HSBC Is in Talks to Pay Russian Claim in Politically-Charged Case
(Bloomberg) -- HSBC Holdings Plc’s Russian unit is in talks with local authorities to pay 1.4 billion rubles ($22 million) in obligations related to the politically-charged case of investor William Browder.
The bank’s lawyers said in Russia’s Supreme Court in Moscow Thursday it is also seeking written assurances from tax authorities that it won’t face future charges or claims related to the high-profile case, but so far hasn’t reached agreement. The court set another hearing for July 30 after the bank asked for more time to reach a settlement.
HSBC was both trustee and manager for Browder’s Hermitage Fund, which was the largest foreign portfolio investor in Russia before his visa was annulled in 2005. Later, Browder alleged that police had taken control of local companies owned by the fund and used them to steal $230 million from the government through fraudulent court decisions and tax refunds. A Hermitage auditor, Sergei Magnitsky, who exposed the scheme, was jailed and died in custody in 2009.
Russia later charged Browder and Hermitage with stealing the money and tried the investor in absentia and sentencing him to nine years in prison. Browder, who now lives in London, has led a campaign to impose sanctions on Russian officials over the case, and succeeded in getting laws on them passed in the U.S. and several other countries.
Last year, a different Russian court ordered HSBC to pay the 1.4 billion rubles. At the time, the bank said it was disappointed in the ruling and would consider an appeal. An admission of guilt by HSBC could be a boost for Russian authorities’ efforts to legitimize their version of events as they pursue further charges against Browder.
“We believe we acted at all times in accordance with the law and applicable banking regulation.” HSBC said in a statement. “The matter is on-going and we make no further comment.”
Browder declined to comment.
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