ANDREY BORODIN

50 years old | Embezzlement, corruption and abuse of power

Born in 1967 in Moscow, Russia, Andrey Borodin is the former director of the Bank of Moscow, one of Russia’s most prominent banks. Following his years as director, from 1995 to 2011, he featured on Forbes’ ranking of “The World’s Billionaires”. At the time, his fortune was estimated at 1 billion dollars.[1]Today, he is listed among the seven richest Russian citizens currently residing in the United-Kingdom.[2]

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Successful beginnings and political patronage

After completing his military service within the KGB and graduating with a Finance and Economy diploma, Andrey Borodin started working as a banker. He began his career in Germany, at the Dresdner Bank, in the early 1990s. In 1993, he left the bank to return to Russia to become the economic and financial advisor to Yuri Luzhkov, Moscow’s mayor at the time. In 1995, Yuri Luzhkov founded a regional bank, namely the Bank of Moscow. He appointed Andrey Borodin as its director.

Thanks to the backing of Moscow’s mayor, Andrey Borodin successfully grew the Bank of Moscow. Initially a regional bank, it quickly became a major Russian financial institution, standing alongside VTB or Sberbank. Russia’s financial crisis in 1998 left the bank almost untouched – drawing suspicion as to the nature of his relationship with his mentor Yuri Luzhkov.

Discrepancies, abuse of power and embezzlement  

Yuri Luzhkov’s removal from his mayoral office by Dimitri Medvedev in 2010 left Andrey Borodin in a difficult position. As soon as he took office, the new mayor Sergey Sobyanin conducted an audit into the Bank of Moscow’s accounts. Initiated in December 2010, the long-term goal of this enterprise was to privatize the bank. It revealed that together with his friend Lev Alaluvev (Bank of Moscow’s VP), Andrey Borodin owns 20,3% of the bank’s assets. However, it seems highly unlikely that his income alone would allow for such a massive investment.[3] In December 2010, the Audit Chamber of the Russian Federation announced it would open an investigation to assess a possible case of embezzlement. 

This sparked an ensuing struggle over the control of the Bank of Moscow. Borodin is fiercely opposed to the deal struck in February 2011, according to which the bank’s shares, at the time owned by municipal authorities, were sold over to VTB. Following the takeover by VTB of the Bank of Moscow, Borodin decided to sell his shares to Vitaly Yusufov, who financed the operation thanks to a loan granted by the Bank of Moscow on Borodin’s direct orders. This loan led to legal action against Borodin for abuse of power. In April, the district court of Tverskoi removed Borodin from his office as president of the Bank of Moscow. The former president was then accused of having embezzled 455 million dollars from the city budget. From 1995 to 2010, he allegedly lent money to shell companies who were then transferring the sums to Yelena Baturina, Yuri Luzhkov’s wife.[4]

In 2011, following the sale of the shares he owned in the Bank of Moscow, Andrey Borodin fled the country and settled in the United-Kindgom, where he obtained the status of political refugee in 2013[5]. His property was seized in Switzerland, Belgium[6], Latvia[7] and Luxemburg, following requests of the Russian government. In March 2013, the American consulting firm Deloitte conducted an audit of the bank’s financial statements and, identified numerous cases of fraud committed by the bank’s top executives from 2007 to 2011.[8] Shortly after, in May 2013, the Swiss federal Criminal Court recognized that the bank had been the victim of financial malpractice. [9]

Andrey Borodin is currently residing in the United-Kingdom. He is still facing charges in both Russia and Switzerland.

[1] https://themoscowtimes.com/articles/moscow-tops-new-york-for-billionaires-5543
[2] http://nordic.businessinsider.com/sunday-times-rich-list-richest-russians-living-in-britain-by-net-worth-2017-2/
[3] http://uk.reuters.com/article/russia-bankofmoscow-borodin-idUKLDE73713H20110408
[4] https://themoscowtimes.com/articles/former-bank-of-moscow-chief-borodin-fumes-9689
[5] http://www.bbc.com/news/world-europe-21627481
[6] http://www.bbc.com/news/world-europe-21627481
[7] http://rapsinews.com/judicial_news/20130821/268610927.html
[8] https://www.ft.com/content/bc88baa4-827c-11e2-8404-00144feabdc0
[9] http://www.independent.co.uk/news/uk/home-news/from-russia-with-hate-whats-not-to-like-about-billionaire-andrey-borodins-life-8706580.html

CHRONOLOGICAL PROCEEDINGS OF THE BORODIN CASE

Russia SwitzerlandUnited-KingdomLatvia

 

 Russia

Europe

2010

  • 2010 : Dimitri Medvedev removes Luzhkov, mayor of Moscow, from office. He is replaced by Sobianine.
  • December 2010: Sobianine requests an audit in the Bank of Moscow’s financial statements, after stating that he wanted to sell the shares of the bank owned by the city
  • 21 December 2010: The Audit Chamber of the Russian Federation announces it will open an investigation to assess a possible case of embezzlement
 

2011

  • 12 April 2011: The district court of Tverskoi removes Borodin from his office as president of the Bank of Moscow.
  • April 2011: Borodin sells his shares to Vitaly Yusufov for 1.1 billion dollars. Yusufov finances the operation thanks to a loan granted by the Bank of Moscow on Borodin’s direct orders.
  • April 2011: After selling his shares, Borodin flees to the United-Kingdom.
  • October 2011: The Attorney General’s office opens a criminal procedure against Borodin and freezes 368 million dollars from his bank accounts.

2012

   

2013

 
  • 1 April 2013: Andrey Borodin obtains political asylum in the UK
  • 15 May 2013: The court of appeal of the Swiss federal Criminal Court recognizes that the bank suffered from financial malpractice (in the form of embezzlement) per Swiss legislation
  • 23 August 2013: Borodin’s goods are seized in Latvia, according to Russia’s assistant prosecutor, Alexandre Zvyagintsev.   

2014

   

2015

   

2016

  • 13 May 2016: The Russian government asks the United Kingdom to seize his residence – the most expensive in the entire UK.