By John Helmer, Moscow

Oleg Deripaska (lead image, right), the controlling executive of Rusal, Russia’s state aluminium monopoly,  has run into difficulty winning the approval of the British Government’s stock exchange regulator, the UK Listing Authority (UKLA),  for an initial public offering (IPO) of shares in EN+. This is the holding unit through which Deripaska runs Rusal; the Siberian hydroelectricity generating company Eurosibenergo;  and coal and molybdenum mines.  Asked to respond to the informal approach which has been made so far on Deripaska’s behalf, UKLA spokesman Chris Hamilton refused to confirm or deny the approach, adding: “any interaction we may have with a firm wanting to list is confidential so [it] isn’t something we can comment on even off the record.”

Rusal insiders say no international bank has accepted Deripaska’s mandate to manage and underwrite a London Stock Exchange (LSE) listing for EN+.  That leaves only Kremlin backing for the share sale through the state banks, said the insider.  “My understanding is that VTB and Sberbank play an active role in it.”  

An earlier attempt, promoted by Deripaska in Bloomberg at the start of February, for Rusal to sell its shares on the LSE, was a feint, a Rusal source said. It was aimed at deterring Mikhail Prokhorov’s Onexim group, a minority shareholder which has been trying to sell its 17% stake in Rusal for years, from making a deal at a discount to the market price for the share. “It has never been seriously considered,” the Rusal insider said. “It was EN+’s and Rusal’s attempt to thwart Onexim’s sale of its Rusal shares to the market, which Deripaska considered harmful to Rusal. This is an example of fake news.”

Part of the problem, London market sources add, is that the EN+ share sale is viewed outside Russia as a bid by the Kremlin to demonstrate investor confidence in the future of  the Russian economy, despite sanctions.  “But if you can’t disguise that nobody is buying except for the Russian state banks, then the scheme is self-defeating, just  as the Rosneft share sale was last year.”  For details of that story, read. 

Another problem, market sources in London say, is that Deripaska himself has already demonstrated considerable risks for investors in the Hong Kong listing of Rusal, now priced at a third of its IPO value. Deripaska risk, they add, also led to the US Government rejecting a deal for the sale of the Opel division of General Motors to a Deripaska-led combination with Sberbank and German government funding; Deripaska was turned down in 2009. For details, read this. Last month, the Opel sale was agreed to the French Peugeot PSA group.

On May 15 Deripaska launched a lawsuit in federal US court in Washington, DC, in a bid to defend his reputation in that country. “Mr. Deripaska has never stolen assets from Ukraine or elsewhere”, lawyers for Deripaska say in the 12-page complaint against Associated Press (AP) of New York, which can be read here. It is defamatory, the lawyers add, to make Deripaska “appear to have been engaged in criminal conduct” and “making him appear infamous or odious.” (more…)

by Editor - Sunday, May 21st, 2017
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By John Helmer, Moscow

A Washington Post reporter has revealed that the Islamic State (IS) laptop plot story, which President Donald Trump mentioned to Russian Foreign Minister Sergei Lavrov at the White House last week came from IS itself, through the Central Intelligence Agency (CIA). The reason for the leaking against Trump, which followed in the Post and in the Anglo-American media, has also been disclosed by the Post. The CIA and at least one senior staff official of the National Security Council, who briefed the CIA on what Trump had said, are angry at the President for revealing collaboration between IS operatives and their US Government handlers in attacks on Russian targets, including Russian airline travellers. (more…)

by Editor - Tuesday, May 16th, 2017
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By John Helmer, Moscow

When it first appeared in Washington in December 2013, the semi-thousand page biography of Vladimir Putin by two minor American think-tank researchers, Fiona Hill and Clifford Gaddy, was judged to be a valuable compilation of everything the US news media and other government-funded think-tanks had already reported, suspected or believed about the Russian president for the previous decade. No more, no less. In Russia, since no knowledgeable or politically significant Russian contributed evidence to the book,  much less. 

