Raiffeisen, Dutch lenders caught up in allegations of laundering Russian money

Shares of various European lenders came under selling pressure following allegations that they may have been caught up in or actively participated in helping to launder illicit monies from Russian clients.

Worst hit were shares of Austrian lender Raiffeisen Bank International, following a report that Hermitage Fund, founded by British financier Bill Browder, had filed a report with Austrian prosecutors alleging that Raiffeisen's predecessor, RZB, had helped launder monies linked to tax fraud in Russia.

Founded in 1995 by Browder, whose father was the head of the US Communist party during World War II, and two other associates, the original Hermitage Fund made stellar returns following the collapse of the Soviet Union.

A close associate of Browder's, Sergei Magnitsky, died during his detention in Russia, having according to some accounts reportedly been trying to investigate the finances of state-run oil and gas monopoly Gazprom - in which Hermitage had held a stake.

Gazprom had long been a focal point of many foreign investors' interest, since the fall of the USSR and before, with many having called for its privatisation in the mid-1990s.

Historically, Gazprom had always been valued at a discount, due to country risk and the opaqueness of its accounts as a heretofore state monopoly and strategic asset of the Soviet and later Russian state.

But according to reports, Hermitage's stated intent was to raise the value of its stake by eliminating the discount on Gazprom's shares, which it attributed to 'corruption'.

As of 1314 GMT, shares of Raiffeisen were down by 12.20% to €19.57.

Stock in Dutch lenders ABN AMRO and ING were also lower on Tuesday, on the heels of a report in De Groene Amsterdammer magazine, from the day before, that a Russian money laundering network had used the country's top three banks, which includes Rabobank.

Also on Monday, The Guardian, on the basis of data on banking transactions provided by the Organized Crime and Corruption Reporting Project, or OCCRP, and Lithuanian website 15min.lt, reported that an estimated $4.6bn in monies had been funeled to Europe and the States from a network controlled by Russians operating 70 offshore companies through Lithuanian accounts.

Shares in ABN AMRO were down by 1.6%, having earlier fallen by as much as 4.6%, and those of ING by 2.6%.