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Borodin sells Bank of Moscow stake as VTB gets 70% minority support

© RIA Novosti . Sergei Piatakov / Go to the photo bankAndrei Borodin
Andrei Borodin - Sputnik International
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Bank of Moscow core shareholder and President Andrei Borodin told RIA Novosti on Friday he has sold his 20.3% stake in the bank, owned jointly with his aide Lev Alaluyev, to an unidentified investor.

Bank of Moscow core shareholder and President Andrei Borodin told RIA Novosti on Friday he has sold his 20.3% stake in the bank, owned jointly with his aide Lev Alaluyev, to an unidentified investor.

In an interview with RIA Novosti, Borodin declined to mention the price his stake was sold for but said he was not satisfied with the deal. An official from state-controlled VTB said the bank did not buy Borodin's share.

Borodin fled to London earlier this week, and on Wednesday offered VTB purchase of his stake, based on a market capitalization of around $6 billion, down from his previous valuation of between $8.2 billion and $9.6 billion. He gave VTB six days to decide.

VTB, which owns a 46.48% stake in Bank of Moscow, has gained enough support from its minority shareholders to control the bank and has no plans to make an offer to them, VTB head Andrei Kostin said on Friday.

"We have enough support from other shareholders for VTB to have operational control of Bank of Moscow," Kostin told a news conference, adding VTB had the support of 70% of shareholders who also supported former VTB employee Mikhail Kuzovlev for the post of bank president. Elections will be held for the post on April 21.

VTB bought 46.48% of Bank of Moscow, Russia's fifth largest bank by assets, from the Moscow government for 103 billion rubles as well as a 25 percent stake in insurer Stolichnaya Strakhovaya Gruppa, which owns 17.3 percent in Bank of Moscow. VTB said it wanted to buy a 100% of the bank by summer but the plan hit a snag as Borodin and Alaluyev had been reluctant to sell their share.

Borodin is a close ally of former Moscow mayor Yury Luzhkov who was fired last fall by President Dmitry Medvedev over a loss of trust. VTB made its acquisition of Bank of Moscow stake in February.

Borodin has said he went to Britain for medical treatment and will be back as soon as he recovers but at home he faces a criminal charge connected with a 12.76-billion ruble ($452 million) credit Bank of Moscow granted to a little-known company linked with property deals involving Luzhkov's wife, Yelena Baturina. The police claim the money came from the city budget and ended on Baturina's personal account, but Bank of Moscow says it violated no rules when issuing the credit.

A police source said Russia's Interior Ministry put Borodin and his First Deputy Dmitry Akulinin on a wanted list. Borodin faces up to 10 years in prison if found guilty.

Borodin has previously said he was not seeking political asylum in Britain. London has already become home to ousted Russian financier Boris Berezovsky and Yevgeny Chichvarkin, a founder of Russia's largest mobile phone retailer Euroset. Luzhkov and Baturina have also been reported to have fled to Britain.

MOSCOW, April 8 (RIA Novosti)

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