Banking News (Russian Federation) by Staf-Alliance

BANKING NEWS (RUSSIAN FEDERATION)

ISSUE # MARCH 2012

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Interior Ministry requests records in banks official’s fraud case

The Interior Ministry has requested for examination the case materials on Vnesheconombank Deputy Chairman Anatoly Ballo. "The materials in the criminal case were submitted for examination to the Interior Ministry's Investigative Department. A decision as to who will go on with the investigation will be taken in the nearest future," the source said. Investigators maintain that Ballo and his accomplices stole $14 million on September 24, 2008 as part of a loan provided to Evraziyskiy to purchase a 100-percent interest in Yugvodokanals' charter capital, the Interior Ministry reported on March 12. Evraziyskiy is a water supply operator in southern Russia. VEB has been Evraziyskiy's major shareholder since 2006. Investigators found that the stolen funds were placed into offshore companies' accounts in Swiss banks. Investigators charged him with fraud a week ago. He faces up to 10 years in prison. Ballo was detained by the security services, but Moscow's Tverskoy District Court later released him on bail.

20.03.2012

Central Bank Sees Big Surplus

The Central Bank forecasts a current account surplus of $100 billion in 2012, First Deputy Chairman Alexei Ulyukayev said. Commenting on the indicator, which reflects the country's overall net income, Ulyukayev said, "We anticipate a very positive current account. It will have a surplus of more than $100 billion." The statements were made in an interview with the Rossiiskaya Gazeta daily published Wednesday. The current account surplus in 2011, according to preliminary figures, grew 43.8 percent to $101.1 billion compared with $70.3 billion in 2010. The current account surplus in February 2012 was about $12 billion, Ulyukayev said. It was $12.2 billion in February 2011, Central Bank statistics show. The first deputy chairman did not make any predictions for this year's capital account — which reflects inbound flows based on borrowings or sales of assets. "As for the capital account, it is still too early to give a forecast. But new positions against the national currency are unlikely to be opened, enabling the investor amid other equal conditions to choose to return assets to ruble form," he said. The balance of payments will influence the exchange rate as will the state of the economy, he said. "If your GDP develops more quickly than the average around the world, it means your currency will appreciate faster. Russia currently has normal expectations for economic growth. GDP growth in 2012 will be a little lower than in 2011 (4.3 percent according to preliminary figures), but higher than average around the world," he said. The impact of external events on the exchange rate cannot be ignored, according to Ulyukayev. "Overall the potential for some ruble appreciation really exists," he said. Seasonal factors also need to be considered, Ulyukayev added. Export revenue is usually high in the first quarter and import spending low so the current account surplus is very high. In the third and fourth quarters the account comes down. "This does not mean the ruble will definitely weaken. So during the current year the chances for appreciation and depreciation are equal," he said. The Central Bank last reviewed its current account surplus forecasts for 2012-14 in November 2011 for all three versions of monetary-financing policy terms. The surplus did not reach $100 billion in any of the three versions that took into account different oil prices. Meanwhile, in the same article Ulyukayev predicted that the "worst is over" for the euro zone's economy, which will probably return to "slow but stable growth" in the second half of this year. Still, the continent's common currency will continue to be volatile for "a very extended time" because of an inflexible and time-consuming decision-making process, Ulyukayev said.

01.03.2012

VTB Eyes Bulgaria Company

VTB Capital is considering the acquisition of Vivacom, Bulgaria's biggest fixed-line phone company, together with the Sofia-based Corporate Commercial Bank, said Atanas Bostandjiev, chief executive of VTB Capital. "We are looking at the deal in partnership with the Corporate Commercial Bank," Bostandjiev said late last week. "It is a very complex transaction, and it is too early to say anything more specific." Vivacom is majority-owned by PineBridge Investments, Hong Kong businessman Richard Li's investment-management firm. Vivacom breached terms on 1.6 billion euros ($2.1 billion) of loans a year ago, which led to its sale.

