For 'X'

[Guest guest]

Dear Rakt. Prabhu.

 

PAMHO. AGTSP.

 

Could you please put this out on X. This is a GBC statement approved by

Ravindra Svarupa Prabhu.

 

ys

bdd

 

 

 

INFORMATION RELEASE From the GBC Executive Committee

 

11 August, 1998

 

Recently a rumour has been propagated which asserts that Harikesa Swami had

speculated with ISKCON and BBT funds on the Russian stock exchange. When the

Russian market suddenly collapsed, the rumour continues, tens of millions of

Prabhupada's dollars were lost.

 

The executive committee has investigated this allegation and found it to be

false. Here is our report about what actually happened.

 

Put simply, there was no capital investment and consequently no capital

loss, at any time, by either ISKCON or the BBT, on the Russian stock

exchange.

 

Among the many disciples of Harikesa Swami in Moscow were several

householders who worked as financial consultants. Together they formed their

own investment firm, which in time became enormously profitable. From these

profits these devotees offered a substantial donation to Harikesa Maharaja.

 

Taking the suggestion of some of his disciples, Harikesa Swami asked the

Russian financiers to keep the sum they had offered him invested in their

company's mutual funds. A percentage of the regular earnings generated by

that capital should be used for Krishna conscious projects. (The remainder

of the earning would be added to the original capital.) This investment was

handled by his disciples, who were professional financial managers, and

Harikesa Swami did not take an active part in it.

 

The sum, invested in long-term stocks, grew considerably. With a high rate

of return on the investment, a large and regular fund became available for

ISKCON projects.

 

A preference was given to education, the most important and neglected of

Srila Prabhupada's priorities. Thus, there was money to develop a number of

important and progressive initiatives in education.

 

One is the VTE, or Vaisnava Training and Education, which designs and runs

courses throughout the world in subjects such as book distribution,

new-devotee training and communications. A second is the Ministry for

Educational Development, which has supported many devotees engaged in

developing curriculum and teacher training for both child and adult

education in ISKCON. A third is the Ministry for Child Protection, which has

been able to develop programs for child abuse prevention and for helping

existing abuse victims.

 

Harikesa Maharaja also channelled substantial funding into the Sri Mayapur

Project. He personally oversaw the development of the exhibitions and the

welfare work in the villages around the ISKCON Campus.

 

The management of the profits generated by those Russian investments and

earmarked for ISKCON was entrusted to a foundation managed by a group of

experienced devotees in the West. They invested those foundation funds very

conservatively in the Western financial market. When it became clear to

them, toward the end of 1997, that the Russian market was going to collapse,

they were able to shift some of the capital from Russia to the West.

 

The rest of the capital remained in Moscow in the form of long-term

investments, and when the value of these fell, the capital ceased to

generate a profit. Consequently, since April this year the foundation has

had only the funds generated by its own investments to dedicate to ISKCON

projects. Some projects had to be cut back.

 

It was this cutback which apparently gave impetus to the rumour of massive

losses of ISKCON funds on the Russian market.

 

The original ISKCON-earmarked investment, earned by independent householders

and invested and managed by them through their own private company, has, in

spite of everything, grown substantially.

 

Again for clarification. No funds belonging to either the BBT or ISKCON were

invested at any time on the Russian stock exchange and consequently no BBT

or ISKCON funds were lost.

 

For the GBC Executive Committee Bhagavat Dharma dasa

 

Please contact Bhagavat Dharma das with any further questions:

 

On COM gbcco (AT) com (DOT) bbt.se

On the NET gbcco (AT) netcomuk (DOT) co.uk