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Cablegate: Gubernatorial Machinations and Bank Panic in Khabarovsk

VZCZCXRO2018
RR RUEHAG RUEHAST RUEHCHI RUEHDA RUEHDF RUEHDT RUEHFL RUEHHM RUEHIK
RUEHKW RUEHLA RUEHLN RUEHLZ RUEHNH RUEHPOD RUEHROV RUEHSR RUEHYG
DE RUEHVK #0122 2970420
ZNR UUUUU ZZH
R 230420Z OCT 08
FM AMCONSUL VLADIVOSTOK
TO RUEHC/SECSTATE WASHDC 1032
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUCNASE/ASEAN MEMBER COLLECTIVE
RUEHVK/AMCONSUL VLADIVOSTOK 1129

UNCLAS VLADIVOSTOK 000122

SIPDIS

E.O. 12958: N/A
TAGS: EFIN ECON PGOV RS
SUBJECT: GUBERNATORIAL MACHINATIONS AND BANK PANIC IN KHABAROVSK

REF: VLADIVOSTOK 106

Summary
------------

1. Thousands of customers in Khabarovsk began a run on the
Dalkombank, withdrawing almost 2.4 billion rubles in cash --
four times the usual monthly amount. The withdrawals between
October 8 and 12 were fueled by rumors of the bank's impending
collapse. The rumors appear to have been started by corporate
raiders hoping to create a rapid decrease in the bank's value
before initiating a hostile takeover.

The Panic Begins
-------------------

2. Thousands of Dalkombank customers in Khabarovsk began a run
on the bank, withdrawing 2.4 billion rubles in cash -- quadruple
to usual amount -- between October 8 and 12. Bank customers
began the frenzied withdrawals after rumors circulated around
Khabarovsk of the impending failure of the bank. The Central
Bank of Russia stepped in to assist Dalkombank by providing
liquidity to meet the cash demand of customers. Dalkombank
management extended banking hours to process customers'
requests, and offered increased interest rates to customers who
kept their funds at the bank. Bank president Andrey Shlyakhovoy
gave a press-conference to calm the public's nerves, and by
October 13 the run ceased.

This is How Rumors Get Started
------------------------------

3. On October 21 Shlyakovoy gave his explanation for the
incident to the media, stating that the rumors of the bank's
troubles had been started by unnamed corporate raiders planning
to target the bank in a hostile takeover bid. He also asserted
that "some banks in Western Russia have already been targeted in
such attacks."

4. Aleksandr Levintal, the Head of Khabarovskiy Kray's
Economic Development and Trade Department, engaged in some
damage control as well, assuring Khabarovsk inhabitants that the
bank is sound and that the Khabarovsk banking system is
sufficiently isolated from world banking activity, and therefore
less susceptible to global financial problems. He explained
"our banks do not receive loans from abroad and do not invest in
stock markets."

5. According to a journalist contact in Khabarovsk, the rumors
that caused the panic were indeed spread by corporate raiders
from VTB 24 Bank, a subsidiary of Vneshtorgbank, as the opening
salvo in its takeover of Dalkombank. Representatives of other
Khabarovsk banks have refrained from commenting on the
situation, though some did acknowledge that the rumors about the
bank were clearly deliberate disinformation.

Gubernatorial Machinations?
---------------------------

6. Governor Viktor Ishayev has an involved history with both
Dalkombank and Vneshtorgbank. A consulate contact in Khabarovsk
told consulate staff that the Governor has held a grudge against
Dalkombank leadership ever since it refused to provide financial
assistance to Dalavia, a Khabarovsk-based airline that recently
filed for bankruptcy (reftel). Ishayev subsequently ordered all
official Kray bank accounts transferred from Dalkombank to
Vneshtorgbank, supposedly as punishment. This move provided at
least a plausible foundation for the rumors of impending
financial doom for the bank.

7. During the panic, Governor Ishayev conspicuously refrained
from making public statements in support of the bank. This is
in contrast to a number of incidents in the past when he
actively shielded local businesses against aggressive takeovers
by Moscow-based business concerns. Observers point out the
precedence of Artel Amur Gold Mining -- when Ishayev did not
step up to defend the local company in January 2007, raiders
successfully took the company over.

Comment
-------

8. Though there is no confirmed connection between the governor
and the rumor-induced panic on Dalkombank, such implications
made by local observers are plausible. Ishayev still wields
considerable influence over Khabarovsk residents, and the fact
that he made no public statements in support of a large, local
bank is cause for concern. It is also clear that, though often
a staunch defender of local companies subject to takeover, he
chose not to help the company that many believe he holds a
personal grudge against.

Gersten

© Scoop Media

 
 
 
 
 
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