Interior Ministry Detains Hermitage Adviser

Hermitage Capital Management lashed out on Thursday against the detention of an adviser to the firm's Russian investment fund.

The Interior Ministry jailed Sergei Magnitsky on charges of tax avoidance on Wednesday, and he is being held in a pretrial detention center in Moscow. The Tverskoi District Court approved the detention, citing the possibility of flight because he possesses a British visa.

"Documents found during the investigation demonstrate that Sergei Magnitsky was directly involved in developing and executing a scheme that Hermitage used to avoid tax payments," one of the investigators told Kommersant.

Magnitsky is a partner with auditing firm Firestone Duncan, whose clients have included Hermitage.

He was arrested on Nov. 24, the same day the Interior Ministry carried out a raid at the Firestone's office in Moscow, according to a press release distributed by Hermitage on Thursday.

"It is a travesty of justice that an innocent man is now sitting in jail in Moscow. Sergei Magnitsky has defended his clients, and this is his reward for that brave work," Hermitage CEO William Browder said in the press release.

Browder, an investor-rights activist, has been barred from Russia since 2005 after battling Gazprom over inflated corporate spending and Kremlin-linked oil major Surgutneftegaz over its murky ownership schemes.