The Daily Telegraph: Hermitage points to RenCap in fraud case

July 31, 2009

By Philip Aldrick

Her­mitage Cap­i­tal Man­age­ment, the hedge fund bat­tling state cor­rup­tion in Rus­sia, has accused Renais­sance Cap­i­tal, one of Rus­si­a’s lead­ing invest­ment banks, of pos­si­ble involve­ment in two alleged frauds cost­ing the Russ­ian tax­pay­er $337m (£204m).

In a tes­ti­mo­ny filed by Her­mitage’s lawyer in a New York court, the hedge fund claims there is suf­fi­cient cir­cum­stan­tial evi­dence to sug­gest that Ren­Cap and its for­mer direc­tors, includ­ing Stephen Jen­nings, the “Kiwi oli­garch” who found­ed and is chief exec­u­tive of par­ent com­pa­ny Renais­sance Group, may be “impli­cat­ed in the tax rebate fraud”.

Her­mitage has been fight­ing the Russ­ian author­i­ties for two years to get them to acknowl­edge “a sophis­ti­cat­ed con­spir­a­cy” involv­ing “senior offi­cers in the Russ­ian Inte­ri­or Min­istry, the Russ­ian Fed­er­al Secu­ri­ty Ser­vice, senior offi­cers of the Russ­ian tax bureaux and cer­tain senior Russ­ian court judges”.

The hedge fund, once Rus­si­a’s largest for­eign investor, led by US nation­al Bill Brow­der, first uncov­ered the alleged fraud in 2007 after three of its sub­sidiaries were stolen in a com­pli­cat­ed scam fol­low­ing a police raid on its Moscow offices, when legal doc­u­ments and seals were confiscated.

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The Daily Telegraph: Law society warning over Russia’s ‘state-sponsored intimidation’

September 11, 2008

 
By Philip Aldrick

A lead­ing inter­na­tion­al law soci­ety has con­demned Rus­sia for the “state-spon­sored intim­i­da­tion” of lawyers rep­re­sent­ing HSBC and the hedge fund Her­mitage Cap­i­tal Man­age­ment after they uncov­ered a large alleged tax fraud.

In com­ments that will add to grow­ing unease about oper­at­ing in Rus­sia, the Inter­na­tion­al Bar Asso­ci­a­tion warned of a “dete­ri­o­ra­tion in the rule of law” after offi­cers at the Inte­ri­or Min­istry raid­ed the offices of lawyers work­ing for Her­mitage and HSBC and issued sum­mons for them to appear as wit­ness­es on cas­es in which they are acting.

Mark Ellis, exec­u­tive direc­tor of the IBA, said: “Respect for the role of lawyers and the inde­pen­dence of the judi­cia­ry rep­re­sent an essen­tial fea­ture of the rule of law. When gov­ern­ment agents inter­fere with the work of lawyers, it is not only the legal pro­fes­sion that is threat­ened, but the over­all legal order in the state.”

Her­mitage claims to have been under attack by sophis­ti­cat­ed crim­i­nals with con­nec­tions in Rus­si­a’s Inte­ri­or Min­istry. The Min­istry last month raid­ed four law firms in Moscow, includ­ing Fire­stone Dun­can of the US.

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