Case of british private equity firm Lehram

The_City_London
Proceeds of Kremlin-connected corruption are being funnelled into the United Kingdom transforming the country into a hotbed of criminal activity. The UK government is poised to take action to address the issue.

The British House of Commons has started examining Russian corruption. Its foreign affairs committee recently launched a parliamentary inquiry to find ways to block corrupt Russian proceeds from entering the country.

Up to now, the government and financial institutions in the UK have been criticised for turning a blind eye to suspicious business owners under the assumption that any business is ultimately a gain for the City of London – a global business hub.

It appears, however, that British firms, the public and government officials – at the mercy of Russian oligarchs – can no longer ignore the issue.

It’s a matter that has been pushed to the fore by several high-profile cases. One of these cases involves the UK’s private equity firm Lehram, which is currently fighting a legal batter for the return of a £250m coal mine in Russia. The mine was transferred to a company linked to a Siberian billionaire. Lehram argues the transfer was illegal.

The case, filed in the Russian commercial court in Kemerovo, the administrative centre of Russia’s coal belt, comes after a director of the UK firm was sent to prison where, it is claimed, he signed over the Gramoteinskaya coalmine and railway complex to avoid spending years in prison.

According to court records, the coal mine, which contains estimated coal reserves of more than 300m tonnes was transferred to a company owned by Alexander Shchukin, a Russian mining magnate who is now under house arrest. He is accused of committing criminal offences and giving bribes.

Back in the UK, several of Shchukin’s close relatives and friends obtained British citizenship and purchased an international security company, 3e International. Even though it is officially owned by a shareholding company, the UK High Court of Justice ruled that ownership belongs to Shchukin’s son-in-law, Ildar Uzbekov. At the same time, he is the director of several other companies in the UK and sits on the board of Bryankee Holdings in Cyprus, together with Shchukin’s daughter Elena, and his father-in-law.

This company receives most of the dividends paid out from Shchukin’s Russian mining operations – money that is used to finance the Shchukin family expensive lifestyle in London. As reported by The Guardian, Elena owns a £3m gallery in Mayfair and a £15m mansion in Highgate.

Uzbekov and business partner Dmitryi Tsvetkov, who reportedly serves as the money-manager, have managed to transfer huge sums of money from Russia through Cyprus to the UK.

In 2014, Adrian Burford, a former UK Foreign Office official, testified under oath before the UK High Court that Uzbekov and the Shchukin family planned to transfer over €1bn to Burford’s company, Fern Advisors Limited, for “investments” in the UK.

Despite Shchukin’s criminal investigation in Russia, Uzbekov and Tsvetkov continue to walk freely in London. The question now is how long until they no longer enjoy immunity and impunity.

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