Kerimov’s VTB Acquisition and the Raiding of Yelena Baturina

baturina021711.jpgShould it come at any surprise that Russia’s most wealthy woman, Yelena Baturina, the wife of former Moscow Mayor Yuri Luzhkov, should wake up to the news today that the offices of her company Inteko were being raided by dozens of machine-gun wielding security officers?  Why on earth the Russian authorities always seem to insist on conducting these raids armed to the teeth, implying violence, is beyond me.

The rapid collapse of Baturina’s real estate empire has been in the works for the past year, helped in no small part by the ouster of her husband and protector, and may in fact be rooted in the over-leveraging financial bubble of 2008.  Last September we indicated that Alexander Bastrykin of the Investigative Committee would likely oversee the the destruction and corporate raiding of Inteko, and perhaps the delay could perhaps be explained by some disputes over who would reap the spoils. 

[Also as a sidenote, Baturina successfully sued Forbes magazine in a libel case for 136,000 rubles.  Forbes had apparently written two objectionable words in the magazine, which claimed that Inteko may have benefited from undue influence from state organs.  If Bastrykin’s case against Baturina goes forward, will the magazine get its money refunded?]

The case doesn’t sound so good for Inteko -prosecutors are interested in a 2009 loan of 12.76 billion rubles fromThe Bank of Moscow to another real estate company which bought up anumber of depressed assets from Inteko, effectively bailing them out ofthe crisis.  Only problem is that the deal coinciding at the exact sametime that the Moscow City authorities voted to grant 15 billion rublesof public budget to boost Bank of Moscow’s capital.

Sounds bad, right?  But the most interesting angle appears buried in a piece Catherine Belton in the Financial Times:  “Theraids come as VTB, the state-controlled bank, is attempting to speed upattempts to take over Bank of Moscow, Russia’s fifth biggest by assets.Andrei Kostin, VTB president, told the Financial Times this week thathe hoped to complete the acquisition by the end of March.”

VTB, of course, is currently going through a Kremlin-assisted privatization of 10% of its shares, attracting significant interest from foreign investors.  Then yesterday it was revealed that billionaire businessman and Duma member Suleiman Kerimov bought the biggest slice of VTB ($500 million invested – apparently he had wanted to buy even more), becoming the bank’s largest single shareholder.  Kerimov is hardly a stranger to Baturina.  Last year, Kerimov’s assets were ordered frozen in Cyprus after a real estate develop claimed that Luzhkov and Kerimov extorted him for a 25% stake in a hotel development.  Kerimov is also co-defendant with Luzhkov and Baturina in another lawsuit opened in London.

The plaintiff in both these cases, Ashot Egiazaryan, has fled to the United States and may be attempting to gain political aslyum.

Sure, it is possible that Kerimov’s big push to buy up a stake in VTB is completely unrelated to today’s raiding of Inteko.  But it is certainly interesting to see so many familiar characters popping up in these stories.