05.03.2012

Bank of Russia and Swedish regulator pen memorandum of understanding

The Bank of Russia and the Swedish Financial Supervisory Authority signed a memorandum of understanding on cooperation in the area of banking supervision, RIA Novosti wired quoting CBR data. The regulators of the two countries intend to interact in the field of banking supervision over trans-border institutions. Cooperation covers licensing (the issue and revocation of licenses), control over ownership, current supervision of the operation of trans-border institutions, the trans-border provision of banking services, cooperation in counteracting laundering of criminal income and the financing of terrorism, and also the conduct of inspections at trans-border institutions. Upon receipt of a request to provide assistance supervisory bodies intend to exchange information on trans-border institutions to promote the efficient implementation of supervisory duties. The Swedish Financial Supervisory Authority supervises banks and financial institutions in the country. The authority issues licenses to banks. If the granting of a license is important, the government deals with this. The Swedish Financial Supervisory Authority is responsible for issuing licenses to all other lending institutions.

07.03.2012

Domodedovo Takes a Loan

Domodedovo, the operator of Russia's largest airport, secured 165 million euros ($216.5 million) in a five-year syndicated loan for general corporate purposes, one of the arrangers said in a statement Sunday.Raiffeisen Bank, which arranged the deal along with ING and Rosbank, added that the loan was raised at a rate of Euro Interbank Offered Rate plus 2.8 percent. Domodedovo had planned to list its shares last year but postponed the deal due to weak markets.

12.03.2012

VTB Capital to Run Tenders

VTB Capital will run the sale of the state's 55 percent stake in the Vanino seaport and 25 percent stake in power generator TGK-5, which are among state assets marked for divestment by the end of next year, the investment bank said Tuesday after signing an agreement with the Federal Agency for State Property Management. The state's previous attempt to sell the holding in Vanino was blocked in May, when a little-known company bid up the starting price 11 times and then failed to complete the payment, Kommersant reported last month. Vekselberg, who controls TGK-5, said in October that his IES Holding would bid for the state's stake in the generator.

14.03.2012

Finance Ministry proposes establishing Russian Finance Agency

The Finance Ministry of Russia proposes setting up OJSC Russian Financial Agency (Rosfinagentstvo) and providing it with the powers and authority in the field of placement and service of government debt, management of available budget funds, national funds, and also of pension accruals, said a draft law posted on the ministry’s official web site. In line with the draft law, a specialized financial institution will be established by the Russian government as an open joint stock company and it will be assigned with the functions to place and maintain records of government financial assets, including resources of the Reserve Fund and the National Welfare Fund (NWF). The institution, in turn, will be able to assign them on trust management terms to other specialized financial institutions. This institution is also proposed to be vested with the Finance Ministry’s functions to place, repurchase, swap, service, redeem and maintain records of Russia’s government debt obligations. Furthermore, the institution could also be authorized to place and maintain records of available budget funds as part of the measures to manage resources of the Unified Treasury Account, and also to place and maintain records of pension accruals of Russian citizens. The draft law’s authors believe that the concentration of the above functions at one institution create conditions for coordinated management of government financial assets and debt obligations. “The performance by the institution of said functions will contribute to improving the quality and efficiency of management of Reserve Fund and NWF resources, and also Russia’s sovereign debt, will minimize interest and currency risks for the federal budget," an explanatory note said. Meanwhile, the Russian government will be able to impose additional requirements for Rosfinagentstvo employees, including the obligation for them to provide information on income, property and obligations of the property nature, on income and property of their spouses and minors, and also to impose on them restrictions and bans related to the fulfillment of their official duties. The political decision on the establishment of this institution was adopted prior to the crisis in 2008. Last August the Finance Ministry of Russia said that accord was reached among various authorities of the economic block on the agency’s establishment and the form of its creation. Moreover, the government was planned to submit a draft law on the establishment of Rosfinagentstvo to the State Duma in autumn 2011, but this was not done.

