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The Interpreter
@Interpreter_Mag
Russian-to-English translation journal, with original analysis and commentary on Russia's foreign & domestic policy.
Interpreter_Mag
Russia Update: January 5, 2015

Publication: Russia Update
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The Interpreter
@Interpreter_Mag
Russian-to-English translation journal, with original analysis and commentary on Russia's foreign & domestic policy.
Interpreter_Mag
Moscow Hedge Fund Manager Disappears Along with $20 Million; Fund's Founder Also Missing
Kim Karapetyan, the CEO of Blackfield Capital in Moscow has disappeared, taking the company's cash with him, the Wall Street Journal has reported (see "Chaos Rules at Russian Hedge Fund as Boss Vanishes):

The firm’s employees didn’t know anything was amiss until mid-October, when three men charged into Blackfield’s offices in an upscale complex along the Moscow River in central Moscow, said people who were there.

The men, who didn’t identify themselves, said they were looking for Blackfield’s 29-year-old founder, Kim Karapetyan, according to the people who were there.

But Mr. Karapetyan wasn’t in the office that day or the next, when senior executives explained to the staff of about 50 that there was no longer any money to pay their salaries, said one former senior executive and ex-employees. The executives disclosed that all the money in the company accounts—some $20 million, including investor cash—was also missing, they said. It couldn’t be determined whether investors were from Russia or other countries.

“Our CEO just…disappeared,” said Sergey Grebenkin, one of the firm’s software developers, in an interview.

It's interesting that the Western press is noticing this story just now, when in fact Forbes Russia covered it back in October 2014. They reported how Karapetyan disappeared with all the money, and also added the important detail that the company's founder Vaginak Mkhitaryan also "stopped coming to the office and ceased to be accessible to investors."

Despite the British-sounding name, the company obtained Russian dealers' licenses to manage securities. Blackfield was in the process of creating an offshore company at the time of the disappearances. According to Aram Gushchyan, head of the algorithms desk and a member of the committee on the futures market at the Moscow Stock Exchange, $20 million was supposed to turn up in Cayman Island accounts -- but went missing. The Interpreter has a translation:

Blackfield Capital stated that it was creating the Global Tactical Asset Allocation Fund and Alpha Equilibrium Quant Fund (both in the Caymans). Gushchyan says that Blackfield Capital's management provided information to potential investors claiming that investors in the company supposedly included Roman Abramovich's Milhouse and Mikhail Prokhorov's Oneksim [not confirmed--The Interpreter]. After the disappearance of the management, Gushchyan learned that they had told potential clients about an increased profitability that supposedly could reach 60% a year. He maintains that he did not know what methods were used to attract clients and had no relationship to the schemes. Olga Kokoreva who was formerly responsible for work with investors at Blackfield Capital reports that she no longer works at the company and doesn't know about its situation.

Blackfield was infamous not only for its lavish parties but for poaching executives from other companies including Deutsche Bank, Yandex, Aton Asset Management, Kaspersky Lab. Sberbank CIB, Renaissance Capital and Deloitte, says Forbes Russia.

Forbes says that Blackfield employees are saying Karapetyan is hiding out in the US, and that he was receiving violent threats from Russia. But calls to his mobile phone have not been answered.


The Interpreter
@Interpreter_Mag
Russian-to-English translation journal, with original analysis and commentary on Russia's foreign & domestic policy.
Interpreter_Mag
Young Dagestani Soccer Champion Gunned Down by Parent's Home Near Makhachkala

Glasan Magomedov, a soccer star from Dagestan, was gunned down by his parent's home last week while visiting his native town of Novokuli Kumtorkalinsky District near the capital of Makhachkala, AOL Sports reported.

Magomedov joined hundreds of young men in this region who are killed at the hands of security police combating Islamic extremism, or by various factions or mafia gangs.

According to The Associated Press, Magomedov's car was sprayed by machine gun fire. He died from his wounds while be transported to a nearby hospital, according to a statement released by Anzhi.

There have been no arrests and there were no reports of other casualties, but the club said there was no way that Magomedov could have been targeted for anything he had done to provoke some sort of retaliation.

"One thing can be said with confidence -- Magomedov could not have provoked anything like this in any way," the statement said.

According to Caucasian Knot, a regional news service, Magomedov had dropped off several friends and was near his parent's home when he was gunned down. That suggests the killers were following him, and knew where his parents lived, not that he was accidentally caught in cross-fire.

