SOURCE: Russian News Service

August 24, 2010 01:17 ET

RNS: Russian Prosecutors to Investigate Charges Against Member of State Duma Ashot Yegiazaryan

MOSCOW--(Marketwire - August 24, 2010) -  Russian News Service reports: Russian businessman Vitaly Smagin has appealed to the Prosecutor's General Office to open a criminal investigation against Ashot Yegiazaryan, the member of the Russian Duma. According to Smagin, Ashot Yegiazaryan had allegedly seized the businessman's stake in a large Moscow shopping center. The charges against a State Duma official came amid the broader controversy that shook the Russian Parliament. Earlier this summer, President Medvedev and the government has openly criticized the Duma deputies for routinely ignoring the parliamentary sessions and showing up no more than few times a year and using their position as a cover for business activities.

Russian law provides the members of the State Duma with immunity against criminal charges, a benefit much appreciated by businessmen who find their way into the Duma to protect themselves against possible criminal prosecution.

Smagin's statement to the Prosecutor General, a copy of which was obtained by Russian News Service, recounted how Yegiazaryan, Smagin's former partner, forced the businessman to provide his 20 percent-stake in the Europark Shopping Center as a collateral against a loan from Deutsche Bank. Then Yegiazaryan allegedly staged the bankruptcy of the company that received the loan and bought out the nominally-priced collateral from Deutsche Bank through his associates, including his brother Artem Yegiazaryan.

In a phone interview, Vitaly Smagin confirmed the charges against Yegiazaryan and said that the criminal probe was the only choice once he had discovered the fraud. "Mr. Yegiazaryan and his associates had devised the scheme to steal my stake in the Europark Shopping Center," said Smagin.

In Russia, the bankruptcy and the arranged collateral buy-out are commonly used by corporate raiders. The Europark case is uncommon only because of its price of over $100 mln and the fact that the high-ranking government official is involved. The shopping center, opened in 2005, is one of the largest shopping centers in Russia. It's located on the prestigious Rublyovskoe Shosse in western Moscow.

Russian News Service ("RNS") is the open news partnership administered by Russia! magazine. It provides coverage of the Russian business, politics and culture.