UK Judge Rules Funder Is Likely Owned by Sanctioned Russians

A UK judge has ruled that there is reasonable cause to suspect that Russian litigation funder A1 is owned or controlled by people sanctioned in the United Kingdom.

Judge Sara Cockerill found that A1’s ownership by sanctioned individuals Mikhail Fridman, German Khan and Alexey Kuzmichev and its subsequent sale for $900 to another A1 employee shows that the company is likely still owned or controlled by sanctioned persons. She cited the low sale price as a cause for suspicion.

“The figure given for the sale price is surprising on its face. The financial documentation adduced (in a lengthy and full exchange of evidence) fails to provide a coherent or robust justification for that figure,” she wrote.

She also wrote that A1 is no longer funding the case and has been replaced by Cezar Legal Consulting Agency. The company and its third party payer are Russian.

The case involves the estate of Georgy Bedzhamov, who co-owned Russian bank Vneshprombank and was convicted of large-scale fraud with estimated losses of about $2 billion. A Russian state agency—roughly the equivalent to the Federal Deposit Insurance Corporation in the US—engaged A1 to help it recover the money.

A1 is a subsidiary of Russia’s Alfa Group and its owners were sanctioned in the UK in March 2022. In the days preceding the sanctions, the owners sold the company to another employee who was not subject to the sanctions for approximately $900. A1’s owners were sanctioned in the US in August and A1 itself was sanctioned in September.

During a three-day hearing in March of this year, each side in the Bedzhamov proceedings debated whether the sale was designed as a way to keep A1’s sanctioned leaders in charge.

In March a Bloomberg Law investigation found that A1 has backed lawsuits in New York and London, both before and after three of its billionaire founders were sanctioned following the 2022 invasion of Ukraine. After publication, Department of Treasury Deputy Secretary Wally Adeyemo said the department needs to look into the use of the litigation finance in the US by foreign actors.

“This is an issue we have to look, we have to both work on and try and address,” said Adeyemo in testimony at a Senate hearing.

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