Posts Tagged ‘browder’
Russia plans new fraud charges against Hermitage’s Browder
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.
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Russia Opens Case Into Browder’s Hermitage Buying Gazprom Stock
Russia opened a criminal case into purchases of OAO Gazprom (GAZP) stock by Hermitage Capital Management Ltd. as prosecutors prepare for the trial of the fund’s founder and his dead legal adviser on tax-fraud charges.
Hermitage head William Browder is accused of illegally buying about 131.6 million Gazprom shares for about 2.1 billion rubles ($70 million) at a time when foreign ownership of the world’s biggest natural-gas producer was restricted, Mikhail Alexandrov, head of the Interior ministry’s investigative directorate for organized crime and corruption, said today on state television.
“Buying Gazprom shares through derivative structures was entirely legal,” Browder said by phone today, adding that neither he nor Hermitage has been notified of the case.
The accusations follow separate tax evasion charges brought against Browder, a British citizen whose London-based fund was once the largest foreign portfolio investor in Russia. Browder, who has been barred from entering Russia since 2005 as a security threat to the state, is being tried in absentia on the same accusations made against Sergei Magnitsky, a Hermitage tax and legal adviser who died in a Moscow prison in 2009. Magnitsky’s family has said the posthumous trial is “politically motivated.”
Browder attempted to use share ownership to exert influence on the company, Alexandrov said. He estimated the damage to the government at no less than 3 billion rubles.
Buying and trading shares of Gazprom by foreigners was restricted before the state raised its ownership in the gas producer to more than 50 percent in 2005. Russia had banned foreigners from holding more than 20 percent of the stock and restricted them to American depositary receipts.
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The Magnitsky Trial: Russia Places a Dead Man in the Dock
At Moscow’s Tverskoy District Court on Monday morning, there was a great deal of confusion among the journalists about what exactly was meant to happen in Courtroom No. 17. On the roster, a preliminary hearing was slated for the case of Sergei Magnitsky, who is accused of tax evasion. The court’s press secretary, Alexandra Berezina, explained that the defendant would learn, among other things, whether he would be granted bail or forced to await trial in prison. But like so much about Russia’s latest adventure in judicial folly, it was not clear how the issue of bail could matter. Magnitsky has been dead for more than two years. When this fact was pointed out to Berezina, she gave a look of exasperation. “I’m just telling you what would normally happen,” she snapped. And hardly anything is normal about this case.
For the first time in Russia’s history, a dead man has been placed in the dock, and it will not be easy for the court to parse all of the cryptic corollaries of that lurid fact. How, for instance, is the defense attorney supposed to consult with his client? A Ouija board? Some kind of voodoo mediation? And what about the issue of habeas corpus — literally, “show me the body” — the bedrock principle of common law that requires the accused to be brought before a judge? Are we to expect an exhumation? “It is a self-evident absurdity,” says William Browder, Magnitsky’s former employer and now his co-defendant in the case. “There’s no way in the world that a lawyer can represent him.” But with a trial as steeped as this one in Russian politics, nothing should seem too far-fetched.
The saga that led to Magnitsky’s death — and subsequently his trial — began in 2009, when Browder hired the young tax attorney to keep the books of Hermitage Capital, Browder’s investment fund in Moscow. While digging into some of the fund’s corporate documents, which Russian police had seized during a raid, Magnitsky uncovered the largest known tax fraud in Russian history. A gang of detectives, tax inspectors and other bureaucrats had allegedly used the fund’s corporate seals and documents to file for a tax refund worth $230 million. Following the paper trail, Magnitsky found that this refund — also the largest in Russian history — had been rubber-stamped at a Moscow tax office in just one day. After that, the money vanished into various offshore accounts. Magnitsky immediately blew the whistle, even offering to give testimony against the officials in court, including agents of the FSB secret police, which Vladimir Putin led before becoming Russia’s President in 2000.
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Magnitsky case: Russia accuses Browder over Gazprom
Russia is preparing new charges against UK-based fund manager Bill Browder, whose lawyer died in a Russian jail but now faces tax evasion charges.
Mr Browder will be accused of illegally buying shares in Russia’s gas monopoly Gazprom, the interior ministry said. Mr Browder called the move “absurd”.
On Monday a Russian judge ruled that a trial of the dead lawyer, Sergei Magnitsky, should go ahead next week.
Mr Browder, who runs Hermitage Capital Management, is to be tried in absentia.
Speaking to BBC Russian, Mr Browder said Russia’s President Vladimir Putin “has given an instruction to law enforcement agencies to charge me with any crime they can think up, no matter how spurious or absurd”.
“Every single securities firm in Russia set up derivatives structures which were legal, to invest in Gazprom shares… there was nothing illegal going on,” he said.
Mr Magnitsky died after his pancreatitis went untreated. He had uncovered an alleged $230m (£150m) tax fraud involving Russian government officials.
Nobody has been convicted over his death or the alleged theft from Russian state coffers.
However, Mr Magnitsky and Mr Browder were charged with tax evasion in the wake of Mr Magnitsky’s offer of evidence to the Russian authorities.
