At a time when mass protests against the greed and criminality of bankers have spread from from the US to Greece, Italy and the UK, and on across the world, the London Daily Telegraph headline, “Financiers are being forced out of Russia”, might be widely applauded by a certain section of the population. So the Bolshie Russians are doing to them what noone else in the capitalist world dares – that might be the theme for Telegraph columnist Con Coughlin. Except that it isn’t.
Instead, in what Coughlin claims in today’s edition is the first interview in exile with Andrei Borodin, former controlling manager of the Bank of Moscow, Coughlin appears to be claiming on Borodin’s behalf that it is wrong to charge bankers with embezzlement, fraud and other crimes. Even more, according to Coughlin, the frame-up in Borodin’s case is part of a vicious scheme in “Vladimir Putin’s ever-tightening grip on the country’s political and commercial life”.
One little detail stands out in Coughlin’s account of what Borodin told him. “Mr Borodin refuted the charges against him, and said he was the victim of a politically-motivated campaign by the Kremlin to seize control of Moscow’s main institutions ahead of next year’s election…He said Mr Putin and Mr Medvedev replaced Mr Luzhkov with a pro-Putin loyalist so that they could strengthen their control over the Russian capital… ‘Luzhkov was too independent for them. Every political act in Russia is not just about politics. It is also about economics,’ he said. He said that the president sent a special envoy to inform him of the takeover, and that he would have no problem with the police and tax authorities if he agreed to sell his stake in the bank for £500 million ($800 million) – about half its actual value.”
Leave aside whether Borodin was in debt to the bank itself as his shareholding (with Lev Alaluev) jumped to 25% by the close of 2009. Ignore whether the Bank of Moscow can have been worth, net of liabilities and uncollectable loans, $3.2 billion (100 ÷ 25 x $800 million), the offer equalling the bank’s capitalisation on the Moscow stock market in December 2009. Overlook Borodin’s acceptance that the VTB takeover offer of February 2011 for Rb103 billion ($3.6 billion) for the city government’s 46.6% stake in the bank was fairly valued.
Try rereading that last line: “He [Borodin] said the president [Medvedev] sent a special envoy to inform him of the takeover, and that he would have no problem with the police and tax authorities if he agreed to sell his stake for £500 million – about half its actual value.”
The sale and purchase of the Bank of Moscow has been a long and complicated affair involving state banks; chains of cutout companies with claims on the bank’s shares; premium and discount valuations; front-men Suleiman Kerimov and Vitaly Yusufov; front-lady Yelena Baturina; and more of the usual suspects and suspicions. Few in Moscow doubt that it would have turned out the way it did if the Mayor of Moscow, Yury Luzhkov, had not fought Medvedev in 2010, lost, and been stripped of job and power. But here from safe haven in London, Borodin appears to be accusing Medvedev of extortion, blackmail, bribery and corruption of the Russian judiciary, prosecutors and police on a grand scale.
For the poster boy of anti-corruption reform in the western media, this is a quite a reputational smudge the newspaper appears to be telegraphing. So did Borodin actually say what Coughlin claims? And did he name Medvedev, not Putin, as the mastermind of the £500 million business proposition for Borodin?
Coughlin doesn’t claim to know much about Russian affairs. His newspaper describes him as “an expert on international terrorism and the Middle East; with the benefit of 25 years in foreign journalism.” The only other mention of Russia in Coughlin’s journalism this year turns out to be a promotion of the Nimrod anti-submarine aircraft which is being scrapped in the British government’s future defence budgets. Taking the side of the Royal Navy and Royal Air Force, Coughlin reported in January: “No one will have been more delighted with the Government’s decision to scrap the RAF’s Nimrod maritime patrol aircraft than the commanders of Russia’s nuclear submarine fleet.” No Russian source for that, naturally.
Coughlin was asked to substantiate his report of Borodin’s remarks by quoting directly what Borodin had said, and to confirm that the “special envoy” had identified Medvedev as initiating the raid on the Bank of Moscow, and compelling Borodin to sell out. Coughlin refused, saying in an email: “please contact lawrence dore at gardant communications in london, who are handling Borodin, on +44 207 976 555[sic].” Gardant is a public relations agency. Asked again to confirm what he had reported, Coughlin replied: “Love the ‘we’! U working for the FSB. Certainly sounds like it.” At Gardant (website motto — “like all good communicators we listen as much as we talk”), Dore was asked to say if Coughlin’s interview had been arranged as part of a public relations campaign for which Borodin is paying. Dore was also asked to identify the name of the special offer-carrying envoy from Medvedev and the date of his visit to Borodin. There has been no response.
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