Russia alleges $70m fraud against Browder

Financial Times

Russia authorities are seeking to charge former investor and shareholder activist Bill Browder with illegally obtaining Gazprom shares worth $70m, interior ministry officials announced on Tuesday.

The American fund manager based in London said the allegations were yet another attempt to intimidate him as he campaigns for Europe to adopt US-style legislation barring Russian human rights violators known as the “Magnitsky Law” named for Mr Browder’s former lawyer who died in a Russian prison in 2009.

The announcement that charges would be brought against Mr Browder followed a well-tested formula in Russia, where criminal indictments usually follow denunciation on state television. Russian network First Channel on Sunday night devoted a seven-minute slot to Mr Browder’s financial dealings in Russia prior to his ejection from the country in 2005.

The allegations themselves focus on whether Mr Browder violated any Russian laws when his fund, Hermitage Capital, used Russian companies registered in the region of Kalmykia to purchase shares in the gas monopoly between 2001 and 2004. At the time, according to presidential decree, foreigners were barred from directly owning Gazprom shares, but many funds used Russian derivative structures to play the market nonetheless.

“Browder used specially developed schemes according to which foreign companies bought liquid shares in the name of Russian legal entities, registered in zones with special tax treatment,” said Mikhail Alexandrov from the Interior Ministry’s Investigative Department on Tuesday. He also accused Mr Browder of seeking to use share holdings in Gazprom to gain a seat on the board, and to exercise influence at the gas monopoly.

Formal charges against Mr Browder would be filed in a matter of days, Mr Alexandrov said.
Mr Browder, a shareholder activist, has never denied seeking to influence Gazprom, but he insists that his actions were legal. “In 2000 and 2004 we ran very high-profile campaigns to stop the massive theft at Gazprom. We did this through forensic investigations into the theft and proxy campaigns for a seat on the board,” he said on Tuesday.

He added that the financial arrangements he made to buy Gazprom shares and to pay taxes on them were commonplace and, moreover, entirely legal. “If one took these accusations seriously, then every foreign investor in Russia should be under arrest,” Mr Browder said.

Mr Browder accuses Russian authorities of seeking to discredit him after he campaigned successfully to pass the Magnitsky law in the US in December. The law forms a travel blacklist of Russian officials who dealt with the case of his lawyer, Mr Magnitsky.

Sergei Magnitsky died in prison in 2009 after he was jailed for a year without charges, after his attempt to testify against senior police officials accused of involvement in a $230m tax fraud in 2007.
Mr Magnitsky is the subject of a separate posthumous trial in which he is accused of tax evasion in 2001-02. Mr Browder is also named as a defendant in the case.

The trial’s start has been repeatedly delayed but is now scheduled for March 11.

Russian state TV network NTV plans to air a documentary about Mr Browder on Wednesday night, which is likely to expand the set of accusations against him. срочный займ на карту займ на карту без отказов круглосуточно https://zp-pdl.com/apply-for-payday-loan-online.php https://zp-pdl.com/get-a-next-business-day-payday-loan.php займы на карту