INTERROGATORIES
1. State your full name:
Vladimir
Petrovich Petrov.
2. Are you admitted as
attorney and counselor at law in any
jurisdiction? If yes, in what jurisdiction(s)
are you admitted or licensed?
I am qualified as attorney
and counselor at law in Russia and republics
of the former USSR.
3. What is your educational
background (college and professional schools,
major and date of graduation)
I graduated from Moscow
Institute of International Relations (a/k/a
"MIMO") Law School majoring in
International Law in 1976. By the decision of
State Examination Board I was awarded
qualification "Lawyer with specialty in
International Law."
4. What languages do you
speak fluently?
Russian, English, working
knowledge of Chinese.
5. In 1992-1993 were you
employed by Joint Stock Bank Inkombank? If
"yes" in what capacity were you
employed?
I was employed by Joint
Stock Bank Inkombank from August 1992 to
November 1993 as Inkombank's Senior Legal
Counsel.
6. If you were employed as
in-house counsel, what was your area of
specialization, if any?
I specialized in legal
aspects of operations involving international
transactions.
7. Are you familiar with
Anglo-American law?
Yes.
8. If employed as in-house
counsel for Inkombank, in this capacity were you
involved in transaction involving sale of
Inkombank's common stock to Morgenthow &
Latham, New York International Insurance Group
and Oriental XL Funds? If no, go to the next
interrogatory, if yes, please describe the
nature and extent of your involvement.
In my capacity as senior
in-house counsel I was assigned by Inkombank's
senior management to review all legal aspects
of the transactions, stock purchase agreements
and to render opinion and approval or
disapproval of the transaction to the senior
management. This was a priority assignment
given to me by the Chairman of Inkombank
Vladimir Vinogradov and Deputy Chairman
Vladimir Doudkin.
9. In your capacity as
in-house legal counsel for Inkombank did you
draft or review, any documents involving sale of
Inkombank's common stock to Morgenthow &
Latham, New York International Insurance Group
and Oriental XL Funds, approve or expressed
opinion with respect to this transaction the
documents pertinent to the transaction? If
"yes", please set forth the details.
I was instructed by the
management of Inkombank to review all legal
aspects of this transaction in light of both
international law as well as the law of the
Russian Federation. The core of each of the
three agreements was Inkombank's standard form
which was normally used in transactions
involving the sale of Inkombank's stock for
hard currency (i.e., US$, British Pound, etc.)
The section entitled "Special
Conditions" set forth the particulars of
this transaction which I carefully reviewed in
light of the objectives presented to me by Mr.
Vinogradov and Mr. Doudkin. In addition I was
overseeing all legal aspects of this
transaction. Having so reviewed the
transaction I was requested to express my
opinion as regards the transaction both in
terms of legalities as well as protecting the
best interests of Inkombank.
10. Briefly, set forth your
understanding of the nature of this transaction
at the time of your involvement in it as
in-house counsel for Inkombank.
Based on my review of the
documents pertaining to this transaction and
my discussions with the management of
Inkombank my understanding was that this
transaction involved the sale of a large
packet of common stock of Joint Stock Bank
Inkombank, to three Western investors, to wit
Morgenthow & Latham, New York
International Insurance Group and Oriental XL
Funds of 14,000,000, 12,000,000 and 14,000,000
shares of common stock respectively. The
aggregate amount of common stock being
purchased represented approximately 40% equity
in JSB Inkombank.
11. Did you form and express
any opinion with respect to this transaction to
Inkombank's management? If yes, please set forth
this opinion.
I recall being concerned
with the fact that Western investors may be
acquiring the lot of common stock which would
permit them to exercise significant if not
complete control over Inkombank. Accordingly,
I insisted upon the inclusion in the
"special conditions" the compulsory
"sell-back" provision after three
years. This way Inkombank was able to
essentially re-purchase its stock for exact
same price for which it sold to investors,
even though it was reasonably expected that
the price of stock would rise significantly. I
believe this to be a very crucial provision
and stated that I could not in good conscience
approve of this transaction absent such
provision. At my insistence Messrs. Vinogradov
and Doudkin negotiated the inclusion of the
provision and it was in fact included. In
addition, I recall expressing some concern to
Mr. Doudkin that Foreign Investors Portfolio
Management, Inc. which acted as an agent for
the three investors may be receiving too
generous a fee for its services, and more
importantly receives these fees from Inkombank,
rather than from the purchasers. I was,
however overruled by Mr. Doudkin on this
point. (Mr. Doudkin indicated that FIPM
performed and is expected to perform very
valuable functions for Inkombank and that the
fee was well deserved.) After numerous changes
and amendments I was finally comfortable with
the final version of the agreements.
I also expressed my concern
to Mr. Doudkin that Inkombank should exercise
greater control over the portfolio of
securities, tendered in exchange for
Inkombank's stock in order to protect the
interests of the bank and to maximize the
profit. Mr. Doudkin assured me that the issue
of control has been resolved by him with the
shareholders and that he had the de facto
control over the entire portfolio.
12. Did you sign the
agreements for the sale of Inkombank's stock to
Morgenthow & Latham, New York International
Insurance Group and Oriental XL Funds?
