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By John Helmer in Moscow

Sovcomflot chief executive Sergey Frank (left, centre figure) testified in the UK High Court last week that as Russia’s Minister of Transport he opposed the privatisation and IPO sale of Sovcomflot shares, despite company board and other ministry approvals starting in 2002. Under cross-examination by counsel for former CEO Dmitry Skarga (right, left figure) and questioning by Justice Andrew Smith, Frank dismissed the share sale plan, which was intended to raise $300 million to buy new ice-class oil and LNG tankers to service the Sakhalin-1 and Sakhalin-2 oil and gasfields. Implying this plan lacked “the proper price received and value”, he testified the government preferred to “sack the management and…find a better team to run the company.”

Frank denied that after losing his own ministry post, he fought against several ministers and Kremlin advisors backing the privatisation, until he was appointed CEO of the shipping company in Skarga’s place in late 2004. Asked if his takeover had been arranged by Igor Sechin (now deputy prime minister) and the oil trader Gennady Timchenko, who wanted to merge Sovcomflot with Novoship before selling shares, Frank said: “basically, my level of education giving me enough comfort to express my own vision of any issue, and that doesn’t need any support of people to say that.”

Since 2005 Frank has been suing Skarga and his associates in the London court, charging fraud, corruption, and damage to the shipping company. The trial commenced on October 1. Frank was in the witness box for four days last week. He was recalled to Moscow, his lawyer told the judge, “at rather short notice, for reasons he can explain if necessary, [for] an Executive Board meeting of Sovcomflot for Friday.”

Under cross-examination, Frank admitted that Skarga’s privatisation plan had been recommended in a feasibility study by JP Morgan, and was backed by Dmitry Kozak, then a presidential advisor (right, right figure) and Sovcomflot board chairman, and German Gref, then Minister of Economic Development. Frank told the judge: “This is not constitutional in Russia, to have groups”. Asked if Skarga was ousted because he “became a political enemy of yourself and Mr Sechin and Mr Timchenko,” Frank told the court: “I am not qualified enough to make my witness statements about some political problems.”

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