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. Last Updated: 07/27/2016

Mayor's Wife Buys Bank Handling City's Cash

MTYelena Baturina has served on the bank's board since 1999 and is currently its chairwoman.
Yelena Baturina, the wife of Moscow Mayor Yury Luzhkov, has bought a controlling stake in one of 21 banks authorized to handle City Hall's finances.

The stake bought by Baturina late last month for an undisclosed amount brings her total holding in Russky Zemelny Bank, or Russian Land Bank, to 52.96 percent, the bank's deputy chairman, Alexei Glinyany, said by telephone Friday.

Before the deal, Baturina owned about 20 percent of the bank, according to Kommersant.

Glinyany said the Bank of Moscow, which is partly owned by the Moscow city government, and the Moscow Fund for Support of Small Businesses remain significant shareholders in Russky Zemelny Bank, but he said he did not know offhand the exact ownership structure.

Baturina has served on the bank's board of directors since 1999, and is currently board chairwoman. Viktor Baturin, her brother and vice president of her chemicals and plastics company, Inteko, is also a board member. A board meeting is expected to be held by the end of the month, Glinyany said.

Inteko, a plastics, chemicals and construction materials producer, has been one of Russky Zemelny Bank's main clients, along with the city government, City Hall's land committee and related construction companies Mosstroiresource and Stroitelno-Montazhnoye Upravleniye No. 1.

Inteko has been a high-profile name in Moscow construction. As well as manufacturing plastic goods ranging from stadium seats to plastic bags, Inteko owns a controlling stake in DSK-3, one of the major producers of PZ-M cement-panel apartment blocks, and most recently bought a 93.4 percent stake in Oskolcement last month for $90 million.

The stake in Russky Zemelny Bank was registered in Baturina's name, rather than belonging to Inteko or an affiliated company.

"For banks of that size, it is not unusual," said Mikhail Matovnikov, deputy director general of Interfax Rating Agency. "It's not typical, but it happens. In the near future, this will probably happen more often as the Central Bank looks more closely into bank ownership."

As of Sept. 30, 2001, Russky Zemelny Bank was ranked No. 233 in the nation by assets (1.47 billion rubles, or $46 million) and No. 319 by capital (230 million rubles), according to Interfax Rating Agency.

Matovnikov said the bank's assets grew rapidly, by 73 percent, over the first nine months of 2002, partly due to increased work with government funds. In addition, the bank received a 500 million ruble loan from the Bank of Moscow.