How Money Is Siphoned Off at VTB

Now I want to tell the story of how I and other

shareholders conducted our own investigation into one

VTB Bank deal, which shows that the bank’s problems

and its losses are not at all due to the fact

that there is a global financial crisis underway, but that perhaps the bank’s main

problems lie in the fact that its management

is full of fraudsters.

In May 2007, VTB, one of Russia’s largest state-owned

banks, successfully carried out the so-called “people’s”

IPO.

The promise of high dividends attracted thousands of citizens

to become shareholders.

The bank’s capital increased by 200 billion rubles.

Two and a half years have passed since then.

Now we can see that all the people who invested their

money received neither dividends nor any increase in the market

value of their shares.

In effect, everyone who invested money after listening, among others, to

the appeals of Putin, Kudrin, and other officials,

lost money.

They ended up in the red.

Why did this happen?

Where is the money going?

A group of the bank’s shareholders led by Alexei Navalny

conducted its own investigation.

VTB decided to make money in the leasing business.

Why not?

It is an excellent business that generates a decent profit.

To do this, they decided to purchase Chinese drilling rigs

and lease them to Russian companies engaged in

oil production in Siberian fields.

But when I and other shareholders began looking into the details

of this deal, we noticed one very strange thing.

In fact, there turned out to be several strange things.

It all began with VTB Leasing purchasing Chinese

drilling rigs, each of which cost the manufacturer

$10 million.

But for some reason VTB paid $15 million apiece to a Cypriot

intermediary company, Clusseter Limited.

Thus, out of a contract worth $650 million,

about $160 million remained with the Cypriot middleman.

We can only speculate as to who owns

this Cypriot offshore company, but we are absolutely certain

that there is no way this could have happened without the involvement

of VTB Bank’s top management.

Today we need greater responsibility in decision-making,

in risk assessment, in credit discipline, and we must choose projects

that are efficient and deliver quick returns.

This is not just about ordinary bribes, regardless

of their size, but essentially about a grave disease that

is corroding our economy and degrading society as a whole.

In this regard, a radical reduction in the level of corruption

is, of course, a strategic task facing the country.

After the drilling rigs had been purchased,

it would have been logical to lease them directly

to the drilling companies working in oil extraction.

But here too, our “effective managers” at VTB Bank

could not simply stand by and watch money

pass them by.

Two months before the deal, yet another intermediary company was created—

Well Drilling.

It was to this company, rather than to the oil producers, that VTB Leasing leased

the drilling rigs.

To make the scale of the scheme clear, we can

look at some simple figures.

The intermediary company received a drilling rig at a rate of

about 200,000 rubles per day.

And it then leased it to the end drilling operator at a rate of

400,000 rubles per day.

If we calculate this across 30 drilling rigs,

we see that the intermediary was earning

roughly 1.5 billion rubles a year this way.

At this point, we have all the documents fully

exposing this scheme.

We have evidence that the actions of VTB employees

effectively fall under the Criminal Code article on

fraud.

This is fraud committed on an especially large scale.

And we intend to seek criminal prosecution

of the people who organized this deal.

We, as VTB shareholders, have also appealed to all

members of the bank’s supervisory board, demanding

that the bank’s management also launch an internal

investigation.

Among those on VTB’s supervisory board and in its management are:

Finance Minister Alexei Kudrin.

Presidential aide Arkady Dvorkovich.

First Deputy Chairman of the Central Bank Alexei Ulyukayev.

Well-known businesswoman Olga Dergunova.

And we demand that they act.

They must respond to the shareholders’ appeal.

They are obliged to put before the supervisory board

the question of investigating these fraudulent

actions within the bank and assisting the criminal investigation

that law enforcement authorities will conduct.

While the bank’s defrauded shareholders demand compensation

for their losses and appeal to the decency of individual members of VTB’s leadership,

the drilling rigs, having played their role in laundering money,

are rusting away under the snow.

This drilling equipment belongs to OJSC VTB Leasing.

It was delivered to us through intermediary entities

from November 2007 to December 2008.

Since that time, we have not been paid

for storing this drilling equipment.

Part of it was taken away to a location unknown to us,

to an unguarded site.

And now you can see with your own eyes those $650 million

that belong to VTB Bank’s shareholders,

supposedly invested by them and supposedly working efficiently.

They are lying here under the snow, in the settlement of Purpe

in the Yamalo-Nenets Autonomous Okrug (a federal district in northern Russia).

Alexei Ilyich Kudrin, Nabiullina, Zhukov,

Dvorkovich from the presidential administration,

the chairman of the Central Bank.

Find a time in my schedule.

I want us to discuss

all these problems in more detail as soon as possible.