The subsequent publication of chapters on the putsch in Ukraine in February 2014, the accession of Crimea, Russian military intervention in Syria in 2015, and the US war to overthrow Putin and fight Russia everywhere in  cyberspace, added nothing more remarkable in Washington, and nothing novel (non-fictional sense) in Moscow.

But had Hill not been appointed a few weeks ago as President Donald Trump’s (lead image, right) director of Russia at the National Security Council (lead left), the principal foreign policy advisor serving the President,  Hill’s book, with its one thousand and one footnotes, and fifteen single-spaced pages of references, led by Hill and Gaddy  themselves, The Economist, and extracts from the Voice of America,  would have been as inconsequential as  they have already proved to be for years. However, Trump’s confidence in, and dependence on Hill’s advice on Putin, and the campaign to impeach Trump himself for high crimes and misdemeanours in association with Putin, change the way the book  must now be interpreted.

Does the evidence that Hill spent two formative years as a student at an institute in Moscow where she rubbed shoulders with Russians bound for, and already bound to, the two state intelligence services, GRU (military intelligence) and SVR (foreign intelligence),  require a counter-intelligence assessment because of the risk which was unforeseen until now?   

Hill’s Moscow time is a detail of her resume which has yet to be identified in US media reporting and Congressional committee vetting.  But as a Russian source from the institute points out, “this is especially curious if we take into account the fact that the Moscow State Linguistic University is a source of supply of employees for GRU and SVR.  It was during the Soviet period, and it remains the same nowadays.” As another Russian source familiar with the secret services points out, by the standard of investigation the CIA, FBI and the US media now apply to Trump, his appointees, business associates, advisers, family,  and friends, does this detail require special scrutiny for Hill? “Her book,” claims the source, “is so full of false leads and dead-ends, don’t the Americans wonder if Hill is a sleeper agent, recruited long ago with the mission to keep the Americans as ignorant of Russia as her book on Putin demonstrates?”

If Hill is a continuing Russian penetration risk at the White House, then is there also the risk that the potentially culpable General Michael Flynn, National Security Adviser between January 20 and February 13, 2017, and his successor General H.R. McMaster, have failed to protect Trump himself? (more…)

by Editor - Monday, May 15th, 2017
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By John Helmer, Moscow

The first meeting of Canada’s new Foreign Minister Chrystia Freeland (lead image, left) with Russian Foreign Minister Sergei Lavrov (right) has backfired when Freeland addressed Lavrov in Russian, and Lavrov replied that speaking in Russian will soon be illegal according to a new law proposed by the Canadian-backed regime in Ukraine.  “While Chrystia Freeland is free to speak Russian here in Alaska,” Lavrov told the press, “in Ukraine, where Russian has long been a native language for a huge number of people, it could soon lose its standing and status.”

(more…)

by Editor - Sunday, May 14th, 2017
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By John Helmer, Moscow

The name Isaac (lead image, right), son of Abraham (centre) and Sarah (left) in the Old Testament book of Genesis, meant “he laughs”. That was because Isaac was conceived when his mother thought she was long past child-bearing,  so Abraham started laughing at her news. He got more serious, later in the story, when he prepared to cut Isaac’s throat. Abraham thought he was doing God’s bidding, until God sent down new instructions.

The Isaac after whom St. Petersburg’s cathedral (Isaakievskiy Sobor, Исаа́киевский Собо́р – lead image, extreme right) – Russia’s largest; world’s fourth biggest church — is a different one. He too got the lucky last laugh. That Isaac was a fourth century Syrian by origin, who was living as a hermit contemplating Christian theology when Valens ruled the eastern Roman empire in nearby Constantinople.  Valens was a nervous, insecure sort who, with his brother, the co-emperor in Rome, had taken power by assassination, bribery and regular shows of military force.

