Russian law-enforcement agencies have opened a criminal case against unnamed employees of the Bank of Moscow for a 540 million ruble fraud, a source close to the bank said Friday, as cited by RIA Novosti.
The source said that the Bank of Moscow’s employees and other unidentified persons stole 540 million rubles from the bank under the guise of foreign exchange transactions in 2009–2010.
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By Con Coughlin, The Telegraph
UP to 30,000 bankers, businessmen and financiers have been driven out of Russia by Vladimir Putin’s ever-tightening grip on the country’s political and commercial life, according to a prominent exile at the centre of a major banking controversy.
Russians who have been forced to live overseas also estimate that tens of billions of pounds worth of assets have been illegally seized by the Russian government as Mr Putin has strengthened his powerbase.
According to Andrey Borodin, the former head of the Bank of Moscow, the talent drain will only increase when Mr Putin, currently prime minister, runs for re-election as president in March – a poll he is almost certain to win.
“We call ourselves Putin’s exiles,” he said in an interview with the Daily Telegraph, his first since fleeing Russia last year.
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By Con Coughlin, The Telegraph
I fear that Vladimir Putin’s confirmation that he is to seek re-election as Russia’s president does not bode well for the future of Anglo-Russian relations. Within days of Mr Putin declaring his intention to re-occupy the Kremlin the first warning shot has been fired at Britain in the form of an official demand for Britain to extradite 43 Russian citizens who have fled to the UK.
The Russian ambassador, Alexander Yakovenko, claims the mass extraditions will help to improve relations between the two countries. I regard it as nothing more than a blatant act of intimidation against David Cameron following his recent, inconclusive, visit to Moscow.
The main purpose of Mr Cameron’s visit was to initiate a thaw in the frosty relations that have existed between London and Moscow ever since Russian intelligence officers were implicated in the 2006 assassination of dissident ex-KGB officer Alexander Litvinenko, who was poisoned with polonium at a London hotel. Russia has consistently refused to hand over Andrei Lugovoi, the main suspect in the case.
But rather than making any admission of guilt, the Russians have resorted to their usual bully-boy tactics by demanding that Britain extradite the exotic assortment of Russian billionaires and pro-democracy campaigners who have sought refuge in London.
The latest senior Russian official to fall foul of the Kremlin is Andrei Borodin, the former chief executive officer of the Bank of Moscow, who has gone into hiding after the Russian government accused him of irregularities relating to a $400 million loan. But Mr Borodin claims he is the victim of a politically-motivated takeover of the bank.Кон Кафлин (Con Coughlin)
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By Catherine Belton and Neil Buckley, Financial Times
On a snowy Friday evening in late March, Andrei Borodin received a call as he flew out of Moscow on a private jet. Then president of Bank of Moscow, Russia’s fifth-biggest, he found himself under mounting pressure as VTB, the state-controlled lender that is Russia’s second biggest, tried to take over his bank. Just hours earlier, the government’s budget watchdog had called for his suspension while it audited what it be-lieved were “dubious” loans to entities re-lated to Bank of Moscow. Police were also investigating him separately over a property loan the bank had made.
“Someone called me and said that on Monday the Russian police will officially accuse me of abusing my authority,” says Mr Borodin. He never flew back; today he is in exile in an undisclosed location. Within months, Bank of Moscow – a quasi-sovereign lender with shareholders including Goldman Sachs and Credit Suisse – was at the centre of one of the nation’s largest corporate scandals of recent years. To fill an alleged hole in its accounts far bigger than previously suspected, the government agreed in July to extend its largest-ever bank bail-out. At Rbs395bn, then worth $14bn, it was equivalent to 1 per cent of economic output.
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Florian Willershausen, Handelsblatt
London and Moscow
He is standing before the ruins of his life – and yet Andrey Borodin seems anything but resigned or downcast. … Borodin is fighting for his reputation as a successful top banker. Let’s not forget, he built up the Bank of Moscow to be the fifth largest bank in Russia within 15 years.
(more…)By Douglas Busvine, Reuters * Exiled former CEO defends lending practices * Says VTB exaggerated bad loans at Bank of Moscow * Loan that financed stake sale well secured - Borodin…
The fate befalling the Bank of Moscow and its CEO Andrei Borodin, author of the adjacent article, is reminiscent of the plot in a bad Hollywood film. The details of what exactly transpired behind the scenes that led the 43-year-old Borodin, sought by the Russian authorities for mismanagement of the Bank of Moscow, to live in exile in London are unclear. “Finanz und Wirtschaft” attempts to trace the course of events. The Bank of Moscow founded in 1995 by the city of Moscow and its mayor Yuri Luzhkov, emerged as one of Russia’s top banks under the leadership of Borodin, a close confidante of Luzhkov. Even as the financial crisis unfolded, the bank maintained buoyant growth and enjoyed the confidence of many western investors. As a result, in July 2010 Goldman Sachs and Credit Suisse jointly acquired a 6.6% holding of the bank’s shares. Everything was going smoothly.
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by Gerald Hosp, Neue Zürcher Zeitung
Question marks still hang over the massive injection of government funds into the Russian Bank of Moscow. The former CEO is defending himself against allegations of credit fraud. The bailout is dragging down the reputation of the entire Russian banking sector.
In these times of financial and economic crisis, government support for a troubled bank is nothing extraordinary. Even so, the case of the financial injection for Russia’s Bank of Moscow (Bank Moskwy, BoM) is more illustrative of the moral condition of the country’s economic and political elite rather than action to restore a bank’s balance sheet. At the beginning of July, the Russian authorities assembled a 395 billion rouble rescue package to pull back the stricken BoM from the brink of bankruptcy. That marked the largest ever capital injection in the Russian banking industry. “The support package was not necessary. With the bailout, the stockholders of the institution were rescued, not the bank,” says Andrei Borodin, the bank’s former CEO, in an interview with this newspaper in an undisclosed location.
Borodin is defending himself against accusations that credit fraud took place under his watch. Russian officials have said that more than half of the institution’s credit portfolio was “in bad shape.” A large portion of this can be ascribed to companies linked to Borodin and other former BoM managers. Attempts were made to sell off assets pledged as collateral. A warrant was issued for Borodin’s arrest in connection with a loan to property firm. Since the end of March, Borodin has no longer been in Russia, and the banker is thought to be in London.
(more…)Neue Zürcher Zeitung The effort to forestall the bankruptcy of the troubled Bank of Moscow became the largest rescue package in the brief history of the Russian banking sector. However,…
Frankfurter Allgemeine Zeitung
The rescue of Bank Moskvy puts Russia’s entire banking sector in a bad light. The state has bailed out to the tune of billions – but for whose benefit remains in dispute. Criticism is levelled at supervision, politics and management.
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