TPG seeks to strike out jailed Russian mogul’s $14 billion conspiracy case

By Kirstin Ridley

LONDON (Reuters) – Private equity firm TPG on Tuesday urged a London judge to strike out a $14 billion lawsuit that alleges the U.S. group was part of a Kremlin-backed conspiracy to strip jailed Russian businessman Ziyavudin Magomedov of key assets.

Lawyers for former billionaire Magomedov allege 22 parties, including TPG, UAE-based port operator DP World and Russian state nuclear energy group Rosatom, plotted to wrest from him control of transport group Fesco, whose most prized asset is the commercial port of Vladivostok.

But Mark Howard, a lawyer for TPG, told the first day of a nine-day High Court hearing that Magomedov had concocted “preposterous allegations” against TPG defendants in an attempt to justify the London proceedings and urged the court to “grasp the nettle and strike out the claims”.

“The Russian state would have had – and had – no need of TPG to pursue its objectives, and the idea that TPG would be interested in the machinations of the Russian state, we would suggest, is somewhat bizarre,” he said.

“I don’t shrink from saying it is an allegation that should never have been made.”

Magemodov, who values his Fesco interest at $8.8 billion, alleges the Kremlin wanted to bring the business under Rosatom’s control.

The businessman, whose wealth was put by Forbes magazine at $1.2 billion in 2018, once controlled a port logistics to oil and gas empire through his Summa Group conglomerate, which he founded with his brother Magomed.

But the brothers were arrested on embezzlement and organised crime charges six years ago in one of the most high-profile prosecutions of its kind in years. Magomedov was sentenced to 19 years in jail in 2022 and is held in a penal colony in Kirov, 900 kilometres (560 miles) east of Moscow, court filings show.

Magomedov says the charges against him are unfounded and is appealing against his conviction, but his position is “increasingly parlous”, his lawyers said in court filings.

In a case that has been split to hear separate allegations against oil pipeline operator Transneft in November, Magomedov alleges TPG breached its obligations to offer him pre-emptive rights to buy its minority 17.5% Fesco stake, triggering the removal of his allies from the board.

Howard argued that Fesco was TPG’s last remaining asset in Russia and that it complied with its obligations when it sold the stake in late 2020 after a disappointing return.

DP World, part of a state-owned global logistics company, alleged it was “hopeless” to suggest it was party to any conspiracy because of its joint venture with Rosatom, court filings show.

Around 10 defendants are challenging whether the lawsuit should proceed in England. Some argue that Russia or Cyprus are more suitable forums or do not stipulate an alternative jurisdiction, court filings show.

Magomedov’s lawyers argue there is a real risk that substantial justice will not be done in Russia.