Silent Whispers

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Red Notice: A True Story of High Finance, Murder, and One Man’s Fight for Justice – Book 30 Review

Posted by Mrityunjay on November 27, 2018

A real life story that reads like a thriller and spy novel- that’s Red Notice for you. The book is about Bill Browder and his firm, Hermitage Capital that was one of the most sought-after western investment funds in Russia. In the chaos that ensued in the post-Soviet privatization of the early 1990s, Hermitage emerged as the front runner for making money in the deeply undervalued securities of the erstwhile USSR. But making money in the hugely flawed Russian capital market, which still had remnants of communist era bureaucratic corruption prevalent in almost every sphere was no easy task. On one hand, the world’s newest capitalist playground offered opportunities of a lifetime in oil & gas sector which was trading at a fraction of Exxons and BPs of the world, its serpentine labyrinth of red-tapism and oligarchy muscle power proved to be a tough nut to crack for even the most battle-hardened investors of Wall Street.

Bill Browder belonged to a pretty distinguished family. His grandfather ran for President as a Communist, his parents were real lefties and guess what, he became a capitalist in reaction to all that. Alumni of Stanford Business School, Browder started in Poland, as a consultant, on a bus deal. Gradually, he worked his way to Russia, after getting Edmond Safra to invest in his fund. What he managed to figure out before anyone else, that the Russian stock market was incredibly undervalued, and that shares distributed to the public were actually more valuable than preferred, voting shares.

The first half of the book feels like an adventure story, as in going to different places and having one.red Reading the first hand account of Browder’s incredible entrepreneurial journey as he keeps climbing the ladders of success with his ingenious methods and networking skills, gives you a heady rush. You will love the segment where Browder and his mate crash the World Economic Forum in Davos. Don’t they say, Success is all about chutzpah? Bill was a risk taker who against all common sense went to work in Eastern Europe just after the Berlin Wall came down in 1989. It actually says a lot about his smartness how he sensed the business opportunities in Russia when most of other big investment bankers preferred to err on the side of caution. He built up his business, kept chasing investors and established Hermitage capital. All was going well for Browder, whose firm managed to turn the relatively modest $25million portfolio into a $1billion fund virtually overnight. This was, of course, until they came up against a ruthless oligarchy, determined to hold onto all of the spoils from their nefarious state-capture schemes.

The tales of corruption prevalent in Russian society is shocking, Or perhaps not so much, if you are an Indian citizen. In Russia, corruption means that you might have the most law-abiding business out there, but if you do something that the local political elite does not like, then things start to happen. Let’s try to figure out the modus operandi as explained in a website – “It all starts with several corrupt policemen raiding your offices, your lawyers’ offices, your business partners’ offices and taking away everything they find with them. It will be followed by a battery of corrupt lawyers and state officials forging documents that, to your utter surprise, show that you sold the company half a year ago to some convicted criminal, but just before the “sale” you applied for $230m tax rebate from the government, were given this money and then stole it before leaving the country. Experiencing WTF moment? Hold on. It goes further. Then, at the court (in absentia), corrupt judges refuse all documented proof that this is not true and she sentences you to 9-year of prison. In the meantime, your local lawyer who presented all the authentic documenting proof about your company being stolen from you and the alleged theft of tax money being actually conducted by corrupt state officials, gets arrested too and sent to prison cell with 10 inmates and 4 beds. If by any chance he develops some serious medical ailments because of poor treatment and lack of food in the prison, he is denied any medical attention by corrupt prison doctors and corrupt prison guards. Lastly, he is beaten to death with batons by corrupt “investigators”. That’s not all. All the corrupt officials who orchestrated the whole drama including the judge get awarded by the state. This is what corruption and well, life, is in modern Russia”.

The lawyer mentioned above, Sergei Magnitsky was the focal point of Hermitage’s resistance to the nexus of politicians, policemen, oligarchs loyal to Putin. That unfortunately, earned him the ire of Putin, finally culminating in his death. While the rest of the team was fighting the whole system headquartered in London, Magnitsky stayed put in Russia and remained proud throughout his ordeal. Bill Browder could never get rid of that guilt and relentlessly campaigned for the ‘Magnitsky Act’ — a targeted set of sanctions against those complicit in his death, backed by legislation. After years of struggle in the US congress and European Parliament he is successful by getting visa bans and asset freezes to all of 50 or so corrupt officials directly connected to the unjust arrest, judgement, torture and murder of Sergei Magnitsky. The second half of the book is totally dedicated to Magnitsky Act based on Bill’s lobbying and ability to garner political support for the same. That whole narration also gives you a glimpse into Bill Browder’s transformation from a highly-regarded international investment banker to his re-incarnation as an international human rights campaigner. The passing of the act was a huge milestone in the history of human rights movement considering it was against the wishes of a powerful world leader- Vladimir Putin.

The Red Notice is a great read but the real triumph is the book’s middle act, which reads like a classic thriller, weaving a tale of corruption, intrigue and murder in the mould of famous mystery writers. The writing style does manage to draw an emotional response from the reader and it’s hard to put down the book once you start reading it. The book successfully manages to articulate the anger, frustration and triumph of Bill Browder’s life. If you are into Russian history and are familiar with capital market, you will enjoy it even more. Red Notice also opens the door to understanding of Russian culture as in kind of pessimism and nihilism that has personified Russian literature throughout the ages. The cynicism and ruthlessness of many of the characters he encounters would fit well into the writings of Tolstoy, Dostoevsky, Chekhov et al. A great read. Go for it.

Happy Reading folk. Cheers.

 

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