VTB's purchase of Bank of Moscow shares to be disputed in court
MOSCOW, July 24 - RAPSI. The transaction on the purchase of 46.5 percent of shares in the Bank of Moscow from the city government has been appealed in court, an outcome which the bank warned its potential investors of in its perpetual Eurobonds, Vedomosti daily reports.
In July VTB received a claim against it registered in the Moscow Commercial Court. The plaintiff disputes the sale of the 46.48 percent stake in the Bank of Moscow, according to the Eurobonds offering memorandum.
The court's data file includes records of a lawsuit registered on May 5 by Sergei Devyatkin against the Moscow Property Department, VTB Bank and Central Fuel Company.
The court initiated the proceedings only on July 3. The first hearing will be held on August 20. Vedomosti has been unable to find out who Sergei Devyatkin is. The Moscow City Hall is also unaware of the plaintiff's background. VTB has made no comment.
VTB announced that it had purchased 46.48 percent of the Bank of Moscow shares and 25 percent plus one share of the Capital Insurance Group in February 2011, just several months after the resignation of Moscow Mayor Yuri Luzhkov.
To avoid an auction, which is obligatory in any kind of privatization in Russia, a scheme involving the Central Fuel Company, which is 100-percent owned by the city, was conceived.
The transaction was held in two stages. At first the city contributed the shares in the bank and the insurance group into the charter capital of the Central Fuel Company as payment for its additional share issuance. In doing so, the fuel company itself was then able to choose the purchaser and subsequently sold its portfolios to VTB for 103 billion rubles ($3.15 million).
The transaction triggered much contention, and there have been several attempts to contest it in court. Ekotekhnologia and the Bank of Moscow filed lawsuits but their claims were dismissed.
VTB is determined to protect its interests, according to the memorandum.