FBI follows the trail of banker Kostin

What mistake did Andrei Kostin make by consolidating the business of the former USSR in the London office of VTB Capital.
16.11.2017
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The first signs of a large-scale international attack on the business of VTB Bank appeared. The Federal Bureau of Investigation (FBI) began to take a closer look at the "Mozambican deal" organized by the syndicate of banks with VTB Capital, and in the British press, the photo of VTB President and Chairman Andrei Kostin in the form of Soviet dictator Joseph Stalin is vivified.

Our debts are grave

The Federal Bureau of Investigation and the US Attorney's Office are conducting a full investigation into the sale of government bonds by the government of Mozambique, which was organized by the syndicate of banks VTB Capital, Credit Suisse and BNP Paribas. The purpose of the investigation is to reveal possible facts of corruption of state officials of the African state during the sale of Mozambique's debt obligations worth $ 2 billion. According to the authoritative newspaper The Wall Street Journal, the investigation began last summer.

It was then that the circumstances of the miraculous transformation of the state credit received for the creation of a fishing fleet in the island state became known, which eventually went to purchase warships: the organizers of the deal attempted to issue them for the protection of the fishing fleet in an investment memorandum. No one was embarrassed at the fact that the size of the created "security squadron" was twice as high as the existing Naval Forces of Mozambique, which were armed with only three boats and 200 personnel.

Then it became known that the financial regulators of several countries were interested in the circumstances of the deal. Representatives of the United States, the United Kingdom and Switzerland have begun checking the transaction for potential violations of securities laws. Banks were accused of hiding information from buyers of securities.

But the fact that at the same time professional interest in Mozambican debt was shown by the FBI agents, it became known only now. According to the WSJ, in June 2016, a small group of representatives of the New York office of the FBI to combat securities fraud visited Maputo, the capital of Mozambique, clarifying the circumstances of the deal. After that, the American federals met with investors who acquired Mozambican government bonds, and asked them to provide them with all the documents on the transaction and correspondence with the banks. In addition, similar meetings were held by the bankers themselves. In particular, representatives of the US Justice Department talked with the organizers of the transaction from Credit Suisse and VTB in London.

The Swiss reacted to this meeting almost instantly, and just in case, they liquidated the whole investment unit engaged in transactions in Mozambique. On the contrary, VTB does not know anything. But most likely the bank and its head Andrei Kostin will now have to enter into a real battle with the American justice.

A good appetite

This whole story is somehow elusively linked to the discovery on the island of Africa's largest natural gas fields. And already there, the liquefaction infrastructure is being actively created for the subsequent transportation of raw materials to the world market. Moreover, history already has a continuation. From the very beginning, the Europeans worked on the development of gas, but in March 2017 it became known that the US oil and gas corporation ExxonMobil bought from Italian Eni 25% in the project for the development of the gas field Area 4 on the shelf of Mozambique for $ 2.8 billion. "Strategic investments will allow ExxonMobil to support development rich natural gas resources in Mozambique, "commented ExxonMobil CEO Darren Woods.

Presumably, the arrival of Americans in Mozambique is explained not only by the desire to "support" the extraction of gas. The total share of ExxonMobil (35.7%) in the project will eventually equal the share of Eni (35.7%). The next largest package (28.6%) belongs to the Chinese company CNPC. And the rest of the shares "broke up" into the pockets of local firms, most likely controlled by the island's elite.

Such a situation gives the situation around Mozambique geopolitical charm - imminent in our time. Obviously, the main blow of US law enforcement agents will be at the London office of VTB Capital, in which the foreign banking business of the former USSR is consolidated. In Soviet times, such consolidation was impossible precisely because it could become an easy prey for sanctions. But, apparently, a very good appetite VTB made such a concentration possible and very vulnerable. Moreover, it is likely that the entire banking group of Andrey Kostin will answer the inexorably approaching problems of the investment business. Assembled assets in one place are too easy targets for attack.

The fact that this attack has already begun is evidenced, in particular, by articles in the British press, where the head of VTB Andrei Kostin is compared with Joseph Stalin (after the appearance of a banker at a banquet in a military jacket). All attempts of the press service to present the resulting analogy to a cute corporation have been ignored.

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