Four top executives at Gazprombank Luxembourg allegedly exploited the chaos triggered by European sanctions against Russia in 2022, executing dozens of transactions in Gazprom bonds that were trading at bargain prices. According to an investigation by the Financial Times, the four bankers received personal loans from their employer, purchased Gazprom bonds at prices down to less than 50% of their face value, and subsequently swapped them for full-value Russian securities. Calculations by the FT, based on documents obtained by the outlet, indicate that these transactions could have generated total potential profits exceeding €9 million.
The "trick" with bonds trapped in Europe
Following the imposition of Western sanctions in 2022, numerous foreign-currency bonds issued by Russian energy giant Gazprom became trapped in Europe, causing their market value to collapse. The Kremlin subsequently created a mechanism allowing Russian investors to replace European securities with corresponding Russian issues, which could be traded in roubles at their original face value. That was precisely where the opportunity was identified. Executives at Gazprombank Luxembourg were positioned to buy discounted bonds in Europe and later exchange them for significantly higher-valued securities in Russia.
The first to "smell" the opportunity
The central figure in the affair appears to be Dmitry Derkats, former director at Gazprombank Luxembourg. Derkats traveled to Moscow in June 2022. Upon his return to Luxembourg, he opened a personal account at Gazprombank Luxembourg, despite internal bank policies prohibiting employees from maintaining personal accounts there. Concurrently, he secured a personal loan from Gazprombank's Moscow headquarters. On July 5, 2022, Vladimir Putin signed the decree enacting the exchange mechanism. Nine days later, Derkats began purchasing Gazprom bonds. In one of his initial transactions, he paid approximately €65,000 for a bond with a face value of €150,000. The bond was later replaced with a full-value security, generating a potential profit of roughly €85,000. Crucially, at the time of purchase, Gazprom had not yet publicly announced that this specific bond would be eligible for exchange.
Then three more joined the game
In September 2022, three additional members of Gazprombank Luxembourg's executive management began buying similar securities at steep discounts:
Sergey Nekrasov Sergey Belousov Pavel Bolshakov
The four directors allegedly coordinated their actions, frequently purchasing identical quantities of the same bond on the same day. Even more notable was the timing: several purchases occurred shortly before Gazprom publicly announced that the specific security could be replaced. In one characteristic case, the four bought a dollar-denominated bond from late September through October. Gazprom announced on October 7 that the bond would be replaced, while the exchange window closed on October 24. The bond had been trading at roughly 50% of its value, whereas the replacement security in Russia returned to full value and later reached 120%.
Over €17 million moved through the accounts
According to documents reviewed by the FT, between July and November 2022, the four bankers received transfers totaling over €17 million, converted from roubles. The funds were used for dozens of bond purchases. Based on acquisition costs, nominal value, and historical exchange rates, the FT calculates total potential profits at over €9 million. Whether these profits were realized in full remains unclear.
The big question: insider trading or just "smart" arbitrage?
The case has raised serious questions not only regarding bank governance, but also over whether the transactions violated EU sanctions. Experts and officials interviewed by the FT also cited potential insider trading, as the bankers appeared to acquire securities shortly before their exchange eligibility was announced. A European official briefed on the findings characterized the scheme as potential "circumvention" of sanctions, arguing it should be reviewed by Luxembourg's criminal prosecution authorities. At the center of the mechanism sits Russia's National Settlement Depository (NSD), which was placed under EU sanctions. European regulations strictly prohibit transactions that directly or indirectly result in payments to the NSD.
Gazprombank responds: "We violated no sanctions"
Gazprombank Luxembourg denied any wrongdoing. The institution stated to the FT that it strictly complied with EU and Luxembourg laws and regulations, maintaining it never breached EU sanctions, including in connection with these specific transactions. Dmitry Derkats likewise categorically denied any illegal conduct. He argued that the fact Luxembourg's financial regulator identified no material violations following its investigation should consider the matter closed.
The regulator's investigation and the "window"
The matter reached Luxembourg's financial supervisor, the CSSF, which conducted an on-site inspection at the bank in March 2023. The CSSF determined that the bank had breached internal rules by allowing employees to open personal accounts. Furthermore, according to the report cited by the FT, the four directors had been designated as "high risk" but were not subjected to the required enhanced oversight. However, the regulatory authority identified no further violations and imposed no financial penalties.
Switzerland and Cyprus in the transaction network
The four bankers utilized Swiss-based Compagnie Bancaire Helvétique (CBH) as a broker, while capital was also routed through Cyprus-based Veles International. The transactions triggered internal pushback within Gazprombank Luxembourg. Certain employees raised concerns regarding possible insider trading. Others maintained that no illegal activity had occurred. Head of Private Banking Dmitry Galkin noted in internal communications that the four had obtained separate personal loans and were purchasing different Gazprom Eurobonds, arguing there was clear "economic rationale" behind the trades. Purchases ceased following an internal review in late 2022.
Where the four are today
All four directors have since departed Gazprombank. Dmitry Derkats states he resides privately in Luxembourg. Sergey Belousov and Pavel Bolshakov manage the investment firm B&B Capital Partners in Luxembourg. Sergey Nekrasov returned to Russia, where he assumed management of the football club Spartak Moscow.
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