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. Last Updated: 07/27/2016

Alfa Sues Kommersant Over Bank Crisis Story

Alfa Bank is suing the Kommersant, alleging damage to its reputation caused by a story depicting chaos in the first hours of last month's banking crisis, the two parties said Friday.

Kommersant, owned by exiled tycoon Boris Berezovsky, said Alfa's suit claimed about 320 million rubles ($11 million) in compensation for a July 7 report that mentioned savers queuing outside banks -- including Alfa -- to get their money back.

Confidence in the Russian banking system was shaken badly last month as depositors, fearing a repeat of the country's 1998 financial crisis, rushed to withdraw savings after the closure of two small banks.

"We confirm that Alfa Bank has submitted a lawsuit against the Kommersant Publishing House to Moscow's Arbitration Court related to protection of its business reputation," Alfa Bank CEO Rushan Khvesyuk said in remarks sent by e-mail.

"We think that the bank has sufficient legal grounds to do so."

Unlisted Alfa Bank is the country's largest private bank, and has a strong retail banking presence through its Alfa Express branch network.

In an article on Friday, Kommersant said Alfa Bank's suit accused the July story of violating a law banning "falsification of socially important information and spreading rumors under the cover of accurate information."

But the daily said that the July article was accurate.

"Everything stated in that article reflects reality, and in fact does not mar Alfa Bank's business reputation," Kommersant's lawyer, Georgy Ivanov, was quoted as saying.

Alfa Bank Chairman Mikhail Fridman said last month his bank had incurred at least $9 million in direct losses and much more in indirect losses during the weeks of instability.

The bank imposed a 10 percent charge on withdrawals to staunch payouts as customers pulled out $650 million in deposits in two weeks, forcing the bank's shareholders to pump in $800 million to steady the institution.

After the crisis subsided, Alfa issued a statement charging that negative and inaccurate media coverage had provoked panic among depositors and said it would argue its case in court.

Confidence in banks has yet to return weeks after the crisis subsided. Analysts said the crisis scared off depositors and that private sector banks would have to fight hard to win back clients by offering a better range of retail services.

Vedomosti quoted Federal Tax Service official Dmitry Volvach on Friday as saying the ministry had a list of at least seven Moscow-based banks it was monitoring closely.

"We seek information regularly and ask about their condition," Volvach, head of the Tax Ministry's credit institutions department, told the newspaper.