Isaac was a go-getter, and insisted Valens give him an audience. Valens wasn’t so nervous he saw every Christian hermit in from the desert, so he refused. Isaac got his own back by broadcasting the meme that Valens would die shortly in a fire.  Valens threw Isaac in prison for sedition, where he stayed until Valens did die (378 AD), and the new successor emperor released Isaac to run a monastery on his pledge not to issue any more emperor death threats. Isaac was lucky too, because of the four versions of how Valens met his death,  one of them included fire. All of them recorded that Valens’s body was never found.

Because Isaac died on May 30 (383 AD), and that turned out to be the birthday of Peter the Great (1672), the tsar decided to turn Isaac into the patron saint of the Romanov dynasty. That’s what the current 19^th century cathedral, built to replace smaller structures on the site, means. Its name signifies  holy war on the enemies of the tsar and  Romanov dynasty. That’s one, but not the only reason, a group of Russian Church bishops have recruited Kremlin support to order  Georgy Poltavchenko, St. Petersburg’s governor, to overrule his earlier decisions,  ignore the courts, city parliament,  and thousands of citizen petitioners, cancel state ownership of the building,  and hand it to the Russian Church to become its property.  

“The Church”,  according to close observers of its affairs in Moscow, “has persuaded the Kremlin to allow it to act above the law, and outside the law, too.  Thieving Church banks like Peresvet go unprosecuted. When businessmen take real estate, the state’s or each other’s,  it’s called asset raiding, and the courts often intervene. Not when the Church is the raider. But even raiding is not enough. The state budget, and of course ordinary taxpayers are being required to pay for the Peresvet Bank bailout,  and for running St. Isaacs, while the priesthood hang on to their gains.” (more…)

by Editor - Tuesday, May 9th, 2017
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By John Helmer, Moscow

Mikail Shishkhanov (lead image, left and right) is the chief executive and control shareholder of B&N Bank (Бинбанк, BiNbank), one of the fastest growing banks in Russia today. What is driving that growth, however, is a combination of state money and influence in circumstances open to challenge from government regulators for the bank’s lack of transparency. 

Four recent transactions by the bank and related-party companies involving Shishkhanov have drawn a  warning from Central Bank first deputy governor, Sergei Shvetsov,  that cash from the Central Bank and from privately subscribed pension funds is what is driving B&N Bank’s growth, and not too prudently or lawfully.  “Shareholders are trying,” said Shvetsov, “to use the resources of pension funds not only for public investment in public instruments, but also to finance projects, fully or partially affiliated with the shareholders themselves”. To secure against conflict of interest and insider dealing, Shvetsov proposed to exercise “strict supervision.”

Shvetsov is head of financial market regulation at the Central Bank of Russia (CBR). His role, according to the bank,   includes “countering malpractice in the financial market, including regulation and control over the observance of the requirements of Russian Federation legislation on countering the illegal use of insider information and market manipulation.”

This week the CBR was asked to clarify whether it is investigating related-party dealings in the sale of $150 million worth of  B&N Bank bonds to the  Safmar pension fund group, both  controlled by Shishkhanov;  the sale to Safmar of Rb3.2 billion ($44 million) in shares of Evroplan, a leasing company also controlled by Shishkhanov;  the sale to Shishkhanov companies of Rb32.4 billion ($500 million)  in shares of Russneft,  the oil company controlled by Shishkhanov’s uncle, Mikhail Gutseriev; and finally, B&N Bank’s role in underwriting the sale of $60 million in fraudulent Tatfondbank bonds, weeks before the Central Bank imposed bankruptcy administration on Tatfondbank. The CBR would neither confirm nor deny, explaining “we don’t comment on actions connected with active banks.”

When the Federal Service for Financial Markets (FSFM), the formerly independent financial regulator  now part of the CBR organization and directed by Shvetsov, was asked the same question, it replied: “We don’t comment on active banks and companies.”  

