Bershidsky on Europe: BMW Spies, Vivendi Battle

Here's today's look at some of the top stories on markets and politics in Europe:

Here's today's look at some of the top stories on markets and politics in Europe:

Russian fraud case leads to New York asset seizure.

U.S. prosecutors moved to seize $23.7 million worth of Manhattan real estate allegedly bought with proceeds from an infamous Russian tax scam. The case is based on a story Bill Browder, a former U.S. citizen now carrying a British passport, has been telling the world for more than six years. According to prosecutors, the corporate identities of three Russian companies were stolen from the Hermitage Fund, run by Browder in Moscow. The companies were then used to fraudulently reclaim about $230 million worth of value-added tax from the Russian budget, with a lot of help from tax officials. After passing through a number of small banks in Russia and Moldova, some of the money landed in New York and was invested in swanky condos. The scheme is now being investigated in a number of countries, but not in Russia. In the U.S., it led to the adoption of the so-called Magnitsky Act, named after Browder's lawyer Sergei Magnitsky, who died in a Moscow jail after after attempting to investigate the fraud. The act banned a number of Russian officials from entering the U.S. and played a big part in the recent cooling of Russian-U.S. relations. If Russia keeps closing its eyes to major corruption cases, other countries are forced to do its work for it. Taking some responsibility would lend President Vladimir Putin more international prestige than any diplomatic tour de force in Syria.

Spain plans 50-year bond as yields fall below Italy's.

Yields on Spain's 10-year government bonds dropped to 4.51 percent, compared to 4.53 percent for similar Italian paper as political uncertainty continued in Italy. A hearing on former Prime Minister Sylvio Berlusconi's ouster from the Senate was postponed until Thursday, and the threat that Berlusconi would bring down the country's ruling coalition remained. Spain, by contrast, is not in political turmoil, and it is doing better economically, finally showing signs of a return to growth. The financial markets may be starting to realize that pricing the two countries' debt similarly is a mistake. The Spanish government hopes to take advantage of this shift by issuing a 50-year bond, the first since the times of dictator Francisco Franco, and healthy demand for the rare instrument is likely to be Spain's reward for responsible post-crisis policies.

BMW accused of industrial espionage in France.

Paris car-sharing company Autolib', part of billionaire Vincent Bollore's business empire, has filed an industrial espionage complaint against BMW after catching workers from a firm employed by the German carmaker tampering with electric car charging points. The two employees of the engineering firm P3 were arrested by French police but released the following day. BMW said it was just testing the charging points for compatibility with its new electric model, the i3, soon to hit the market. Whether or not Autolib's techology was of interest to BMW, with its vast engineering expertise, the French company's business model is its real treasure, with 34,000 subscribers paying to use 1800 electric Bollore Bluecars in Paris and its suburbs. The Bollore group is expanding the scheme to other French regions, but even the existing network of 4,000 charging points is clearly of interest to electric car producers.

French business titans slug it out in Vivendi boardroom battle.

Europe's biggest media and telecom company, Vivendi, is about to appoint a new chief executive, and its powerful chairman, Jean-Rene Fourtou, and biggest shareholder, Vincent Bollore (him again), have clashed over candidates. Fourtou suggested Thomas Rabe, who now heads the German media group Bertelsmann. Bollore, determined to "keep the company French," briefly became a candidate himself, maneuvering Fourtou into giving up on Rabe. There is more to the struggle than egos and personalities. Fourtou, who saved Vivendi in the early 2000s after a Napoleonic acquisition spree ended in a $30 billion loss, wants to concentrate on media and entertainment, shedding telecom assets. Bollore, France's 10th richest man who owns 5 percent of Vivendi shares, is unsure about that strategy and wary of Fourtou's dominance in the company's decision-making. Ultimately, however, Vivendi will need to become more focused. Now, the former water company is still something of a grab bag for various assets picked up mainly because they were available.

$8 million apartment repossessed in London.

Bankrupt Irish property developer Ray Grehan's apartment in London's most expensive residential development, One Hyde Park, has been repossessed by Ireland's "bad bank," the National Asset Management Agency. Grehan owes it almost $400 million. The agency plans to sell the one-bedroom apartment for $8.25 million, $2.44 million more than Grehan paid for it in 2007. London appears to be heading toward another real estate bubble: Prices of expensive homes here already stand 40 percent above their pre-crisis peaks.

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    Leonid Bershidsky at

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