Red Notice: A True Story of High Finance, Murder, and One Man’s Fight for Justice by Bill Browder

1
Persona Non Grata
November 13, 2005
I’m a numbers guy, so I’ll start with some important ones: 260; 1; and
4,500,000,000.
Here’s what they mean: every other weekend I traveled from Moscow,
the city where I lived, to London, the city I called home. I had made the
trip 260 times over the last ten years. The “1” purpose of this trip was to
visit my son, David, then eight, who lived with my ex-wife in
Hampstead. When we divorced, I made a commitment to visit him every
other weekend no matter what. I had never broken it.
There were 4,500,000,000 reasons to return to Moscow so regularly.
This was the total dollar value of assets under management by my firm,
Hermitage Capital. I was the founder and CEO, and over the previous
decade I had made many people a lot of money. In 2000, the Hermitage
Fund had been ranked as the best performing emerging-markets fund in
the world. We had generated returns of 1,500 percent for investors who
had been with us since we launched the fund in 1996. The success of my
business was far beyond my most optimistic aspirations. Post-Soviet
Russia had seen some of the most spectacular investment opportunities
in the history of financial markets, and working there had been as
adventurous—and occasionally, dangerous—as it was profitable. It was
never boring.
I had made the trip from London to Moscow so many times I knew it
backward and forward: how long it took to get through security at
Heathrow; how long it took to board the Aeroflot plane; how long it took
to take off and fly east into the darkening country that, by midNovember,

was moving fast into another cold winter. The flight time was
270 minutes. This was enough to skim the Financial Times, the Sunday
Telegraph, Forbes, and the Wall Street Journal, along with any important
emails and documents.
As the plane climbed, I opened my briefcase to get out the day’s
reading. Along with the files and newspapers and glossy magazines was
a small leather folder. In this folder was $7,500 in $100 bills. With it, I
would have a better chance of being on that proverbial last flight out of
Moscow—like those who had narrowly escaped Phnom Penh or Saigon
before their countries fell into chaos and ruin.
But I was not escaping from Moscow, I was returning to it. I was
returning to work. And, therefore, I wanted to catch up on the weekend’s
news.
One Forbes article I read near the end of the flight caught my eye. It
was about a man named Jude Shao, a Chinese American who, like me,
had an MBA from Stanford. He had been a few years behind me at
business school. I didn’t know him, but also like me, he was a successful
businessman in a foreign land. In his case, China.
He’d gotten into a conflict with some corrupt Chinese officials, and in
April 1998, Shao was arrested after refusing to pay a $60,000 bribe to a
tax collector in Shanghai. Shao was eventually convicted on trumped-up
charges and sentenced to sixteen years in prison. Some Stanford alumni
had organized a lobbying campaign to get him out, but it didn’t work. As
I read, Shao was rotting away in some nasty Chinese prison.
The article gave me the chills. China was ten times safer than Russia
when it came to doing business. For a few minutes, as the plane
descended through ten thousand feet over Moscow’s Sheremetyevo
Airport, I wondered if perhaps I was being stupid. For years, my main
approach to investing had been shareholder activism. In Russia that
meant challenging the corruption of the oligarchs, the twenty-some-odd
men who were reported to have stolen 39 percent of the country after the
fall of communism and who became billionaires almost overnight. The
oligarchs owned the majority of the companies trading on the Russian
stock market and they were often robbing those companies blind. For the
most part, I had been successful in my battles with them, and while this
strategy made my fund successful, it also made me a lot of enemies.
As I finished the story about Shao, I thought, Maybe I should cool it. I
have a lot to live for. Along with David, I also had a new wife in London.
Elena was Russian, beautiful, incredibly smart, and very pregnant with
our first child. Maybe I should give it a rest.

Red Notice: A True Story of High Finance, Murder, and One Man’s Fight for Justice by Bill Browder