BRITISH VIRGIN ISLANDS HIGH COURT ISSUES MULTI-JURISDICTIONAL RULING TO PROTECT HSBC AND THE HERMITAGE FUND FROM RUSSIAN FRAUD
The High Court of Justice of the British Virgins Islands (the “Court”) has issued a multi-jurisdictional injunction against Boily Systems Limited (“Boily”), a BVI company that acquired three Russian investment vehicles that had been stolen from HSBC and the Hermitage Fund and that were used by an organized criminal group to defraud the Russian Government of US$230 million. The ruling made in response to court filings by HSBC, acting as Trustee of the Hermitage Fund, on 11 July 2008, will be used in Russian arbitration hearings scheduled for later this week in Moscow regional court.

BRITISH VIRGIN ISLANDS HIGH COURT ISSUES MULTI-JURISDICTIONAL RULING TO PROTECT HSBC AND THE HERMITAGE FUND FROM RUSSIAN FRAUD
The High Court of Justice of the British Virgins Islands (the “Court”) has issued a multi-jurisdictional injunction against Boily Systems Limited (“Boily”), a BVI company that acquired three Russian investment vehicles that had been stolen from HSBC and the Hermitage Fund and that were used by an organized criminal group to defraud the Russian Government of US$230 million. The ruling made in response to court filings by HSBC, acting as Trustee of the Hermitage Fund, on 11 July 2008, will be used in Russian arbitration hearings scheduled for later this week in Moscow regional court.

LARGEST FOREIGN INVESTOR IN THE RUSSIAN STOCK MARKET DENIED ENTRY INTO RUSSIA
Hermitage Capital Management, the largest foreign investor in the Russian stock market and the adviser to the award-winning Hermitage Fund, confirmed today that its CEO, William Browder, has been denied entry into Russia since mid November.   Hermitage has more than $4 billion under management and acts on behalf of over 6,000 institutional and individual investors from over 30 countries.

RUSSIA’S LARGEST FOREIGN PORTFOLIO INVESTOR RECEIVES 2005 EUROHEDGE AWARD
Hermitage Capital Management, received the 2005 EuroHedge Award naming the Hermitage Fund as the “Fund of the Year” in the Emerging Market Equities category. In recognizing the Hermitage Fund, the largest Russia-dedicated fund in the world, EuroHedge noted the fund’s superior performance among all other emerging market equity funds.

Hermitage message on Gazprom share liberalization
On Friday, December 23rd, Vladimir Putin signed into effect a law and the accompanying presidential decrees that fully liberalize the foreign ownership of Gazprom shares. This is an event that we have been waiting for more than ten years and given the large weighting of Gazprom in the Fund and the importance of Gazprom for the Russian stock market the significance of this new law cannot be overstated.

Vadim Kleiner Letter to Supporters
Today Gazprom held its Annual General Meeting for shareholders and announced the results of the election to its 11-member Board of Directors.  Unfortunately, despite your strong support, I failed to win a board seat.  In the final count, I placed 12th out of 18 candidates, with 5.3% of the votes cast.

Institutional Shareholder Services and Russian Investor Protection Association Endorse Vadim Kleiner for Gazprom Board of Directors
In advance of the annual general meeting of Gazprom on June 24, 2005, Institutional Shareholder Services, Inc. (ISS), the leading international shareholder voting adviser, has issued voting recommendations for the Gazprom board of directors.   In a strong endorsement, ISS recommends that Gazprom shareholders concentrate all of their cumulative votes behind Mr. Vadim Kleiner and withhold all votes for the remaining 18 candidates.

European Union Legal Center Joins Minority Shareholder Fight at Surgutneftegaz with Appeal to Russian Constitutional Court
Surgutneftegaz minority shareholders today announced that the Center for Constitutional and Legal Protection, a legal reform center backed by the European Union, has filed an appeal on their behalf to the Constitutional Court of the Russian Federation.

