Email This Post - Print This Post Print This Post

By John Helmer, Moscow

Oleg Deripaska has made his debut in the witness-box of the UK High Court, testifying for almost three hours on Friday afternoon, after being called as a witness by Roman Abramovich against the claims of Boris Berezovsky.

So precise and painstaking were Deripaska’s responses to some of the questions asked by the High Court Justice Dame Elizabeth Gloster and Laurence Rabinowitz, counsel for Berezovsky, that the near-total collapse of another of Deripaska’s cognitive functions, his memory, stunned the courtroom in London. At one point, the presiding judge told Rabinowitz that she permitted him to continue a line of questioning to probe Deripaska’s claim for forgetfulness after Rabinowitz said he had done as much as he could.

Deripaska’s problem started at the outset of his testimony when he was asked whether he had had a conversation with Vasily Anisimov, the owner of aluminium and alumina plants in the northwest of Russia and a stake in the Krasnoyarsk smelter, which later became part of United Company Rusal. Anisimov has testified to their conversation in 1999. “I have no recollection of that”, Deripaska responded.

By February 2000, Deripaska acknowledged that he and Abramovich were negotiating the sale and purchase, as well as merger of Deripaska’s aluminium plants with those Abramovich was buying. There has already been a detailed argument in court over conflicting evidence of what the terms, Party 1 (selling to Abramovich) and Party 2 (buying with Abramovich) meant at the time to those involved. When Deripaska was asked what he knew of the composition of the contracting parties, he replied “It’s hard for me to recollect what took place ten years ago.”

When shown newspaper reports of what Abramovich and his partners had been buying in February of that year, ahead of his own deal with Abramovich, Deripaska repeated that he did not recall articles in Vedomosti on the deal-making, nor reports in the English-language and aluminium industry press. But he did remember that he didn’t like Vedomosti newspaper. “Vedomosti, as a press outlet, is something that I do not trust in terms of the quality of its materials even today, and therefore I would have hardly been reviewing those materials even in those days.”

Deripaska’s recall improved for the period a month later, on March 4 and 5, 2000, when he said he met with Abramovich, his advisor Eugene Shvidler, and his own advisor Alexander Bulygin, the chief executive of the Siberian Aluminium (Sibal), then the only asset Deripaska claimed in the Russian aluminium business. Deripaska corrected his questioner for not referring to the Baltschug Kempinski Hotel by its full name; he also corrected the lawyer for referring to a single negotiating session, when in fact, he said, there had been two separate ones – one at the downtown hotel, and one later the next day at Abramovich’s dacha in the Moscow suburbs.

Asked, however, what the written agreement record, compiled at Deripaska’s request by Bulygin, had meant in its identification of the buying and selling parties, Deripaska responded: “Today I would be hard put to recall that Bulygin was typing away something on his computer.”

So, if Deripaska and Abramovich had been negotiating their deal, who else signed and who else may have owned assets that were subject to their sale and purchase agreement? At first Deripaska claimed: “I was interested, I had a vested interest in making sure that everything that we had agreed upon be implemented very, very accurately and clearly in order to save those plants. Now, for that, all the interested persons had to act together, and that means the suppliers, the managers of those plants, those people who had trade relations with those plants.”

Rabinowitz then asked Deripaska whether he meant that they were signatories for an agreement for sale and purchase of the assets. Deripaska refused to answer at first.

“Mr Deripaska, none of those people were going to sign the merger agreement with you, that’s right, isn’t it?” “Well, if you allow me, I’d like to read the translation of what I’ve just said into English to make sure it was properly translated and then we can continue our discussion, with your permission.”

Pressed next if he knew that Shvidler was Abramovich’s partner in the signing of their agreement, Deripaska was reluctant to answer directly. Rabinowitz: “Well, did you understand him to be Mr Abramovich’s partner for the purpose of this transaction?” Deripaska: “Mr Shvidler was very businesslike, very sure of himself, very tough.”

At this point Justice Gloster intervened: “The question is: did you think that Mr Shvidler, who signed the agreement, was a partner of Mr Abramovich at that time? Deripaska: “At that point in time it was very difficult for me to make any judgment. It was the first time that I was seeing the person. But he was very sure of himself. The way he conducted himself was very, very self-assured.”

At this point, Deripaska’s recollection of the men on his own side in March of 2000 began to suffer. Asked to acknowledge that he was advised by two lawyers, Paul Hauser of the Bryan Cave law firm in London and Stalbek Mishakov, a Sibal lawyer in Moscow, when he was preparing the sale and purchase agreement for the Rusal assets that month, Deripaska prevaricated, leading Justice Gloster to intervene again: “Mr Deripaska, just to cut through this, what was Mr Hauser’s role in this period so far as you were concerned? In what capacity was he acting for you, if he was?” “Well, to be exact, I do not recall exactly what his role was. The person who was in charge of my corporate department was Stalbek Mishakov.” So, Deripaska was asked by Rabinowitz, was he a lawyer? “I think he was”. “For how long had he been acting for you as at March 2000?” “I have no exact recollection.”

The cross-examination went on to ask what Deripaska remembered about the deal he and Abramovich reached two years later, in September 2003. That was when Deripaska agreed to buy Abramovich’s stake in Rusal for just over $2 billion in two stages over twelve months. This is what the High Court has already been told about this transaction in earlier testimony from Abramovich.

