Russian banker Sergei Pugachev suffers setbacks in London legal battle


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The Independent Online

Sergei Pugachev, the billionaire Russian businessman who lives in one of London’s grandest homes with his partner, the socialite Alexandra Tolstoy, has suffered a series of setbacks in his attempts to stave off a civil legal action alleging fraud and embezzlement.

Mr Pugachev is alleged to have stolen money awarded to his bank in Russia under  the Russian government’s bailout programme – charges he denies – and is fighting a freeze on his assets awarded by the London High Court.

Yesterday, his lawyers announced they had ceased representing him – the second law firm to do so – and he was ordered by the Court of Appeal to disclose further information about certain trusts he allegedly controls.

The court also overturned a judge’s order made in September last year demanding the Russian authority pursuing him pays $25m into an English bank account to cover Pugachev for the event that the freezing order against him collapses and he needs compensation – a payment known as “fortificiation”.

Mr Pugachev’s solicitors were Fried, Frank, Harris, Shriver & Jacobsen. They took over from Stephenson Harwood when that firm stopped working for the billionaire.

Mr Pugachev’s bank was called Mezhprombank. He argues that his wealth has been systematically stolen from him by certain elements in the Russian state, and has described the cases against him as “politically motivated”.

Ms Tolstoy, a descendent of Leo Tolstoy and a former BBC presenter, has given interviews in which she complains that the £10,000 allowance the family was given under the asset freeze is barely sufficient for the upkeep of the family’s castle in France. They live in two London homes including a £12m house in Battersea. Mr Pugachev has claimed he is down to his last $70m.