Background: The Hermitage Saga Continues

Bill Browder. Photo courtesy: FT

Bill Browder’s saga in Russia continues.  This time, he’s convinced the Austrian authorities to look into the possible links Raffiesen Zentral Bank might have had with what ended up being the biggest tax fraud in Russian history.  If memory serves me right, after Bill had been kicked out of Russia, he’d taken the precaution of taking all physical documents out of Russia as well (I remember seeing them piled in boxes at his temporary offices near Covent Garden).  But hey, this is Russia, you can’t get away that easily.  Turns out there were three Hermitage owned/affiliated companies still with some physical presence (at their law offices) in Russia.  So the Interior Ministry “police” raided the law offices and carted off documents including their official seals and articles of association.

These were then used to (with some bizarre reasoning) take back the USD 230 million taxes Hermitage had paid the Russian exchequer.  At the same time, these companies contracted other shell companies that left them with debts of (you guessed it) about USD 230 million in unpaid bills.  The resulting court cases sailed at light speed through the Russian courts and ended up with the tax refunds going into yet unknown pockets.  Only in Russia…

Now, Bill’s lawyers have got the Austrian authorities to take notice.  The Austrian prosecutor is questioning RZB about links to the tax fraud, though the Austrian financial watchdog, the Financial Market Authority, seems to have absolved RZB of involvement.

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