[P2P-F] Fwd: "Financial Engineering" : 1995-96 Russian "Grabification" and "Loans for Shares" scheme

Tue Jan 19 09:30:45 CET 2016

---------- Forwarded message ----------
From: Dante-Gabryell Monson <dante.monson at gmail.com>
Date: Tue, Jan 19, 2016 at 10:05 AM
Subject: "Financial Engineering" : 1995-96 Russian "Grabification" and
"Loans for Shares" scheme
To: "econowmix at googlegroups.com" <econowmix at googlegroups.com>, "
op-n-m at googlegroups.com" <op-n-m at googlegroups.com>, "
agile-vortex at googlegroups.com" <agile-vortex at googlegroups.com>

Or How Financial Engineering is used, again and again, to enable a coup and
transfer property to a small elite ...
Below, the post sovietic Russian case , or "loans for shares" scheme of
1995-6 :

http://www.businessinsider.com/what-is-a-russian-oligarch-2013-3?IR=T

*" The oligarchs are the product of the privatization of state companies
after the fall of the Soviet Union. The Russian economy was in disarray and
the government wanted to redistribute badly managed state-owned companies
in just about every industry you can imagine in an effort to move towards
capitalism.In 1994, executives at Russia's only Swiss Central Bank
accredited bank, Oneksim Bank came up with a  plan to help then-President
Boris Yeltsin and his administration raise some cash while distributing the
companies.The plan was called "loans for shares." Russian banks lent the
government money in exchange for temporary stakes in state-owned companies.
If the government defaulted on its loan, the banks got to keep their
stakes.Of course, the government did default, and those with the capital to
take advantage of this fire sale, like Oneksim Bank's then-president and
Russia's 4th richest man Vladimir Potanin, became wealthy beyond belief.
"///*
Also see :

https://en.wikipedia.org/wiki/Privatization_in_Russia

*" Voucher privatization took place between 1992-1994 and roughly 98
percent of the population participated. The vouchers, each corresponding to
a share in the national wealth, were distributed equally among the
population, including minors. They could be exchanged for shares in the
enterprises to be privatized. Because most people were not well-informed
about the nature of the program or were very poor, they were quick to sell
their vouchers for money, unprepared or unwilling to invest.[citation
needed] Most vouchers—and, hence, most shares—wound up being acquired by
the management of the enterprises. Although Russia's initial privatization
legislation attracted widespread popular support given its promise to
distribute the national wealth among the general public and ordinary
employees of the privatized enterprises, eventually the public felt
deceived. "*

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