Valērijs Belokoņs

Valērijs Belokoņs
Valērijs Belokoņs at Bloomfield Road
Born	(1960-02-14) 14 February 1960 Riga, Soviet Latvia
Nationality	Latvian
Occupation	Businessperson
Known for	Founder of Baltic International Bank
Children	3

Valērijs Belokoņs (also known as Valeri Belokon) (born 14 February 1960) is a Latvian businessman and a majority shareholder and Chairman of the Supervisory Board of Baltic International Bank, a Latvian commercial bank. He is also a co-owner and former Chairman of Blackpool Football Club. He is also the sole shareholder of the now defunct Manas Bank, a Kyrgyz commercial bank. From 12 January 2010 to 4 June 2013, he served as a Trustee of The Prince's Foundation for Building Community.

Education

Born in Riga, in the former Latvian Soviet Socialist Republic, Belokoņs studied at the University of Massachusetts Amherst (USA) and the University of Latvia, Faculty of Philology.

Early career as a journalist and KGB informant

In the 1980s, prior to becoming involved in business, Belokoņs worked as a correspondent in Soviet Youth newspaper in Latvia.

According to KGB archives which were de-classified and uploaded for open access by the Latvian Government in December 2018, on 8 October 1987 (while Belokoņs was working for Soviet Youth, and six years before he founded Baltic International Bank), Belokoņs was recruited as a KGB agent in Latvia and operated under the alias “Myachikov”.

Current business interests and appointments

Belokoņs is the chairperson of the Supervisory Board of Baltic International Bank ("BIB"), and his corporation Belokoņs Holdings has interests in finance, media, the Food industry and social projects in Latvia and Kyrgyzstan as well as football in England. These include

• Finance and investments
  • Baltic International Bank ("BIB") – founded in 1993, servicing VIP customers. Position - Founder, Main Shareholder and Chairman of Council. Representative offices basen in London, Moscow and Kiev
  • Manas Bank – founded in 2008 in Bishkek, Kyrgyzstan (in insolvent liquidation since 6 July 2015)
  • Since 2007- JSC Investment Management Company Global Fondi - co-founded by ex Prime Minister of Latvia, The former Chairman of National Bank of Latvia - Einars Repše
  • Since 2009 - JSC Hercogiste - company's aim is to develop sustainable projects in Latvia
• Food industry
  • JSC Brīvais Vilnis (Established in 1949) – One of the biggest and most developed fish-processing enterprise in Latvia
• Media
  • Otkritij Gorod – a monthly magazine in Baltic countries
  • Novo News – a daily Internet newspaper
  • Since 1995 - Valērijs Belokoņs's Publishing House Ltd – became popular with the National encyclopaedia Latvijas Enciklopēdija and annual edition Who's Who in Latvia
• Social Projects
  • Baltic Institute of Strategic Studies – a non-profit scientific research organization founded in 2004.
  • Riga Golf School – Founded in 2003 - charity project - first sport school of golf in Latvia that serves as basics for young generation to be introduced to golf culture.

In June 2008, Belokoņs sold his 30% stake in the Latvian television station TV5 to the News Corporation owned by Rupert Murdoch.

Baltic International Bank, Latvia ("BIB")

According to the website of AS Baltic International Bank (“BIB”), Valērijs Belokoņs holds 66.95% in BIB whilst his brother Vilori Belokoņs holds 32.99%.

BIB provides a range of financial services to individuals and corporate customers in Latvia. It accepts fiduciary, term, 33 day notice, and subordinated deposits, as well as money deposits and other funds, and multicurrency accounts. It also offers commercial, mortgage, industrial, and consumer loans; overdrafts; and trade financing services, as well as short-term and long-term loans for business development. In addition, BIB provides cash and liquidity management, and asset management services, as well as bank bonds; invests in financial instruments portfolio and private equities; and offers co-financing for business projects and transactions. Further, it offers brokerage, repo transactional, and custody services, as well as structured financial products; operates online trading platforms; and invests in precious metals, gold, and funds. Additionally, BIB engages in the provision of payment, remote, and currency exchange services; cards; and funds transfer, treasury, and capital market services, as well as real estate business.

