LONDON (Reuters) – Kazakh BTA Bank’s defaulted dollar bond traded near seven-week highs on Monday, after a British judge late last week sentenced its former chairman Mukhtar Ablyazov to 22 months in jail.

Mukhtar Ablyazov

The bond is trading at its highest since the bank first indicated it was in default in early January, on hopes BTA may now recover more of its assets.

In late 2008, BTA, one of biggest Kazakhstan banks, found itself on the verge of bankruptcy. Managed by Mukhtar Ablyazov, the bank had been generously handing around uncovered loans to offshore companies, claim Kazakhstan prosecutors. In 2009, Ablyazov was granted a politically-motivated asylum in Britain after the billionaire had allegedly clashed with Kazakhstan authorities. Accused of embezzling at least $5 billion, the ex-chairman of BTA faced charges in London.

The exile of Ablyazov played into the hands of his business partners: Maksim Pukhlikov and Sergey Sheklanov. According to RBC, the three bought the assets of Vihino port in 2008: 51% for Ablyazov (BTA) and 49% for Pukhlikov and Sheklanov (managers of BTA-Kazan bank, a daughter of BTA). However, after Ablyazov had started his get-away from Kazakhstan authorities, the partners decided to enjoy the moment and oust him out of the Vihino business. There followed series of conflicts and litigations.

Recent London’s decision to issue a warrant for imprisonment of Ablyazov may re-trigger Pukhlikov and Sheklanov to seize the Vitino port, presumes Moscow-Post. According to the newspaper, the entrepreneurs are planning to transfer the assets of the port through dummy companies.

Vitino oil port is located on the western shore of Kandalaksha bay (White Sea) in the Murmansk region. The port was raised specifically for super tankers in 1995. Vitino has four terminals; one of them is deep-water and is able to accept sea tankers of up to 70.000 tons cargo capacity.