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Russia: Vavilov Denies Russian Central Bank Charges

Moscow, 15 July 1997 (RFE/RL) -- In Moscow today, former First Deputy Finance Minister Andrei Vavilov categorically denied charges that he misappropriated more than $500 million in government funds.

Vavilov, who left the government in May and now heads the private MFK bank, was accused yesterday by Central Bank President Sergei Dubinin of diverting government money through the private Unikombank for his own profit.

Dubinin charged that while in office, Vavilov illegally channeled hundreds of millions of dollars in state funds, in the form of government bonds, to Unikombank. In return for the government bonds, and on behalf of the state, Unikombank was supposed to pay out $275 million to the Moscow regional government and another $237 million to the MiG aircraft manufacturer. But according to Dubinin, when Unikombank received the government bonds, it quickly sold them and kept the profit for itself.

Vavilov today refuted the acccusation, saying all the funds had been paid out by the bank. He said the transaction was legal and normal and had been approved by his superiors. Unikombank also issued a statement calling the embezzlement charges absurd. Russia's Prosecutor General has opened an investigation into the case. Observers of the murky political and financial scene in Russia say the charges against Vavilov may be underpinned by political motives as well as economic ones.