Russian police are threatening to seize documents unless HSBC Holdings Plc hands over information required for a criminal investigation into Hermitage Capital Management Ltd., the investment fund said.
Under a new criminal case alleging “fraudulent actions,” Russia’s Interior Ministry is demanding that HSBC’s Moscow unit provide financial and banking information about the fund’s companies dating back to 1996, Hermitage said in an e-mailed statement today. Otherwise, the documents can be taken by force, it said, citing a request from the ministry to HSBC.
Andrei Pilipchuk, a ministry spokesman, declined to comment when contacted by Bloomberg. Evgenia Efimova, a spokeswoman for HSBC in Moscow, said she couldn’t comment immediately.
Russia is prosecuting on tax-evasion charges London-based Hermitage head William Browder and a lawyer who worked for the fund, Sergei Magnitsky, who died in a Moscow prison in November 2009. The trial opened last month.
Magnitsky died at age 37 while in pretrial detention after alleging the biggest known tax fraud in Russia, 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 playing a role in Magnitsky’s death and Russia’s government retaliating by barring American citizens from adopting Russian orphans.
Browder is being tried in absentia on the same tax-evasion charges as Magnitsky, and has denied any wrongdoing by either of them. He has lobbied for U.S. and European legislation targeting 60 Russian officials who he says are responsible for Magnitsky’s death with visa bans and asset freezes. Hermitage was once Russia’s biggest foreign equity investor.
The Prosecutor General’s Office said Nov. 29 that Browder and Magnitsky are accused of evading taxes of 522 million rubles ($17 million). Browder, a British citizen, is refusing to take part in the proceedings and the U.K. authorities aren’t cooperating in the case, the prosecutor’s office said.
HSBC said in October that it’s focusing on organizing Russian debt sales and providing loan financing and export credit a year after selling its consumer business in Russia.