Lawyer ordered to repay €300,000 taken from Kazakh oligarch widow’s account

Veteran lawyer and businessman Pio Valletta has been ordered by an appeals court to refund a client €300,000 that he took from her account without her consent.

Confirming a ruling by the court of first instance, the Court of Appeal presided over by Chief Justice Mark Chetcuti, has dismissed Valletta’s appeal filed by Valletta and confirmed the original sentence in its entirety, which ordered him to repay the misappropriated funds.

The case dates back to 2010 when Elnara Shorazova – the widow of Kazakh oligarch Rakhat Aliyev who was found dead in an Austrian prison under suspicious circumstances –asked Valletta to deposit €2.4 million into an account to finance a company that was being established in Austria.

It resulted, however, that Valletta had taken €900,000 from the amount and claimed it as professional fees without informing or asking for Shorazova’s consent.

A police report was lodged against Valletta claiming the misappropriation of funds.

After an out-of-court settlement, Valletta agreed to refund the money according to an agreed schedule and terms with the proviso that if he made the payments on time, he would benefit from a €300,000 discount on the €900,000 he allegedly misappropriated.

The agreement also stipulated that Shorazova would withdraw the criminal report, as well as another case filed against Valletta before the Commission for the Administration of Justice.

But after Valletta failed to uphold his end of the agreement – with the scheduled deposits being either late or missing – Shorazova filed a civil case demanding the forfeiture of Valletta’s €300,000 ‘discount’ and asking him to repay the full amount.

In his defence, Valletta said he had interpreted the agreement in a different way and argued that the €300,000 discount was to be paid as his professional fees.

The court, however, rubbished the defence by ruling Valletta had not provided any evidence to substantiate his interpretation.

The court ruled in Shorazova’s favour and ordered the lawyer to repay the funds in full and to foot all court expenses.

In 2017, Valletta had been in charge of negotiations with the government over the privatisation of the Marsa horse track.

Acting on the behalf of other shareholders, which included Hugh Morshead of the notorious cash-for-passports concessionaire Henley & Partners and Maltese contractors Schembri & Sons, known as Id-Dobbu, Valletta negotiated the €28 million project to turn the racetrack into a high-level facility.

It included the concession of public land in Marsa for 65 years to be turned into offices and shops even though this did not form part of the original Request for Proposals.

While none of that investment has so far materialised, Valletta cashed in on the deal by selling his shares to the other partners.