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Kazakhstan Kagazy Group (KK Group) has today won a comprehensive victory in its $260m fraud claims against former shareholder and CEO Maksat Arip and former CFO Shynar Dikhanbayeva (the Defendants) in the London High Court.

The KK Group brought these claims to the London High Court in 2013, after finding evidence that entities connected to the Defendants had syphoned off funds raised by the KK Group.

The frauds left the KK Group in a very difficult financial situation. In 2015 KK Group obtained litigation funding from Harbour Fund III, L.P (one of the largest global litigation funders) to fund the claim. After four extremely challenging years, the KK Group has finally obtained a successful judgment.
 In his judgment, Mr Justice Picken has held that:

• Six KK Group companies have been defrauded by the Defendants.

• The “very substantial” fraud perpetrated by the Defendants caused the KK Group to default on its borrowings: “the very fraud which has brought about the claims has meant that the Claimants have had to face a critical and ongoing financial crisis”. [para 562]

• “The Defendants went to considerable lengths to hide their tracks” including from the Group’s auditors and from investors in Kazakhstan Kagazy PLC’s 2007 IPO, which raised $273m on the London Stock Exchange. [562]

• Former Kazakhstan Kagazy PLC CEO and Exillon Energy PLC Chairman Maksat Arip was “a thoroughly dishonest witness”, who was intent “to present a thoroughly misleading picture to the Court in order to try to cover up his role in the alleged frauds”. [65]

Kazakhstan Kagazy PLC’s CEO, Tomas Mateos Werner, commented: “This judgment is a resounding victory for the KK Group, which has fought to prove the claims since 2013. Having turned around the fortunes of the business, we now look forward to enforcing the judgment and repaying our creditors. This victory would not have been possible without the unwavering support of KK’s employees, clients, funders and creditors.”

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Follow the link to see full judgement.