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Hermitage’s Browder Wins Dismissal of Russian’s Libel Case

Hermitage Capital Management founder William Browder
Hermitage Capital Management founder William Browder is in the U.K. and appealing the Russian sentence. Photographer: Chris Ratcliffe/Bloomberg

Hermitage Capital Management founder William Browder won the dismissal of a U.K. libel case filed by a former Russian policeman accused of playing a part in the 2009 death of legal and tax adviser Sergei Magnitsky.

Judge Peregrine Simon ruled that the U.K. wasn’t the right jurisdiction for the ex-policeman, Pavel Karpov, to file the lawsuit. The dispute is part of a larger fight over Magnitsky’s death in prison and duelling accusations of tax fraud between Hermitage and the Russian government.

Hermitage, once Russia’s largest portfolio investor, shut its Russia fund in March as Browder, 49, was sued for libel in London and tried in absentia for tax evasion in Russia. A Moscow court found Browder and the late Magnitsky guilty of tax evasion in July, sentencing the businessman to nine years in jail. Browder is in the U.K. and appealing the Russian sentence.

“This is a global case of forum shopping,” Mark Stephens, a lawyer for Browder, told reporters outside court. “Crooks, brigands and oligarchs have come to London to launder their reputations,” and today’s ruling “will be a disincentive for people of that ilk.” Stephens also represents Bloomberg News and other media organizations.

Karpov filed the London suit over a series of videos accusing him of kidnapping, attempted extortion and killing Magnitsky.

Unjustified Allegations

Lawyers for Karpov said in a statement that while Judge Simon dismissed the suit, he ruled that Browder and Hermitage did “not come close to providing sufficient evidence to support the unjustified allegations they have made.”

In 2011, a human-rights council under then-President Dmitry Medvedev called for officials to be prosecuted for Magnitsky’s death. The council said he was bludgeoned with rubber batons after being denied medical care during almost a year of pre-trial detention on trumped-up tax evasion charges.

Russia ended its investigation in March into Magnitsky’s death, saying it found no sign he’d suffered physical abuse while he was detained.

Magnitsky was “not a truth-seeker,” Medvedev said in a Bloomberg Television interview in January. “He was a corporate lawyer or accountant, and defended the interests of the people who hired him.”

Diplomatic Intrigue

Magnitsky and Browder are accused of evading 522 million rubles ($16 million) of taxes, the Russian Prosecutor General’s Office said in November. Browder has denied any wrongdoing by either himself or Magnitsky. He successfully lobbied for U.S. legislation targeting 60 Russian officials he says are responsible for Magnitsky’s death with visa bans and asset freezes.

The case sparked a diplomatic row, with the U.S. and U.K. imposing sanctions on Russian officials accused of playing a role in Magnitsky’s death and Moscow retaliating by creating its own list of banned human-rights violators, including people the Foreign Ministry accused of torture at Guantanamo Bay, Cuba. Russia followed with a ban on adoptions by American citizens.

Browder accuses a Russian-run criminal organization of conspiring to take control of Hermitage subsidiaries and having done that gave themselves a $230 million tax refund unlawfully, Judge Simon said.

The case is Pavel Karpov v William Browder & Ors in the U.K. High Court of Justice, Queen’s Bench Division Case No. HQ12D03133

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