On 10 March 2016, Latvia’s financial regulator, Financial and Capital Market Commission, fined BIB €1.1 million for “repeated violations of the provisions of the Law on the Prevention of Laundering the Proceeds from Criminal Activity (Money Laundering) and of Terrorist Financing (AML/CTF) and Regulations on Customer Due Diligence, getting involved in transactions that subject the bank to material money laundering and reputational risks”.

Manas Bank, Kyrgyz Republic

In 2007, Belokoņs acquired then insolvent Kyrgyz commercial bank Insan Bank, and renamed it as Manas Bank. Manas Bank started its operations from 1 January 2018, offering a range of corporate and retail banking services. However, within 28 months, by 8 April 2010, the Kyrgyz National Bank placed Manas Bank under its administration to investigate money laundering. On 6 July 2015, Manas Bank was placed into insolvent liquidation.

In August 2011, Belokoņs pursued international arbitration against the Kyrgyz Republic claiming that the government's interference with Manas Bank amounted to “expropriation” of the bank. On 24 October 2014, the Paris-seated arbitral tribunal awarded Belokoņs a US $15 million compensation (plus legal costs) for the “expropriation” of Manas.

However, upon Kyrgyz Republic’s appeal in France (at the seat of arbitration), on 21 February 2017 the Paris Court of Appeal annulled the arbitral award finding that Belokons had bought Manas Bank “in order to develop … money-laundering practices”. The court said such money laundering would not be monitored in Kyrgyzstan because of Belokoņs’s “privileged” relationship with Maxim Bakiyev, the son of the then President of Kyrgyzstan. The court further held that the arbitral award must be annulled because to allow its enforcement would reward Belokoņs for “criminal activities”, which would be contrary to French international public policy.

In particular, the court found that after Belokoņs took over Manas Bank, $5.2bn flowed through its accounts in less than three years, and concluded this “dazzling success” in a poor country “cannot be explained by orthodox banking practices”. Bank records presented to the court showed that client accounts had been opened in the names of people whose identification documents, including passport details, had been stolen. One Manas Bank client, New-Zealand-registered company Lakerock Contracts Ltd, had $534m go through its account in nine months. Examination of the company’s registration documents found the named company head, and sole signatory for the multimillion-dollar account, was a taxi driver in Belarus. When interviewed on request by the Belarus police, he told officers he had never signed any of the documents and knew nothing about Manas Bank or Lakerock. Another company BMD Commerce, had $24m through its account in a year, including multimillion-dollar physical cash deposits and withdrawals. The authorised account holder on the Manas Bank forms was a resident of Latvia. Latvian police and Kyrgyz border records showed this person to be a 20-year-old man who had never been to Kyrgyzstan. Subsequently the investigation found he was serving a prison sentence in Latvia when much of the account activity was taking place.

The Paris court of appeal concluded in its judgment that Manas Bank “was taken over by Mr Belokon in order to develop, in a state where his privileged relations with the holder of economic power guaranteed him the absence of any true monitoring of his activities, money-laundering practices which could not have flourished in the less favourable environment of Latvia.”

Belokoņs appealed the judgment to the French Supreme Court on 12 May 2017 but Belokoņs’s appeal was dismissed by the Supreme Court on 12 July 2018.

Criminal conviction for money laundering

Following a Kyrgyz criminal investigation into Manas Bank which started in 2011, on 12 May 2017, Belokoņs, members of Manas Bank management and Maxim Bakiev (the son of the former Kyrgyz President) were convicted in absentia of money laundering by the Kyrgyz court. Belokon was sentenced to 20 years in prison. The criminal verdict was based on substantially the same evidence as that put before the Paris Court of Appeal three months earlier (in February 2017), and in it the Kyrgyz criminal court came to substantially the same conclusions as the Paris Court of Appeal, namely that money laundering was flourishing at Manas Bank, Manas Bank and BIB worked jointly to administer money laundering schemes, that in his capacity as Chairman of the Supervisory Board of BIB and the sole shareholder of Manas, Mr Belokon could not have been unaware of those practices and that that he established Manas Bank not to make profit from the legitimate banking business but to engage in money laundering, and that Belokon’s substantial association with the son of the then President of the Kyrgyz Republic helped Manas Bank operate in this manner without any interference by the regulators.