Yes, after I was satisfied
that the Agreements adequately represented
what Messrs. Vinogradov and Doudkin presented
to me as Inkombank's objectives with respect
to this transaction, and further was satisfied
that the interests of JSB Inkombank were
adequately protected I, as it was the regular
procedure under the circumstances signed every
page of each of the three agreements.
13. Did you see Mr. Doudkin
executing the agreement? If yes, when and where?
Who else was present?
Mr. Doudkin executed the
Agreements in his office in my presence
immediately after my signing each page
approximately in the second part of July. I do
not recall, who if anybody else was present at
the time.
14. Did you see Mr.
Vinogradov executing the agreement? If yes, when
and where? Who else was present?
Subsequent to mine and Mr.
Doudkin's executing of the agreements in the
offices of Inkombank, Mr. Vinogradov signed
the three agreements in Moscow restaurant (I
do not recall the name) at the celebration
dedicated to closing of this transaction.
Invited and present were Inkombank's US lawyer
Mr. Emanuel E. Zeltser, Esq., New York
Investment Banker Mr. Wm. Donald Redfern,
Inkombank's Deputy Chairman Mr. Roman
Zdrayevsky, and some other people whose names
or functions I do not recall.
15. After the execution of
the agreements who retained the signed copy of
or copies?
After Mr. Vinogradov signed
the agreements, I gave Mr. Zeltser one copy of
each agreement (one for Morgenthow &
Latham, another for New York International
Insurance Group and third for Oriental XL
Funds) with strict instructions to deliver
them to the shareholders or their lawyers in
New York. I kept the second original of three
agreements (the bank's copies) and brought
them back to Inkombank's Department of
Currency Capital in order to effect the
issuance of share certificates.
16. Were the share
certificates ever issued? If so, who were they
delivered to?
Mr. Doudkin shortly after
signing of the agreements informed me that the
funds from the shareholders were received by
Inkombank and share certificates were issued
and were given to Mr. Zeltser for delivery to
the shareholders or their attorneys in New
York.
17. Please, add any
additional comments with respect to this
particular transaction.
I can state without
reservations that the entire transaction of
sale of stock was above board, and Inkombank,
its legal department and its management acted
absolutely properly in legal and ethical
business aspects in every respect vis-a-vis
Morgenthow & Latham, Oriental, New York
International and FIPM, and in full accordance
with Russian and international laws.
18. Did there come a time
when you, in your capacity as legal counsel was
assigned by Inkombank's management to travel to
New York in order to interview, select and
retain an attorney or attorneys in the United
States? If yes, who instructed you?
I have received this
assignment from Inkombank's Chairman of the
Board Mr. Vladimir Vinogradov and Deputy
Chairman of the Board Vladimir Doudkin.
19. What was the purpose of
retainer of outside counsel in the United
States?
In the latter part of 1992,
there was a conflict between Inkombank and
Inkombank's New York correspondent at the time
Citibank, N.A. concerning erroneous payment by
Citibank on L/C and foreclosure by Citibank of
Inkombank's collateral of $1,500,000.00. In
addition Inkombank was seeking to establish
commercial presence in the United States and
eventually apply for a rep. office license in
the US. Accordingly, we sought to retain
several qualified counsel to provide legal
advice with respect to the above mentioned
matters.
20. When did you travel to
New York to retain an attorney or attorneys?
In December of 1992
21. Did you in fact retain an
attorney or attorneys?
I recommended the services
of two legal counsel to the Board of Directors
of Inkombank. Subsequently, having reviewed my
recommendation both of these counsel were
retained by the board.
22. If answer to previous
question is "yes", who did you retain?
The Board of Directors of
Inkombank retained the services of the law
offices of Fulbright & Jaworsky and
Emanuel E. Zeltser, Esq.
23. If the attorney or one of
the attorneys which you retained was Emanuel E.
Zeltser, Esq., who recommended him, or how did
you learn of him?
Mr. Zeltser was recommended
by Mr. Gassan Mirzoyev, Esq., Chief Legal
Counsel of "Mosjurcenter" (city
counsel for the City of Moscow), as an
qualified attorney, experienced in both Russia
and the United States, who is perfectly
by-lingual and is well familiar with the laws
of both former USSR and the United States.
24. With respect to the
retainer of Mr. Zeltser did you conduct due
diligence as regards Mr. Zeltser's education,
experience, credentials, reputation, etc. before
retaining him. If yes, describe the due
diligence which you conducted in connection with
Mr. Zeltser's retainer, including references
from third parties.
I have conducted due
diligence before recommending Mr. Zeltser's
legal services to Inkombank's management, and
specifically, as it is a routine procedure
conducted third party verifications of Mr.
Zeltser's credentials, education, experience,
moral character and reputation. I verified that
he was an attorney duly admitted to practice law
in the State of New York In addition, I verified
that Mr. Zeltser was a US Legal Counsel for the
Academy of Jurisprudence of the Ministry of
Russia of the Russian Federation and had a
"Excellency" Diploma from a law school
in the former USSR. As regards Mr. Zeltser's
experience in the United States, I established
that Mr. Zeltser was a General Legal Counsel for
Dialog International, Inc. a major trade company
headquartered in New York. Dialog International
was immanently satisfied with Mr. Zeltser's
legal services. All references supported my
conclusion that Mr. Zeltser was a qualified
attorney, experienced in US and Russian law and
of good reputation. I reported the results of my
due diligence to Mr. Doudkin.
