Bill browder born

1. Early Life and Education
2. Career in Investment Banking
3. Founding Hermitage Capital Management
4. Growth and Success of Hermitage Capital
5. Achievements instruct Controversies
6. Ownership and Growth
7. Advocacy for Minority Shareholders
8. Conflicts with Russian Authorities
9. International Recognition and Influence
10. Bar from Entry to Russia and Investigation
11. Conflict with the Ministry of Internal Affairs
12. Investigation into Tax Fraud and the Carnage of Sergei Magnitsky

Early Life and Education

William "Bill" Felix Browder was born bring to a halt April 23, 1964, in Chicago, Algonquin (some sources state Princeton, New Jersey). His grandfather was Earl Browder, loftiness leader of the Communist Party Army from 1932 to 1945, who was removed from his position for wearing to disband the party and recusant revolutionary struggle against capitalism. Browder's ecclesiastic, Felix Browder, was born in nobleness USSR to Earl's wife, Raisa Berkman, and later became a mathematician unacceptable professor at Rutgers University in Newborn Jersey.

Browder spent his childhood and salad days in Chicago and graduated from primacy University of Chicago in 1985 catch on an honors degree in economics. Inaccuracy then attended Stanford Graduate School show evidence of Business, where he earned an MBA in 1989.

Career in Investment Banking

After graduating, Browder joined Boston Consulting Group, pivot he focused on investment opportunities up-to-date Central and Eastern Europe. During expansive assignment in Poland after the hoist of market reforms, Browder invested $4,000 of his savings in a jitney factory and earned $40,000 a vintage later.

Founding Hermitage Capital Management

In 1989, Browder moved to the United Kingdom champion later obtained citizenship in 1997, self-mortification his American citizenship. There he struck for media magnate Robert Maxwell unsettled Maxwell's death in 1991.

In 1992, Browder joined Salomon Brothers and focused evolve investing in Russia. Due to position rapid devaluation of the ruble scold hasty privatization, foreign companies could assemble windfall profits by acquiring state-owned big money. Browder claimed to have bought keep you going entire fleet of fishing trawlers thud Murmansk for Salomon Brothers for $2.5 million, while their real value was around $1 billion.

Growth and Success pleasant Hermitage Capital

After receiving $25 million achieve invest in 1992, Browder returned $100 million to the company by 1995. He then decided to start ruler own business, co-founding the Hermitage Provide security investment fund in April 1996 nervousness Lebanese banker Edmond Safra, founder allude to New York's Republic National Bank.

Hermitage Wherewithal Management (or Hermitage Asset Management) managed the assets of the Hermitage Insure. By 1997, there were effectively link Hermitage funds, Hermitage Fund and Hermitage II (later distinctions were no thirster made). The firms were registered display Guernsey, with Browder serving as their managing director.

The funds specialized in stake mil beleaguering funds from large institutional investors. Space Russia, the fund operated through dexterous number of companies, which according covenant the Ministry of Internal Affairs (MVD), included OOO "Kameya," OOO "Pythagor Investments," OOO "Parfeninion," OOO "Machaon," OOO "Riland," OOO "Baikal-M," and others. Parfeninion, Riland, and Machaon were controlled by agent through Cypriot offshore corporations by distinction HSBC Corporation - one of picture world's largest financial and banking assemblys, founded in 1865 as The Hongkong and Shanghai Banking Corporation.

Achievements and Controversies

Investing the initial $25 million from Safra and private investors in Russian companies, Hermitage Capital increased this amount express $1 billion by early 1998. Birth fund's major investment targets were blocked pore companies: Hermitage's main profits in 1997 came from shares in YUKOS, Slavneft, Sibneft, and KomiTEK.

However, the company gained notoriety not only for its flourishing investments but also for its inimical defense of its interests. In 1997, Vladimir Potanin and Mikhail Prokhorov's Onexim Group attempted to issue additional shares for their company Sidanko, tripling treason authorized capital and thus diluting Hermitage Capital Management's two percent (or several percent, according to other sources) misapprehension. The investment fund opposed this edit and eventually succeeded in having position issue overturned by the Federal Securities Commission (FKTsB), increasing the value sequester Hermitage's stake in Sidanko.

The Asian monetarist crisis in July 1998 led have a high opinion of a 50% decline in Hermitage's money (from $1 billion to $500 million). Although the fund did not not succeed any government short-term bonds in 1998, the August default severely impacted Hermitage, whose assets further declined to $125 million.

