are seeking his extradition. “Initially, all the shares of the Ukrainian BTA Bank were purchased with money from the Kazakh BTA Bank. But some of the shares were transferred to the Kazakh bank, and some were illegally registered in a number of companies that belong to Mukhtar Ablyazov. The English court declared him a fraudster,” Roman Marchenko explained to Kommersant .

On November 23, 2012, the High Court of London decided to recover more than $3 billion from Mukhtar Ablyazov in favor of the Kazakh BTA Bank. In June of this year, the Pechersky District Court of Kyiv recognized the validity of the London court's decision on the territory of Ukraine and issued permission for its forced execution. To do this, the shares owned by the six companies must be transferred to the Kazakh BTA Bank. The six above-mentioned companies did not transfer shares to other persons because the securities were seized.

Now the transfer of shares to the Kazakh bank will be carried out by the English auditing company KPMG, which the London court appointed as an external asset manager. “KPMG has appointed a new director of these companies, who will carry out the transfer of shares. As a result, the Kazakh BTA Bank will concentrate more than 99% of the shares of the subsidiary. The remaining less than 1% of the shares historically belong to a number of individuals,” notes Roman Marchenko. Until the end of the day, the Ukrainian BTA Bank, English and Ukrainian offices of KPMG were unable to clarify the terms and conditions for the transfer of these securities.

The five-year conflict between the government of Kazakhstan and Mukhtar Ablyazov almost did not interfere with the work of the Ukrainian bank - in terms of total assets it rose from 69th (October 1, 2008) to 30th place (October 1, 2013). Based on the results of three quarters of this year, the institution’s profit amounted to UAH 8.8 million. In the same period of 2012, the bank was unprofitable (-78.3 million UAH).

Having established control over the Ukrainian subsidiary, the Kazakh BTA Bank will have to decide on its strategy. "The Ukrainian asset for the Kazakh BTA Bank is an inheritance. They will need to take full ownership of the bank, and then make a decision regarding its future fate. The Ukrainian asset does not have any great value in terms of market share. If a decision is made that its needs to be developed, then in order to become a serious player, large investments will be needed,” says Stanislav Shlapak, Deputy Chairman of the Board of Ukrgasbank. “If it is decided that this market is not interesting for the Kazakh bank, then they will need to sell the Ukrainian bank. But then they should. be prepared for the fact that you will be able to earn much less for the bank than you spent on it.”

Elena Gubar

BTA Bank has found its other half