(Updates with Russian ambassador comments on Luzhkov’s whereabouts in fifth paragraph.)
Sept. 29 (Bloomberg) -- Yelena Baturina, the billionaire wife of ousted Moscow mayor Yury Luzhkov, denied wrongdoing in a $407 million fraud case that led to a police raid on her ZAO Inteco property company in February.
The Interior Ministry’s investigative committee said Feb. 17 that ZAO Premier Estate colluded with employees of Bank of Moscow to fraudulently receive a loan of about 13 billion rubles ($407 million) that ended up in Baturina’s personal account. The company had no intention of repaying the loan, while incorrect information was given about the collateral against which it was issued, the ministry said, without specifying the collateral.
Baturina, 48, who became Russia’s richest woman during her husband’s 18-year stewardship of Europe’s largest city, said late yesterday in an e-mailed statement that she sold a land plot to Premier Estate for 12.6 billion rubles in May 2009, leading to the transfer of the funds to her account. She denied Russian media reports that she inflated the value of the land, citing independent appraisals.
Russian state media accused Luzhkov, 74, of corruption and favoritism toward his wife in the run-up to the ex-mayor’s sacking last September by President Dmitry Medvedev. Both deny any wrongdoing. Russian regulators agreed to provide a record 395 billion-ruble bailout for Bank of Moscow in July after state-run VTB Group bought the city government’s 46.5 percent stake in the lender and discovered bad debts.
Luzhkov is living in the U.K., Russia’s ambassador to the U.K., Alexander Yakovenko, told the British Broadcasting Corp. in an interview published on its website Sept. 9.
Russian investigators haven’t filed any charges against Baturina or Inteco, according to yesterday’s statement. “There are no grounds for any charges,” it cited the ex-mayor’s wife as saying.
The money ended up in Baturina’s account legitimately because the land belonged to her, Baturina’s press service said yesterday.
Bank of Moscow’s press service declined to comment today on whether Premier Estate is repaying the loan on schedule. Irina Dudukina, a spokeswoman for the Interior Ministry’s investigative arm, didn’t answer her office or cell phones.
International Arrest Warrant
The former chief executive officer of Bank of Moscow, Andrei Borodin is the subject of an international arrest warrant by Russian authorities over his connection to the loan. Investigators haven’t provided any proof of wrongdoing and the loan is being repaid on schedule, Borodin’s Moscow-based attorney Mikhail Dolomanov said in July.
The criminal proceedings against Borodin and VTB’s February takeover of Bank of Moscow, Russia’s fifth-biggest lender, were a “political” move to change the bank’s shareholders, Borodin said Aug. 24 in e-mailed comments to Bloomberg.
Sberbank Investments, a unit of Russia’s state-run lender, and B&N Bank’s Chief Executive Officer Mikhail Shishkhanov said Sept. 6 they had agreed to buy Baturina’s Inteco. Lukhkov’s wife decided to sell the company after getting a fair offer, statements cited her as saying.
In the almost two decades her husband ran City Hall, Baturina built up a fortune estimated by Forbes in June 2010 at $2.9 billion. Her wealth fell to $1.2 billion, Forbes said in March.
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