Posts Tagged ‘Hermitage’
Hermitage Capital calls for Russian inquiry into $330m ‘tax frauds’ uncoverred by Sergei Magnitsky
Lawyers for the London-based hedge fund Hermitage Capital Management have applied to the Russian authorities for an inquiry to be opened into the alleged involvement of a senior state official in suspected tax frauds worth more than $330m (£204m).
The alleged frauds were uncovered in 2008 by Sergei Magnitsky, Hermitage’s investigative lawyer whose death in custody while awaiting trial on allegedly trumped-up charges has become a national scandal.
Mr Magnitsky’s colleagues have unearthed new evidence that they claim shows the same two tax officials, Olga Stepanova and Elena Khimina green-lighted the rebates for both alleged frauds. Ms Stepanova has since been promoted to a senior post in the Russian defence ministry.
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Russia short of long-term capital despite windfall oil revenues
Russia, which has accrued large international reserves from windfall oil revenues, is short of long-term capital to stimulate economic growth, experts said at the St. Petersburg International Economic Forum last week.
“Russia really has a shortfall in long-term domestic capital that will support issues along with foreign capital,” Renaissance Insurance Group head Boris Jordan said at a roundtable discussion at the forum.
Russia has long been seeking to diversify its economy away from a dependence on on oil and gas exports, the largest source of budget revenue.
“It is quite easy to raise capital from everything connected to raw materials, oil, gas production and local monopolies,” President of the United Shipbuilding Corporation Roman Trotsenko said. “It is very difficult for companies working on the open market, in a completely competitive environment, to raise capital.”
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Investors to Gauge Climate at Forum
When corporate leaders from around the globe gather in St. Petersburg on Thursday for the International Economic Forum, they will be treated to a picture of the country as modern and investor-friendly.
Special features this year include morning yoga, a business regatta and an open-air performance from British pop legend Sting on the city’s Dvortsovaya Ploshchad on Thursday evening, according to the forum’s cultural program.
Yoga might be welcome by participants eager to understand what is being said between the lines.
The Indian meditation practice aimed at achieving spiritual tranquility is reportedly a favorite pastime of President Dmitry Medvedev, who will attend the forum Friday and Saturday.
It is Medvedev’s political future that vexes investors as political uncertainty mounts in the run-up to December’s State Duma elections and the question over whether his “tandem” with Prime Minister Vladimir Putin will continue after the March 2011 presidential vote.
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Lawlessness Unlimited
Despite the Kremlin’s ongoing efforts to combat legal nihilism, there is little or no evidence on the ground of a change in support for the rule of law in Russia, a new study has found. Russia fared the worst of its BRIC peers (Brazil, India And China) when it came to upholding the principle of separation of powers and the observance of fundamental human rights, according to the Rule of Law Index report released on Monday.
“The country shows serious deficiencies in checks and balances among the different branches of government (ranking 55th), leading to an institutional environment characterized by corruption, impunity, and political interference,” said the report, which was prepared by the World Justice Project and funded by a grant from the Bill and Melinda Gates Foundation. “Violations against some fundamental rights, such as freedom of opinion, freedom of association, and arbitrary interference of privacy are areas of concern.”
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Congress goes after Russian officials for human rights violations
President Barack Obama is set to meet with Russian President Dmitri Medvdev on May 26 in France on the sidelines of the G-8 meetings. In advance of that meeting, Congress has unveiled a new bill to force the administration to sanction Russian officials for human rights violations.
“One of the core foreign policy objectives when we came into office was the Russia reset,” Deputy National Security Advisor Ben Rhodes told reporters on a conference call on Friday. “It has been one of the most productive relationships for the United States in terms of the signing and ratification of the New START treaty, cooperation on nuclear security, cooperation with regard to Iran sanctions and nonproliferation generally, the northern distribution network into Afghanistan that supports our effort there, and our discussions with Russia about expanding trade ties and their interest in joining the WTO, as well as Russia’s increased cooperation with NATO that was manifested by the NATO-Russia meetings in Lisbon.”
