Hermitage Capital head Browder will soon be charged over Gazprom stock theft [updated]

Charges will soon be filed against Hermitage Capital Management CEO William Browder as part of an inquiry into possible misappropriation of stock in Russian gas giant Gazprom, a Russian Interior Ministry official said.

"The head of the investigative group has already given the green light to bringing charges against Mr. Browder. It will be done within the next few days," Mikhail Alexandrov, the director of the ministry's department investigating organized crime and corruption-related offences, said at a press conference on Tuesday.

Hermitage Capital head William Browder was seeking access to documents of strategic importance to Russia, Alexandrov said.

"This is not just the question of personal gain in evasion of the law, Browder's acquisition of Gazprom stock, but also of attempts to push one's rules and to receive access to corporate financial reports," he said.

Browder was making demands, including adjustment of the company charter, from 2001 through 2004, he noted.

Meanwhile, Hermitage Capital insists that it purchased Gazprom shares legally.

"All of the operations to acquire Gazprom shares were carried out in strict accordance with the law. The procedure itself passed an evaluation by the Securities Commission, which confirmed its compliance with the law. Accusations that this somehow caused damage to the company are simply absurd," Hermitage said in a press release distributed in Moscow on Tuesday.

Hermitage has connected charges brought against its CEO William Browder with the U.S. adoption of the Magnitsky Act.

Yet the Russian Interior Ministry argues that the criminal case was started with due reason.

"Concerning the investment fund's statement, the Interior Ministry believes that either Hermitage Capital representatives' denial is a misunderstanding, or they speak with their tongue in their cheek," the Interior Ministry's press center told Interfax. "If the deal to buy Gazprom shares is to be legal, the government's permission was needed to buy them, which, however, was not officially given."

"If there had been permission, no criminal case would have been started," the press center added.

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