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. Last Updated: 07/27/2016

Creditors' Jeers Rock Stadium Meet

Cat calls rang through the CSKA sports stadium Monday - but not because the club's basketball team had lost another European Cup game.

This time, the jeers came from babushkas and middle-aged men taking time off from their day jobs in the hope of retrieving frozen savings from bankrupt Promstroibank.

These members of Russia's "new poor" saw their hopes collide head-on with the powerful interests of Russia's Central Bank and representatives of Europe's biggest banking houses - and shatter.

Some 1,500 creditors showed up at the stadium Monday for a creditors' meeting to vote for a candidate to act as the bank's liquidation manager. The candidate will then be considered at a court hearing scheduled for Thursday.

In what was seen as a two-horse race between the depositors' choice, Pyotr Kushnarenko, and Central Bank favorite Viktor Frolov, the Central Bank man won hands down Monday, with over 75 percent of the vote.

For many of the long-suffering private depositors whose savings have been locked in the bank ever since it collapsed in the wake of the August 1998 crisis, that was the final straw.

"This can't be true," yelled one depositor across the hall. "Bezobraziye [Outrageous]! This is a meeting of swindlers," he shouted. "We don't know who Frolov is."

Even though private depositors sitting in the stalls outweighed them in sheer numbers, the central and foreign bankers presiding from the balcony far above the fray steamrolled through their candidate in a vote weighed by debt volumes. The millions of dollars in overdue debts held by the men on the balcony won the day.

Kushnarenko, who had actively courted the private depositors' votes, said he still hoped for the courts to overrule the vote and appoint him liquidation manager.

Meanwhile, the stadium rang with even louder hoots when depositors - owed around 1 billion rubles ($34 million) - heard the proposed monthly salary for the bank's new liquidation manager of 45,000 rubles ($1,570).

For many of them, that salary was almost the size of their lost savings.

"People don't matter here. Money talks. It's just one long fight between members of different oligarch groups. I don't know why I bothered coming," said Nina, an unemployed woman in her 40s who still hasn't seen a kopek of the 92,000 rubles she held in the bank. She had deposited that amount (then worth about $15,000) just before the crisis, putting most of the proceeds from selling her apartment into the bank.

Promstroibank, once one of Russia's leading industrial investment banks, came out of the crisis with debts exceeding assets by approximately 3 billion rubles, said Vladimir Korotkov, the head of the bank's corporate client department.

"That's buttons compared to the massive debt holes that other major banks bailed out by the Central Bank came out of the crisis with," he said.

"SBS-Agro has received over 7 billion rubles in stabilization credits from the Central Bank. We needed less than half that amount and still got nothing," he said.

The bank now owes around 50,000 private depositors.

Foreign creditors - including Bayerische Vereinsbank, London Forfaiting Co., Dresdner Bank and Central Bank foreign affiliates Eurobank and OstWestHandelsBank - hold up to 60 percent of the bank's debts, Korotkov said.

He said that over $100 million in syndicated loans owed to foreign creditors had been the ruin of the bank when the ruble devaluation saw the debts mount rapidly in ruble terms.

But even though Bayerische Vereinsbank is the bank's biggest creditor, holding 19 percent of its total debt at 911 million rubles, the Central Bank holds sway because foreign creditors include its affiliates, Korotkov said.

The Central Bank alone is owed 417 million rubles, according to Promstroibank documents.