Russia's VTB says trader wins freeze on some French accounts

Mon Jan 14, 2008 9:58am EST

MOSCOW Jan 14 (Reuters) - A Swiss trading company that tried to seize art and warplanes to recover debts from Russia has won a French court order to freeze accounts at a unit of state-controlled VTB bank, VTB said on Monday.

VTB (VTBR.MM), Russia's number two bank, said a number of accounts held at its French arm had been frozen on the orders of a Paris court after a suit brought by a Geneva-based firm called Noga.

Reached by telephone in Geneva, Noga had no immediate comment. Noga, owned by octogenarian entrepreneur Nessim Gaon, has in the past sought to seize Russian assets abroad to win back debts related to an oil-for-food deal struck in 1991-92 as Russia reeled from the breakup of the Soviet Union.

Noga's attempted asset seizures have so far proved futile, but they have forced Russia to structure a rainy-day budget fund, which gathers windfall oil revenues, to protect it from litigation.

Earlier, news radio station Ekho Moskvy said the frozen accounts included those held by the Finance Ministry, the presidential administration's foreign property arm, the central bank, the Energy Ministry and state arms trader Rosoboronexport.

A spokesman for VTB declined to name the account holders. "We consider it unethical to name the companies," the VTB spokesman said in Moscow.

The budget stabilisation fund, worth over $150 billion, seeks investment exposure to top-rated sovereign bonds but does not invest directly. The arms-length structure is designed specifically to protect against any legal action by Noga.

Noga won a Swedish arbitration ruling in 1997 that upheld claims then worth $63 million, and has since sought the seizure of, among others, Russian planes due to fly at France's Le Bourget airshow and a touring art collection in Switzerland.

All of the seizures were subsequently overturned in the courts.

(Reporting by Dmitry Sergeyev, Writing by Douglas Busvine; Editing by Ruth Pitchford)

((douglas.busvine@reuters.com; tel: +7 495 775 1242; Reuters Messaging: douglas.busvine.reuters.com@reuters.net)) Keywords: RUSSIA FRANCE/FREEZE

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