Moscow Ex-Mayor Will Testify in Bank of Moscow Criminal Case

Yury Luzhkov, the former Moscow mayor, will testify tomorrow in a criminal case relating to Bank of Moscow, the recipient of Russia’s biggest-ever bailout, his lawyer Genri Reznik said.

Luzhkov is a witness in a case involving the city government’s purchase of a stake in Bank of Moscow in 2009 for about 15 billion rubles ($492 million), the Interior Ministry said in an e-mailed statement on Oct. 27.

Luzhkov, fired last year after almost two decades in power, was summoned to testify after he criticized President Dmitry Medvedev and his office. Sergei Naryshkin, Medvedev’s chief of staff, on Oct. 26 said that Luzhkov was fired for inefficient management and corruption allowed by him and his entourage, RIA Novosti reported.

ZAO Premier Estate, a property company, colluded with Bank of Moscow employees to fraudulently receive a loan of more than 12 billion rubles that ended up in a bank account of ZAO Inteco, then belonging to Luzhkov’s wife, Yelena Baturina, according to investigators.

Before the loan agreement, the Moscow government decided to buy a stake in the bank for 15 billion rubles, of which about 13 billion rubles was used as a loan to Premier Estate, investigators said.

Luzhkov and Baturina have denied wrongdoing. Baturina, who became Russia’s richest woman during her husband’s 18-year stewardship of Europe’s largest city, said Sept. 28 in an e- mailed statement that she sold a land plot to Premier Estate for 12.6 billion rubles in May 2009, leading to the transfer of the funds to her account.

Ignoring Summons

Baturina has ignored repeated summons to testify as a witness, claiming she was abroad, investigators said in an Oct. 28 statement. Investigators are ready to involve Interpol and turn for legal assistance to relevant agencies in the United Kingdom and Austria if Baturina fails to appear, they said.

Luzhkov’s questioning over Bank of Moscow and criticism from Kremlin officials is a reaction to his comments in an interview with Radio Free Europe’s Russian service where he said that Medvedev has demonstrated his incapacity to resolve the country’s issues and will be “a very weak” premier, Luzhkov told Izvestia newspaper Oct. 26.

Russian Prime Minister Vladimir Putin announced Sept. 24 that he plans to return to the Kremlin next May by swapping jobs with his successor, Medvedev, potentially giving him another 12 years in power.

“My rights as a citizen, who worked honestly and against whom such complaints cannot be made, are being violated,” Luzhkov told the Izvestia daily. “They are being made by authorities that are taking revenge and are persecuting a citizen for political motives.”

To contact the reporters on this story: Lyubov Pronina in Moscow at lpronina@bloomberg.net Henry Meyer in Moscow at hmeyer4@bloomberg.net

To contact the editors responsible for this story: Balazs Penz at bpenz@bloomberg.net

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