Yet his fellow players and friends say they knew of no reason while Magomedov would be targeted as he was a good person and not involved in any scandal.

Magomedov was a player for the Russian Anzhi Makhachkala club. He had been living in Egypt and had been home only a few days after returning for a visit. Says AP:

Anzhi, which was relegated to the second tier in Russia's domestic league last season, has had a policy of having its star players -- such as striker Samuel Eto'o -- in Moscow to avoid the security risks in Dagestan.

The killing immediately sparked talk about how secure Russia would be as host for the 2018 World Cup. The same issues played with the Olympics, although in the end a combination of overzealous security and tough rules prevented any mishaps. Several months before the Games, Russia was plagued by several terrorist attacks, in which all the perpetrators were killed.

In the post-Soviet countries, sports is riddled with crime and corruption and intertwined with security and intelligence. Athletic facilities and clubs are seen by the state as a means of establishing the prestige of the state, especially abroad and also as a means of channeling the energies of young men who might otherwise fall prey to gangs and extremist Islamist groups.

Magomedov's funeral took place today in Makhachkala.

The Interpreter
@Interpreter_Mag
Russian-to-English translation journal, with original analysis and commentary on Russia's foreign & domestic policy.
Interpreter_Mag
Mikhail Khodorkovsky Revives an Old Russian Tradition: Exile

Julia Ioffe has an article that appeared in the New Yorker today titled "The Man To Take On Putin" about businessman and former political prisoner Mikhail Khodorkovsky.

We were struck by the comment on the Russian tradition of exiles, which mentions Alexander Herzen, whose journal's name was the inspiration for our own blog name, "The Bell":

There is a long history of opposition figures pondering and trying to influence the Russian condition from abroad. In the nineteenth century, Alexander Herzen, a liberal populist living in exile in London and Geneva, published essays in his journal, Kolokol (The Bell). (The tsar, Alexander II, was an ardent reader and eventually agreed to free the serfs.) Leon Trotsky edited Pravda while living in Vienna. Lenin, who, after Paris, lived in Zurich, not far from where Khodorkovsky lives now, began publishing his Communist newspaper, Iskra (The Spark), in Germany.

Disturbingly, this tradition, which seemed to wane after the collapse of the Soviet Union, is now reviving again. Ioffe makes a stark tally of just how many writers, artists and scholars and entrepreneurs have been forced to emigrate from Russia and go into exile -- starting with Khodorkovsky himself:

These days, many of those who still agitate for a freer Russia assemble abroad. The editor of Lenta.ru, once the most popular news site in Russia, was pushed out because of the site’s reporting on the war in Ukraine; most of the editorial staff resigned in protest. Part of the team moved to Riga, where it has established a new Web operation, called Meduza.

Ilya Ponomarev, once a vaguely oppositional figure in the Russian parliament, is now living in San Jose, California. Anna Veduta, the press secretary of the opposition leader and anti-corruption campaigner Alexey Navalny, is studying at Columbia University. Navalny’s lieutenant, a banker named Vladimir Ashurkov, is in London, having fled a set of trumped-up criminal charges. Leonid Bershidsky, one of Russia’s most prominent columnists, is writing about Russia’s ills from Berlin. Sergei Guriev, an economist who once advised both the Kremlin and Navalny, now teaches in Paris, at the Institut d’Études Politiques. Rustem Adagamov, one of Russia’s leading bloggers, is in Prague. Khodorkovsky’s Open Russia, a loose affiliation of journalists and activists, has its nerve center there, too.

And there are many others, for example the writer Masha Gessen, who was forced to leave Russia with her partner and their children due to Russia's anti-gay laws; Oleg Kashin, a blogger brutally beaten in Russia following critical articles who had to move to Europe; Marat Gelman, the art gallery owner who also suffered a beating some years ago, and recently the closure of his projects, who finally opted to leave; Pavel Durov, the entrepreneur who founded the popular Russian social network VKontakte, who refused to give up his customers' private data to the secret police nor bow to political pressures yet was finally compelled to sell his shares and leave for Europe. And many more whose names are not known.

(Note: The Interpreter is a project of the Institute for Modern Russia which is funded by Pavel Khodorkovsky, the son of Mikhail Khodorkovsky.)

-- Catherine A. Fitzpatrick


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