Rebuttal Fact Video 1


Browder and Edmond Safra (1932–1999) founded Hermitage Capital Management in 1996 for the purpose of investing initial seed capital of $25 million in Russia during the period of the mass privatization after the fall of the Soviet Union.

Beny Steinmetz was another of the original investors in Hermitage.[19] Following the Russian financial crisis of 1998, Browder remained committed to Hermitage’s original mission of investing in Russia, despite significant outflows from the fund.

Hermitage became a prominent activist shareholder in the Russian gas giant Gazprom, the large oil company Surgutneftegaz, RAO UES, Sberbank, Sidanco, Avisma and Volzhanka.[20] Browder exposed management corruption and corporate malfeasance in these partly state-owned companies.[21] He has been quoted as saying: “You had to become a shareholder activist if you didn’t want everything stolen from you”.[10] In 1999, Avisma filed a RICO lawsuit against Browder and other Avisma investors including Kenneth Dart, alleging they illegally siphoned company assets into offshore accounts and then transferred the funds to US accounts at Barclays. Browder and his co-defendants settled with Avisma in 2000; they sold their Avisma shares as part of the confidential settlement agreement.

In 1995–2006 Hermitage Capital Management was one of the largest foreign investors in Russia,[23] and Browder amassed millions through his management of the fund. In both 2006 and 2007, he earned an estimated £125-150 million[24][25] In March 2013, HSBC, a bank that serves as the trustee and manager of Hermitage Capital Management, announced that it would end the fund’s operations in Russia. The decision was taken amid two legal cases against Browder: a libel court case in London and a trial in absentia for tax evasion in Moscow.[26]

Conflict with Russian government

In 2006, after ten years of business deals in Russia, Browder was blacklisted by the Russian government as a “threat to national security” and denied entry to the country. The Economist wrote that the Russian government blacklisted Browder because he interfered with the flow of money to “corrupt bureaucrats and their businessmen accomplices”. Browder had earlier supported Russian president Vladimir Putin.[27] As reported in 2008 by The New York Times, “over the next two years several of his associates and lawyers, as well as their relatives, became victims of crimes, including severe beatings and robberies during which documents were taken”.[10] In June 2007, dozens of police officers “swooped down on the Moscow offices of Hermitage and its law firm, confiscating documents and computers.

When a member of the firm protested that the search was illegal, he was beaten by officers and hospitalized for two weeks, said the firm’s head, Jamison R. Firestone.”[10] Hermitage became “victim of what is known in Russia as ‘corporate raiding’: seizing companies and other assets with the aid of corrupt law enforcement officials and judges”.


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