To put the scale of IMF lending to Russia into
perspective, Russia's exports of goods and services averaged about
$80 billion a year in recent years, which is over 25 times the
average annual disbursement from the IMF since 1992."
The Enrons of the East
Hermitage Capital Management, an international investment firm owned
by HSBC London, is suing PwC (PricewaterhouseCoopers), the biggest
among the big four accounting firms (Andersen, the fifth, is being
cannibalized by its competitors).
Hermitage also demands to have PwC's license suspended in Russia.
All this fuss over allegedly shoddy audits of Gazprom, the Russian
energy behemoth with over $20 billion in annual sales and the
world's largest reserves of natural gas. Hermitage runs a $600
million Russia fund which is invested in the shares of the allegedly
misaudited giant.
The accusations are serious. According to infuriated Hermitage, PwC
falsified and distorted the 2000-1 audits by misrepresenting the
sale of Gazprom's subsidiary, Purgaz, to Itera, a conveniently
obscure entity. Other loss spinning transactions were also
creatively tackled. Stoitransgaz - partly owned by former Gazprom
managers and their relatives - landed more than $1 billion in
lucrative Gazprom contracts.
These shenanigans resulted in billions of dollars of losses and a
depressed share price.
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