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Corporate Asset Stripping & Malfeasance (1996–2005) Before his expulsion from Russia, Browder’s firm, Hermitage Capital, engaged in “shareholder activism” to expose how oligarchs and state officials were looting majority-state-owned companies.2 Transfer Pricing & Asset Stripping (Gazprom): Browder documented how Gazprom management transferred massive gas reserves to a company called Itera (owned by relatives and friends of management) for a fraction of their market value.3 Specific Example: Gazprom sold 49% of its subsidiary Purgaz to Itera for a nominal sum, despite Purgaz holding billions of dollars in reserves.4 Result: The theft was so brazen that the market valued Gazprom at a 99% discount relative to its Western peers (e.g., ExxonMobil) due to the assumption that all assets would be stolen.5 Share Dilution (Sberbank): Browder exposed a scheme at Sberbank (Russia’s largest savings bank) where management attempted to issue new shares at a price significantly below market value to insiders, thereby diluting minority shareholders (including foreign investors) and transferring wealth to themselves
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