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. Last Updated: 07/27/2016

Voucher Fund, Director in Sell-Off Feud

He says they are robbers and they say they are merely doing the best they can in the unpredictable world of Russian privatization. Some 800 million rubles ($510,000) rides on whom the Moscow district court believes on March 9.


The voucher fund Neft-Almaz-Invest is seeking the damages from Mikhail Kharshan, the president of the First Voucher Investment Fund, in a case that raises serious questions about privatization ethics and shareholder trust.


The dispute centers around an interview that Kharshan gave Radio Russia on Sept. 18, in which he was asked by a caller on the radio show for his opinion on Neft-Almaz-Invest.


What Kharshan actually said in response to the question is a matter of debate -- Neft-Almaz-Invest's lawyer, Marina Kryukova, said in an interview that the district court is now in possession of a tape of the interview, but Izvestia reported last week that the tape would have been erased as a matter of course, a month after the interview, so that no transcript could possibly exist.


Tape or no tape, Kharshan does not pretend that he praised the voucher fund.


"As far as I remember," Kharshan said in an interview, "I said that shareholders should not believe the enormous promises and the fantastical claims made by the fund."


Kharshan, who describes the management of Neft-Almaz-Invest as "robbers and thieves," said he told listeners that the fund could not possibly deliver the "gigantic returns" it promised as it had "never paid anyone any dividends."


Neft-Almaz's aggressive advertising campaign, launched last summer, touted returns of 750 percent to its investors.


According to Kryukova, the fund has already partially delivered on its promises. She said the first six-month dividend paid to the original shareholders, numbering 5,112, was 375 percent.


Kharshan maintains that this was achieved through manipulation of the prices of the shares, and that only the original 12 shareholders actually received anything.


As for the second dividend payment, Kryukova acknowledged that "it is impossible to say what it will be -- the shareholders may decide not to issue any dividends at all." She said it would be decided at a shareholders' meeting this spring.


Kharshan is as skeptical about the second biannual dividends as he was about the first.


In a press release, he cited an article in Izvestia that calculated the dividends cannot total more than 0.1 percent per share -- which is, he noted, "a little less than 750 percent."


Kryukova said the investment fund, which has investments in over 150 firms -- largely chemical companies, as opposed to the oil and diamonds of the fund's name -- has not misled anyone with its advertisements.


"Everyone advertises," said Kryukova, "but it's up to each person to think and decide for himself."


Kharshan sharply criticized the State Property Committee for what he sees as lax regulation of the voucher funds, but said he was not unduly worried about the case. "It will drag on for a while," he forecast.


"But who is going to answer to duped investors?" he asked.


The State Property Committee could not be reached for comment.