15.03.2012

Sberbank Tops Russia’s Most Reliable Banks List

State-controlled Sberbank and VTB Bank are the most reliable banking institutions in Russia, according to a ratings list published by Forbes on Monday. Russia’s largest 100 banks were graded using the estimates of rating agencies in February 2012. The rating scale ranges from the highest level of five points (BBB grade) to the lowest level (two points, or CCC). The most conservative estimates were used if several ratings were available. Sberbank tops the list with five points and assets of 10.4 trillion rubles ($347 billion) followed by VTB also with five points and assets of 4.1 trillion rubles ($138 billion). Gazprombank, affiliated with Russian energy giant Gazprom holds third place with four points and assets of 2.4 trillion rubles. The local subsidiaries of foreign banks, UniCredit Bank, Raiffeisen Bank, Citi Bank, Nordea Bank, Intesa Bank, BNP Paribas, ING Bank Eurasia, Rusfinancebank and DeltaCredit also scored the highest five points on the Forbes List. Deutsche Bank, a subsidiary of the German banking giant scored only one point on the Forbes scale. The Russian banks on the Forbes list of the top ten reliable banks also include state-controlled Russian Agricultural Bank (fourth place), Bank of Moscow (fifth place), VTB-24 Bank (sixth place), Alfa-Bank (seventh place) and Rosbank (ninth place).

19.03.2012

Siluanov Backs Higher Capital Requirement

Finance Minister Anton Siluanov said he supports a proposal under discussion by the government for a more than fivefold increase in the minimum capital requirement for banks after 2015 to spur consolidation. Raising the limit to 1 billion rubles ($34 billion) from the current 180 million rubles would be "possible and normal," Siluanov said in Moscow Wednesday. The minimum is already scheduled to rise to 300 million rubles by 2015 and no decision has yet been made to increase it from that level, he said. Siluanov, who pledged last September to "continue the work that was already started" under former Finance Minister Alexei Kudrin, is affirming his ousted predecessor's stance to lift capital buffers to 1 billion rubles. Kudrin said in October 2010 that the proposal, which he estimated might halve the number of banks to about 500, would be delayed because of continued "tension" in the financial industry. The country had 974 lenders on March 1, down from 1,058 at the start of 2010, Central Bank data show. Only 109 Russian banks exceed the capital level of 1 billion rubles as of March 1, Interfax reported, citing Central Bank Deputy Chairman Mikhail Sukhov. The government expects further consolidation of the financial industry, "with the creation of large banking groups, including some that control a large share of the market," according to a document published by the Finance Ministry in March 2011 outlining a state strategy for banks to 2015. "As the consequences of the financial crisis are overcome, the banking sector will develop amid tougher competition in the most profitable segments," the government said in the document. Russia's five largest lenders boosted their assets this year to control a combined 50.5 percent of the banking system on March 1, compared with 47.7 percent at the start of 2011, according to the Central Bank. The country's top four banks are controlled by the state.

22.03.2012

Gazprombank looking to place $1 bln Eurobond in 2012

RIA NOVOSTI. Gazprombank plans to place Eurobond worth around $1 bln in 2012, as RIA Novosti wired, the bank’s deputy management board chairman Alexander Sobol said. “This year we plan to float Eurobonds for up to $1 bln," he said. According to Sobol, the bank will place the paper, most likely, in the second half of the year. Gazprombank needs borrowed funds to increase its credit portfolio. “We have a lot of credit applications from major companies," he pointed out. Last time the lending institution tapped the debt market at the end of 2011, floating Eurobond for CHF 420 mln. Moreover, Gazprombank has three outstanding Eurobond issues for $1.62 bln and also ruble-denominated Eurobonds for Rub 20 bln.

