Luzhkov meets ministry's multi billion fraud probe
Luzhkov's appearance in court appears to be a serious step in Russia's current anti-corruption drive, as Luzhkov has previously boasted that not a single civil servant in the city administration was prosecuted for corruption in his 18-year rule as Moscow mayor.His lawyer Genry Reznik has stressed that his client was summoned as a witness.“It is not a ‘Luzhkov case’. It’s a case of the Bank of Moscow, so how can he be a defendant?” Reznik told journalists. After the ex-mayor left the court, Reznik said that his client's status remained unchanged.Yury Luzhkov was interrogated in connection with a doubtful multi-million-dollar deal between the Bank of Moscow and the Premier Estate company in 2009, during his mayoral term. Back then the Moscow government bought a 75 per cent share in the Bank of Moscow. Most of the money for the deal, 12.7 billion rubles (about US$458 million), was given to Premier Estate as a loan it needed for the purchase of 58 hectares of land in Moscow. It should be noted that the company only had a registered capital of 10,000 rubles (around $350). The land was owned by Inteko, a company belonging to the then-mayor’s wife, Elena Baturina. Prosecutors claim that the land was sold at a price exceeding the actual market price by three times and that the money finally ended up in Baturina’s personal accounts.The former mayor has always denied the accusations as “nonsense” and called them politically-motivated.The Bank of Moscow is one of the largest commercial banks in Russia, with the Moscow government being the largest shareholder, owning almost 47 per cent of stocks. It was established in 1995, during Yury Luzhkov’s first mayoral term. Luzhkov was dismissed as mayor due to “loss of confidence” in September 2010.His wife and daughters are currently abroad. He recently stated that he had forbidden them to return to Russia. Elena Baturina has been repeatedly summoned for questioning as a witness, but she has never turned up in court. The prosecution has warned that if she fails to appear for interrogation next time, they will turn to Interpol for help.On Monday, VTB (VneshTorgBank), as the main creditor of the Bank of Moscow, said it was insisting on servicing the credits extended to structures affiliated with the ex-top management, including former CEO Andrey Borodin.According to sources in VTB, the bank has no intention of taking away Borodin’s assets. Nor is it interested in the bankruptcy of these structures. Rather it wants their owners to carry full responsibility for them and their debts.