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CEO of SocGen Russia Detained Over Suspected Bribe

Societe Generale
Adam Jeffery | CNBC

The chief executive of Societe Generale's Russian unit was held in Moscow on Wednesday on suspicion of receiving bribes, dealing a blow to the French bank's hopes of achieving a turnaround on its primary foreign market.

The questioning of Rosbank Chief Executive Vladimir Golubkov follows promises by President Vladimir Putin to crack down on endemic corruption in business and public life but it is also a blow against one of the few international banks left in Russia.

Despite announcing cost cuts when it published its latest results, SocGen has reaffirmed its commitment to Russia, a market it entered at high cost over the past decade that has been abandoned by other Western banks.

Those plans could now be at risk after Golubkov's detention on suspicion of illegally accepting a six-figure dollar sum and soliciting a far larger bribe.

The Rosbank CEO was held "on suspicion of receiving illegal monetary compensation" totalling 5 million roubles ($159,600), the Russian Interior Ministry said in a statement that gave his job title but not his name.

Golubkov was also suspected of soliciting a bribe of $1.5 million to grant a loan, and a second senior Rosbank manager was also held. Rosbank declined to comment. A source close to the bank said Golubkov was at his office in central Moscow.

Payments to facilitate loans are not unusual in Russia's banking system and typically go undetected. Cases that do come to light have been known to result from a competitor mobilising so-called 'administrative resources' to put pressure on a bank.

Western banks including Barclays and HSBC have pulled out in recent years, having paid up to four times book value to get a foothold in Russia only to find they could not compete with state-backed Sberbank and VTB .

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