23.03.2012

Former Russian Banker in Coma After London Attack

A former Russian banker is in a critical condition following an attack by an unknown gunman in the business area of London’s East End, the Russian Kommersant daily reported on Friday, quoting local police.German Gorbuntsov, a former owner of several banks in Russia and Moldova, who is living in London, was approaching his house on the Isle of Dogs late in the afternoon on March 20, when an attacker armed with a submachine gun opened fire on him, police said. The gunman fled the scene before police arrived. Gorbuntsov was seriously injured and taken to hospital, where he has been placed in a medically induced coma, the report said.Gorbuntsov’s lawyer, Vadim Vedenin, says he thinks the attack may be linked to his client’s role in a 2009 investigation into a murder attempt on another Russian banker Alexander Antonov. Three ethnic Chechens were charged with the attempted murder but the organizers remain unidentified and the case was closed until this year. It was reopened on March 2 after Gorbuntsov, who himself had been investigated as possible ringleader, submitted a new testimony to police, which they believe suggested the involvement of Gorbuntsov's former business partners, Pyotr Chuvilin and Sergei Mendeleyev, Vedenin told the paper.The two men have denied any links to the case, the report said. Gorbuntsov is also wanted in Moldova, on several charges, including an illegal bank takeover and embezzlement. Moldovan prosecutor Viorel Radetsky told the newspaper that investigators had already collected “major evidence” against Gorbuntsov, adding that the Moldovan Prosecutor’s Office was cooperating with Russia’s law enforcement authorities on the case. However, Gorbuntsov’s Moldovan lawyer Valery Andronik told Kommersant he believed the attack on his client was unlikely to have been masterminded in Moldova. “He told me several times: ‘If I go back to Russia, they will kill me’,” the lawyer said.

23.03.2012

Promsvyazbank Looks at $500M Bond Issue

Alexei and Dmitry Ananyev were ranked by Forbes this year as Russia’s 49th richest men, with $1.8 billion each. Promsvyazbank, one of Russia's largest privately owned banks, may issue eurobonds worth about $500 million in the second quarter of 2012 and float shares later in the year if market conditions allow, a top executive said. The lender also plans to increase net income in 2012 but expects conservative loan book growth due to uncertainty over Greece's debt woes and instability in the Middle East, first deputy chief executive Alexandra Volchenko said.External markets, largely closed for Russian borrowers in the second part of last year, started to reopen after the European Central Bank pumped liquidity into the banking system and lenders accepted a Greek debt restructuring. "We will take advantage of the positive environment during the second quarter. … We will discuss the amount, but it is likely to be comparable to our outstanding [eurobond] issue of $500 million," Volchenko said. Promsvyazbank last placed a three-year eurobond issue worth $500 million in April with a 6.2 percent coupon. The bond is now trading around par. Volchenko added that the lender might also raise a syndicated loan in the fall, but gave no details. Promsvyazbank, in which brothers Dmitry and Alexei Ananyev own a 74 percent stake, considered an initial public offering before the global financial crisis of 2008-09, and it is returning to the idea, as investor sentiment warms toward emerging markets. Volchenko said Promsvyazbank might launch an IPO in the second half of 2012 if markets stay in positive mood. "We are in quite a high state of readiness for an IPO. … But everything depends on the markets. If the situation is favorable in the second half of 2012 we will do it. If not, we will go in 2013," she said. Volchenko said Promsvyazbank might float a stake of about 25 percent in the form of new and existing shares, raising some $1 billion. The deal, if successful, would be the biggest among nonstate Russian banks since Nomos bank raised more than $700 million in an IPO last April. Apart from the Ananyev brothers, the European Bank for Reconstruction and Development owns an 11.75 percent stake in Promsvyazbank, while 14.37 percent belongs to Germany's Commerzbank. Commerzbank is to sell its stake in Promsvyazbank to the Ananyevs by the middle of the year, as the German lender needs cash to boost capital to ensure it can withstand any future financial crises. Volchenko declined to say how much more Promsvyazbank shareholders are going to pay for Commerzbank's stake but added that the deal is due to be closed by July 1. Volchenko said the lender managed to achieve its profit target last year and aims to earn about 9 billion rubles ($306 million) in 2012, with a return on equity of 15 percent. She declined to detail 2011 results, which are due out next week. In August, Promsvyazbank cut its 2011 profit target by a third to 5 billion rubles after downgrading its view on the prospects for the Russian economy. The lender, which grew its loan book by more than 20 percent last year, plans loans growth of about 15 percent this year and is targeting a net interest margin of about 5.5 percent, up from 5 percent last year.

