A UK judge has recently ruled that there is reasonable cause to suspect that Russian litigation funder A1 is controlled by individuals who have been sanctioned in the United Kingdom. Mikhail Fridman, German Khan, and Alexey Kuzmichev, who are believed to be the owners of A1, are among those who have been sanctioned.
Judge Sara Cockerill has reasoned that the sale of A1 for $900 to another one of its employees suggests that the company is possibly still under the control of the said sanctioned individuals. The surprisingly low selling price has been cited as a cause for suspicion.
Furthermore, the intricate series of events revolving around the case points towards a connection with Georgy Bedzhamov—a co-owner of the Russian bank Vneshprombank—who has been convicted of large-scale fraud causing losses estimated at around $2 billion. A Russian state agency somewhat akin to the Federal Deposit Insurance Corporation in the US hired A1 in its bid to recuperate the money.
Crucially, A1, a subsidiary of Russia’s Alfa Group, found its owners sanctioned in the UK in March 2022. In the days before the sanctions, the owners sold the enterprise to an employee who had not been sanctioned—for approximately $900. As it transpired later, A1’s owners were sanctioned in the US in August, with A1 itself being sanctioned in September.
A Bloomberg Law investigation in March found that A1 had backed lawsuits in New York and London both before and after its billionaire founders were sanctioned. Once this was an acknowledged fact, Wally Adeyemo, Department of Treasury Deputy Secretary, stated that they needed to scrutinize the role foreign actors were playing in US litigation finance.
Regardless of the cloth and cut of this intricate legal drama, the episode brings to the fore the potential perils of financial transactions that can, under certain light, be obscured or misleading. As it stands, the verdict of the UK judge certainly raises some questions on the legitimacy of A1’s transactions.
The full details of the case can be found in the original Bloomberg report.