Publication: Monitor Volume: 3 Issue: 137

Sergei Dubinin, Chairman of Russia’s Central Bank, has accused Unikombank, one of Russia’s commercial banks, of embezzling half a billion dollars of state funds entrusted to the bank for servicing. (Reuter, July 14) Dubinin said yesterday that the case had been referred to the state prosecutor for investigation. His accusation fueled speculation over the existence of a power struggle between Russia’s top financial institutions. Dubinin said Unikombank misappropriated funds on two state grants in 1996 and 1997. One transaction involving funds allocated to Moscow oblast was worth $275 million, and a second, worth $237 million, was a loan to the MiG-MAPO plant. (RTR, Itar-Tass, July 14) Dubinin also accused the Finance Ministry of having failed to exercise proper control.

Last week, an official at the prosecutor’s office said former deputy finance minister Andrei Vavilov and former first deputy prime minister Vladimir Potanin, chairman of Oneximbank, would be among those questioned in connection with the case, which has been entrusted to the Federal Security Service. Both Potanin and Vavilov lost their government posts in the March 1997 cabinet reshuffle. There have recently been reports of a falling-out between Potanin and current finance minister Anatoly Chubais, and Potanin is suspected of being behind an attack on Chubais that appeared in Izvestia on July 1. Vavilov is currently President of the International Finance Corporation (MFK), an Oneksimbank affiliate. Last week MFK announced it was merging with Renaissance Capital: at that time it was stated that Vavilov would not work for the new bank, but would probably move to another Oneksimbank controlled company.

Dubinin went out of his way yesterday to stress that neither Chubais nor his predecessor as finance minister, Aleksandr Livshits, knew about Vavilov’s shady transactions. He also said that the other banks involved in the transactions did nothing wrong — thereby apparently vindicating Oneksimbank, which had formerly been implicated in the MiG-MAPO deal. Unikombank, whose major shareholder is Moscow oblast, denied the accusations, which the procurator is investigating. The accusations about Unikombank’s loan to Moscow oblast were first detailed last week in Moskovskie novosti (No. 27, July 6-13). Addressing a press conference this morning, Vavilov denied any wrongdoing. (BBC, July 15)

Three Russians Make Forbes 200.