Story: The investigative team has denied Vladimir Krasnov, the lawyer asked by Andrei Borodin to represent him, access to participation in the criminal case on charges brought against Andrei Borodin.
Examination, by the Tverskoi Court, on July 18 of a complaint against this decision resulted in a judgment on this urgent matter being postponed until a later date.
Therefore, the violation of Borodin’s right to defense continues. He sees the situation as evidence of the biased nature of the criminal prosecution against him.
In the meantime, the criminal case and communications support for it are going into overdrive.
What can a lawyer be busy doing who has accepted a client’s assignment to represent him but who has been prevented by an investigator, under an artificial excuse, from participating in the criminal case?
He could be appealing the illegal decision in a court of law and studying media coverage, since, due to the above reason, he is unable to familiarize himself with the criminal case file.
The following has been established as a result of this forced “sabbatical”.
The State-owned [bank] VTB has acquired the Government of Moscow-held stake in the Bank of Moscow where Andrei Borodin used to be President, i.e. municipal property, for RUR 103 billion. Technically, the stake was paid for with VTB’s money, however de facto, as far as I understand, it was government money, meaning, at the end of the day, that it was paid for with budget funds.
Did the Government of Moscow have the right to sell what it owned?
It most certainly did.
Was it required to follow a statutory procedure (independent appraisal, tender, etc.)?
It most certainly was.
Was the procedure complied with?
Did the transaction proceeds go to the municipal budget?
I have not found any information to that effect in the media, which is surprising, since, given a 2011 budget deficit guarantees, announced by Mr. Sobianin and intended to maintain social safety net programs, the Muscovites would really like to know.
Was the takeover of the Bank of Moscow by VTB a friendly transaction?
Based on all characteristics, the answer is no. However, it is business, so it is kind of like there is nothing personal here.
Was VTB required, after closing the transaction, to send an offer to the other Bank of Moscow shareholders?
It most certainly was.
Did it do so? Alas, based on media reports, it did not.
Did Andrei Borodin take steps to resolve what, in the beginning, seemed like a corporate conflict?
The media have published this statement by VTB President Alexei Kostin:
We and Andrei Borodin have agreed to cooperate, jointly make corporate decisions, and discuss the matter of buying out his stake. The deal may close before the end of March… We have an understanding of what kind of price we are willing to pay… We will not make any unilateral decisions
For obvious reasons, the media did not discuss the progress of the negotiations. However, judging by the fact that an obvious sea change occurred soon and unilateral efforts commenced to leak to the media compromising information about the conduct of the former Bank of Moscow management the negotiations ended without ever beginning.
On March 23, 2011, Borodin submitted a public offer to VTB to buy out shares formerly owned by the Government of Moscow at the price of the April 8, 2011 transaction. By then the results of the Bank of Moscow audit by the RF Audit Chamber were available (at the time, the Audit Chamber’s estimate of the amount of the so-called bad loans made by the bank was significantly lower than according to rumors in the media).
One would think that it turned out that a State-owned bank had paid RUR 103 billion for a major-league financial “hole”.
One would think that a market-driven solution would be to accept Andrei Borodin’s offer and to walk away from the deal without sustaining any losses.
This is not what happened though.
The response was, as they say, asymmetrical as, on April 6, the investigative team selected a measure of restraint against Borodin and, on April 11, the same Tverskoi Court “temporarily” suspended Borodin from his position as President and Member of the Board of Directors of the bank.
This last detail is especially telling since these days, apparently, a court of law is able, if necessary, to appropriate the exclusive powers of the general meeting of shareholders.
Simultaneously, an aggressive and professional inflammatory campaign has been mounted in the media with regard to Andrei Borodin and the situation at the bank: following the rules of maneuvers (which, as you know, are more important than war itself), the heavy artillery has been brought in.
Deputy Prime Minister and Finance Minister Alexei Kudrin, without waiting for the outcome of an audit by the Central Bank and the results of investigative actions, has announced for the city and the world to hear, as if it were a proven fact, that certain actions by Andrei Borodin were «clearly unlawful».
Mikhail Zadornov who, one would think, is an experienced politician and financier, has exposed himself in the sense that, against the law, he has somehow come into possession of – and has been publicly disseminating them – completely confidential data from Andrei Borodin’s tax returns that allegedly suggest that Borodin’s income was not sufficient for him to buy 20, or even 11 for that matter, percent of the bank’s stock, clearly “offering a hint” to the law-enforcement agencies where else to look for “unlawful behavior”.
