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. Last Updated: 07/27/2016

Police Set to Order Freeze Of Missing MinFin Bonds

Russian police are preparing an order to freeze up to $7 million of Finance Ministry, or MinFin, bonds which are missing, the second loss of such bonds reported recently, banking sources said Friday.


Prices fell on the news early in the day but dealers said they recovered later because the amount was not large and because Vneshtorgbank, a major depositary, had informed the main traders about the move.


"For the financial community it is quite understandable some bonds can be stolen ... but the situation is clear now as we know the numbers," Eurobank dealer Olivier Coursault said.


A police official confirmed that an order to freeze MinFin bonds was being prepared but was unable to give details.


Earlier this year, authorities froze $24.2 million of the dollar-denominated bonds, which had been lost. Many of them were stolen in Chechnya.


Rumors about the first freeze started circulating in June, hitting prices of the paper, which is traded in Russia and abroad. Subsequently, the Finance Ministry said it would not service the frozen bonds.


Banking sources said more bonds, belonging to a small Russian bank and some Russian foreign trade organizations, are now missing.


They said an order to freeze these bonds, the exact amount of which they could not state, had already been drawn up by detectives at the 5th Moscow police precinct but had been formulated incorrectly.


It was now being redrafted but it was not clear when the prosecutor would issue it.


"We know of such a document," said Yury Rakul, acting head of the investigations department of the 5th Moscow police precinct.