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Statement by Andrei Borodin

The Moscow Commercial Court has appointed for 4 September the main hearing on a claim seeking to invalidate the transaction in which the Moscow-government-owned stake in the Bank of Moscow was made part of the authorized stock of the Central Fuel Company (CFC) with its subsequent sale to the VneshTorgBank (VTB). The claimant, a Mr Devyatkin, demands that the transaction and all its legal consequences be cancelled.

It was clear from the start that the legal arrangement was a sham transaction, only called to conceal the real essence of the deal. The sale of the stake in the Bank of Moscow owned by the Government of Moscow can only happen under privatization legislation, with all the restrictions that it imposes. The sale must happen on an open auction, and a company partially owned by the state cannot be a buyer. If you abide by law, you cannot sell the city-owned stake in the Bank of Moscow to the arbitrarily chosen VTB for an arbitrarily chosen price.

Indeed, Moscow Government spokesmen have never concealed that the sale of the Bank of Moscow shares through their inclusion in the CFC authorized stock was just a way to obviate the law.  No doubt, a court that is not under administrative pressure would find the transaction to be fictitious and its consequences invalid. This is not idle talk; arbitration practice in Russia does have precedents in similar cases. However, I pin no hopes on the independence of the court making a decision in this case.

Also, the latest developments show that what we have here is not individual bias of judicial and law-enforcement agencies with respect to subjects in cases concerning the Bank of Moscow but an evident tendency of absolute judicial arbitrary rule in Russia. This is seen both in the example of the wave of politically motivated trials, harsh in form and with a pre-determined sad outcome for their victims, and in the example of recent economic cases. Long prison terms for petty hooliganism and unproven offences together with hundred-billion fines for allegedly lost profits – this is the current stage in the development of the Russian “judicial system.”

I fully agree with the stance and arguments of the claimant, Mr Devyatkin, and am prepared to organize required legal support for him. Moreover, I am prepared to make available lawyers to provide consulting assistance to those who would deem it necessary to join in the claim. I am not yet planning to take part in this trial myself. The experience of my trials in Russia shows that such cases are characterized by the highest degree of legal nihilism and political commitment.