British investor charged with tax evasion in Russia

Authorities in Russia have brought tax evasion charges against a well-known British investor who has been barred from the country for nearly 30 months, it is reported.

However, police denied that charges had been filed and the investor’s company dismissed the article as untrue.

The daily Kommersant newspaper, without naming sources, reported that Russian law enforcement officials had filed charges against William Browder, chief executive of Hermitage Capital Management.

Anzhela Kastuyeva, spokeswoman for the Interior Ministry’s central Russia branch, said no charges had been filed against Mr Browder.

An official at London-based Hermitage said he had asserted that the newspaper report was based on a claim by police officers that Hermitage suspects had been involved in an attempt to defraud the company.

The investigation into Hermitage centres on a tax payment made by a company advised by Hermitage. When the investigation was opened in June, Hermitage said the case was groundless.

The Hermitage official went further yesterday, saying that the company had received assurances from Russian tax authorities that it had met all its tax obligations and that there were no claims against it.

The official said the alleged fraud involved the unfounded tax evasion claim; police raids on offices of Hermitage and its main law firm in Moscow, where the official said police beat a lawyer who tried to resist; the burglary, theft or harassment of other lawyers hired by Hermitage; subpoenas to major banks demanding documents related to Hermitage but unrelated to the alleged tax underpayment; and the takeover, through forgery and fraud, of companies related to Hermitage.

Tax and bank officials could not be reached for comment.

The Hermitage official said the alleged fraud failed, in part because there were no assets in the holding companies which were taken over.

He said Russia’s Investigative Committee had opened a criminal investigation into fraud allegations levelled by Hermitage. The official asserted that the Kommersant report was retaliation by police who have been questioned by the Investigative Committee.

Mr Browder, a crusader for shareholders’ rights, has been barred from entering Russia since November 2005, with authorities citing national security concerns.

Hermitage Capital oversees more than three billion US dollars (£1.6 billion) in investments. Once one of Russia’s largest investment advisers, it has diversified into a number of other countries since Mr Browder was barred from entering Russia.

Observers have said Mr Browder may have made enemies in one of his many high-profile campaigns for greater transparency and efficiency at some of Russia’s biggest conglomerates.

Though a vocal supporter of the economic policies of President Vladimir Putin, he has publicly fought alleged fraud and cost overruns at gas monopoly OAO Gazprom, among other companies.