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Russia alleges $70m fraud against Browder
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.
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Russia resumes hearings against dead lawyer
A Moscow court resumed preliminary hearings Monday in the posthumous trial of a Russian lawyer whose death in jail after accusing state officials of tax fraud has upset the Kremlin’s delicate ties with the US.
The Tverskoi District Court began the latest preliminary hearing against Sergei Magnitsky — Russia’s first legal procedure against a dead man — behind closed doors at 0600 GMT, a court spokeswoman told AFP.
The hearing is expected to set a date for the start of the trial in the case, after the state appointed an attorney to defend Magnitsky despite protests from his family.
“A lawyer is not allowed to take an instruction in a case that is clearly unlawful, and to take a position against the will of the client,” said a complaint written by Magnitsky’s relatives and distributed by his former employer Hermitage Capital.
“The assertion by prosecutors that the case was initiated at the request from the relatives is a lie,” the letter said.
Magnitsky’s mother Natalya and her own lawyers are boycotting the trial.
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Police Set to Charge Browder for Buying Gazprom Stock
The Interior Ministry is preparing to bring criminal charges against U.S.-born investor Bill Browder, the latest turn in a feud that has led to U.S. sanctions against Russian officials, a Russian ban on U.S. adoptions of Russian children and the upcoming posthumous trial of Sergei Magnitsky.
Magnitsky worked as a lawyer for Browder’s Hermitage Capital, once a minority shareholder in the state-controlled gas giant, Gazprom. He died in jail in 2009 after his pancreatitis went untreated. The Kremlin human rights council said in a 2011 report that Magnitsky had been repeatedly beaten and deliberately denied medical treatment.
Magnitsky and Browder are due to be put on trial next week for tax evasion.
Browder, a British citizen, has been barred from Russia since 2005 as a security threat, according to Russian officials. He has campaigned to bring those responsible for Magnitsky’s death to justice.
Mikhail Alexandrov from the Interior Ministry’s Investigative Department said Tuesday that there is sufficient evidence to charge Browder with misappropriation for allegedly using subsidiaries to amass a 3 billion ruble stake in Gazprom between 2001 to 2004. Until 2005, foreign investors were not allowed to hold more than 9 percent of Gazprom shares.
“We’re talking about not only personal enrichment with the violation of Russian laws by illegally buying up stocks in strategically important gas monopolist Gazprom, but it’s about intending to impose their own rules on that company,” Alexandrov said.
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Russia Says New Fraud Charges Against Browder
Russian authorities announced new fraud charges against U.S.-born investor William Browder, escalating pressure in a politically charged case that has fueled tensions between Moscow and the West.
The new charges come as a Moscow court is set to begin hearings in a rare posthumous trial of Mr. Browder’s former lawyer, Sergei Magnitsky, on tax-evasion allegations next week.
Mr. Magnitsky died in a Moscow jail in 2009 after exposing what he and Mr. Browder claimed was a $230 million fraud perpetrated against the Russian government by senior police and security officials. A Kremlin human rights commission said in 2011 that Mr. Magnitsky was beaten and deliberately denied medical treatment, leading to his death. Russian authorities deny any wrongdoing and lower-level prison officials charged in the case have been acquitted.
The U.S. government, pushing for a full investigation of his death and the corruption allegations, passed a law known as the “Magnitsky Act” last year that imposes visa bans and asset freezes on Russian officials allegedly implicated in the case and other violations of human rights. The law triggered some of the worst tensions in years between Moscow and Washington. The Kremlin denounced the measure as unjustified interference in Russia’s affairs and retaliated by banning adoption of Russian children by Americans.
Mr. Browder, a U.K. citizen, is now pushing for passage of similar restrictions in Europe. He said Tuesday the new charges were “retaliation” for his global campaign. A Russian Interior Ministry spokesman denied that. Officials said they would seek his extradition to Russia, though so far western law-enforcement agencies haven’t cooperated in the probes.
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Magnitsky Partner Faces Charges In Gazprom Stock Case
Russian authorities say they are preparing to bring new charges against William Browder, the U.S.-born former employer of the late Russian anticorruption lawyer Sergei Magnitsky.
The Interior Ministry on March 5 said Browder, the founder of the Hermitage Capital investment fund, is accused of illegally purchasing $3 billion in shares in Russia’s state-controlled company Gazprom.
Browder has campaigned for the prosecution of those responsible for the death of Magnitsky, who died in pretrial detention after accusing Russian officials of fraud.
“They can sort of whip themselves up into a crazy frenzy of misuse of their own justice system, but it really has no impact on our campaign,” Browder told RFE/RL’s Russian Service after the announcement. “They killed Sergei Magnitsky, they tortured him to death. We’re going to get justice for Sergei Magnitsy. And the more of this crazy stuff they do, the more obvious it becomes that there is a criminal regime going on in Russia who are basically doing everything they can to cover up the murder, and we’re not going to let them cover it up.”
The announcement of the new charges against Browder came one day after a Russian court announced on March 4 that an unprecedented posthumous trial against Magnitsky for tax evasion will start on March 11.
Browder is a co-defendant in the trial and will be tried in absentia.
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