23.03.2012

VTB Bank could buy 40% of Ingosstrakh

VTB Group is holding negotiations over the purchase of nearly 40% of Ingosstrakh shares from Czech group PPF and Italy’s Generali, a source close to one of the Russian insurer’s shareholders told Vedomosti business daily. The fact these negotiations are in progress was confirmed by a VTB Group executive and a PPF source. A VTB Group manager engaged in the strategy to expand insurance assets sees several scenarios of using a new asset if the deal goes through. Under discussion is to combine VTB Group’s insurance assets (VTB Insurance and MSK Insurance Group) and those of Ingosstrakh, and VTB Group will be able to gain a controlling interest in such joint venture, the newspaper’s respondent specified. Another possible scenario is to sell an equity stake in Ingosstrakh during the insurer’s IPO, he said. VTB Group and Basic Element, another co-owner of Ingosstrakh, do discuss teaming up in the insurance sector, confirmed a Basic Element executive, but the state-run bank’s sale of an interest in Ingosstrakh in an IPO is also one of the options. Of course, if VTB Group succeeds in making arrangements on the deal with PPF owner Petr Kellner. The talks also involve Generali that through partnership with PPF also invested some money in Ingosstrakh, said two Vedomosti respondents who are familiar with the course of consultations. It is even simpler for VTB Group to talk with the Italian company than with PPF, they pointed out: last year Generali invested $300 mln in VTB Bank shares and discussed with the Russian lender an option to set up a joint venture in the insurance sector, but suspended talks because of the problems related to investment in Italian sovereign bonds. They did not say how the sellers and the buyer assess a 40% interest in Ingosstrakh and when the deal could be transacted. It cannot be ruled out that the parties will not come to an agreement, one of the sources said. Expert RA deputy general director Pavel Samiev assesses 40% of Ingosstrakh at $1 bln. This is one of the best assets on the Russian insurance services market, he said. Basic Element owner Oleg Deripaska and PPF teamed up five years ago when Alexander Mamut sold his interest in Ingosstrakh for $700—750 mln to PPF Investments (PPFI), a fund that manages money of Czech billionaire Petr Kellner and his partners. Since then Basic Element and PPF have been involved in a long corporate war in courts and in the media. The foreigners managed to fend off an attempt to dilute their interest by an additional share issue, but they failed to impact Ingosstrakh’s management. VTB Bank is a clearer partner for Deripaska, said a source close to him, and it will be simpler to carry on business and make agreements on disputed issues with the bank, he hopes. Furthermore, VTB Bank is a major creditor of Basic Element and its companies. The total amount of loans provided is not disclosed, but, for example, during the crisis the state-run bank lent Russian Machines and recovered debt from Glavstroy. VTB Group is also a partner of Basic Element in some projects: last year VTB Capital acquired a 4.35% stake in energy holding En+ for $500 mln. Representatives of VTB Group, PPF, Generali and VTB Capital (advises on the deal) declined to comment.

