Seladore Legal

Jailed businessman Ziyavudin Magomedov resists Russian conspiracy with London court victory

• London court rules in favour of Magomedov in FESCO ownership battle
• Magomedov was arrested in March 2018 on embezzlement charges which he fiercely denies
• Ruling finds that Magomedov's joint venture partner, Texas Pacific Group (TPG), unlawfully diverted its stake in FESCO to ROSATOM proxy
• Businessman expresses his sense of betrayal by former partner David Bonderman, Chairman of TPG and Wall Street magnate
• Magomedov built multibillion-dollar fortune from Russian ports and other infrastructure, as well as western investments such as Virgin Hyperloop

LONDON, March 23, 2023 /PRNewswire/ -- Russian businessman Ziyavudin Magomedov has scored a legal victory against Russian individuals and corporate entities whom he accuses of attempting to dismantle and appropriate his estimated $15 billion business empire.

A newly-revealed ruling by the London Court of International Arbitration (LCIA) shows that Mr Magomedov's former joint venture partner, Texas Pacific Group (TPG), exploited his incarceration and struck a secret deal to sell its interest in FESCO, which owns the port of Vladivostok and other important transport assets in Russia.

The ruling affirms TPG's obligation to have offered its FESCO stake to Mr Magomedov and raises serious questions about the conduct of the US private equity giant and its leadership.

Mr Magomedov, owner of the Summa Group conglomerate, was arrested and jailed in Moscow in March 2018, pending a trial on unevidenced charges of embezzlement. As the Russian prosecutor's judicial campaign against Mr Magomedov subsequently gathered pace, TPG's Chairman David Bonderman reneged on personal assurances given to Mr Magomedov and instead aligned himself with Mr Magomedov's enemies in agreeing to sell the FESCO stake to businessman Mikhail Rabinovich.

The finding of wrongdoing by the LCIA Tribunal is welcomed by Mr Magomedov. 

Rabinovich is alleged in court documents filed by Mr Magomedov to have been acting as a proxy for ROSATOM, the state atomic agency. Numerous local and international media have reported that FESCO will ultimately be transferred into the ownership of ROSATOM.

The LCIA's ruling required TPG's 17 per cent FESCO stake to be re-sold to Mr Magomedov at a huge discount to its true value.  However, the Russian courts immediately responded with far-reaching confiscation orders. The ownership structures via which Mr Magomedov holds his vast stake in FESCO have now had their underlying shares registered in Russia purportedly confiscated. If those confiscations (along with others) are upheld in Russia, Mr Magomedov's losses will run into tens of billions of dollars. He intends to pursue further legal action to seek compensation for those losses.