Artradis Fund Management joins lawsuits over valuation of Kazakh bank
QVT Financial, a manager of global multistrategy hedge funds that claims more than USD11bn in assets under management, has announced it will be joined by Singapore-based Artradis Fund Management in its dispute with Italy's Unicredit Group over its acquisition of Kazakhstan's ATF Bank.
Artradis has commenced proceedings to produce powers of attorney to join QVT in its lawsuits against UniCredit's subsidiaries Bank Austria Creditanstalt and ATF Bank. Together QVT and Artradis account for 12.3 per cent of ATF's preference shares, which in total represent some 30 per cent of ATF's share capital.
QVT, which has offices in New York, London and Taipei, has invest more than USD200m in Kazakh stocks, making it one of the country's largest foreign investors. On November 13 last year Bank Austria Creditanstalt acquired majority stakes in the three types of ATF Bank shares on the Kazakhstan Stock Exchange in three separate transactions.
The dispute over the valuation of ATF Bank relates to the tender offer made for ATF preference shares, of which QVT holds more than 1.2 million. Bank Austria's tender offer for preference shares of USD47.3 per share is at a substantial discount to its offer of USD84.8 per share for ATF common stock, and QVT argues that the offer undervalues its shareholding in ATF Bank by as much as USD45m.
QVT it also disputing alleged attempts by UniCredit to take control of the ATF board, including the appointment a supposedly independent director who was until eight months ago chief executive of UniCredit Romania. The hedge fund manager says this move is in apparent contravention of business law in Kazakhstan, which requires three years' separation between connected parties before a director can be considered independent.
'We are delighted to be joined by Artradis in our litigation against UniCredit's subsidiaries and the ongoing dispute to obtain a fair price for shareholders,' says QVT chief executive and partner Angelo Moskov.
Artradis Fund Management was established in 2001 to deploy a multi-asset class trading philosophy to the absolute return industry in Asia and currently manages more than USD3.3bn in various absolute return funds with distinct objectives and risk parameters, the Artradis Barracuda Fund, Artradis AB2 Fund, Artradis Naga Funds and Artradis Russian Opportunities Fund.
Martin Diggle, chief investment officer for the Artradis Russian Opportunities Fund, adds: 'Artradis Fund Management invested in the Kazakh market in the belief that globally accepted standards of corporate governance and the protection of minority shareholder rights would be upheld.
'We believe that the offer from Unicredit to minorities in ATF Bank significantly undervalues the shareholding of Artradis and other parties. Specifically, we feel that holders of preferred shares in ATF Bank have been materially disadvantaged, and we will fight for fair terms for all minorities in this case. We have faith that the Kazakh authorities will want to encourage further investment in this fledgling market by ensuring an even playing field for all long-term investors.'
Meanwhile, QVT says, the situation with UniCredit and Bank Austria Creditanstalt's treatment of the bank's preference shareholders and other minority shareholders has drawn the attention of Transparency International, an international lobbying and research group on corruption issues, which says it has launched an investigation.
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