(FYI: As a private individual, Borodin owns 25 shares, which he apparently purchased after denying himself a cup of coffee at lunch).
The loud (since it aired live on Kommersant-FM on July 11 of this year) interview with new Bank of Moscow President M. Kuzovlev could not be possibly viewed as a source of information in this case since it made no sense.
It can be gleaned from interviews granted and comments offered by the above-mentioned and other individuals that my client allegedly «made unilateral decisions to extend loans to various organizations», «forged official documents», «concealed information and directly deceived regulators, shareholders, and auditors», «knowingly violated corporate procedures», «siphoned off assets» and did many other things.
All that behavior, had it actually happened, contains attributes of specific criminal offences. In the meantime, those who offered comments, while “stumbling over their own testimony”, have reported all of the above as if those were actual and ostensibly established facts; undaunted, they have ventured to pass judgment on the economic rationale of certain activities and decisions by the management of a commercial entity, clearly without having the authority or information to do so.
Thus, «improper persons» who have assumed the functions of investigators and prosecutors, have “appointed” as the principal culprit of “the key problem” Andrei Borodin who I have been deprived of an opportunity to defend as per the statutory procedure and who has been denied a chance to honor a public commitment to resolve the problem at his own expense and thus defend his reputation.
An interview with Vitaly Yusufov in Kommersant on July 15, 2011, is quite telling in this regard. If only everyone undertaking to discuss this matter chose their words as carefully! True, I cannot agree with him to the extent that «defense against criminal prosecution is prosecuted under the law». What should be prosecuted is obstruction of a lawful defense in a criminal case, which is what is going on here. Apparently, Yusufov was referring to illegal waiver of criminal liability. If that is the case, he is absolutely correct.
I believe that all those interviews and statements serve to discredit my client and to put pressure on the public opinion and law-enforcement agencies.
It would be counter productive to respond to such attacks since a discussion of rumors and speculation would take us outside the scope of the law, which, as I understand, is exactly what our opponents are seeking to accomplish above all.
Such tactics are not new.
In yet another high-profile case that I participated in, someone else stood accused of one thing, while something different was said publicly, while still something else was meant. If one were to compare the data in the Bank’s official 9 month report for 2010 with today’s estimates, then indeed the shareholders and other interested parties have every reason to feel despondent about [what has occurred] over the duration of – let us call this – corporate conflict.
In her thorough piece “Our Domestic Lehman Brothers” (Daily Magazine, July 18, 2011), Yulia Latynina has said, in one instance, that «USD 150 million has been carried out» of the bank, and, in another instance, has referred to «a spectacular, USD 14 billion wide, hole».
So, is it 14 billion or 150 million after all?
Neither number in her piece resembles other [numbers] cited by other sources: such as the proverbial RUR 150 billion or the approximately USD 4.5 billion. I think you will agree that «size does matter». If numbers vary by hundreds of percent in a single piece authored by a top-notch professional like Yulia Latynina that means that there is something wrong with the sources of information. The same is true of the loan provided to Yusufov Jr. that was either extended by the «former management» (according to Latynina), or «with the knowledge of VTB» (Vedomosti, July 18, 2011). And, of course, it was a complete surprise when Deputy Chairman of the VTB Board Herbert Moss stated that, apparently, the acquisition of the Bank of Moscow improved both the current financial performance and the VTB Group’s 2011 estimates (Vedomosti, July 19, 2011). If that is true then what kind of «spectacular hole» are they even talking about?
Of course, it is not about the numbers but about the fact that there is a lot of superficial [talk] about both the Bank of Moscow and about Andrei Borodin, both due to ignorance and, also, quite intentionally.
It seems that, against this background, some people have failed to heed the appeals, by Ye. Yasin, S. Aleksashenko, A. Grigoriev, and A. Navalnyi, to the effect that unilateral assessments are impermissible; have failed to attach importance to a credible opinion voiced by Vladimir Radchenko and Alfred Zhalinsky and published during the same period of time to the effect that «criminal justice continues to be used as a tool of redistributing property» in this country (Vedomosti, 06.24.2011).
I will reveal a defense attorney’s secret – I have added to my arsenal these opinions expressed by professionals.
It seems that now that the audit by the RF Central Bank has been completed a serious conversation is resuming about the situation around and inside the Bank of Moscow, a bank, as the CB only recently believed, that was among Russia’s systemic and most reliable financial institutions. Simultaneously, the media have reported new twists and turns in the criminal case, a case in which I have so far been prevented from participating. That means that I will fight, in a court of law, to have my client’s rights reinstated and I will continue to study the “case file” using the same sources”.