UK court rules Russian investment firm still likely owned by sanctioned oligarchs despite sale

A UK court judge has ruled ‘there is reasonable cause to suspect’ that Russian investment group A1 continues to be owned or controlled by UK-sanctioned Russian oligarchs Mikhail Fridman, German Khan and Alexey Kuzmichev, saying the company’s March 2022 sale to another A1 employee for £714 ‘is hotly contentious.’

‘Primary amongst the points which indicate that there is reasonable cause to suspect that that joint arrangement is still in place is the unsatisfactory nature of the evidence about the sale price,’ Judge Sara Cockerill wrote in her 3 May judgement. ‘The so called “verification” of the value is broad brush in the extreme and not at all what might be expected by way of professional valuation,’ the judge determined, noting the sale was ‘not to a neutral third party but to a long-term employee of the Founders. The sale too is to a long-term employee, with some evidence of his previously acting as a nominee shareholder,’ identified in court papers as Mr. Fayn.

The court concluded: ‘Accordingly, were it necessary to do so we would conclude that there is reasonable cause to suspect that, despite the share transfer in A1 Investment and sale of A1 to Mr Fayn there is reasonable cause to suspect that A1 is owned or controlled by a designated person or designated persons within the meaning of Regulations 5-6 of the Russia (Sanctions) (EU Exit) Regulations 2019.’

Just before A1 and its owners were sanctioned in the UK in March 2022, the company was sold to Fayn for the equivalent of £714.

The United States imposed sanctions on A1 and its owners in August and September 2023. A1 is a subsidiary of Alfa Group, one of Russia’s largest privately owned investment groups.

https://www.judiciary.uk/wp-content/uploads/2024/05/Vneshprombank-v-Bedzhamov-Judgement.pdf