A Russian oil industry banker says “it’s clear from Russneft’s share trading record since last November’s IPO that there is almost no sale volume. Also, the share price isn’t responding to the price of oil or to the movement of the other Russian oil companies. That means Russneft is closely held. There’s a fake float, not a free float.” (more…)

by Editor - Sunday, May 7th, 2017
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By John Helmer, Moscow

Last year the government of Botswana decided to halt a 2-year old, multimillion dollar contract for its state mining company to purchase a nickel mine from Norilsk Nickel, Russia’s largest mining company. The government also decided to put its state nickel mining company into bankruptcy to protect against court claims from Norilsk Nickel. At the same time, the Botswanans tried arranging a buyout of their mining company by a penniless investment group in the United Arab Emirates.

A document, drafted on March 13 and circulating since then among Botswana Government officials, reveals details of the buyout and confirms that the Norilsk Nickel deal was negotiated in bad faith by the Botswanans without the money to pay for it.  The Botswanan Government then sought secret help from the South African Government to block the deal. 

This sequence of events, decided behind closed doors,   have so far cost Norilsk Nickel a contract worth $277.2 million, and the conviction that the Botswana Government cannot be trusted to honour either its obligations to foreign investors, or its promises of employment and prosperity to its own people. Mining sources in Gaborone, the Botswana capital, say it’s a case of politicians inexperienced in business “doing something either so clumsily they are culpably incompetent, or so cleverly they are corrupt. Either way the Norilsk Nickel case is a tragedy for the country.”

The deal was the last exit from Africa by the Russian company, convinced that Botswana is a much higher risk than has been admitted until now in reports of the International Monetary Fund, the World Bank, and Transparency International.  As for the smoking-gun letter, Sadique Kebonang, the Botswana mining minister to whom it was addressed, says: “I am unaware of it. I will look for it since you have brought it to my attention.” He declined “to respond to matters that are before court and are subject to the sub judice rule.” (more…)

by Editor - Tuesday, May 2nd, 2017
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By John Helmer, Moscow

Fifty years is enough time to tell the difference between a journalist whose memoir of growing up in Winnipeg failed to notice there were any Ukrainians in Canada; and another whose memory of growing up Ukrainian in Alberta failed to notice Canadians.

The first was Melinda McCracken (lead images, left and centre) whose friendship I first made in Montreal in 1967, when she was a reporter for Montreal and Toronto media. She died in Winnipeg almost twenty years ago, but left behind Memories Are Made of This –  a memoir of Winnipeg in the 1950s. The other is Chrystia Freeland (lead image, right), whose entire career, including time at the Globe and Mail in Toronto, has been spent promoting an idea of Ukraine for which she has advocated a war for which Canadians will go on paying into the future without end. (more…)

by Editor - Tuesday, April 25th, 2017
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By Max van der Werff, Amsterdam

Original in Dutch and English translation, also by Max van der Werff, appear here. 

On April 12, 2017, a thousand days had passed since Malaysia Airlines Flight MH17 was shot down above East Ukraine. Up until now, those who did it have not been identified, indicted or arrested, and many questions remain unanswered. (more…)

by Editor - Thursday, April 20th, 2017
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By John Helmer, Moscow

Like you, I have been a frequent commercial airplane flyer for years. I don’t have a bone break or concussion to report from airplane or airport handling, though like you too, my luggage has suffered that, and worse. My teeth are falling out from natural causes. I have not been beaten up for insisting on my legal right to an aircraft seat I have paid for. But I have been the target of threatened violence by British Airways crews; arrest by personnel of Heathrow airport and Olympic Airways; abuse by female Qantas passengers who don’t know what decompression does to their infants’ ears; and Afghans without socks and shoes on Emirates Airline flights.

Through it all, my experience in flying has convinced me the two best airlines to fly if you are an economy-class passenger are Aeroflot and Cathay Pacific, the first because it is state owned, and second because it is Chinese. More of what this means after you fasten your safety belt and make sure your seat backs and folding trays are in the full upright position. (more…)

by Editor - Sunday, April 16th, 2017
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