Bankrupt Vneshprombank Has $3.2 Billion in Creditors, Including Russian Olympic Committee

June 3, 2016
Larisa Markus, former head of Vneshprombank, being arrested by police in December 2015. Photo by Vladimir Pesnya/Sputnik/AP

LIVE UPDATES: Vneshprombank, formerly among Russia’s 40 largest lenders, is facing demands from creditors totaling 215 billion rubles (US $3.2 billion).

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Moscow Legislators Claim Condoms Ineffective Against HIV; Urge Fight Against ‘Moral Degradation’

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A tray in Russian clinic labeled “Samples for HIV Test”. Photo by Ilya Pitalev/Kommersant
2016-06-03 22:08:56

Russia’s HIV/AIDs epidemic, fueled in particular by injection drug abuse, is well known to the international medical community and the public at large.  That’s because the foremost HIV specialist in Russia since the Soviet era, Vadim Pokrovsky, has attended international conferences but also spoken out frequently to the media. In May 2015, he called the spread of HIV in Russia “a national disaster,” Kommersant reported. According to official statistics, more than a million Russians out of a population of 144 million are infected with HIV. About 204,000 Russians have died of AIDS since 1987.

But conservative deputies in the State Duma asked for Pokrovsky’s facts to be checked and commissioned a report to be done on the AIDS epidemic and how to stop it.

On May 30, a debate was held at the Moscow City Duma or municipal legislature in which instead of doctors, historians from the Russian Institute of Strategic Studies (RISI) spoke, said Kommersant. RISI is a think-tank founded by a decree from President Boris Yeltsin in 1992; since then former KGB officers and other conservatives have taken it over with the mission to research issues “to guarantee national security.” As Paul Goble has written, RISI is attached to the office of the president and frequently advises President Vladimir Putin.

Lyudmila Stebenkov, chair of the Moscow City Duma’s commission on health said that the press was to blame for “insinuations” that there is an “epidemic” of AIDS in Russia; she also said Russian NGOs financed by Western foundations were to blame as well.

RISI spent nearly a year working on its HIV/AIDS report, which was introduced at the City Duma by Tamara Guzenkova, one of three authors of the report. Guzenkova is a doctor of history, not of medicine and has been known for publications criticizing the current Kiev government for what she describes as “the decline of the EU.”

She said the topic of AIDS is “part of the West’s information war” against Russia and said that condoms do not prevent people from contracting HIV but in fact help spread the virus, she believes.

Guzenkova said there were two models for combatting AIDs. One was with “neoliberal ideological content, insensitive to special national features, with absolutization of the rights of the risk groups — drug addicts and LGBT.”

The Russian government has refused to permit “harm reduction” problems involving the issuing of clean needs to drug addicts, believing that it contributes to addiction.

The other way to fight AIDS which Guzenkova dubbed “the Moscow model” “takes into account special cultural, historical and psychological features of the Russian population and is founded on conservative ideology and traditional values.”

She said the West was guilty of promoting its model exclusively in the international community and is “opposing Russia as a country” because it has its own independent way of doing things.

Oksana Petrovskaya, a second co-author of the report, another RISI historian and an expert on the problems of Russians in the “near abroad,” i.e. other Soviet republics, said that the fight against HIV/AIDs was more successful in Moscow than in St. Petersburg precisely because of its emphasis on “traditional values” (translation by The Interpreter):

“Moscow may be looked upon as a symbol of native [ethnic] Russians, and St. Petersburg as Western European cultural values. […] The grounded originality of the spontaneously- growing sacred Moscow land is opposed to the artificially and rationally organized St. Petersburg, whose main component myth was the apocalypse of the doomed city. The counterculture of St. Petersburgers, formed on the wave of perestroika, is based on an understanding of the freedom of the individual as freedom from what is disliked.”

Petrovskaya is referencing not only the fate of St. Petersburg, then known as Leningrad during World War II when it was under siege by the Nazis for 900 days, but Peter the Great’s “opening of a window to the West” in 1703 by building a city in the swamps near the Finnish border.

A third co-author of the RISI report was Igor Beloborodov, a sociologist who heads RISI’s Sector on Demography, Migration and Ethnoreligious Problems. He cited the sources of HIV transmission as follows:

“This is the contraceptive industry which is interested in selling their own products, and that means attracting as many adolescents as possible into early sexual relationships. The pornography industry — despite all our laws, you can get any materials in two clicks.”

Beloborodov also blamed the “sex items industry” which he said were “lobbyists directly interested in the corruption of the population.” He said the idea of sex education for school children was imposed by the West “for the demographic deterrence of countries which are viewed as political rivals.”