27.03.2012

Bank of Russia announces changes in government securities trading

The Central Bank of Russia declared changes in trading in government securities. As the regulator’s PR department reported, “in accordance with the joint plans of the Finance Ministry of Russia and the Bank of Russia to liberalize the market of federal government securities (later referred to as government securities) and due to the permission to list government securities on MICEX Stock Exchange effective February 13, 2012 there will be the following changes on the government securities market: (1) prior to March 5, 2012 government securities will trade in the trading system of MICEX-RTS (in the government securities section) in full in accordance with the effective statutory framework of the government securities market and on MICEX Stock Exchange in accordance with MICEX Stock Exchange’s trading regulations, and also on the OTC market; (2) starting March 5, 2012 the conclusion of new transactions with government securities in the government securities section will discontinue in all trading regimes, except the one when the Bank of Russia places government securities on behalf of the Finance Ministry of Russia”. As specified, the Bank of Russia will hold auctions to float government securities in the government securities section until the Finance Ministry of Russia takes a decision to shift the placement to the stock exchange. “Meanwhile, after March 5, 2012 it will be possible in the government securities section, before its final close, to execute previously concluded outside-system deals with execution dates (including also direct repurchase transactions with the Bank of Russia) on the dates as established at the time of entering into such transactions," the Bank of Russia said in a press release. After March 5, 2012 direct repurchase transactions with government securities will be entered into by the Bank of Russia only on MICEX Stock Exchange and the Saint Petersburg Stock Exchange, the regulator specified.

05.03.2012

The Finance Ministry of Russia will oblige management companies to disclose profit earned since they begin to manage pension accruals

The Finance Ministry of Russia plans to impose an obligation on management companies to disclose information on profit earned since the conclusion of an agreement on the management of pension accruals, said Elena Artemova, head of the ministry’s department, at a forum devoted to the management of private capital in Russia, Central and Eastern Europe. At present, according to her, amendments to the order on the manner of information disclosure, which oblige to disclose this information, are being agreed upon with the Russian Pension Fund and the Ministry of Healthcare and Social Development. Currently, management companies disclose information on profit earned from the management of pension accruals for the past three years. The amendments will allow to see results of management since the signing of a relevant agreement, which will enable the Pension Fund of Russia and private pension funds, if no profit is derived, to demand the dissolution of the agreement, Artemova said. The ministry’s official also said that she sees no reasons to broaden the list of instruments, in which pension accruals are permitted to invest. At present, management companies may invest pension accruals only in securities from the A1 quotation list. “Most proposals to broaden the list of securities permitted for investment lack sufficient reasons, proposals are worded as “we want, but no analysis was performed”, Artemova said. “When we introduce an instrument, it should be reliable, should have a track record," the ministry’s representative thinks. She believes that this is not correct to promote new instruments at the expense of pension accruals. Setting a profitability benchmark for pension accruals for management companies could lead to excessive attention of asset managers to the deviation from this benchmark to the prejudice of other indicators. Management companies would have to offset the negative deviation from this indicator using own funds. The second negative result of imposing the benchmark, Artemova thinks, could be that investment portfolios of various management companies could become similar.

15.03.2012

Finance Ministry set to submit draft law on prudential supervision over banks to government

In the near future the Finance Ministry of Russia will submit to the government for consideration a draft law that would allow the Bank of Russia to take decisions on prudential supervision at banks based on motivated judgment, Finance Minister Anton Siluanov said at a banking conference on Wednesday. “Soon we’ll submit to the government a draft law allowing the Bank of Russia to take decisions on prudential supervision over banks based on the so-called motivated judgment," he said adding that this issue previously gave rise to discussions, but the Finance Ministry was understood by all ministries and agencies concerned at the government. Siluanov emphasized that he regards these proposals to be important for the regulation of prudential supervision. “If a bank were able to make such motivated judgment a year or two ago, a number of problems at commercial banks, including major ones, would have been avoided," he said. The finance minister hopes this amendment will be approved and brought to the State Duma in coming weeks.