Surgutneftegaz Minority Shareholders File Appeal in Treasury Share Dispute to the Supreme Arbitration Court of Russia
Hermitage Capital Management, Prosperity Capital Management, Firebird Management and the Russian Investor Protection Association today announced they have filed an appeal to the Supreme Arbitration Court of Russia in their continuing suit to invalidate Surguneftegaz treasury stock held by Surgutneftegaz subsidiaries.

William Browder Named Young Global Leader by World Economic Forum
William Browder has been named a Young Global Leader by the Forum of Young Global Leaders, which works in close cooperation with the World Economic Forum in Geneva.  Browder was recognized by the Forum of Young Global Leaders’ international Nomination Committee for his role as a leading shareholder rights activist and an advocate for better corporate governance in Russia.

Hermitage Message on Yugansk Auction
Yesterday evening the Russian government took the crucial step in the final destruction of Yukos by auctioning off 100% of the common stock (76.79% of the charter capital) of the company’s main production unit, Yuganskneftegas. Instead of Gazpromneft, Gazprom’s official bidding vehicle, winning the auction as the market anticipated, a completely unknown company called Baikal Finance Group won with a bid of $9.35 billion.

Minority Shareholders Ask Putin to Fight Confiscatory Squeeze-Out Proposals
Today, a group of 25 of the largest investors in Russia delivered to President Putin a letter expressing grave concern over the Duma’s recent passage in the first reading of so-called “squeeze-out” amendments to the Joint Stock Company Law.

Hermitage Update on Gazprom
Over the course of the last year we have written a number of updates about negative developments in Russia as we communicated various episodes in the Yukos affair. Today we are pleased instead to be writing you about a surprise positive announcement at Gazprom.

Investors File Appeal to Cancel Surgutneftegaz Treasury Shares
Today, a group of international investors, including Hermitage Capital Management, Firebird Management LLC, Prosperity Capital Management, and the Russian Investor Protection Association filed an appeal to the West Siberian Federal Arbitration Court to reverse the May 25, 2004 decision by the Khanty Mansiysk Arbitration Court denying the investor group’s suit to invalidate Surgutneftegaz treasury stock held by Surgutneftegaz subsidiaries.  

Hermitage Message on the Russian Banking Situation
The two key conclusions, explained in detail below, are that the current crisis is one of liquidity and not solvency, and that the banking system is currently so small that any problem can be dealt with easily by the government.

Letter to Gazprom Investors
Today Gazprom held its Annual General Meeting for shareholders and announced the results of the election to its 11 member Board of Directors.   Unfortunately, Vadim Kleiner failed to gain a board seat as he placed 12th out of 22 candidates, with 6.2% of the votes.

Institutional Shareholder Services Recommends Voting for Vadim Kleiner at Gazprom’s Annual General Meeting
In advance of the annual general meeting of Gazprom, Institutional Shareholder Services, Inc. (ISS), the leading international firm advising on shareholder voting, has issued its voting recommendation for Vadim Kleiner, candidate for the Gazprom board of directors.   Every year ISS issues recommendations focused on promoting corporate governance and protecting returns for shareholders at companies worldwide.

Today, the Moscow Arbitration Appeals Court dismissed Sberbank’s defamation charges against Vadim Kleiner in relation to an article published in Vremya Novostei on January 21, 2003
Today, the Moscow Arbitration Appeals Court dismissed Sberbank’s defamation charges against Vadim Kleiner in relation to an article published in Vremya Novostei on January 21, 2003, but required Vremya Novostei to publish a retraction of the article.

Investors Respond to Court Ruling on Surgutneftegaz Treasury Shares
Today, the Khanty Mansiysk Arbitration Court heard arguments and issued a ruling in a suit against Surgutneftegaz launched by Hermitage Capital Management, Firebird Management LLC, Prosperity Capital Management and the Russian Investor Protection Association.  The court denied plaintiffs’ request to cancel the treasury shares.  An opinion is expected in several days.

Hermitage message on Yukos affair
In the last few days, the international newspapers have been full of disturbing headlines about tax evasion, subsidiary asset freezing and the potential default of Yukos, Russia’s second largest oil company in terms of production. Given the impact on the Russian stock market, we thought it would be useful to explain the facts of the Yukos case and what they mean for Russia and for investors in the Hermitage Fund.