Publication: Monitor Volume: 5 Issue: 45

Meanwhile, First Deputy Interior Minister Igor Kozhevnkov announced yesterday that his ministry is investigating charges that Aleksandr Smolensky, the head of SBS-Agro bank, embezzled US$32 million from a bank in Kazakhstan in the early 1990s. The official said that Smolensky is suspected of having used forged documents to embezzle the money from the Dzhambulsky commercial bank, in collusion with the bank’s chairman (Kommersant daily, March 5). Kozhevnkov said investigators were awaiting Smolensky’s return to Russia from Austria to question him about the case. An SBS-Agro spokesman told a newspaper that Smolensky was having heart and blood pressure problems treated in Vienna (Moscow Times, March 5). SBS-Agro officials charged that the Interior Ministry was reviving old and discredited charges against Smolensky for political reasons (Russian agencies, March 5).

At the same press conference, Kozhevnkov also detailed other criminal investigations involving other “oligarchic” banks. He charged that Grigory Koshel, deputy chairman of Oneksimbank, was involved in the embezzlement of funds from the Azot fertilizer factory. In 1997, a Moscow court ruled that Oneksimbank had acquired its stake in Azot in a fraudulent privatization tender. According to a report published today, Koshel was not the main participant from Oneksimbank in the Azot deal, but was made the fall guy. Koshel, who was arrested for his alleged part in the deal last November, was released after posting US$500,000 bail and after the Interior Ministry’s investigative committee received personal assurances from Vladimir Potanin, Oneksimbank’s founder, and Viktor Gerashchenko, who heads Russia’s Central Bank. According to this report, investigators say that Gerashchenko, while heading Moscow International Bank, concluded several deals with Oneksimbank, and specifically with Koshel (Kommersant daily, March 5).

First Deputy Interior Minister Kozhevnkov also reiterated charges that the automaker AvtoVAZ had illegally sold cars domestically for greatly reduced, “dumping” export prices, and that the profits had gone to middleman firms based offshore (NTV, March 4).

The deputy interior minister’s charges were interesting in that they hit at the interests of both the current government–SBS-Agro is closely connected to Deputy Prime Minister Gennady Kulik–and its main opponent, Boris Berezovsky, who has been closely linked to AvtoVAZ. In addition, Kozhevnkov referred to allegations against Rosvooruzhenie, Russia’s state arms exporters (Russian agencies, March 4). Last week, “Nezavisimaya gazeta” referred to corruption allegations against the company, which is headed by an ally of Primakov and Maslyukov. In addition, Oneksimbank has in the past serviced Rosvooruzhenie’s accounts.