21.03.2012

Bank of Moscow wins $16 mln from insurer

The Moscow Commercial Court ruled on Monday to collect from Strakhovaya Gruppa $16.4 million in loan debt for the Bank of Moscow. A pretrial session was to be held on Monday, but the insurer fully accepted the bank's claims. The parties did not object to hearing the case on its merits and the judge passed the award. Both the plaintiff and the defendant declined to comment on the dispute. The court is in the middle of considering two more Bank of Moscow lawsuits against the insurer: for 1.418 billion rubles ($48.4 million) and for 1.16 billion rubles ($39.6 million). Strakhovaya Gruppa is a major shareholder of Stolichnaya Strakhovaya Gruppa, holding a 50 percent minus one share stake. Stolichnaya Strakhovaya Gruppa manages an insurance holding that includes Strakhovaya Gruppa MSK, the Moscow Reinsurance Company and MSK- Life. The Bank of Moscow is restructuring its finances with the assistance of the Deposit Insurance Agency and the VTB Group, which holds a 94.8-percent interest in the bank. An inspection initiated by VTB, the bank's new shareholder, uncovered bad loans in its credit portfolio. The Deposit Insurance Agency allocated a 295 billion ruble ($10 million) loan to the bank at the expense of Central Bank reserves. The loan was granted for 10 years at a discounted rate. The loan was then invested in federal loan bonds, which helped to close the gap in the banks finances. In December, VTB raised its share in the Bank of Moscow from 80.57 to 92.22 percent by acquiring shares from Strakhovaya Gruppa MSK.

05.03.2012

Sberbank's $29 mln claim included into shipbuilder's creditors' list

The St. Petersburg Commercial Court has included Sberbank's $29 million claim into the creditors' list of the Baltiysky Zavod shipbuilding company. Sberbank earlier sought to include its $1.5 million claim in the creditors' list, but reconsidered its claim in late February. The bank seeks to recover the debt for a loan contract signed in October 2009. Sberbank issued a $68 million loan to Baltiysky Zavod to finance its production activities. The loan was set to mature in June 28, 2012. The St. Petersburg Commercial Court will also hear on April 28 the tax service's request to include its $11 million claim into the creditors' list.

07.03.2012

Bank of Moscow's $7 mln action against developer to be heard in May

The Moscow Commercial Court will consider on May 12 two Bank of Moscow lawsuits to collect from Premier Estate and TD Ramenskaya almost $7 million in loan debt. On Monday, the court held a preliminary hearing of the lawsuits over loans provided to TD Ramenskaya and guaranteed by Premier Estate. TD Ramenskaya was part of Inteco, formerly owned by Yelena Baturina, Russia's richest woman and the wife of Moscow ex-Mayor Yuri Luzhkov. One of the lawsuits concerns a 64.74 million ruble (($2.2 million) loan issued in several tranches between October 2009 and June 2010. Considering the penalties and interest, the amount in the claim is 77.114 million rubles ($2.6 million). The other lawsuit stems from a 109.45 million ruble ($3.7 million) loan granted in tranches from June 2010 to March 2011. Given the interest and penalties, the claim totals 127.758 million rubles ($4.3 million). The repayment of the loans has been accelerated as the company has failed to pay interest on time and did not produce its accounting reports. The defendants have not accepted the claims and will prepare its detailed arguments for the trial. The Investigative Department opened a criminal case against former Bank of Moscow President Andrey Borodin and his deputy Dmitry Akulinin in late 2010. Borodin and Akulinin were charged with embezzling 12.76 billion rubles ($432 million) from the Moscow budget through a loan to Premier Estate. Premier Estate used the funds to purchase a 58 hectare land plot from Baturina's TD Ramenskaya in Moscow. Prior to granting the loan to Premier Estate, the bank issued new shares worth 15 billion rubles ($508 million). The stake was purchased by the Moscow government, the bank's majority shareholder. Investigators say the bank's personnel were well aware of the false information that Premier Estate submitted about the pledge to secure the loan. Inteco insisted that the land purchase deal was valid. Borodin and Akulinin are under investigation in another case that was opened this winter. Now, they are suspected of stealing 6.7 billion rubles ($227 million).

12.03.2012

FUTURE EVENTS

INTERNATIONAL FINANCE BANKING AND INSURANCE CONGRESS

18-22 April 2012 Antalya, Turkey

Website: http://www.fibacturkey.org

Contact name: Dr. Nazan Caglar

This conference intends to be a global forum for researchers to present and discuss their recent research findings and new techniques and to create an effective network of cooperation in Finance, Banking & Insurance.