Birth: 21 September 1956
Citizenship: Russia
Area of expertise/official title: Chairman, VTB Bank (2002–to date)
Table of Contents
Biography of Kostin Andrey
On September 21, 1956, Kostin Andrey was born in Moscow. In 1979, he got a degree with honours in international economics from the economics school at Moscow State University of Lomonosov. In 1982, he defended his thesis and got a degree as a Candidate of Economic Sciences. His thesis was called “Globalization as a Form of Internationalization of the Economy.”
From 1979 to 1992, he worked as a diplomat at the USSR’s General Consulate in Australia and the USSR’s Embassy in Great Britain.
From 1993 to 1995, he was the Deputy Head of Imperial Bank’s Foreign Investments Department. He was chosen as the first Vice Chairman of the National Reserve Bank in 1995. (NRB).
He was put in charge of Vnesheconombank on October 18, 1996, by order of the President of the Russian Federation (VEB).
He was named President and Chairman of the Board of Vneshtorgbank on June 10, 2002. (VTB).
In July 2007, he became a member of the Board of Directors of Russian Railways OJSC (RZHD). In July 2008, he was re-elected to this position, but in 2010, he refused to run again because he wanted to focus on his work at VTB.
In November 2011, he was named Chairman of the Business Council of the Asia-Pacific Economic Cooperation (APEC) Summit, which was set to take place in Vladivostok in September 2012.
He is the son of Kostin Leonid Alekseevich, a well-known Soviet leader. He has a wife. He has a child and a grandchild.
Links and information
Kostin became a banker because he had to. His boss, President of the National Reserve Bank Alexander Lebedev, wanted to hire Kostin because he had never been in charge of anything and had a good name. In 1993, Kostin got his first taste of banking at Imperial Bank. In 1995, he quit his job as the Deputy Chief of the Foreign Investment Department at Imperial Bank to become the first Deputy Chairman of the National Reserve Bank (NRB).
In 1997, the Russian Federation’s General Prosecutor’s Office started a criminal case against Fedorov Igor Igorevich, a stateless person who lived in the United States. The statement said that a number of NRB managers used internal currency bonds (OB83) to make a number of transactions with their relatives, some of whom worked in state institutions. They sent about $30 million overseas to the accounts of companies they had set up just for that purpose. These companies were used to “wash” money that had been earned illegally.
Lebedev, Kostin, and Roman Shvetsky, who is the Chairman of the Board of the Bank, were all directly involved in these transactions. Lebedev bought the internal currency bonds for $190 million (even though they were supposed to be worth $1 billion), which is 19% of what they were really worth. So, even at this point, the bank’s representatives could have made up to $110 million. In order to hide the money they made from selling the securities, Shvetsky and Kostin first made a deal with Fedorov over the phone. They signed all the official paperwork, but the deal was made over the phone. Fedorov then opened and registered several offshore companies at their request.
Then, they used a plan that made it possible to hide the involvement of the real owner of the internal bonds (OVVZ), which was the NRB, in the operations to move money abroad.
Fedorov and the NRB made an official deal to trade the OBB3 bonds from the sixth and seventh tranches for bonds from the fifth tranche. But in reality, Shvetsky and Kostin told Fedorov to put all the money from the sales of OBB3 bonds into a correspondent account of the American International Bank in Mosbusinessbank for the companies he had opened. The money was then moved, also on verbal orders from Shvetsky and Kostin, to accounts of companies in the Cayman Islands and then to accounts of companies in different banks in Switzerland. One of the companies was called Lebeko, which means “Lebedev and Kostin” in Russian.
Skandaly.ru, published on November 27, 2003
In 2009, there was a big deal about how VTB-Leasing bought 30 drilling rigs. Alexey Navalny wrote on his blog that the drilling rigs bought cost 1.5 times as much as the manufacturer’s official price list said they would: $457 million instead of $300 million. From his point of view, this only happened because an intermediary, Clusseter Ltd. of Cyprus, was involved in the deal.
