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A. Borodin’s letter to State Duma Deputy S. Gavrilov

To S.A. Gavrilov
Chairman,
Committee for Property Issues,
State Duma,
Federal Assembly of the
Russian Federation

Dear Mr Gavrilov,

I have learned with great interest from the media about your initiative on holding a session of the State Duma committee that you chair to consider information and materials of law-enforcement agencies, the Deposit Insurance Agency and the Accounting Chamber of the Russian Federation allegedly concerning misappropriations in the Bank of Moscow. I strongly welcome your initiative and am prepared to provide any possible assistance in its implementation.

I believe that for you, a former member of the shareholders’ Consultative Council of the VTB Bank, it will be easy to sort out the situation surrounding the Bank of Moscow. For your information, I will cite a few circumstances that, in my opinion, deserve your committee’s special attention:

- Illegality of the sale of the stake in the Bank of Moscow belonging to the Moscow Government without a competition;
- Illegality of the participation of a government-owned bank, VTB, in the privatisation transaction of the acquisition of the stake in the Bank of Moscow belonging to the Moscow Government;
- The fact that the funds from the sale of the stake in the Bank of Moscow belonging to the Moscow Government were not paid into the municipal budget;
- The extremely low price at which the VTB Bank bought Bank of Moscow shares from shareholders; and
- The unproductive policy of the work of the VTB Bank with assets and relevant pledges of the Bank of Moscow (in particular, their sale/reassignment at very low prices).

Building on the important topic of the activity of the Bank of Moscow, its top management and shareholders, as well as for the sake of getting an objective picture, it seems reasonable to examine the results of the current majority shareholder of the Bank of Moscow, the VTB Bank, in particular from the point of view of economic efficiency of the use of financial support by the government (joint stock, subordinated loans, etc.).

I believe it is extremely important to make the committee’s work open to a maximum, and sources of information, public as far as possible. In particular, I would appreciate it if I had an opportunity to look at the reports of the Central Bank of the Russian Federation and the Deposit Insurance Agency on the situation in the Bank of Moscow prepared in 2011, as well as the text of the documents explaining the reasons for which the Bank of Moscow was provided government assistance in the amount of 295 billion roubles.

I hope the Committee will be able to arrive at objective and unbiased conclusions concerning the situation with the Bank of Moscow and will make informed decisions as a result of its work. This is especially important given your announced plans on inter-parliamentary cooperation for settling relevant judicial cases. I believe that only the absence of political bias will allow representatives of the Russian parliament achieve its goal.

// signed //
Andrey F. Borodin

31 October 2012