Self-exiled Russia economist Guriev voted back onto Sberbank board

By bne IntelliNews May 31, 2013

Ben Aris in Moscow -

There was high drama at Sberbank's annual general meeting on Friday, May 31 as celebrity Russian economist Sergei Guriev was voted back onto the board of Russia's biggest bank despite having fled the country last weekend in fear of being arrested.

Guriev said earlier he had withdrawn his name from the list of board candidates. The economist is now in France after leaving hurriedly over worries he was getting caught up in the Kremlin's widening crackdown on opposition protesters and their backers, which observers say is rapidly taking on the appearance of a classic 1930s-style Stalinist purge. But the head of Sberbank's legal department told journalists ahead of the vote that Guriev's name was still on the ballot because it was too late to remove it.

Despite Russia's reputation for lawlessness, it has stringent corporate action laws that govern shareholder meetings and the agenda - lists of candidates for posts and permissions to vote by proxy have to be set at least 45 days in advance of a shareholder meeting. No changes are possible after this deadline.

Guriev is an extremely well-known economist, the rector of the liberal New Economics School that advises Prime Minister Dmitry Medvedev, amongst other people, and is credited with being a leading intellectual force behind much of Russia's current reform plans.

Despite being absent from the country and saying he didn't want the job, Sberbank's shareholders voted overwhelmingly to reappoint Guriev to the bank's supervisory board. Guriev's name got 22.7bn of share votes in favour of his reappointment, more than anyone else, and even beat out the bank's chairman and former minister of economics and trade German Gref, who received 20.6bn of the votes for his reappointment.

The result was a shock and some pundits are asking if the vote is a mini-rebellion against the authorities, who have been cracking down on corruption within the ranks of officialdom as well as targeting opposition politicians and non-governmental organisations.

The main question is who voted for Guriev: 44% of the bank's shares are currently owned by foreign investors, according to Anton Karamzin, head of Sberbank's investor relations, and many of them can be expected to support Guriev. However, the state owns another 56% of the bank's shares, which means Guriev must have had a great deal of support from Russians. These days Sberbank's shares are the gilt stock of the Russian equity market and pretty much anyone who is invested in Russia - both Russian and foreign - holds some Sberbank shares. In this sense, the vote for the Sberbank board can be taken as a vote on the government's policies.

However, Guriev has been associated with the opposition blogger Alexei Navalny, to whom he offered advice on a reform agenda. His school has also reportedly received financial backing from jailed Yukos founder Mikhail Khodorkovsky. Moreover, Guriev was a member of the Kremlin's human rights council and took part in an evaluation of the court proceedings against Khodorkovsky, concluding that he was sentenced unjustly in his second controversial trial in 2011.

Russia's Investigation Committee, which is spearheading the anti-corruption campaign, called Guriev in for questioning as a witness in the Khodorkovsky case in April. All this activity has led to speculation the Kremlin is cooking up yet another case against the troublesome oligarch to keep him in prison.

For Guriev, things came to a head at the end of last week when the committee demanded he submit five years' worth of his emails and other documents, as well as computers. Guriev then approached top government officials for help, according to bne sources close to Guriev, but was told they were powerless to stop the investigation and advised him to leave the country. He is now in Paris where his wife, also an acclaimed economist, teaches at a French university. Guriev told the liberal radio station Echo Moskvy on Friday, May 31 that he is not coming back: "I prefer to live in a country where I am not threatened."

The whole episode is extremely embarrassing for Russian President Vladimir Putin, who has been calling for improvements to Russia's investment climate. According to Guriev, Putin had reassured him he would come to no harm, but clearly Guriev was not confident that even Putin could protect him. "I won't go back even if there is a small chance of losing my freedom," he said in a written exchange with the New York Times. "I have not done anything wrong and do not want to live in fear."

The reasons for the threats against Guriev remain very unclear. He is well-liked and respected by everyone and told bne in an interview earlier this year that he regularly advises not just liberals, but also many top government officials, as well as many of the leading oligarchs, such as Kremlin-insider Mikhail Prokhorov. At a small reception to celebrate the New Economics School anniversary earlier this year, the room was filled with a who's who of oligarchs, politicians and heads of foreign investment banks, one participant tells bne.

Guriev's friends speculate that he has simply been caught up in a more general purge of government. While the crackdown on NGOs and opposition leaders this year has been widely reported, state officials are equally in danger. The anti-corruption campaign was ramped up in November last year when then-defence minister Anatoly Serdyukov was sacked and accused of corruption. Since then, three Duma deputies were forced to resign on corruption charges and the heads of several big state-owned companies have also been accused. Even the mighty Gazprom is currently being audited and some of its subsidiaries are being investigated on corruption charges. "It all smacks of a 1930s purge," says one of Guriev's close associates, who is in touch with the economist but didn't want to be named. "He could well have just been caught up in somebody's fight or desire to settle scores. That's the problem with purges: everyone is guilty and merely accusing someone of something is enough to get them out of the way."

While Guriev has been outspoken on economic issues and warned that the current policies will lead to economic stagnation, he is unusually a lot more circumspect when it comes to politics. He was again on Friday, May 31 when asked who was to blame for the attack. "I have no complaints about either Vladimir Putin or Dmitry Medvedev. I heard them say that nothing is threatening me and that they will not interfere in the work of the Investigative Committee. I respect such an approach and believe that it is wrong to ask the president of the country to interfere on each occasion," Guriyev told the Ekho Moskvy radio station.

Guriev has already taken up a post as the visiting professor in the economics department at the Institut d'Etudes Politiques, in Paris.

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