VERDICT

IN THE NAME OF THE RUSSIAN FEDERATION

Moscow

10 March 2011

Tverskoy District Court of Moscow including I.B. Alisova, presiding judge, with the participation of D.P. Schtunder, the public prosecutor from the General Directorate for prosecutors' participation in criminal court hearings of the RF Attorney General's Office), M.A. Tretyakov and S.A. Tolokolnikov, the proxies of victims acting under powers-of-attorney, V.G. Khlebnikov, the defendant, O.V. Kirilenko, the defence attorney, Certificate No 6393 and authorization No 6, in the presence of Ye.M.Fomicheva, the secretary, has heard in open hearing the criminal case of Viacheslav Georgievich Khlebnikov, born on 9 July 1967 in the city of Tambov, citizen of the Russian Federation, with clean record, graduate of secondary school, married, having a dependant under age, unemployed, registered at Tambov-6, 2/168, apartment 46, charged with the crime specified in Part 4 of Article 159 of the RF Criminal Code (in wording of the Federal law No 162- dated 8 December 2003) has found the following: Before 3 September 2007, Khlebnikov acted in collusion with V.A. Markelov (convicted for this rime by decision of Tverskoy District Court dated 28 April 2009) and other persons to embezzle the budgetary funds of the Russian Federation and the city of Moscow, the RF entity, by illegal refunding of allegedly overpaid income tax for the year of 2006. For this purpose, on September 3, 2007 by the decision of the sole member of Parthenion LLC, Makhaon LLC Reland LLC- Pluton LLC (hereinafter referred to as LLC) V.A. Markelov, Khlebnikov was appointed the General Director of Makhaon LLC. In September and October 2007, Khlebnikov, acting as the General Director of Makhaon LLC, Markelov and other persons using their positions fabricated and submitted forged and corrected income tax returns for the year of 2006 on behalf of Parthenion LLC and Makhaon LLC to Inspectorate No 28 of the Federal Tax Authorities for Moscow, located at the address: Moscow, Shvernika street, 7, bldg. 1, on behalf of Reland LLC to Inspectorate No 25 of the Federal Tax Authorities for Moscow, located at the address: Moscow, 5th Kozhukhovskaya Street, 1/11, by reducing income tax base to offset alleged unaccounted losses previously incurred by the Company in 2006, and stating income tax overpayment to be returned in accordance with Article 176 of the RF Tax Code: to Parthenion LLC in amount of 3,276,188,017 rubles, to Makhaon LLC in amount of 372,825,989 rubles, and to Reland LLC in the amount of 1,751,489,000 rubles. On verification of tax amounts to be returned, Khlebnikov, Markelov and other