Referring to a conversation he had with Dr. Joachim de Irala of Spain,  Beloborodov blamed condoms for the spread of HIV.

“He believes that contraceptives remove the self-preservative role of individual behavior. And five contacts with a condom at the age of an adolescent is equal to one unprotected contact.

One way or another the best form of protection from STDs, including AIDs, is the monogamous family, heterosexuality , and I emphasize, maintaining fidelity to one another, you cannot think of anything better.”

Stebenkova said she supported the use of condoms to prevent pregnancy, but she did not believe in their effectiveness against HIV.

Aleksei Maus, the head of the Moscow AIDS Center, who was present at the City Duma debate, countered that the risk was reduced in any event. But a deputy said that condoms didn’t provide “absolute” protection and therefore the implication was that the government should promote abstinence rather than contraceptives. 

Stebenkova concluded the debate by countering, “We need not to fight AIDS in the larger picture but fight drugs and degradation.”

Members of the movement Open Russia founded by businessman and former political prisoner Mikhail Khodorkovsky picketed the Duma this week after the debate, saying the Duma deputies themselves should be compelled to pass AIDs test as they were “in a risk group” for making such statements.

The effectiveness of condoms against the spread of HIV has been established by studies in the US and Europe. The US government has said condoms are “highly effective” against the spread of HIV if used correctly and the World Health Organization has said condoms are “the only devices that reduce the transmission of HIV.”  Scientific researchers have debunked the claims that the HIV virus can pass through condoms or that condom use is ineffective compared to abstinence.

— Catherine A. Fitzpatrick

Bankrupt Vneshprombank Has $3.2 Billion in Creditors, Including Russian Olympic Committee
RBC reports that Vneshprombank, formerly among Russia’s 40 largest lenders, is facing demands from creditors totaling 215 billion rubles (US $3.2 billion). The bank’s license was shut down in January when its liabilities were found, during an inspection by the Central Bank, to exceed its assets by about $2.3 billion.
The bank’s management were accused of various types of operations to strip its assets, Reuters reported in January.
Currently 11 creditors are seeking 215 billion rubles in payments, although administrators only have 5% of that sum to make payments, says RBC. The demands on the bank grew from 81.1 billion rubles in early April to 176.7 billion by May 1, and the register for creditors was closed May 18.
About 10,000 of the creditors (81 billion rubles or $1.2 billion) are depositors, individual entrepreneurs and the Agency for Insurance of Deposits (AID), Russia’s version of the FDIC. The rest are companies. None of the claimants involved companies that are delaying workers’ wages, although bank employees themselves have not received their salaries for some months.
The AID declined to say how much it would pay out on the demands, saying creditors would receive an announcement on June 17. One of the VIP depositors told RBC that it expected to get back no more than 15% of his deposit.
Authorities plan to use “all available instruments” to find the bank’s assets to fill the bankruptcy estate, says RBC. This includes lawsuits in international courts for assets found abroad. 
Margarits Sologubenko, head of Sameta, a corporate reconstruction company, told RBC that officials would be encouraged by the case of Sergei Pugachev, owner of Mezhprombank and a former senator, whose yacht in the Cayman Islands and villas in France were seized with foreign cooperation to pay creditors.
Vneshprombank was known for holding the assets of key state institutions, along with the personal accounts of prominent Russians, the New York Times reported.
Among Vneshprombank’s biggest customers was the Russian Olympic Committee, which suffered hardships with making payments and other financial operations, Kommersant reported in December 2015.
The New York Times reported in February that Grigory Bedzhamov, the president of Russia’s national bobsled federation, disappeared and then was found to have fled to Monaco amid claims that he was related to the collapse of Vneshprombank. His sister, Larisa Markus, head of the bank, was arrested and charged with large-scale fraud. He was said to own between 1-3% of the bank’s assets but he has not been formally charged.
The case illustrated “the entanglement of sports with corruption and cronyism among Russia’s elite,” the New York Times commented, as President Vladimir Putin has turned to oligarchs to finance Russia’s national sports teams.
Vneshprombank was shut off from the electronic payments system by Russia’s Central Bank on December 16, 2015 after an inspection. On December 22, 2015, the Central Bank declared a moratorium on satisfying the demands of its creditors, and placed the troubled bank under a temporary administration for six months.
Then Vneshprombank’s banking license was then revoked on January 21, Reuters reported.

Tverskoy District Court has seized two homes owned by Markus. According to one of the creditors, a Panamanian offshore company called Panabroker, Markus owned 8 properties in New York which were alleged to have been purchased with funds from Vneshprombank. Forbes has written about the real estate, planes and yachts owned by Georgy Bedzhamov, obtained from loans by European banks.

— Catherine A. Fitzpatrick