Tory backbencher Kevin Hollinrake has called on the government to close the “loopholes” that have allowed UK professional services firms to continue carrying out bankruptcy proceedings on behalf of the Russian state.
In a letter to Rishi Sunak, the Conservative party MP accused accountancy giant Grant Thornton, litigation funder Harbour, and London law firm CMS of undermining the UK’s efforts to “restrict the Kremlin’s access to funds,” by carrying out bankruptcy proceedings against Russian oligarch Alexey Motylev.
In working on behalf of Russia’s state-owned Deposit Insurance Agency (DIA) to recover funds from the bankrupt billionaire, Hollinrake claimed the three London headquartered firms are fuelling the Kremlin’s war efforts and enabling 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 responsible for more than £2bn in debts following the collapse of his Rossisky Kredit Bank in 2015.
A spokesperson for Harbour said: “Harbour is not funding this case and has not been involved since June 2021. We have contacted Kevin Hollinrake MP’s office to highlight this inaccuracy.”
It remains unclear as to whether Harbour Litigation Funding is still set to receive a share of any recoveries, after having pulled out of the case last year.
In his letter, the MP for North Yorkshire constituency Thirsk and Malton claimed the bankruptcy proceedings are being financed by London litigation funder Harbour, as he claimed the firm is set to “receive a share of any recoveries”. A spokesperson for Harbour noted that the litigation funder had not been involved in the case since June 2021.
The MP explained that Grant Thornton has also been acting as the trustee in the case, using advice from London law firm CMS. In 2020, CMS successfully secured a worldwide freezing order against Motylev, in relation to the bankruptcy proceedings.
The letter comes after both Grant Thornton and CMS shuttered their Moscow offices and cut their ties to Russia in response to the country’s invasion of Ukraine.
A spokesperson for CMS said: “Anatoly Motylev, a Russian national resident in the UK since 2015, whose Russian banking and pension group collapsed with debts of more than £2 billion has been declared bankrupt by the High Court in London.”
“Members of Grant Thornton have been appointed as trustees in bankruptcy and CMS are instructed by those members to advise.”
“As Grant Thornton have said, when any assets recovered in this case are distributed, this will be done in full compliance with the law and relevant sanctions in place. It is plainly in the public interest that the bankruptcy proceed with the appropriate professional advice.”
Hollinrake’s call comes after The Times reported that Grant Thornton is set to earn up to £10m in fees through its work recovering assets from Motylev, who has lived in the UK since 2015.