Russian Interior Ministry Seeks Arrest Warrant for Bill Browder in Putin-directed Retaliation Against Magnitsky List

April 17, 2013

Today, the Russ­ian Inte­ri­or Min­istry announced that they intend to seek a war­rant to arrest Bill Brow­der, CEO of Her­mitage Cap­i­tal Man­age­ment. The hear­ing to seek the war­rant will take place at the Tver­skoi Dis­trict Court in Moscow at noon today. They will seek the arrest war­rant in rela­tion to spu­ri­ous charges of “steal­ing” Gazprom shares in late 1990’s‑early 2000’s and “inter­fer­ing” in Gazprom’s strate­gic policies. 

The mate­ri­als for this new case have been sep­a­rat­ed by the Russ­ian Inte­ri­or Min­istry from the posthu­mous case against Sergei Mag­nit­sky, who is cur­rent­ly on tri­al in Rus­sia in the first-ever posthu­mous tri­al in Russ­ian his­to­ry. This new case was opened a month after the Russ­ian Pres­i­dent Vladimir Putin promised to “delve deep­er” into the Mag­nit­sky case at a press con­fer­ence on 20 Decem­ber 2012, where he was ques­tioned sev­en times about the Mag­nit­sky affair and the ban on US adop­tions of dis­abled Russ­ian orphans, which was the offi­cial Russ­ian Gov­ern­ment response to the U.S. Mag­nit­sky Law.

This will be the sec­ond known case of an ‘in absen­tia arrest war­rant’ in rela­tion to a West­ern­er in Rus­sia. The first one was in rela­tion to a Span­ish nation­al under a Yukos case.

This is also the first case in the Russ­ian his­to­ry where the author­i­ties seek to impose crim­i­nal penal­ties on pur­chas­es of Gazprom shares by for­eign­ers from a decade ago.

The Russ­ian Inte­ri­or Min­istry charges relate to the pres­i­den­tial decree of 1997, which imposed spe­cif­ic restric­tions on the way for­eign­ers could own domes­tic shares of Gazprom at the time when Gazprom had two types of shares avail­able. The decree did not stip­u­late any crim­i­nal lia­bil­i­ty, and all restric­tions on Gazprom own­er­ship were lift­ed in 2005 when Gazprom moved to a sin­gle class of share. 

The charges con­tra­dict the offi­cial Russ­ian Gov­ern­ment con­fir­ma­tion of the legal­i­ty of Gazprom own­er­ship struc­tures that were wide­ly used by all major mar­ket par­tic­i­pants in Rus­sia a decade ago. Gazprom itself set up such a struc­ture with Ruhrgas, and pro­mot­ed it.

“The retroac­tive and arbi­trary appli­ca­tion to one mar­ket par­tic­i­pant of a crim­i­nal stan­dard in rela­tion to a prac­tice that is con­sid­ered law­ful for all oth­er mar­ket par­tic­i­pants is the hall­mark of a polit­i­cal­ly-direct­ed abuse of jus­tice in this case,” said a Her­mitage Cap­i­tal representative.

The case itself has no legal prospect because there were nev­er any crim­i­nal sanc­tions for own­ing Gazprom shares. 

The Russ­ian Inte­ri­or Min­istry alleges that Her­mitage pur­chased Gazprom shares in order to “inter­fere” in Gazprom’s poli­cies, gain infor­ma­tion on its activ­i­ties, get elect­ed to the board, and influ­ence the company.

“Indeed, we tried to influ­ence the com­pa­ny so that Gazprom man­age­ment stopped steal­ing bil­lions of dol­lars worth of assets and cash flow. It is amaz­ing that the Russ­ian gov­ern­ment nev­er want­ed to stop the steal­ing itself,” said Her­mitage Capital. 

This lat­est move is a marked esca­la­tion in the retal­i­a­tion against Mag­nit­sky sanc­tions which were imposed last Fri­day, on 12 April 2013, by the US Gov­ern­ment as part of the imple­men­ta­tion of the Sergei Mag­nit­sky Rule of Law Account­abil­i­ty Act signed by U.S. Pres­i­dent Barack Oba­ma on 14 Decem­ber 2012.

The move fol­lows a coor­di­nat­ed Russ­ian state pro­pa­gan­da cam­paign in the last three months, where all Krem­lin-con­trolled TV chan­nels, includ­ing NTV, Rossiya, and 1TV ran slan­der­ous pro­grams accus­ing Mr Brow­der of mur­ders, steal­ing IMF mon­ey in 1998, caus­ing the Russ­ian default, steal­ing Gazprom shares, and being a UK spy.

“Pres­i­dent Putin treats the law and the truth like a child in a sand­box,” said a Her­mitage Cap­i­tal rep­re­sen­ta­tive. “There are no rules. There is no law, and he thinks he can do what­ev­er he wants. This may be true in Rus­sia, but it is not true else­where in the world.”

Comments

• Link