Following the verdict, the Latvian Foreign Ministry lodged a formal protest with the Kyrgyz authorities “express[ing its] concern about the gross violations of the Kyrgyz Republic's criminal procedural norms by certain members of the country's law enforcement agencies in this case”. The Ministry further said “We firmly believe that the court made its judgment in revenge for the unfavourable international arbitration award that Kyrgyzstan received and whereby the Kyrgyz Government was ordered to pay Latvian citizen Valeri Belokon US$16.5 million as compensation." Separately Belokon claimed that the criminal process “ignored the most basic principles of natural justice”, including that he was not even given notice that the hearing was happening. However, the Paris Court of Appeal judgment notes that criminal proceedings began in Kyrgyzstan in January 2011, some three years before Belokoņs’s win in the arbitration, and the conviction records show that whilst Belokoņs did not appear at the trial himself, he had lawyers at the court representing him.

Several of the accused (but not Belokon) appealed the Kyrgyz criminal verdict, but their appeal was unsuccessful. As there are currently no extradition treaties between the Kyrgyz Republic and most other countries, Belokoņs is unlikely to be extradited to the Kyrgyz Republic to serve his sentence.

Blackpool F.C.

Through Belokoņs Holdings and VB Football Assets, Belokon bought a 20% stake in Blackpool Football Club in 2006, and is the club's president. In June 2007 he stated that he was prepared to increase his stake in Blackpool from 20% to 50% following the clubs promotion to The Championship.

On 8 July 2008, Belokoņs announced that he and Owen Oyston, the majority share-holder of the club, would be personally financing the construction of the new South Stand and South-west corner at Bloomfield Road, with work to start immediately.

On 31 July 2009, it was announced that Belokoņs was setting up a new transfer fund for Blackpool, into which he was adding a "considerable amount" on 5 August in order to invest in new players identified by team manager Ian Holloway.

On 22 May 2010, Blackpool F.C. were promoted to the top tier of English football, the Premier League, one year sooner than Belokoņs had predicted when joining the club in 2006.

In September 2015, Belokoņs initiated legal action against the Oystons, alleging improper use of club funds.

In August 2017, Belokoņs resigned as director of Blackpool Football Club. In November 2017 a court determined that Owen Oyston and his son had abused their majority shareholding position at the club in a manner that was detrimental both to the business and Belokons himself. They were ordered to pay £31 million to buy out Belokons' share of the business. Club supporters were hopeful that the amount set by the court was so high that the Oyston family would be forced instead to sell their interest.

Personal life

Until 2017, Belokoņs was married to Diana Belokon. In 2017, they were reported to have expended £1.75 in legal fees on their divorce proceedings before the English High Court, in which Belokoņs’s ex-wife sought several million pounds while Mr Belokoņs was arguing that she should get nothing.

Belokoņs has three children.

External links

• [BBC Russian Service, 21 December 2018, Latvia has Opened KGB Archives. Head of the Church, Former PM and a Significant Businessman happened to be There: https://www.bbc.com/russian/features-46653022]
• [Press release of the Latvian Financial and Capital Market Commission: http://www.fktk.lv/en/publications/press-releases/5657-fcmc-applies-fines-to-as-baltic-international-bank-and-its-board-chair.html]
• [Judgment of the Paris Court of Appeal dated 21 February 2017 in the matter of Belokon v Kyrgyz Republic: https://www.italaw.com/sites/default/files/case-documents/italaw8476.PDF]
• [1]
• [2]
• "Tangerine dream" – a Q&A with Belokon from BBC Sport
• Belokon Holdings website
• Baltic International Bank website
• The Prince's Foundation for the Built Environment website