persons misinformed official tax authorities by submitting fabricated false agreements for delivery of Gazprom OJSC shares, agreements on termination thereof due to failure to execute and other documents supporting debts of Parthenion LLC, Makhaon LLC, Reland LLC to Grand-Aktiv LLC, Instar LLC and Logos Plus CJSC, and arguments in written confirming authenticity of the fabricated documents and above debts and statements of return of alleged income tax overpayment for the year of 2006. On 24 December 2007 the Head of Inspectorate No 28 of the Federal Tax Authorities for Moscow took a decision to return the amounts overpaid: to tax payer Parthenion LLC, the corporate income tax paid to the budgets of the RF constituent entities in the amount of 1,194,454,077 rubles; the corporate income tax paid to the budget of the RF entities in amount of 1,194,454,000 rubles; the corporate income tax paid to the RF Federal budget in the amount of 887,279,940.48 rubles, totaling 3,276,188,017.48 rubles; to tax payer Makhaon LLC, the corporate income tax paid to the budget of the RF constituent entities in the amount of 271,444,514 rubles; the corporate income tax paid to the RF federal budget in the amount of 101, 381,475 rubles, totaling to 372,825,989 rubles. On the same day, the Head of Inspectorate No 25 of the Federal Tax Authorities for Moscow took a decision to return the corporate income tax overpaid by the tax payer Reland LLC to the budget of the RF constituent entities in the amount of 1,283,689,955 rubles; the corporate income tax paid to the RF Federal budget in the amount of 476,799,045 rubles that add up to 1,760,489,000 rubles. Based on the above decisions, on 26 December 2007 the Federal Treasury Office of the RF Ministry of Finance for Moscow transferred budgetary funds of the RF budget in amount of 1,465,460,460.48 rubles and budgetary funds of Moscow, the RF constituent entity, in amount of 3,944,042,546 rubles that adds up to 5,409,503,006.48 rubles, to bank accounts of the above companies, the amounts considered to be a specially large scale, meanwhile Khlebnikov, Markelov and other persons managed these funds at their discretion. On review of the case details Khlebnikov in the presence of the defence attorney agreed to the charges and petitioned for verdict without court proceedings. This petition was sustained by the defendant in court hearing. The public prosecutor and victims did not object to the special procedure for taking a decision. On reaching the conclusion related to verdict announcement without court hearing, the court proceeds from that Khlebnikov is charged with a crime punished by maximum of 10 years in prison; also, he fully understands and agrees to the charges and realizes the nature and consequences of the petition made on a voluntary basis and by an advice of the defense attorney; the charges are found to be reasonable and supported by evidences, which are considered by the court acceptable, and there no grounds for termination of the criminal case. The court has referred the crime committed by Khlebnikov to Part 4 in Article 159 of the Federal Law No 162-FZ dated 8 December 2003 in wording in force at the time the crime, was committed and proceeds from that by way of fraud and collusion with a group of persons and using their position he embezzled another's property in the form of funds

totaling 5,409,503,006.48 rubles, which is considered to be a rather significant amount. When imposing penalty the court gives due consideration to the nature and social danger of the offence committed and therefore the court finds it appropriate to punish the crime by imprisonment in general penitentiary. At the same time, the court takes account of absence of aggravating circumstances and recognizes sincere repentance of Khlebnikov to be extenuating circumstances. Also, the court gives due consideration to favorable references of Khlebnikov and that he has to keep a dependant under age and the mother, elderly invalid person. Therefore, pursuant to Part 4 of Article 159 of the RF Criminal Code of the above revision the court finds it possible to impose the minimum punishment and abstain from a penalty. In view of requirements of the criminal law and purpose of punishment, on imposing punishment the court finds no reason to apply the provisions of Article 64 and 73 of the RF Criminal Code. Based on the above and guided by Article 316 of the RF Criminal Procedure Code, the court convicted To find Viacheslav Georgievich Khlebnikov guilty for committing the crime specified in Part 4 of Article 159 of the RF Criminal Code (in wording of the Federal law No 162-FZ dated 8 December 2003) and using this Article imprison him for 5 (five) years in a general penitentiary. The term of punishment of V.G. Khlebnikov shall be counted down from 20 September 2010 and include the pre-trial detention term. The restraint for V.G. Khlebnikov comprising arrest is to be left unchanged till the verdict shall enter into force. On entering the verdict into force, the physical evidences listed in personal files 200, volume 4; personal file 236, volume 14; personal file 131, volume 15; personal files 206-214, 215-22, volume 30 shall be kept attached to the criminal case. The seizure of funds in amount of 685,024,893.29 rubles on the temporary account in the cash settlement center of the RF Ministry of Interior (TIN 7706074737, KPP 770631005, account No 05731441310 with the Federal Treasury Directorate for Moscow, settlement account No 40302810800001000079 with Division No1 of the Moscow Main Territorial Administration of the Bank of Russia, BIC 044583001) is to be lifted; these funds considered physical evidence (file 255-258, volume 89) are to be added to RF Treasury revenues. The verdict may be appealed to the Moscow City Court via the appeal procedure through Tverskoy District court of Moscow within 10 days from the verdict announcement, and the convicted may appeal the verdict within the same period from the date of serving the copy of the verdict according to Article 317 of the RF Criminal Procedure Code.
Presiding Judge Seal: Tverskoy District Court of Moscow Stamp: Copy is true Judge (signed) Secretary (signed)