The £5.3m sale of a 12-bedroom Surrey mansion linked to a case of alleged banking fraud has led to the high court in a bid by lawyers to send some of the proceeds to one of the banks that controlled by the Russian state.
Lawyers believe that some of the money could be transferred to one of Vladimir Putin’s state-controlled banks, the National Bank Trust, without any sanctions violations. They sought a court order to allow the transfer.
Ministers are now facing questions about why the bank has escaped sanctions so far, with a former bank boss claiming the money could be used to help finance the war in Ukraine.
The bank, which was once promoted by actor Bruce Willis, is 99% owned by the Central Bank of the Russian Federation, which helps finance the country’s federal budget and is targeted by UK sanctions.
Christine Jardine, a Liberal Democrat MP who raised questions in parliament about why the bank was not placed under sanctions, said: “It has been a year since questions arose about whether the National Bank Trust was allowed to money funnel to Russia, but we are still in the dark.
“We urgently need clear answers from the government on this matter. If there are any loopholes in the government’s sanctions regime they must be closed immediately.
The National Bank Trust accused in a case in the high court that its former majority owners – Nikolay Fetisov, its former president, Ilya Yurov, ex-chair of the supervisory board, and Sergey Belyaev – orchestrated a fraud to get millions of dollars in salaries and bonuses.
London’s high court ruled in January 2020 that the bank was owed $900m in compensation from three former bosses allegedly involved in the scheme. Fetisov and Yurov denied wrongdoing in the case and Belyaev said he had no knowledge of the alleged plot.
Fetisov and Yurov, who are both settled in the UK, filed for bankruptcy in the case. The bankruptcy specialists of Mazars, the audit, tax and advisory firm, work as joint trustees in their bankruptcy, seeking to recover assets for the benefit of the National Bank Trust and other creditors.
Fetisov’s family properties include a mansion in Oxshott in Surrey which was bought for £4.25m in October 2012. It has a swimming pool, gym and private cinema. The property was sold last month for £5.3m and Mazars is understood to be seeking a court order allowing the payments to be sent to Russia.
A transfer to a UK bank is no longer available due to the war in Ukraine, but it is suggested to send the money through a legal company acting for the bank in Russia.
There are also efforts to trace Fetisov’s assets in Cyprus, Switzerland and the US. A court was previously told his family portfolio included a flat in Chelsea in London and a residence near Moscow.
A campaign Willis led in 2010 is credited with raising the profile of Russia’s National Bank Trust. It included cardboard cut-outs of the actor in bank branches across Russia, a poster campaign and television ads.
The bank collapsed in December 2014 after alleged fraud, requiring a state-backed bailout. Its majority owner, Russia’s central bank, has been targeted by UK sanctions in February 2022, with restrictions banning UK people from carrying out financial transactions with the bank.
Lawyers reckon the restrictions won’t affect its subsidiary, the National Bank Trust. Under article 26 of the federal law on the central bank of Russia, it is legally required to transfer 75% of its revenues to the federal budget of Russia. A UK judge ruled earlier this year that Putin does not control the National Bank Trust for the purposes of sanctions regulations.
The bankruptcy trustees are also seeking to realize Yurov’s assets. The high court heard in 2018 that Yurov’s family assets included Oxney Court, a £4m gothic manor house with swimming pool and tennis court on the Kent coast, two properties in Cyprus and three flats in Chelsea with a combined worth of over £6m. .
Yurov said he accepted that the assets should be sold and the money recovered, but that the National Bank Trust should be put on the sanctions list. He warned that the money could be used to finance the war in Ukraine.
Vladyslav Vlasiuk, a sanctions expert who works in the Ukrainian president’s office, said he would like to see the UK also impose sanctions on Russia’s National Bank Trust. He said: “Sometimes there are gaps in the sanctions and they need to be closed.”
The Foreign Office declined to comment on the National Bank Trust. Mazars said it would not comment on an ongoing case.