Asked if he can now recollect the two contracting companies, Eagle Capital Group for Deripaska, Madison Equities for Abramovich, Deripaska replied: “Yes, I recall there was such a company, Eagle, yes.” But why had the agreement spelled out a two-stage sale and purchase of the Rusal shares? Deripaska: “What I’d like to say is that I get the feeling that I have never seen this agreement. Could you formulate your question, please?” Rabinowitz: “Do you recall that other transaction by which Mr Abramovich’s company, Madison, transferred the shares to Cliren so that they could be transferred by Cliren to your company?” Deripaska: “Which shares? What is Cliren company?”

At this point, the judge began questioning Deripaska on what he knew of the terms of the deal and the identity of the asset owners he was buying from. “Mr Deripaska, in this first paragraph the suggestion is made that Madison, that’s Mr Abramovich’s company, is holding the 25 per cent shareholding in Rusal Holdings Limited on behalf of another company, called B Company, or that company’s ultimate owners, B. Is that something, or is that issue something that you knew anything about at that time?”

“No, I was not aware of that in any way.”

The cross-examination turned back to the meeting Deripaska had had on March 13, 2000, at the Dorchester Hotel in London with Berezovsky, Badri Patarkatsishvili, and Abramovich. What had led Deripaska to fly to London for that meeting, on a few hours’ notice at Abramovich’s request, when he had been in London just days earlier, is the focus of Berezovsky’s case; this is because the latter is claiming that he and Patarkatsishvili insisted their claim to a half-share in the assets be recognized before the Rusal merger went ahead.

Deripaska said he flew back to London on Abramovich’s airplane because “he asked me to do him a favour”. What was that favour, and how had Abramovich explained the urgency of the meeting and those whom they were to meet? “I do not recall,” Deripaska replied, “but it’s hardly possible that he [Abramovich] would have told me about Patarkatsishvili.” Hadn’t Abramovich revealed – as he has testified in court – that he had already had two telephone conversations about the merger with Patarkatsishvili? “I have no recollection of that.”

Perhaps, Rabinowitz suggested, Deripaska was having trouble recalling exactly what or whom Abramovich had mentioned; or then again perhaps he was remembering clearly that Abramovich had not mentioned Patarkatsishvili at all – which was it? “Once again, I apologise, it’s very difficult for me to recollect such specific details ten years on, ten years after the events… I do not recall Abramovich saying anything about Patarkatsishvili.”

By the time Deripaska got to the Dorchester suite, where the meeting was held, his recall function had improved markedly. Deripaska wanted to see Berezovsky in London, he now testifies, because he owed him repayment of a large loan from 1997. Deripaksa conceded that he hadn’t asked for repayment, but believed Berezovsky “had been avoiding having to have a meeting with me. How could I have asked him?”

Deripaska also remembers that Berezovsky was late in arriving at the hotel for their get-together, obliging Deripaska to wait “almost an hour, waiting in that suite, and obviously I was speaking on the phone and doing other things with a person who was not very pleasant to me. I’m talking about Badri [Patarkatsishvili].”

Then, Deripaska recalled, Berezovsky arrived, out of breath, “his hair not properly done.” He also remembered that Berezovsky was not wearing a tie, and “I think there was a shirt, and above the shirt there was like a dressing gown or something like that.” According to Deripaska, he wasn’t sure he remembered whether Berezovsky was wearing trousers under the dressing gown. “He might have turned up in any form, even in the nude. That would have been quite in his character.”

So what did happen and what was said after Berezovsky had arrived? Berezovsky’s lawyer read out Abramovich’s earlier testimony in court that there had been a discussion of the Rusal merger, but nothing about Berezovsky’s debt to Deripaska. “I do not recall that,” Deripaska answered.

What did he recall of the share purchase agreements of September 17, 2003, which formalized Deripaska’s acquisition of stakes Abramovich had held or controlled in Rusal? “I do not recall this document, and the amount is probably the one that we had agreed upon with Roman, give or take a few. But I do not recall, do not remember this document.” Deripaska was then asked if he remembered that the agreement allowed a second stage into 2004 for completing the purchase of the Rusal shares, with a first right of refusal in the event Abramovich was offered money for the remaining 25% shareholding by someone else. Deripaska replied: “Once again, I’d like to remind you that I did not remember this document and the chances are I’ve never seen it.”

Justice Gloster asked Deripaska to try his memory again. “Tell me in headline terms what the deal was,” she asked. “We came to an agreement as to how and in what way we were going to terminate that partnership. Now, after that, I instructed my people to draft those contracts that Mr Rabinowitz is referring to.”

According to Deripaska, he didn’t have enough money to meet Abramovich’s asking price in one go. So he needed more time, he said. Rabinowitz: “why did you not, in respect of the 25 per cent of shares that you were not buying at that time, take an unrestricted option to acquire those other shares at a fixed price at a time when you could afford to pay for those shares?

Deripaska: “The beginning was — the beginning for that was the putting an end to the partnership with Roman. And, for me, it was sufficient to get those promises which he was giving to me.”

Note to illustration: the origin of the family name Deripaska is in Odessa, which was captured and rebuilt by the Spanish soldier, Jose Pascual Domingo de Ribas, after directing part of the Russian army and navy during the wars against the Turks in the late 18th century. De Ribas supervised the reconstruction of Khadzhibei, renaming the city Odessa, and rearming it. He is memorialized himself in one of the city’s boulevards, Deribasovskaya.

Leave a Reply