UK Court Probes Suspected Shell Company Funding Fugitive Banker's Legal Fight
A major UK High Court case has exposed suspected attempts by sanctioned Russian oligarchs to circumvent international sanctions by using shell companies to fund legal proceedings against a fugitive banker.
The case centers on Georgy Bedzhamov, co-owner of the collapsed $3 billion Vneshprombank, who fled Russia in 2015 ahead of his sister's arrest for embezzling $1.8 billion from the bank [1]. Now living in London under an asset freeze, Bedzhamov faces ongoing litigation while receiving a monthly allowance of £120,000 ($160,000) for living expenses and personal security [1].
The controversy emerged when it was revealed that A1 LLC, the company funding the legal case against Bedzhamov, may itself be controlled by sanctioned Russian oligarchs. According to a 2024 UK High Court judgment, the court found "reasonable cause to suspect" that A1 remains under the control of designated persons despite an alleged sale in March 2022 [2].
A1 was originally owned by Mikhail Fridman, German Khan, and Alexey Kuzmichev - three founders of Russia's Alfa Group who were sanctioned by the UK on March 15, 2022. Just days before their designation, the trio allegedly sold their interests to company associates for the equivalent of $714 [2].
Mrs Justice Cockerill found multiple red flags in the transaction. The sale price was "surprising on its face," and A1's financial statements contained "obvious omissions" that failed to justify such a low valuation [2]. The balance sheet excluded approximately $20 million owed by the bank, plus millions held in court as security deposits [2].
The alleged buyers also raised suspicions. Alexander Fayn, an 86-year-old who purchased A1, had previously held small "nominee" shareholdings in related companies, suggesting he may have acted as a front for the real owners [2]. Andrei Kosogov, who received the shares in A1's parent company, has worked for Alfa Group for over 30 years [2].
"The factual circumstances of the Alleged Buy Out strongly suggest that it was not a genuine and arms' length transaction but instead a sham, designed to circumvent the impact of sanctions," the court noted [2].
This pattern of asset transfers mirrors tactics used by other sanctioned oligarchs. Fridman's executive assistant was sanctioned in April 2022 after taking ownership of three of his entities with "no evidence that these were arms-length transactions" [2]. Khan's wife was designated after receiving large financial gifts from him just before his sanctioning [2].
The Vneshprombank scandal itself reveals the human cost of such financial engineering. Among the bank's affected depositors were Russian government ministries, state-owned corporations, and the Russian Orthodox Church, who entrusted the institution with tens of billions of rubles [1].
Meanwhile, Bedzhamov has used complex offshore structures to hide assets globally. Leaked documents from the Pandora Papers show he and his sister used a Cypriot law firm to backdate share transfers and move money through shell companies spanning from the British Virgin Islands to the Marshall Islands [1].
The court's findings highlight how sanctioned individuals continue attempting to access the UK legal system while evading the restrictions designed to isolate them financially. As international sanctions tighten, such sophisticated evasion schemes threaten to undermine the effectiveness of these crucial accountability measures.
Sources:
[1] Organized Crime and Corruption Reporting Project, "Fugitive Russian Banker Used Cypriot Law Firm to Hide Assets, Move Money"
[2] UK High Court of Justice, "Vneshprombank v Bedzhamov Judgement," 2024
