RUSSIAN INVESTMENTS:
RUSSIAN IPO INVESTOR ALERT

French holders of Russian government bonds remind investors that the Russian Federation is still in default today (April 2007) on their estimate of some US$ 90 billion owed to them since the Bolshevik, then the Soviet, and now the Russian Federation governments have all unilaterally repudiated Tsarist debt and refused any form of contact or dialogue with their legitimate bone fide creditors.

They also remind investors that in its Sep. 15th 2006 report entitled “Governance matters: a decade of measuring the quality of governance”, the WORLD BANK rated Russia’s governance comparable to that of Swaziland, Zambia and Kazakhstan. Russia came 151st out of 208 countries in terms of (…) accountability, quality of regulatory bodies, rule of law, (…). In particular, rule of law (i.e. the courts and the quality of contract enforcement) was judged as effective in Russia as it is in Ecuador, Indonesia, and Bangladesh. Nicaragua, East Timor, and China’s ability to control corruption was judged similar to Russia’s.

On April 3rd 2007 Mr. John Thain, the New York Stock Exchange CEO, warned that he was “very concerned about the quality of corporate governance, the transparency of company financials and the protection of minority shareholders. A number of Russian companies raise serious questions around these issues.”

Despite these findings, and the main rating agencies’ knowledge that Russia is in default on US$ 90 billion of Tsarist debt, Russia is rated “INVESTMENT GRADE” whereas it clearly should “SELECTIVE DEFAULT”.

French bondholders intend to pursue their claim until full settlement at present value, by any legal means and in any jurisdiction they deem appropriate.

EVERY POTENTIAL INVESTOR IN RUSSIA MUST BE MADE AWARE OF THESE FACTS.

FRENCH CREDITORS OF THE RUSSIAN FEDERATION STRONGLY ADVISE AGAINST ANY FORM OF INVESTMENT IN A COUNTRY WHOSE SOLVENT GOVERNMENT HAS SYTEMATICALLY REFUSED TO FULFIL ITS NATIONAL AND INTERNATIONAL OBLIGATIONS, REFUSES ALL CONTACT AND DIALOGUE WITH ITS LEGITIMATE BONA FIDE CREDITORS, AND REFUSES TO DISCLOSE LIABILITIES WORTH US$ 90 BILLION.