Auctioning Assets

I have discussed the Central Bank’s asset stripping of the banks it is shutting down here before. Rossiskaya Gazeta published an interview today with the Deposit Insurance Agency’s Deputy General Director, Oleg Baranov, about the agency’s plans to hold live auctions to sell the property of bankrupt banks. The assets will be sold to repay defrauded investors, Baranov claimed.

The DIA (Russia’s equivalent to the US’ FDIC)  plans to revive live auctions, with the first one taking place before the end of the year. Ordinary citizens will be allowed to participate in the process. Baranov told RG that they hoped that the competitive atmosphere of a live auction would net them more profit from the assets. He also explained that customers would be allowed to see the items before the auction to see what they were getting.

The DIA is already selling some items online, Baranov acknowledged, furniture, phones, computers, and so on. They are hoping to start selling the same type of items in live auction. If it goes well, they will expand and start auctioning off items of greater value, at least up to half a million rubles.

The newspaper also asked Baranov about the value of the total assets of liquidated banks.

The DIA is overseeing the liquidation of 287 credit institutions, Baranov answered. “The aggregate value of their assets is about three trillion rubles. And it is constantly growing due to the ongoing withdrawal of licences.” He also told the paper that his agency is currently overseeing the elimination of 34 state pension funds.

The Russian government is also looking to recoup its losses by seizing assets of Russian bankers who have fled abroad. The British authorities are still cooperating in this retrieval process, Baranov told RG, “despite some geopolitical differences” they “acted… according to the law, and not guided by emotions.” He cited the case of Sergei Pugachev, whose assets were turned over to the DIA this year by a British court. The International Business Times reported in August that “Pugachev is accused of siphoning $700m (£531m) from his bank, Mezhprombank, including Russian government bailout funds during the financial crisis.” The agency is currently in the process of selling two of Pugachev’s UK properties.

One thought on “Auctioning Assets

  1. Pingback: Russia’s Economy: A Primer – Nina Jobe

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