Embattled Bank of Moscow president ‘ready’ to return to Russia

Bank of Moscow President Andrei Borodin said on Tuesday that he intends to return to Russia despite police plans to charge him with illegally granting a $444 million loan to Yelena Baturina, wife of the capital’s former mayor.

“Last week police asked a court to relieve Borodin of his duties, after which he was to be charged and a restraint on travel imposed,” a police source said earlier.

A Moscow court rejected the request and Borodin then fled Russia, the source said. He faces up to 10 years in prison if convicted.

However Borodin told RIA Novosti in a telephone conversation that he was ready to sell his joint-ownership of a 20.3% stake in the bank to the VTB bank based on a market capitalization of $6 billion.

He also said he is receiving medical treatment abroad and is ready to return to Russia as soon as he recovers.

“I intend to return as soon as my health permits me to,” he said without elaborating on the nature of his illness.

Banking sources said Borodin, whose duties are being temporarily performed by Bank of Moscow Vice President Sergei Yermolayev, was in London, where former Moscow Mayor Yury Luzhkov and his wife are thought to be resident. The Bank of Moscow said Borodin was on sick leave.

Investigators raided Premiere Estate, a property company owned by Baturina, in February as part of a probe into misuse of Moscow city funds in connection with the 13 billion ruble loan to her. Police also raided the Bank of Moscow and the homes of some of its directors.

Police think some of the bank’s staff helped embezzle money which ended up in Baturina’s account. The loan granted by Bank of Moscow was allegedly used in a complex series of deals to buy land in Moscow owned by Inteco, Baturina’s construction and real estate firm, at an excessive price, in order to slash the firm’s debts.

Both Inteco and Baturina have consistently denied any impropriety in connection to the deals.

Meanwhile, a fight for control over Bank of Moscow has been going on since February, when Russia’s second largest bank, state-controlled VTB announced a gradual acquisition of Bank of Moscow, the capital’s investment vehicle. The Moscow government sold its stake in the bank to VTB for 103 billion rubles after President Dmitry Medvedev fired Luzhkov last fall.

VTB now owns a 46.48% share in Bank of Moscow and plans to gain a 100% control. Borodin and his business partner Lev Alaluyev hold a 20.3% stake in Bank of Moscow.

Borodin gained a court injunction blocking the acquisition of Goldman Sachs’ 3.88% stake in the bank, which would have increased VTB’s share in Bank of Moscow to a controlling interest.

MOSCOW, April 5 (RIA Novosti)

Leave a comment