LONDON (CNNfn) - In an effort to hide funds from creditors, Russia transferred billions of dollars of its hard currency reserves to a fund management company in an offshore U.K. territory, according to published reports Friday.
Sergei Dubinin, the former head of Russia's central bank admitted Thursday to the long-suspected transfers to the Channel Islands tax haven of Jersey, which included funds from the International Monetary Fund, according to the reports.
Russia's prosecutor-general, Yuri Skuratov, last week alleged that up to $50 billion of central bank reserves may have been transferred offshore over five years. He then officially resigned, possibly under pressure from President Boris Yeltsin.
The transfers, from 1993 to 1997, were not illegal, but could complicate the Russian government's efforts to restructure its $150 billion in overseas debt and strike a new deal with the IMF, the reports said. Russian officials have suggested that they may ask for up to 50 percent of their debts to be forgiven.
Dubinin, who ran the central bank from 1994 to 1998, said the central bank transferred reserves because an overseas creditor had been pursuing legal action to recover Soviet-era debts on which the Russians had defaulted, the reports said.