Russia’s Bank of Moscow denies offshore firm repaid $3 bln debt

Prime News

Russia’s Bank of Moscow has denied receiving U.S. $3 billion in debt payment from Oneworld, the managing company of the bank’s former top management, a bank representative told PRIME Wednesday.

“The Bank of Moscow has not received any duly formalized assets from this company or from any individuals affiliated with it. Non-resident companies’ liabilities with the Bank of Moscow -extended earlier as credits – have yet to be repaid,” the representative said.

Cyprus Mail reported on July 6 that Oneworld had fully redeemed the liabilities of Cypriot offshores to the Bank of Moscow with part of the debts repaid in September 2011 and the remainder transferred in May.

Oneworld said the assets handed over in May to the Russian bank are worth $3 billion and significantly exceed the volume of indebtedness, according to an estimate of independent appraisers. The valuation was initiated by the Bank of Moscow’s former management.

The Bank of Moscow, previously an investment vehicle of the Moscow government during former Moscow mayor Yury Luzhkov’s term in office, was acquired by VTB in 2011. Following the acquisition, VTB discovered a huge gap in its assets that required a $13 billion bailout, Russia’s largest for a bank.

At the time, the volume of bad loans was estimated at 366 billion rubles, including 150 billion rubles provided by the Bank of Moscow in loans to bogus companies. These companies comprised 52 offshore units and 88 company–residents.

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