|
IMF may delay Russia loan
|
 |
September 7, 1999: 7:59 a.m. ET
Next installment in $4.5B package could remain on hold amid new probe
|
LONDON (CNNfn) - In the latest setback for Russia's fledgling economic recovery, the International Monetary Fund is likely to delay the next installment of a $4.5 billion loan as it probes whether the country's central bank mishandled previous loans, according to reports published Tuesday.
In independent probes, the IMF and PricewaterhouseCoopers, auditor for Russia's central bank, are determining whether the bank misused funds held in accounts at several European banks, the reports said.
Russia is already trying to fend off allegations that a syndicate of mobsters, businessmen and senior officials funneled up to $15 billion -- including $200 million in IMF aid -- through an account at Bank of New York in the U.S.
The money-laundering scandal has aroused the ire of some Russian officials, who have denounced the charges as a ploy by unnamed Western interests to humble Russia at a vulnerable moment.
Officially, however, Russian officials have struck a conciliatory stance while denying wrongdoing.
"We are not going to make excuses for ourselves," Russian Deputy Finance minister Oleg Vyugin was quoted as saying on Russia's ORT television this week. "We are ready to provide the necessary information."
Sam Jaffa, a spokesman for PricewaterhouseCoopers, told CNNfn.com that it was the Russian bank itself -- and not the IMF -- which had personally requested the audit of the European banks as a good-faith gesture.
In a previous probe, Pricewaterhouse found that the central bank had funneled $1.2 million in IMF aid through an offshore company called FIMACO on the British Channel Island of Jersey. Prior to that, the auditor had examined the use of a $4.8 billion loan extended to Russia on the eve of its financial meltdown in August 1998.
The auditor did not conclude Russia had improperly used funds in either case.
Growth seen as picking up
The latest probe is another obstacle to Russia's economy as it tries to recover from last year's collapse of the ruble and government default on billions of dollars in short-term debt. The events triggered an international market decline that sent overseas investors racing for the exits.
Russia is just scraping back now, and expects its economy to grow 2 percent this year, after contracting in all but one of the previous seven years. But analysts say even a slight perception of disarray or dishonesty in the country's financial markets could send skittish investors scrambling to get out again.
Since 1992, the IMF has lent Russia almost $20 billion. The organization -- Russia's biggest international lender -- has conditioned each aid package on a series of budgetary and economic criteria that had to be met in order to release the next tranche of the loan.
Russia received the first, $640 million installment of the latest loan plan reached in July. The country was due to receive the next installment in September, contingent on satisfying the IMF criteria. Among the conditions, Russia agreed to strict procedures for verifying compliance with the terms of the loan.
The probe centers on whether Russia's central bank may have mishandled accounts in five European banks in which it holds more than a 50 percent stake, The Wall Street Journal reported. The banks include the Moscow Narodny Bank in London and the Banque Commerciale Pour L'Europe du Nord in Paris, the newspaper said.
|
|
|
|
|
 |
|
