SocGen’s Rosbank CEO Detained in $1.5 Million Bribery Sting
Stock Chart for Rosbank (ROSB)
The head of Societe Generale SA (GLE)’s Russian unit was detained in a sting operation with cash on his desk after demanding $1.5 million from a company seeking to modify loan terms, Russian police said.
Vladimir Golubkov, chief executive officer of the French lender’s OAO Rosbank (ROSB) unit, was caught counting cash in his Moscow office today, Andrey Pilipchuk, an Interior Ministry spokesman in Moscow, said by phone. The CEO had 5 million rubles ($159,000) out of the amount he’d asked for prolonging the loan and reducing the interest rate, Pilipchuk said.
Golubkov had a senior vice president collect the bribe from a company official who tipped off police, Pilipchuk said. The vice president was detained when she accepted the money. After agreeing to cooperate with police, she passed the cash to her boss, he said.
The arrest of a banker at such a senior level “hasn’t happened before in Russia, in my memory,” Pilipchuk said.
Rosbank named First Deputy CEO Igor Antonov as interim chief and is cooperating with the authorities, Dmitry Grachev, a spokesman for the lender, said in an e-mailed statement that didn’t identify the executives who were detained. Societe Generale, France’s second-largest lender, declined to comment.
Rosbank shares fell 2.5 percent to 83 rubles on the Micex, the lowest level since April 29, cutting its market value to $4.1 billion. Societe Generale rose 2 percent to 30.60 euros in Paris.
Golubkov had already received $1.2 million earlier this year from the same company official, according to Pilipchuk. The CEO was seeking the remaining amount by May 1 before traveling to Paris and may have been trying to make up for a cut in his compensation, Pilipchuk said.
The borrower is in the automobile industry, and the loan was for about $80 million, he said.
Golubkov joined Rosbank in 1999 from United Card Services and became CEO in September of 2008, after Societe Generale gained control of the lender, according to the bank’s website. Born in 1966, he graduated from Moscow State Technical University in 1990, the website says.
A video sent by e-mail from the Interior Ministry shows police officers with machine guns entering Golubkov’s office as he stands by his desk, which is covered in stacks of ruble notes.
“We don’t have any questions, this will all be reviewed during the initial investigation,” a police representative tells Golubkov in the video.
Societe Generale raised its stake in the Russian lender to about 82 percent after agreeing in 2010 with billionaire Vladimir Potanin’s Interros Holding to merge its local operations into Rosbank. Potanin remains a shareholder.
As CEO, Golubkov helped Rosbank weather the collapse of global financial markets and Russia’s recession in 2009, restoring profitability as the lender reduced costs and cut jobs. Societe Generale’s Russian operations, including Rosbank, contributed 39 million euros ($50 million) of net income in the first quarter, up from 3 million euros a year earlier, the French lender said May 7. Russian revenue rose 12 percent while costs dropped 4.4 percent from a year earlier.
Societe Generale has a 141-year-long history in Russia and had extensive bank operations in the country before the 1917 revolution. In 1993, the French lender was the first foreign bank to acquire a general license from the Russian central bank, according to Rosbank’s website. Rosbank serves 3 million customers in 340 cities and towns in Russia.
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