By John Helmer, Moscow
Oleg Deripaska, chief executive of United Company Rusal, is prosecuting his old friend and Rusal veteran, Andrei Raikov, on charges already dismissed by the Moscow police and the Moscow courts, because Raikov, according to his representatives, has refused to testify for Deripaska against another old friend, Mikhail Chernoy (Michael Cherney).
Cherney’s 6-year lawsuit in the UK High Court to recover his 13% shareholding in Rusal, and enforce the shareholding contract and trust agreement he and Deripaska signed in March 2001, goes to trial next week. Lawyers for Cherney and Deripaska will present summaries of their positions, before the court adjourns for the summer recess. Witness testimony and cross-examination will start when the court resumes on October 1.
Presiding in the trial will be Justice Andrew Smith. He is the High Court judge who ruled against the claims by state shipping company Sovcomflot against former executives and chartering partner in December 2009 and March 2010. Smith also presided in parts of the long-running aluminium corruption case involving Deripaska and the Tajikistan Aluminium Plant (TadAZ, Talco).
This week documents have come to light from the Raikov case, including a 12-page judgement by the Moscow city court (Dorogomilovsky district) issued on April 3, 2012. These show that the allegations of fraud and corruption which Deripaska loyalists have aired in the Russian press and in a US court filing, have been trumped up. The reason for this, Raikov’s representatives say, is twofold.
“There was a serious personal conflict between Raikov and Deripaska”, one of the representatives says. “Deripaska had been considering appointing Raikov as the General Director of Russneft. However, when that purchase failed [January 2010], he gave him only the small United Oil Company [UOG], which was far below Raikov’s level, So Raikov decided to quit and found a high position in a very large and powerful company. Deripaska took that as a personal insult. He also began to be concerned that Raikov knew too much about Rusal’s history.”
“The Rusal security section [headed by Victor Boyarkin], which has become stronger than Rusal’s shareholders during the last three or four years, wanted Raikov to give false testimony against Chernoy in the London hearings, but Raikov flatly rejected that.”
A representative for Raikov said that Boyarkin is a powerful figure inside the Rusal headquarters in Moscow. This has been confirmed by Guinean Government officials who have dealt with Boyarkin, reportedly a military intelligence officer to start with, during negotiations over Rusal’s concessions in that country’s bauxite mines and alumina exports.
According to Russian newspaper reports and applications which Rusal’s lawyers have filed in the courts of Nicosia (Cyprus) and New York, as well as with the Moscow police, there are two sets of allegations against Raikov. The first charges that he manipulated ship chartering and freight contracts for the transportation of bauxite and alumina between 2003 and 2007 to create kickbacks for himself and others. The second claims he defrauded United Oil Company to pay himself and other UOG employees inflated bonuses.
The shipping allegations were dismissed in a Moscow police report of April 4-May 4, 2008. Six months earlier, in November 2007, an agreement was signed by Rusal in which it dropped all fraud charges against the shipping companies and released the Russians who operated them from Rusal’s prior claims.
Several weeks before that agreement was signed, it now appears Rusal commissioned an independent British shipping consultant, Fred Doll and the Doll Consultancy, to analyse the terms which Raikov and the others had helped to arrange for several years before.
The report , dated September 2007, says that “Marine Commercial management within the [Rusal] Raw Materials Group [supervised by Raikov] should be congratulated for having negotiated freight contracts that are extremely advantageous [to Rusal] in the current market… The freight provider, Oldendorff Carriers…has honoured the contract, reflecting a longstanding relationship with Rusal and its history as a reputable company.” Cautioning that the shipping arrangements were so beneficial to Rusal they might be loss-making to the transportation companies, and potentially trigger force majeure to halt the contracts, Doll concluded “it should be repeated that Oldendorff has honoured the contract to date, in a situation where others might not have done so.”
Doll, an influential director at the London shipping brokerage of Clarksons before he set up his own consulting firm near London, was not available to confirm the details of his report to Rusal. He died last December, and the firm has ceased operating, a spokesman said at its former office.
Raikov’s contention is that Rusal is framing him with allegations about the shipping business which the internal company evidence, the release agreement, and the subsequent Moscow police investigations have substantiated to be false.
The Raikov representatives also say that the new claims of wrongdoing by Raikov when he moved to UOG have been carefully reviewed in a Moscow city court proceeding, and also found to be false. Instead, in her ruling of April 3, Judge Natalia Minor ordered Rusal to rescind the dismissal order against Raikov, eliminating the allegation that he had been fired for misappropriation, and substituting instead that he was leaving for reason of “voluntary termination”. Rusal was ordered to pay Raikov back-salary of Rb5,308,916.40 ($190,000). The allegations that Raikov had attempted to defraud the company through unlawful bonus payments were not supported, and the bonus calculations ruled to have been in line with company rules and Russian law.
According to Judge Minor, “ the court also considers that the defendant [UOG] did not present any appropriate proofs that receipt of the bonus payment by Raikov A.B. in the minimum amount caused any damage to the Company’s property ….The court believes that the references of the defendant’s representative to the fact of the initiation of legal proceedings against Raikov A.B. on 07.07.2011 (criminal case No. 664809) upon signs of a crime provided by P. 4 of Art. 160 of the Criminal code of the Russian Federation are not well-founded and do not result in any legal consequences for consideration of the present dispute…”
Recent Russian media reports reveal other attempts to apply pressure on witnesses or potential witnesses in the Cherney proceedings in London. A leak from confidential court documents of the witness lists from the Deripaska side and from Cherney’s appeared in the Russian website Pravo.ru on April 9. Cherney’s lawyers in London decline to say if the leak is accurate, citing the High Court’s confidentiality rules.
This Moscow leak was followed in June by a publication in Sovershenno Secretno. This goes after the names on the purported list of witnesses for Cherney, suggesting that if they appear in the High Court they may run into all sorts of trouble. According to the reporter Larisa Kislinskaya, “I really feel women’s solidarity, sympathy, for just one person, whom Mr Cherney intends to call in London as a witness. Zhanna Malevskaya, the widow of Anton, mother of two of his children… Alas, after the London trial she could be restricted to travel abroad. So does she need it? There already are precedents.”
“The trouble is that it’s not so easy [to be a] witness for Cherney… And the audience in the court will be demanding and experienced. FBI agents, employees of the Israeli and German intelligence, the British counterintelligence – all will be sitting there in the courtroom.”