Posts Tagged ‘bne’

24
July 2013

Latvia – like a Virgin island

Business News Europe

If you’ve ever wondered what sort of tax dodges they get up to in the British Virgin Islands, take a trip to Latvia and speak with Kristaps Zakulis, chairman of the country’s financial regulator, the Financial and Capital Markets Commission (FKTK). Zakulis displays impressive knowledge of and enthusiasm for talking about the Caribbean archipelago whenever Latvia’s own offshoring industry is mentioned.

During the course of an interview lasting less than an hour, he racks up a couple of dozen uses of the words “British Virgin Islands”, “former British colony” and “John Smith” – all the more impressive when the conversation was supposed to be about his agency’s investigation into the links between Latvian banks and the notorious Magnitsky affair in Russia.

The annoyance Zakulis expresses over anything bearing a Union Flag was clearly supposed to provoke your correspondent into a fit of patriotic indignation, yet never having been to the Caribbean archipelago or of a high enough net worth to open any tax-efficient account more impressive than a Post Office savings book, it was a wasted expenditure of energy.

But Zakulis’ probable point is that whatever is happening in Latvia is happening elsewhere too – which is certainly true as far as offshoring goes. To an extent the point could also be applied to the Magnitsky case, as banks in Moldova, Lithuania, Estonia and Cyprus holding accounts from the UK, Belize and – you guessed it, the British Virgin Islands – have been named by lawyers representing Hermitage Capital Management of laundering $230m in the case that led to the death in detention of their lawyer Sergei Magnitsky. According to the lawyers, around $63m of that total was laundered via six Latvian banks in 2007 and last year, Hermitage filed a complaint in Riga demanding the authorities look into its allegations.

Latvia’s Economic Police initially seemed disinterested, but did eventually open an investigation that is ongoing though yet to bring any criminal charges.

To its credit, FKTK was much more active in conducting an investigation and even found one bank culpable enough to impose the maximum fine it is allowed by law, LVL100,000 (€142,000). But the Magnitsky case has a way of making everyone it touches look absurd, from the ridiculous contradictory accounts of how the lawyer met his death in the first place to his ludicrous posthumous conviction pushed by the Kremlin. The Latvian connection does not disappoint in this regard either, for FKTK refuses to say not only when the fine was imposed, but even the name of the bank that is supposed to pay it.

Read More →

Share:
  • Facebook
  • Twitter
  • Google Buzz
  • LinkedIn
  • del.icio.us
  • Google Bookmarks
  • Yahoo! Buzz
  • Tumblr
  • StumbleUpon
  • FriendFeed
  • NewsVine
  • Digg
06
March 2013

Russia plans new fraud charges against Hermitage’s Browder

BNE

The Kremlin is about to shoot itself in the foot again after it announced that it will open an investigation into Hermitage Capital Management’s Bill Browder for illegally trading in locally listed Gazprom shares during the naughties.

Browder has gone from being Russia’s biggest portfolio investor to spearheading a relentless campaign in exile in London against the Kremlin following the death of his associate, the accountant and auditor Sergei Magnitsky, while in custody in 2009.

The two sides hate each other, but this time the Russian government took the initiative after a senior Interior Ministry official told journalists on March 5 that companies belonging to Hermitage violated the so-called ring fence around Gazprom’s locally listed shares that banned foreigners from ownership. “The Interior Ministry’s Investigative Department is investigating a criminal case concerning the illegal purchase of Gazprom shares by legal entities that were majority owned by foreign nationals, notably William Brower,” said Mikhail Aleksandrov, head of the department’s section which investigates organized crime and corruption cases. Aleksandrov said that Russia lost some RUB3bn ($97m) from 29 transactions with Gazprom shares concluded by Browder’s firms.

Hermitage denied the allegations. “The ownership of Gazprom shares was completely legal,” the company said in a statement. “It was approved by the Russian authorities and the Russian Federal Securities Commission as well as Gazprom itself. If one took these accusations seriously, then every foreign investor in Russia should be under arrest.”

Browder claimed that the charges are politically motivated and as a result of his campaign to sully the Kremlin’s name and hold high officials to account for Magnitsky’s death. The US Congress passed in December a bill called the “Magnitsky Act”, which withholds visas and freezes financial assets of Russian officials thought to have been involved with human rights violations.

Read More →

Share:
  • Facebook
  • Twitter
  • Google Buzz
  • LinkedIn
  • del.icio.us
  • Google Bookmarks
  • Yahoo! Buzz
  • Tumblr
  • StumbleUpon
  • FriendFeed
  • NewsVine
  • Digg