Accessibility links

Breaking News

Fugitive Former ‘Kremlin Banker’ Facing Potential Jail Time In Britain

Sergei Pugachyov (right) with Russian President Vladimir Putin in 2000
Sergei Pugachyov (right) with Russian President Vladimir Putin in 2000

A Russian tycoon once dubbed the “Kremlin’s banker” who fled abroad amid charges of financial wrongdoing faces possible jail time in Britain after the London High Court found him guilty of breaching numerous court orders in a contentious civil case involving billions of dollars.

Judge Vivien Rose said at a February 8 hearing that Sergei Pugachyov, a former Russian lawmaker and shipping magnate who was once one of the country’s richest men, would be sentenced on February 11.

The court found that Pugachyov, who did not attend the hearing, had breached 12 out of 17 court orders in connection with litigation lodged with the court by Russia’s Deposit Insurance Agency (DIA), which is acting as liquidator of Mezhprombank, the bank he founded that filed for bankruptcy in 2010.

The agency has alleged his involvement in pilfering $1 billion in funds from Mezhprombank, and Russia has issued an Interpol notice for his arrest on charges of “misappropriation or embezzlement,” allegations Pugachyov denies.

Pugachyov had lived primarily in London since fleeing Russia in 2011, and the London court had ordered him not to leave the country. He nonetheless left Britain in early 2015, saying he feared for the safety of himself and his family, and now lives in the south of France.

He portrays the litigation as part of a broader Russian government campaign -- including death threats -- to plunder his business empire.

But some skeptics -- Kremlin critics among them -- say Pugachyov and other wealthy exiles accused of crimes in Russia merely claim to be victims of a corrupt Russian government only after benefiting from a merciless system that eventually turned on them.

A former campaign adviser to Russian President Vladimir Putin, Pugachyov has accused Putin of corruption in numerous interviews with Western and Russian media outlets over the past year.

Most recently, he told a BBC Panorama investigation, Putin’s Secret Riches, that the Russian president “considers everything within the territory of the Russian Federation -- everything that can be converted into cash -- to be his own.”

Pugachyov is currently subject to a $2 billion worldwide asset freeze issued by London’s High Court based on a request from the DIA.

Judge Rose on February 8 ruled that he breached 12 out of 17 court orders, including giving false evidence, leaving the country in violation of court-imposed travel restrictions, and failing to hand over his French passport.

Pugachyov told RFE/RL last year that he left Britain “absolutely legally.”

The Financial Times cited Pugachyov’s senior litigation adviser, Michael McNutt, as saying that handing his client a jail term would be “outrageous” and “inappropriate.”

“The ruling highlights how the Russian state is using the U.K. courts against non-U.K. citizens…in order to further Russian state aims,” the British newspaper quoting McNutt as saying, noting that Pugachyov had been informed of the ruling.

Pugachyov in September took his case to the Permanent Court of Arbitration in The Hague, demanding $12 billion from the Russian government, which he accuses of "stripping" his assets.

With reporting by Bloomberg, The Financial Times, and AFP
  • 16x9 Image


    RFE/RL journalists report the news in 27 languages in 23 countries where a free press is banned by the government or not fully established. We provide what many people cannot get locally: uncensored news, responsible discussion, and open debate.