- February 11, 2013
- Posted by: Josiah Hincks Solicitors
- Category: Business Law Updates
A businessman who is facing a €500 million claim in respect of the financial collapse of a bank of which he was once chairman has failed to overturn a court order freezing his assets. The Commercial Court rejected arguments that the case against him in respect of alleged misappropriation of the bank’s funds should be stayed pending the outcome of on-going proceedings to extradite him to Lithuania where he is facing a criminal investigation.
The businessman was formerly chairman and 68.1% shareholder of a Lithuanian bank which was declared insolvent in November 2011. The bank has estimated its total deficiency at approximately £1billion and its insolvency has had a significant public impact in Lithuania. The businessman, who is domiciled in England, has had a European arrest warrant issued against him.
Refusing his applications to stay the civil proceedings and to discharge the asset freezing injunction, the court ruled that, with adequate safeguards in place, there was no appreciable risk that their continuation would cause serious prejudice or injustice to him in respect of the extradition proceedings and criminal investigation. The court also rejected arguments that, in obtaining the asset freezing order, there had been material non-disclosure by the bank. The continuation of the order was also justified by a real risk that the businessman might dissipate his assets notwithstanding his presence within the jurisdiction and restraint orders that had already been made against him. The court also refused to stay orders requiring the businessman to make full and frank disclosures in respect of his assets.