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Statement by Andrey Borodin

Recent reports in the Russian media, in particular on the state TV channel First Channel, about the so-called problems in Bank of Moscow came as no surprise to me. We should wonder why these allegations are being repeated and why new threats are being made at this time. In my view the answer is simple: my legal team in Moscow recently has been persistently asking difficult questions about the missing funds apparently paid by VTB to the City of Moscow for the City’s 46.5% stake in Bank of Moscow. These are difficult questions for the Government to answer and rather than answer them maybe someone wants to distract the attention of the citizens of Russia from the fact that the funds have not appeared in the City’s accounts by making new unfounded allegations about the former management of Bank of Moscow.

Let’s look at the facts: almost 6 months after the state-owned VTB acquired a 46.5% stake in Bank of Moscow, previously owned by the City of Moscow Government, the funds from the sale of the City’s stake have to our knowledge not appeared in the City’s accounts and possibly are now held on the correspondent account of VTB, which is benefiting from these funds.

Because of this the City of Moscow does not have access to 103 billion roubles, paid for the sale of shares of Bank of Moscow, previously owned by the City, and it is not earning interest from these funds, which could have amounted to almost USD 100 million today.

In April 2011, my attorney, Mikhail Dolomanov, upon my request filed a claim asking the prosecutors to investigate the issue of the missing funds in the City’s budget. On 25 July, Mr. Dolomanov filed another claim asking the Prosecutor General to personally monitor the investigation related to this matter. But, despite our efforts, over the past four months, no serious investigative measures have been undertaken by the law enforcement agencies.

Isn’t it odd that nobody in the Moscow Government, Russian Government or Prosecutor’s Office is asking questions about the missing funds in the City’s budget?