But Rhodes didn’t mention what most in Congress see as Russia’s backsliding on issues of democracy, freedom of the press, and human rights. A large group of senators introduced a bill on Thursday afternoon that they hope will force the administration to address this issue. Called the Sergei Magnitsky Rule of Law Accountability Act of 2011, it is named after the anti-corruption lawyer who was tortured and died in a Russian prison in 2009. The bill targets his captors as well as any other Russian officials “responsible for extrajudicial killings, torture, or other gross violations of human rights.”
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Sergei Magnitsky charges fabricated, says Russia inquiry into Moscow lawyer’s death
In a landmark investigation into the cell death of Moscow lawyer Sergei Magnitsky, a special Kremlin commission is likely to publicly implicate members of Russia’s Interior Ministry and FSB.
The metal cage used for prisoners in courtroom No 14 at the Tverskoi regional court was empty during a recent hearing, its door wide open, when the court considered the arrest of Ivan Cherkasov, a senior executive at British investment fund Hermitage Capital.
Mr Cherkasov, who lives in London, said he has no intention of returning to face charges of tax evasion he says are false. He said his arrest was an act of revenge by members of the Russian security services.
Just days before, an independent commission set up by President Dmitry Medvedev said that the charges in the case of Russian lawyer Sergei Magnitsky were fabricated and that Interior Ministry and FSB security service officers were at least partly responsible for Mr Magnitsky’s death in Moscow’s Butyrka prison in 2009.
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Panels probe Yukos and Magnitsky cases
The cases of Yukos and Magnitsky came into the public focus again over the week as experts of the European Court of Human Rights discussed the trials of Khodorkovsky and Lebedev and Russia’s Prosecutor-General probed the death of Hermitage Capital lawyer Sergei Magnitsky. And a panel at the Russian president’s Human Rights Commission is currently working on a report to shed more light on these high-profile cases.
According to a report published by the European Court of Human Rights, the trial against former Yukos chief Mikhail Khodorkovsky was not politically motivated.
In 2005 Mikhail Khodorkovsky and his business partner Platon Lebedev were sentenced to eight years in prison for embezzlement and tax evasion. In spring 2009 they faced another trial on charges of stealing oil and money-laundering. In December 2010, they were sentenced to 13.5 years in prison but the term was cut by one year later. In accordance with the court’s final sentence, the two will get out of prison in 2016.
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Why Khodorkovsky Matters
Over the past six months, I’ve written three columns about Mikhail Khodorkovsky, the former Russian oligarch who has been in prison since 2003, charged, tried, convicted — and recently reconvicted — on transparently bogus tax and embezzlement charges.
Partly, I keep returning to the subject because his lengthy imprisonment offends my sense of justice; his real crime, after all, was challenging Vladimir Putin, the Russian strongman. More importantly, Khodorkovsky’s fate stands as a powerful illustration of Russia’s biggest problem: the contempt the country’s corrupt rulers have for the rule of law.
Yet after each of those columns, I received feedback saying, essentially, that Khodorkovsky deserved what he got. Even if the crimes for which he went to prison were fictitious, he undoubtedly did bad things on his way to becoming Russia’s richest man. “He stole Russian national resources, truly the wealth of the nation,” read one e-mail, referring to Khodorkovsky’s role in founding the now-defunct oil company Yukos. “I have zero sympathy for him.”
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Law Society Event, A few words from me…
I went to the Sergei Magnitsky evening at the Law Society, 113 Chancery Lane, London on 26 May 2011. I wasn’t prepared for the impact of the screening of the hour-long Justice for Sergei that was filmed especially for the first anniversary of his death in prison on 16 November 2010. The movie made a strong point that Sergei could have escaped and he conscientiously didn’t make that choice. Until the last moment he believed in justice and rule of law, and he also believed that his duty as a lawyer was to document injustice and bring it to the attention of those in charge. That stated with his discovery of $230 million VAT tax reimbursement fraud and ended with the complaints about prison conditions that affected him and his fellow inmates among whom he often was the only one who could legibly complain and wasn’t afraid to do so despite the reality each complaint was followed by a deterioration of his conditions.
I thought that, after reading papers, online interviews and evidence submitted by REDRESS to the UN Special Rapporteur on Torture, I knew the story very well. After the screening, I couldn’t touch any part of the Magnitsky event in my mind and possibly write about it.
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