Otkritie Financial Corp. can seize a London property valued at about 20 million pounds ($32 million) as part of a fraud lawsuit against George Urumov, one of its former senior bankers.
Otkritie, a brokerage part-owned by Russia’s VTB Group (VTBR), is suing Urumov, his wife and several affiliated companies in a London court over an alleged $160 million fraud involving Argentine warrants and theft of bonuses meant for colleagues.
The house was bought with “ill-gotten gains,” said Paul McGrath, a lawyer for Otkritie. Urumov’s lawyers said he doesn’t live in, or have a financial interest in, the St. John’s Wood- area home.
Judge Julian Flaux ruled Otkritie could seize the property because the company listed as its owner, Dunant International, failed to respond to the lawsuit. Urumov’s lawyer said his client gave away his shares in Dunant.
Urumov’s argument he has no “beneficial interest in Dunant is a somewhat implausible one,” Flaux said. A statement sent by Urumov’s firm Farrer & Co. said today’s decision did not affect the case, and could be set aside if he won at trial.
“The judge expressly put on record that he was not deciding whether or not there had been any fraud,” Farrer & Co. said.
Urumov, the former global head of fixed-income at Otkritie, was arrested by London police investigating the fraud in October. He denies the allegations, according to his attorney Robert Weekes.
Otkritie spokesman Alex Karakhan said today’s judgment was a “good step” in the process of reclaiming the money. “We are very confident we will make a full recovery,” he said outside court.
Judge Flaux approved a move by Otkritie to expand its lawsuit against Urumov by adding new defendants. They include former Otkritie employees Ruslan Pinaev, Sergey Kondratyuk, and Vladimir Gersamia, a former portfolio manager at Threadneedle Asset Management, a London-based unit of Ameriprise Financial Inc. (AMP)
Gersamia said in an e-mailed statement he hasn’t been arrested or questioned by police, and will be ”vigorously contesting” any claims brought against him. He denies any wrongdoing. Contact details for Pinaev and Kondratyuk couldn’t be located.
Threadneedle was asked by the U.K. Financial Services Authority to review its compliance systems after it halted a multimillion pound trading fraud was attempted in August 2011. The firm isn’t being investigated by the regulator.
“The matter was immediately reported to the authorities and the individual involved was subsequently dismissed,” Threadneedle said in a statement.
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