Hermitage Lawyer Says Office Raided

A lawyer representing Hermitage Capital Management, once the largest foreign investor in the country, said his office was raided last week in what he said was an attempt to link him to tax fraud.

Hermitage chief executive Bill Browder, an investor-rights crusader barred from Russia on national security grounds since 2005, has said three investment vehicles formerly under his control were used to defraud the state of $232 million in taxes. Browder and his lawyer, Eduard Khairetdinov, have said the three companies' founding documents and seals had previously been taken from another Moscow law office by investigators, and subsequently used to take control of the three companies.

"They are trying to tie me, as Browder's lawyer, to the extortion of $232 million from the state budget," Khairetdinov said by telephone.

Khairetdinov, who represents Hermitage and its trustee, HSBC, said his office received a package Wednesday with Hermitage Capital Management's office in the West End of London marked as the return address.

Before Khairetdinov's staff could sort through the contents, investigators arrived and seized the package, leaving them with a protocol stating that they took the three investment vehicles' founding documents, which had not been seen since they were originally seized, Khairetdinov said.

Browder said Hermitage did not send the package and received confirmation from the courier service that the package was sent from a drop-off point in south London on Aug. 18.

The protocol also contained power-of-attorney documentation from a man named as a plaintiff in a series of lawsuits instructing Khairetdinov to act on his behalf. The lawsuits have resulted in claims that left the three investment vehicles in debt, creating pre-conditions for a $232 million tax refund, he said.

He said the investigators were from Kazan, the capital of Tatarstan, where Hermitage and HSBC are fighting in court to regain control of the companies.

A Kazan district court issued an order for the search on Aug. 11. A copy of the order showed Tatarstan Interior Ministry investigators thought the three companies had been used to commit tax fraud and requested permission to search the office.

The investigators believed Khairetdinov's Moscow office could contain valuable evidence, including proof of the companies' debts and documents authorizing him to represent all the entities, the order said.

A spokeswoman for the Tatarstan Interior Ministry said her department was not responsible for the case.

A spokeswoman for the Prosecutor General's Office was unavailable for comment.

Three other Moscow law offices were searched, Browder said by telephone from London.

A partner at one of them, Jamison Firestone of Firestone Duncan, Hermitage's general counsel, confirmed by telephone his office was searched and police removed some documents already reviewed by investigators.

"If lawyers are being attacked it makes it impossible to access the legal system. In no civilized country would the attack on lawyers be allowed to happen," Browder said.