EurasiaNet Business & Economics - Tajikistan: Aluminum Plant Embroiled in Protracted, Expensive Legal Case

BUSINESS & ECONOMICS

TAJIKISTAN: ALUMINUM PLANT EMBROILED IN PROTRACTED, EXPENSIVE LEGAL CASE
11/14/08

Some big names are popping up in a multi-million dollar graft trial involving Talco, Tajikistan’s largest aluminum smelting plant. The case is being heard in London. Among the prominent personalities with alleged connections to the case are Russian metals magnate Oleg Deripaska and Tajik President Imomali Rahmon.

Originally filed nearly four years ago, the case only went to trial in the High Court in October. It centers on allegations that the plant’s former manager Abdukadir Ermatov, and another entrepreneur, Avaz Nazarov, pocketed roughly $500 million in company assets.

Although neither Rusal nor Deripaska are defendants in the case, Murray Rosen, queens counsel for Talco told the court; "accomplices came and went. They constitute a colorful cast including some of the biggest and most ruthless operators in Russia and Central Asia. Foremost among them was Rusal, previously called Sibal, owned by its chairman, Mr. Oleg Deripaska."

Rahmon’s name first came up during testimony in late October. On November 10, testimony explored Talco’s relationship with Orienbank, one of Tajikistan’s largest commercial banks, and a financial institution with close ties to the president’s family. [For background see the Eurasia Insight archive].

Ermatov and Nazarov are pleading not guilty to the charges and have launched a counterclaim. But in a separate action, Talco is pursuing Deripaska in the British Virgin Islands for allegedly playing a key role in the fraud.

Talco currently accounts for more than 50 percent of Tajikistan’s annual export revenue. Fees for the London case are estimated to top $125 million making it one of the most expensive court cases ever in British legal history. Tajikistan’s state budget in 2007 was approximately $700 million. [For background see the Eurasia Insight archive]. According to some estimates, the costs of pursuing Talco’s suit is costing Tajikistan an amount equivalent to about 5 percent of the country’s GDP.

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