Russian court suspends recovery of $30.4 mln from HSBC
MOSCOW, September 1 (RAPSI) – The Sixteenth Commercial Court of Appeals has suspended the procedure of recovering 1.8 billion rubles (about $30.4 million) from HSBC Management (Guernsey) and HSBC Bank (RR) in favor of Dalnaya Step, a company believed to be formerly under control of William Browder’s Hermitage Capital Management, court documents read on Friday.
The recovery was postponed until a court of appeals rules on the issue.
On August 24, head manager of Dalnaya Step petitioned the Commercial Court of Kalmykia to arrest the assets. The applicant sought the arrest of the bank’s funds held on an account opened in the Central Bank of Russia’s main office for the Central Federal District in Moscow. However, the court ruled that the applicant did not provide evidence that the account was opened in the Central Bank. Hearings over the motion were postponed until August 31.
On August 2, the court recovered over 1.8 billion rubles in favor of Dalnaya Step.
On June 9, an acting manager of Dalnaya Step filed a claim to collect funds from companies formerly in control of it, namely HSBC Management (Guernsey) and HSBC Bank (RR).
On March 21, 2016, the court ruled to resume bankruptcy proceedings with regard to Dalnaya Step. According to an acting manager back then, proceedings were still in effect and there was a need to make former controllers of the company accountable.
In 2015, the department of Russia’s Federal Tax Service (FTS) for the Republic of Kalmykia filed a motion with the court to declare void a decision made in October 2007 to complete the liquidation of Dalnaya Step. The FTS department said the reason for the petition is that Russia’s Interior Ministry is investigating Alexander Dolzhenko, former bankruptcy management at Dalnaya Step, on suspicion of premeditated bankruptcy.
Browder stands charged with several economic crimes in Russia, including premediated bankruptcy and tax evasion, according to lawyer Alexander Antipov Antipov.
Earlier, the Tverskoy District Court arrested Browder in absentia on charges of embezzling stock of Russia’s oil giant Gazprom. According to Russian authorities, Browder illegally bought over 130 million Gazprom shares worth at least 2 billion rubles ($34 million at the current exchange rate) at a lower, intra-market price through a Russian company he controlled, Kameya LLC, which amounts to large financial loss for Russia.
However, the United Kingdom refused to extradite its national.
In 2013, a Russian court sentenced Browder in absentia to 9 years in prison. The court found that from 1997 to 2002, Hermitage Capital auditor Sergey Magnitsky created and applied an illegal tax evasion scheme in the interests of Browder.
Magnitsky worked for Firestone Duncan and represented Hermitage Capital, which the Russian authorities accused of tax evasion. Magnitsky was arrested on fraud charges in November 2008 and found dead in a Moscow detention center in November 2009. The lawyer’s death provoked an international outcry.
In July 2013, Moscow’s Tverskoy District Court found Magnitsky guilty of tax evasion and closed the case due to his death. According to the case materials, Magnitsky’s and Hermitage Capital director William Browder’s actions cost Russia over 500 million rubles ($8.5 million).