- Transport and logistics titan Magomedov was arrested in 2018
- He and his brother subjected to 4 years pre-trial detention in notorious Lefortovo prison
- The brothers are appealing conviction and 19-year custodial sentence for alleged financial crimes
- Magomedov's High Court conspiracy claim is one of the largest lawsuits ever brought in the English courts as he strives for compensation for the business empire manoeuvred into Russian state hands
- His losses include a controlling stake in FESCO, one of Russia's most important strategic port and cargo businesses including the Port of Vladivostok
- Defendants include US-based TPG, the major private equity firm, as well as ports and cargo giant DP World, key Russian state companies and other alleged conspirators
- Wall Street magnate David Bonderman, TPG's Chairman, is accused of misleading Magomedov at the same time as TPG was unlawfully undermining his right to a controlling stake in FESCO by selling its shares in the business to alleged co-conspirators
- Claim spearheaded by litigation specialist firm, Seladore Legal, alongside two leading KCs from Brick Court Chambers
- Further litigation into other huge and allegedly unlawful asset-seizures may follow
LONDON, Sept. 27, 2023 /PRNewswire/ -- A businessman wrongly jailed in Moscow has launched international legal action to seek redress from companies and individuals that have allegedly colluded in and profited from his legal persecution in Russia.
Texas Pacific Group (TPG), the US private equity giant, ports multinational DP World and a number of Russian state companies are amongst the major corporations facing conspiracy allegations filed at the UK High Court by Ziyavudin Magomedov, who was incarcerated in 2018 on embezzlement charges which he emphatically denies.
Mr Magomedov – whose businesses include high-profile tech investments in the US and Europe – was given a 19-year jail sentence in December 2022, having already spent more than four years in prison awaiting trial. Simultaneously, he is fighting concerted efforts by prosecutors and business rivals to confiscate his estimated multibillion-dollar business empire.
Mr Magomedov co-owned the vital NCSP port in Novorossiysk which handles Russia's oil and grain exports from the Black Sea. Mr Magomedov also owned the two largest grain terminals in Russia and is entitled to a majority and controlling shareholding in the FESCO conglomerate, owner of numerous strategic transport assets in Russia, including the port of Vladivostok. The legal action, filed at the Commercial Court in London, details how the defendants have allegedly worked in concert with powerful interests within the Russian state to systematically deprive Mr Magomedov of both FESCO and NCSP, at the same time as depriving him of his liberty.
The legal claim conservatively estimates the value of the claimants' interest in FESCO at $8.8 billion, and their interest in NCSP at $5.0 billion. The combined claim of $13.8 billion it is the largest ever claim brought in the English High Court outside the collective redress regime.
The claim has been filed at the Commercial Court of England and Wales, a subdivision of the King's Bench Division of the High Court of Justice. The case number is CL-2023-000401.
Beyond that, Mr Magomedov held substantial additional assets, including grain terminals, that were expropriated and are understood to have fallen into the hands of well-connected figures in the Russian establishment. Since the conflict in Ukraine began, these assets have frequently been mentioned for their strategic importance to Russia's war effort. Mr Magomedov reserves the right to pursue additional legal remedies in England (or elsewhere) in relation to these assets. Such a step could see the estimated value of his claims rise to at least $30 billion.
Mr Magomedov remains detained in Lefortovo, the maximum-security prison which became the focus of global media interest in April 2023, when it was used to incarcerate Evan Gershkovich, the Wall Street Journal reporter accused by Russia's authorities of spying.
The criminal charges levelled against Mr Magomedov related to alleged embezzlement of funds arising from public procurement contracts, including some that related to infrastructure required for the 2018 football World Cup, hosted by Russia. The prosecuting authorities claimed the alleged embezzlement caused 11 billion roubles of damage to the state and third parties (approximately $110 million at today's exchange rates). Mr Magomedov strenuously denies all accusations of wrongdoing.
The prosecution was brought initially by Lt Col Nikolai Budilo, an individual subject to international sanctions relating to his involvement in the proceedings against lawyer Sergei Magnitsky, who died in custody. In 2019, the prosecution was handed over to the FSB, Russia's security service. At the FSB's request, significant parts of Mr Magomedov's trial were heard in private and without media reporting.
Mr Magomedov was convicted in December 2022. His brother Magomed and other co-accused were also handed lengthy prison sentences. The conviction is being appealed.
Further information about Mr Magomedov and the legal claim can be found at www.ziyavudin-magomedov.info.
About the claim
US-based TPG – long term JV partners of Mr Magomedov in FESCO, and led by Mr Magomedov's former friend David Bonderman – are amongst the defendants accused of conspiring in a fraud. The private equity giant was contractually obliged to offer its FESCO shares to Mr Magomedov when it quit the investment in the face of the campaign against him. Instead of fulfilling that contractual obligation, TPG engineered the sale of the stake to one of the alleged chief architects of the conspiracy, businessman Mikhail Rabinovich, whom Mr Magomedov says is a proxy for the Russian state-owned ROSATOM, according to the claim. It is alleged that TPG struck a secret deal with Rabinovich whilst Mr Magomedov was behind bars.
TPG also allegedly worked with other conspirators to keep Mr Magomedov in the dark and thwart attempts that he might have made to resist the unlawful transaction. The firm did this despite personal reassurances sent by Bonderman to Mr Magomedov when he was in jail, it is alleged. Bonderman sent a personal note to Mr Magomedov in November 2020, falsely asserting that TPG had "not 'colluded' with any other buyers or indeed acted to favour any other buyer in any way", according to the claim.
Rabinovich is accused of acting on behalf of ROSATOM, Russia's state nuclear energy company, and DP World, the UAE-based port and cargo operator. Rabinovich, ROSATOM and DP World are all defendants in the case, having allegedly conspired to benefit from a concerted raid on Mr Magomedov's holdings in FESCO that featured intimidation by state officials, bribery and the misconduct of some FESCO directors.
Pipeline company Transneft, another well-known state enterprise in Russia, is meanwhile accused of playing a key role in seizing NCSP from Mr Magomedov's control. According to the claim, Mr Magomedov was arrested the day after a meeting between Nikolai Tokarev, Transneft's president, and Tokarev's reported friend and former KGB colleague Vladimir Putin. Once Mr Magomedov was detained, Tokarev and his allies allegedly said they would speak to Putin to halt the prosecution if he sold his stake at a knock-down price.
Ziyavudin Magomedov's legal team
Seladore Legal is one of London's leading law firms for major and complex litigation and arbitration. Founded by former Herbert Smith and Latham & Watkins practice head Simon Bushell in 2019, Seladore's partnership comprises some of London's most senior and knowledgeable litigators, with experience of the biggest civil fraud, white-collar and commercial cases of recent years. Seladore featured in the most recent Legal 500 guide which described the boutique firm as being "of the highest calibre" and possessing "great know-how within a very close knit group".
The firm has instructed Tim Lord KC of Brick Court Chambers to act as lead counsel in these proceedings. He has more than 30 years' experience in commercial disputes and is widely recognised as one of the most accomplished cross-examiners in the London Bar. He was Chambers & Partners' Commercial Litigation Silk of the Year in both 2013 and 2018, and has been described as "one of the top five advocates of his generation".
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