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By John Helmer in Moscow

Yury Privalov, the former head of Sovcomflot’s London-based shipping operations, wound up his testimony in the High Court this week with half a dozen new allegations undocumented before in court, or since his release on parole from a Moscow prison on October 10, 2008.

Testifying over eight days by videolink from Moscow, Privalov, who has already served 22 months in Swiss and Russian prisons, revealed that his sole employment now is as a consultant to Sovcomflot chief executive, Sergey Frank (right figure). Details of hidden commissions he admits skimming from newbuild contracts and bank loan transactions were admitted in court, with deal percentages ranging from 1% to 4.3%. In total, Privalov’s bank account balances were identified in testimony at $14.5 million at the end of 2004, when Frank started an investigation.

Privalov charged in his testimony that, although he had been skimming in 1999, he took subsequent payments at the behest of the defendants whom Sovcomflot has accused in the High Court case — former CEO Dmitry Skarga, who did not take office until 2000, and former chartering partner, Yury Nikitin. Their barristers charged Privalov with fabricating new claims. They include the charge that at the Bibendum restaurant in London in 2005, Privalov was told by Skarga to throw his computer in the Thames. “This is the first time you have said this,” Steven Berry QC, acting for Nikitin, told Privalov. Privalov insisted he was telling the truth, adding that reading transcripts of the trial had jogged his memory.

Justice Andrew Smith asked Privalov “when did you decide to give a full and frank statement of all the events which took place?” Privalov replied: “I took the decision, basically, when I found myself in Moscow, and I was presented with all the things which were happening.” Asked by counsel if he was afraid to go back to jail, and lose what remains of his fortune, Privalov said: “I haven’t got too much money left in any case. Not too much …” The court was told that as part of his agreement with Sovcomflot for relief from Russian prosecution, Privalov has paid $2 million back to the shipping company.

He also denied he was testifying because of threats against his life or freedom by Frank. “Nobody is forcing me to do this [testimony]. I have a consultancy agreement with Sovcomflot, which started, I believe, in April.” Frank had told him, Privalov told the London court, “that my full and frank cooperation and witness statement, that would at least close these issues for me.”

Berry asked Privalov to explain why in his initial confession statements to lawyers for Sovcomflot, and in the settlement agreement he had signed with the company, he had omitted to blame Nikitin or Skarga for his illegal payments. “You are saying,” Berry asked Privalov, “that before that, both in 2005, all throughout 2006/7/8, February 2009, June 2009, right up to the end of September 2009, you had simply forgotten that Mr Nikitin, through Falbridge, paid you over half a million dollars into Getwire; is that your evidence?” “Yes”, responded Privalov, “but that was a long time ago. That’s correct.”

“Mr Privalov, you have made up the story that Mr Nikitin paid money in that way to you, into Getwire, haven’t you?”

“Me? No, I didn’t.”

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