The President of Tajikistan was today accused of involvement in a multimillion-pound aluminium fraud that has led to one of the most expensive lawsuits in British history.

The accusation was made at the High Court in London during a trial arising from a fight for control of an aluminium smelter on the outskirts of Dunshabe, the capital of Tajikistan, one of central Asia’s poorest countries. The extraordinary case is expected to cost almost £90 million in lawyers’ fees.

Talco, the state-owned aluminium producer, has accused Abukadir Ermatov, its former manager, and Azar Nazarov, a Tajik businessman now based in the UK, of using the smelter as their personal “cash cow” and diverting more than $500 million (£305 million) in profits from it from 1996 to 2004.

Earlier this week, lawyers for Talco told the court that Mr Ermatov and his family had received millions of pounds in bribes from Mr Nazarov, including properties in London and Moscow. Murray Rosen, QC, said: “We will show that Mr Nazarov and Mr Ermatov and their other accomplices stole hundreds of millions of dollars from a country that could very ill afford it.”

But Mr Nazarov’s lawyer today told the court that the accusations were little more than a smokescreen to cover the claimants’ own fraud.

Brian Doctor, QC, said that Mr Ermatov and Mr Nazarov were ousted in December 2004 by “shady” individuals with ties to the Tajik Government.

Control of the plant was transferred without compensation to CDH Investments, an offshore company controlled by several prominent Tajik figures including President Emomali Rahmon, the country’s head of state, Mr Doctor said.

Mr Ermatov and Mr Nazarov have brought their own claim against Talco and are seeking around $130 million (£80 million) in damages.

They claim that more than $20 million (£12 million) a month in profits has been diverted offshore since the smelter was removed from their control, leaving it unable to service its debts despite four years of booming aluminium prices.

Mr Ermatov and Nazarov deny that their relationship was corrupt and claim that they are merely old friends.

They claim that they reversed a “calamitous” decline in production caused by five years of civil war, organising supplies of raw materials and working capital and brokering deals with two of Europe’s biggest aluminium producers: Norsk Hydro, the Norwegian industrial giant, and Rusal, the Russian company controlled by Oleg Deripaska.

Mr Doctor told the court that Talco had invented the accusations against Mr Ermatov and Mr Nazarov as an “excuse” to creditors.

He accused Talco of pursuing the case with a “complete lack of restraint” and questioned why it was spending the equivalent of 5 per cent of its gross national product on a claim against individuals of “limited means”.

“Virtually no case in legal history has cost the claimant so much,” Mr Doctor said.

In a statement to The Times, Talco responded: “Talco was defrauded over many years and it has been a time-consuming and expensive process piecing together the facts from the distortions and deceptions of the conspirators and their accomplices. Our claim relies on clear evidence of corruption and bribery on a huge scale.

“The defendants’ allegations of fraud involving the President are a smokescreen and utterly false. The defendants have basically made these allegations belatedly as a tactic to divert attention away from the legitimate claims against them and to mask their own corruption.”

The case continues.

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