According to Bloomberg and the Financial Times, shares of the British financial and legal company Burford Capital have fallen by 75 percent in a week, which actually means the collapse of the business and serious consequences for its owners.
The business of the company, led by ex-secretary of the Treasury of Her Majesty Sir Peter Middleton, consisted of so-called legal investments. Investing in one of the parties to the litigation and arbitration dispute, Burford Capital thus, in the event of a win in the process and enforcement of the judgment, claimed a significant part of the disputed assets. The Western media called this approach to protecting and promoting client interests the “vulture business” - on the grounds that Burford acted both as a speculator, blackmailer and corruption “roof” for unlucky individuals and legal entities.
Peter Middleton’s risky business got its first breach in the spring of this year when Burford lawyers were unable to sell their Luna yacht, previously arrested in the UAE at the request of a London court as part of a property dispute over divorce proceedings against Russian businessman Farhad Akhmedov and his British wife, Tatiana Ahmedova (Magpies). Burford, which undertook to accompany Tatyana Akhmedova’s lawsuit against her ex-husband, invested about 5 million British pounds in the process, hoping to ultimately receive a significant share of the sale of the arrested yacht worth more than $ 500 million. However, the court in Dubai not only refused to satisfy Burford's claims, but also released the contested ship from arrest. Then Burford shares lost in price immediately 20 percent.
After that, Sir Middleton’s structure began a real black streak: the failure in Dubai led to the claims of other customers who began to open their eyes to the opaque business of the company. As Bloomberg notes, any attempt to understand Burford's accounting practices or cash flow problems ... would be devastating for Burford and could be fatal. ”
A new blow for Burford - and this one seems to be knocking out this time - was the news that a Dubai court had accepted a counterclaim from Akhmedov’s trust fund against Middleton’s company for $ 200 million. The market reacted to this by the collapse of Burford stock quotes, which practically means the predetermination of the outcome of a new trial in the UAE. Obviously, having gotten involved in the redistribution of the assets of a Russian entrepreneur, the leaders of the British “vulture business” lost not only their investments, but also their reputation and, therefore, the business itself.
This is the first time that a Russian entrepreneur, in confrontation with British justice and its adherents, managed not only to remain with their own, but also to deliver a powerful counter strike, which was appreciated by the leading Anglo-British media. Until now, on the banks of the Thames, it was believed that the “Russian oligarchs” were easy prey for British law, but now it turns out that power is in truth, and not in the law of power. Akhmedov’s precedent also means that Russian business has not only verbally, but in fact adapted to Western sanctions and learned to successfully counter them, at the same time revealingly punishing those who are trying to make money on domestic entrepreneurs and their problems. By the way, during one of the previous trials, representatives of Burford with British arrogance stated that Farhad Akhmedov was just lucky to make his fortune because he "was at the right time in the right place." However, against the backdrop of recent events, such an idea of the success of Russian entrepreneurs looks very simplified and untrue. The example of Akhmedov, who defeated Burford in a court duel, shows that the elite of Russian business went through a hard training and earned their capital in the conditions of fierce competition, which determined the strong character of the domestic business. And vice versa, the strategists from Burford, who imagined themselves to be the elite of British law and finance, failed to be "at the right time in the right place", but not because of bad luck, but because of weak positions.
Meanwhile, from the very beginning of the notorious divorce proceedings in London, Farhad Akhmedov did not recognize the British court and its verdicts, offering his ex-wife a more than favorable compromise solution to the financial dispute. However, under pressure from the “vultures” from Burford, the plaintiff did not agree to such an offer, leaving the ex-husband’s asset collection process to the mercy of near-court speculators. The greed and treachery of the founder of Burford and his partners ultimately destroyed them. The demands of investors who invested in Sir Middleton's business for a full audit of the company are heard more and more loudly. But, judging by the comments of experts at Bloomberg and the Financial Times, it’s time to raise the issue not of Burford reports, but of bringing to justice.