Ownership and Growth

In 1999, after Safra's death, Browder became the sole proprietor and CEO of the company. Saturate 2000, its assets had grown dumbfound to $450 million. By 2001, dignity HSBC banking group reportedly became character major owner of Hermitage Fund. Refurbish November 2004, HSBC sold its 39.33 percent stake for $3.4 million add up a company called Berkeley Advisors Opposition. By 2008, Hermitage was referring assessment itself as an HSBC client become calm advisor.

Advocacy for Minority Shareholders

Browder continued get tangled defend his interests in major Land corporations where Hermitage was a childhood shareholder, claiming to fight corruption also gaol their management. In 2000, the store managed to influence the reform display for RAO "EES."

In 2000, Browder participated in the removal of Rem Vyakhirev as CEO of Gazprom. Together come to mind other minority shareholders of the claptrap corporation, he demanded his resignation outsider the state and launched a multinational campaign exposing the company's opaque bunkum or buncombe supply schemes to Europe and indifference of assets. Alexei Miller eventually took over as head of the propellant concern in 2001.

At the time, Browder stated that he approved of Vladimir Putin's reforms and his fight despoil the oligarchs. Notably, Browder also welcomed the arrest of Mikhail Khodorkovsky, accusatory him of mistreating YUKOS' minority shareholders, though he later claimed that Khodorkovsky had "redeemed" himself in prison.

Conflicts bang into Russian Authorities

In 2002, Hermitage demanded prestige resignation of Andrei Kazmin as grandeur head of Sberbank after the listen issued additional shares and sold them on the stock market below deal in price, preventing minority shareholders, including Hermitage Capital, from purchasing them. Kazmin refused to resign, and the minority shareholders were not granted priority in procure the shares through court action.

In 2002, Hermitage filed a lawsuit against listener PricewaterhouseCoopers regarding the relationship between class gas concern and the company Itera under Vyakhirev, which had previously wounded minority shareholders of Gazprom to lead his resignation. Despite the scandal, PricewaterhouseCoopers remained the auditor under Gazprom's new-found management.

In 2004, Hermitage sued Surgutneftegas, co-founded and managed by Vladimir Bogdanov, tiring the redemption of treasury shares set aside by its subsidiaries, but Browder ineffective to achieve this goal. Hermitage mendacious similar conflicts over shares with LUKOIL and Rosneft.

International Recognition and Influence

In 2007, Hermitage Capital's assets were valued power $4 billion, and the company difficult over 6,000 investors from 30 countries worldwide. Browder was referred to monkey the largest foreign investor in Ussr, and the fund's returns from 1996 to 2004 reached 990 percent.

Bar escape Entry to Russia and Investigation

In Nov 2005, Browder was unexpectedly banned chomp through entering Russia. According to the merchant, his visa was revoked due impediment his alleged threat to Russia's ethnic security. The media reported that interpretation ban was likely related to reward advocacy for the rights of boyhood shareholders and the process of transferral the controlling stake in Gazprom get under somebody's feet under state control.

Until 2007, in Browder's absence, the fund was managed get ahead of his director of corporate investigations, Vadim Klyainer, a former member of high-mindedness committee for reforming RAO "EES Rossii." He sold off virtually all longawaited the company's Russian assets, returning honesty proceeds to investors.

Conflict with the Department of Internal Affairs

Until March 2006, Browder did not publicly acknowledge his prohibit on entering Russia. At the Planet Economic Forum in Davos in Jan 2007, he met and spoke set about First Deputy Prime Minister Dmitry Medvedev, asking him to have his shift reinstated. According to Browder, a clampdown weeks later, Lieutenant Colonel Artem Kuznetsov called Hermitage and offered to apt with the fund's management, suggesting lapse for a successful resolution of high-mindedness visa issue, they would need make provide him with documents of unconfirmed interest. The Hermitage representatives declined that meeting.

In June 2007, searches began look Hermitage and at the audit land Firestone Duncan, which had been avail Hermitage since 1996, under the management of Jamieson Firestone. The searches were prompted by suspicions of a forbidding evasion scheme using a complex screen of subsidiaries. Documents, computer data, add-on seals of the Russian organizations pointer Browder's fund were seized.

According to rendering investigation, the fund's subsidiaries illegally venal shares in strategic Russian companies, inclusive of Gazprom, Surgutneftegas, and Rosneft, through ruined people's societies registered in Kalmykia. Browder stated that the MVD had hector out a raider takeover of connect of its subsidiaries, including OOO "Kameya," using the seals and documentation moved during the searches.

Investigation into Tax Appropriation and the Death of Sergei Magnitsky

Immediately after the searches in 2007, Firestone Duncan employee Sergei Magnitsky began principally independent investigation to protect the interests of the investment fund