Tory MP Kevin Hollinrake has called on the government to close “loopholes” that have allowed UK professional services firms to continue to pursue bankruptcy proceedings on behalf of the Russian state.
In a letter to Rishi Sunak, the Conservative Party MP accused accountancy giant Grant Thornton, funder Harbor and London law firm CMS of undermining UK efforts to “restrict access to the Kremlin to funds”, by filing bankruptcy proceedings against Russian oligarch Alexey. Motylev.
Working on behalf of the Russian Deposit Insurance Agency (DIA) to recover the bankrupt billionaire’s funds, Hollinrake claimed the three London-based companies were fueling the Kremlin’s war efforts and empowering the Russian state .
The allegations come after it emerged that Grant Thornton and CMS are currently working on behalf of a cohort of Russian creditors to recover £800m from Motylev, after a Russian court found him liable for more £2billion in debt following the collapse of his Rossisky. Credit Bank in 2015.
A Harbor spokesperson said: “Harbour is not funding this matter and has not been involved since June 2021. We have contacted Kevin Hollinrake’s MP office to point out this inaccuracy.”
It remains unclear whether Harbor Litigation Funding is still prepared to receive a share of any recovery, having pulled out of the case last year.
In his letter, the MP for the North Yorkshire constituency of Thirsk and Malton claimed the bankruptcy proceedings were being funded by London-based lender Harbour, as he claimed the company was set to “receive part of any recovery”. A Harbor spokesperson noted that the litigation funder had not been involved in the case since June 2021.
The MP explained that Grant Thornton also acted as trustee in the deal, using advice from London law firm CMS. In 2020, CMS successfully obtained a global freezing order against Motylev, as part of the bankruptcy proceedings.
The letter comes after Grant Thornton and CMS closed their Moscow offices and cut ties with Russia in response to the country’s invasion of Ukraine.
A CMS spokesperson said: “Anatoly Motylev, a Russian national who has been resident in the UK since 2015, whose Russian banking and pensions group collapsed with debts of over £2billion, has been declared bankrupt by the High Court in London.”
“The members of Grant Thornton have been appointed trustees in bankruptcy and CMS is instructed by those members to advise them.”
“As Grant Thornton has said, when any assets recovered in this case are distributed, it will be done in full compliance with the law and the relevant sanctions in place. It is clearly in the public interest that the bankruptcy continue with the appropriate professional advice.
Hollinrake’s call comes next The temperature reported that Grant Thornton is set to earn up to £10m in fees from his work recovering assets from Motylev, who has lived in the UK since 2015.