Testimony of William Browder. Commission on Security & Cooperation in Europe the U.S. Helsinki Commission.
June 23, 2009
”Mr. Chairman and Distinguished Members of the Commission, thank you for inviting me to appear before you today.
I have been asked to share my thoughts on the rule of law in Russia. Unfortunately, my own personal experience shaped by fifteen years of investing in that country confirms to me that the situation in Russia is not a pretty picture, and it is getting worse.
When I first started Hermitage in the mid-1990’s, my clients would ask me about the Russian horror stories they had heard of shareholders getting wiped off corporate registries, having assets stolen by crooked management or being the targets of corrupt government officials seeking bribes. What I was able to tell my investors back then is that while corporate governance was terrible, valuations were cheap, and investors would make money as Russia evolved from “horrible” to just “bad.” I am here today to tell you that Russia is reverting. The investor horror stories that were largely fantastic in the 1990’s are now commonplace. The situation in Russia is going from “bad” back to “horrible” and it will be more than just investors who lose out in this process.
The New York Times: An Investment Gets Trapped in Kremlin’s Vise
July 24, 2008
William F. Browder was one of the most prominent foreign investors here, a corporate provocateur who brought the tactics of Wall Street shareholder activists to the free-for-all of post-Soviet capitalism. Until, that is, the Kremlin expelled him in 2005.
Mr. Browder then focused on protecting his billions of dollars of stakes in major Kremlin-controlled companies, like Gazprom, and on fighting to return to a land where he had deep and unusual family ties. So when he ran into Dmitri A. Medvedev, the country’s future president, at the World Economic Forum in Davos last year, he saw his chance.
In a brief conversation at a dinner at the Swiss resort, he pressed Mr. Medvedev for help in regaining his Russian visa. Mr. Medvedev, then a top aide to President Vladimir V. Putin, agreed to pass along his request.
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