Medvedev Says Investors Aren’t Interested in Magnitsky Death

Russian Prime Minister Dmitry Medvedev said that business leaders aren’t concerned about the case of Sergei Magnitsky, a lawyer for Hermitage Capital Management Ltd. who died in prison in 2009.

“Not a single businessman is bringing this up,” Medvedev said in an interview with state-run Vesti television at the World Economic Forum in Davos broadcast today. “It doesn’t interest anyone, except perhaps certain individuals who are earning political capital from it.”

Magnitsky died at the age of 37 while in pre-trial detention after uncovering the biggest known tax fraud in Russian history, a theft of $230 million from the national treasury. The case sparked a diplomatic row, with the U.S. imposing sanctions on Russian officials accused of having a role in Magnitsky’s death and Moscow retaliating last month by barring Americans from adopting Russian orphans.

Bill Browder, head of London-based Hermitage, which was once Russia’s biggest foreign investor, has lobbied for U.S. and European legislation targeting Russian officials he says are responsible for Magnitsky’s death with visa bans and asset freezes.

Magnitsky was “not a truth-seeker,” Medvedev said in an interview in Davos with Bloomberg Television on Jan. 23, defending the decision to try him posthumously. “He was a corporate lawyer or accountant, and defended the interests of the people who hired him.”

The lack of a single conviction of officials implicated in the case is a symbol of the Russian government’s failure to tackle corruption, said Christopher Granville, managing director of Trusted Sources, a London-based emerging-markets research group. The only official to face trial over Magnitsky’s death, a prison doctor, was acquitted in December.

“The Magnitsky case is a very emotional black mark against the Russian investment environment,” Roland Nash, chief investment strategist at Moscow-based Verno Capital, which manages about $200 million in Russian equities, said by phone on Jan. 17. “It harms sentiment.”

An investigation by Hermitage Capital, a London-based investment fund, has traced $134 million through bank accounts and shell companies in at least 17 countries. Hermitage accused government officials of stealing from taxpayers.

A human rights council, under then-President Medvedev, urged the prosecution of officials in 2011 for Magnitksy’s death. It said he was bludgeoned with rubber batons in prison after being denied medical care during almost a year of pre-trial detention on trumped-up tax evasion charges.

Russian prosecutors in November sent to court the tax evasion charges against Browder and the deceased Magnitsky and the trial is due to start later this month. Browder’s Russian visa was revoked in 2005, and he hasn’t been back since.

Russia kept its ranking as the most corrupt country of any Group-of-20 nation, according to Transparency International’s 2012 Corruption Perceptions Index published last month, placing it at 133rd place out of 176 countries, below Uganda and Nicaragua.

To contact the reporter on this story: Henry Meyer in Moscow at hmeyer4@bloomberg.net

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

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