It bought 30 drilling rigs from the Chinese company Sichuan Honghua Petroleum Equipment Co. Ltd. and then sold them to VTB-Leasing. VTB had a different explanation: the price seemed to be that high because it included installation, customs clearance, warranties, and spare parts for the leasing company (as opposed to the contract of Clusseter Ltd with the manufacturer). Even Kostin had to give a reason for not being there. ” VTB-Director Leasing has been fired… He said, “None of my coworkers… took any money.”
Navalny wanted the deal to buy 30 drilling rigs to be null and void. The Federal Arbitration Court of the Moscow District, which upheld the decisions of the first and appeals courts, denied his request. Navalny said that the former general director of one of the companies that had leased the drilling rigs was guilty of fraud and bribery.
The lawyer said that Well Drilling Corporation Company stole 119 million rubles in VAT from the government by giving a bribe to the Moscow tax office. In the statement about the crime he sent to the General Investigation Department of the Investigative Committee of Russia, Navalny was accused of many things.
Vedomosti was first published on September 3, 2012.
Yury Luzhkov’s retirement as mayor of Moscow in November 2010 allowed Kostin’s VTB to buy 100 per cent of the Bank of Moscow’s equity. During the course of one year, the Moscow government and VTB struggled for control of the Bank of Moscow against its senior management and co-owners, notably the bank’s president, Andrey Borodin, who is close to Luzhkov, and his advisor, Lev Alaluev. The winner is the leading individual or team. On February 22, 2011,
VTB completed its purchase of the city government’s stakes in the Bank of Moscow and Stolichnaya Insurance Group (SIG) (the Moscow city government directly owned 46.48 per cent and indirectly owned 4.33 per cent through SIG shares). On February 24, Borodin suggested Kostin for the position of Bank of Moscow board chairman (instead of the first Deputy President of the Bank of Moscow, Dmitry Akulinin, elected to the post a few days earlier, on February 21).
Borodin, who had “vigorously opposed the arrival of VTB,” abruptly changed his position, although no one could explain why. According to experts, however, agreements reached “at the expense of arm-twisting” seldom work. Thus, some observers related the searches in the bank led by Borodin on February 17 to the business dispute between VTB and the Bank of Moscow before Kostin’s selection as chairman of the board.
Source: Slon.Ru, 21 Feb. 2011.
Borodin said on April 8 that he had sold all of his shares. Representatives from VTB responded to this claim by saying that the state bank did not buy Borodin’s shares. In September 2011, VTB said that it had increased its share of the Bank of Moscow from 46.48% to 80.57% but didn’t say where it got the extra shares. According to the news, VTB bought 19.91% of the shares from businessman Vitaly Yusufov, who had bought them from Borodin in the spring of 2011.
VTB also bought 3.88% of the shares from Senator Suleiman Kerimov, and it’s likely that the Stolichnaya Insurance Group bought the rest.
After the Bank of Moscow’s shares were merged, the Deposit Insurance Agency gave the bank a loan of 295 billion rubles to help it. After this deal was done in October 2011, Vladimir Putin, the Prime Minister, criticized Kostin without warning. The prime minister said this about buying the Bank of Moscow: “You got there, but now you don’t know how to get clean. Then you go to the government and ask them to help you.”
Interfax, October 6, 2011
In December 2011, it became known that Kostin’s VTB had bought a 20% stake in Metalloinvest, a major holding company. In this context, the press pointed out that VTB had just filed a big claim against one of Metalloinvest’s structures. This could be seen as the start of a legal war between Kostin and Alisher Usmanov, who is the main co-owner of the holding, and it was thought that Usmanov didn’t stop the deal because he didn’t want to fight.
Date: December 23, 2011; Source: The Moscow Post
In November 2012, the Russian Forbes magazine put Kostin at the top of its list of Russia’s highest-paid top managers. By the book’s estimates, he made about $30 million in 2011. VTB officially denied what the magazine said about Kostin’s salary.
FOR MORE ARTICLES ON CRIMINAL AFFAIRS
1. Dion Welton: Sentenced For Prison – Criminal Affair
2. The secret luxury of the SBU officer Artem Shilo – Criminal Affair