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TPG labels case by former billionaire Magomedov 'bizarre'

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Dispute turns on alleged unlawful sale of port assets

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Defendants include UAE's DP World, Russia's Rosatom

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Magomedov was sentenced to 19 years jail in 2022

By Kirstin Ridley

LONDON, Sept 10 (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.