 |
|
|||||||
|
||||||||
|
PRESS Emanuel Zeltser helps expose Inkombank crimes Inkombank's questionable past Bank of New York's bid to help a Russian bank sell shares to investors illustrates its aggressive charge into the controversial business of courting Russian customers. BoNY helped one of its top Russian clients, Inkombank, win regulatory approval to sell its stock in the USA as American depositary receipts (ADRs) in 1996. At the time, however, Inkombank's financial status was being challenged in Russia. Then, Russian bank regulators were investigating the bank. A 1996 report by Russia's central bank found that Inkombank had violated numerous laws and accounting rules. The report said the bank inflated its income in 1995 by "tens of billions of rubles." It also found "unjustifiable credits of large amounts to the accounts of some shareholders," who were not named, and that the bank's situation was worsening. In fact, the report recommended curtailing the bank's operations, in part by not letting it accept new deposits from customers. In 1998, after the collapse of the Russian ruble, Inkombank and many other Russian banks were declared insolvent. Various U.S. regulatory agencies were informed of the dubious financial state of Inkombank by lawyers involved in a bitter legal dispute in New York involving Inkombank, one of its former lawyers and shareholder groups. Emanuel Zeltser , a lawyer opposing Inkombank in court, says BoNY was effectively helping sell ADRs of a bank that was misrepresenting itself in the USA as financially sound. Zeltser 's partner, Alexander Fishkin, sent a letter to the Securities and Exchange Commission, including an English translation of a summary of the Russian central bank's report. Fishkin subsequently received a letter from SEC enforcement division attorney Thomas Sporkin acknowledging receipt of the information. SEC officials would not comment Friday. Fishkin sent a similar letter to officials of the Federal Reserve Board, which also declined to comment. Inkombank received U.S. regulatory approval to sell ADRs and commenced with an offering in 1996 and 1997. It announced it sold 600,000 shares. BoNY is under investigation by law-enforcement authorities in the USA, Europe and Russia for alleged links to Russian organized-crime figures, which may have used Russian and Western banks to launder money. BoNY officials did not return calls seeking comment. It has consistently refused to comment about the investigation. BoNY aggressively sought business relationships with Russian banks -- notably Inkombank, Menatep and others -- in the early-to-mid 1990s. A key figure in the ongoing probes is Natasha Gurfinkel Kagalovsky, a BoNY senior executive in charge of Russian bank business. The summary of the Russian central bank report forwarded to the SEC did not mention organized-crime activity. Still, Vladimir Brovkin, a professor at American University who has studied Russian organized crime, says that at a minimum, BoNY and the SEC should have been more skeptical, given the report of the bank's shaky financial grounding and numerous press reports in the USA and Russia saying many top Russian banks may be in business with organized-crime elements. At the time, Inkombank issued public denials of such reports.
||
OUR MISSION ||
NEWS ||
LEGAL REFORM ||
RESEARCH ||
|
_________ |
|
||||||
