This blog has reported both on the state’s war on lawyers as well as its campaign against Hermitage Capital and its found William Browder, following a corporate raiding and identity theft scandal tied to the Interior Ministry. Today, the two stories have merged, as it appears that a lawyer formerly employed by Hermitage has been placed under arbitrary arrest. This is apparently what happens when you talk about shareholder rights and corporate governance in Russia – or if you bother to complain when the government seizes your property.
Sergei Magnitsky, a legal and accounting adviser for Moscow-based law firm Firestone Duncan, was detained Monday after a raid on his home and police issued a formal warrant for his arrest two days later, said Bill Browder, chief executive officer of Hermitage Capital Management. The law firm was also raided, the third time in the past year, Browder said in a telephone call with The Associated Press.
An Interior Ministry spokesman could not be reached for immediate comment late Thursday.
Browder, a crusader for shareholders’ rights, has been barred fromRussia since November 2005. He said the law firm was involved indefending his company and its partner, HSBC, from what he alleges was a2006 takeover of assets through forgery and fraud. He says theindividuals behind the alleged scheme then fraudulently reclaimed $230million in taxes from the state.
Browder said Magnitsky’s arrest was in connection with tax evasion claims.
In a separate statement, Hermitage said Magnitsky “was apparentlytargeted for providing accounting advice to two Hermitage Fund entitiesin 2001 that police claimed underpaid taxes in that year.”
Hermitage has twice been cleared of the tax evasion charges, but the case was reopened earlier this year.
Hermitage was once one of Russia’s largest investment advisers, andnow has investments in a number of other countries, since Browder wasbarred from entering Russia.