By Maria Levitov and Henry Meyer, Bloomberg

The “political” takeover of Bank of Moscow by Russia’s state-owned VTB Group led to the biggest bank bailout in the country’s history to transfer government money to Bank of Moscow’s new shareholders, former chief executive officer Andrei Borodin and his representatives said.

“The criminal prosecution and takeover of Bank of Moscow are part of the same chain of the political decision to change shareholders at Bank of Moscow and to place it under government control,” Borodin said in an e-mailed statement yesterday.

Borodin is under an international arrest warrant by Russian authorities over his connection to a $443 million loan alleged to have ended up in the accounts of former Moscow Mayor Yury Luzhkov’s wife, Yelena Baturina. Luzhkov was fired by President Dmitry Medvedev in September, amid corruption allegations after 18 years at the helm of Europe’s largest city. VTB bought the city government’s 46.5 percent stake in Bank of Moscow for $3.6 billion in February. Borodin, 44, denies any wrongdoing.

VTB denied the allegations, saying it was “a purely strategic deal and not a political one,” according to an emailed statement yesterday. The press services of the Kremlin and the Moscow City government declined to comment yesterday on Borodin’s statements.

Medvedev has made fighting corruption the main goal of his presidency since 2008 as he seeks to attract foreign investment to wean Russia’s economy away from dependence on oil and gas. Russia is the world’s most corrupt major economy, according to Berlin-based Transparency International’s 2010 Corruption Perceptions Index released in October. The country was ranked 154th among 178 countries, alongside Tajikistan.

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