By John Helmer, Moscow

When Alfred Sloan ran General Motors in Detroit, he supplied Nazi Germany with engine technology, assembly lines, and working capital for Messerschmidt and Junker warplanes, Panzer tanks, troop and gun transports, along with land mines and torpedo detonators. The Germans said they couldn’t have invaded Poland, Belgium, Holland, Norway, France, or Russia without him. Sloan was breaking US law at the time, so he destroyed the company records of his collaboration with Berlin. He also supplied the US war effort with comparable military technology, if a bit slower in the air.

World War II was a good business for Sloan. “The business of business is business” is a motto attributed to Sloan. He may not have said it. There’s no doubt he thought it.

Since March of this year the US Treasury has declared war on Russia, and through the Office of Foreign Assets Control (OFAC) it has ordered US businesses and banks not to collaborate. The European Union (EU) and other US allies, like Switzerland, Japan, Norway, Canada, and Australia, have been asked by Washington to implement the same measures. But the country sanctions lists aren’t quite the same. In the gaps and differences, a model of Russian business is emerging into plain light. A theory of the political succession in Russia, too.
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by Editor - Wednesday, November 19th, 2014
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By John Helmer, Moscow

Petropavlovsk Plc has almost run out of tricks.

Advertisements placed at the start of this month in the London papers that the goldminer may be on the receiving end of a Russian-funded bailout lifted the London Stock Exchange share price for less than 24 hours. The market capitalization has since continued on its trajectory towards worthlessness. Kirill Androsov of Altera Capital, the door-opener for a fresh Sberbank financing, is refusing to say which way the door is swinging. According to a leading London mine financier, “Petropavlovsk’s assets just don’t have any value. Low grade and tough metallurgy. Gentle euthanasia is the best option.”
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by Editor - Tuesday, November 18th, 2014
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By John Helmer, Moscow

United Company Rusal, the state aluminium monopoly run by Oleg Deripaska (lead image), has announced a third-quarter profit of $25 million, its first bottom-line in the black for three years. The company’s report explains the result by pointing to production cuts, the decline in costs of production, and a rise in the market price of aluminium.

In theory, the reason for the profit is that demand for Rusal metal is growing, and supply falling. “Healthy consumption growth,” Deripaska said on the company website last week, “coupled with production curtailments, have led to a deficit in the global market, ex-China, of 0.9 million tonnes of aluminium in the first nine months of the year. This, together with falling LME inventories, which have dropped below 4.5 million tonnes, means the deficit is continuing to widen. These positive market developments and our continued focus on cost controls and increasing margins through value added production have enabled UC RUSAL to report significantly improved third quarter results.”

In fact, Zug, London, and New York traders report, demand for physical metal is uncertain, especially inside China, while supply outside China is being restricted in warehouse by producers like Rusal, and traders allied with them. It remains more profitable to finance aluminium in storage than to sell to metal users and consumers. This is market manipulation, the traders say, pointing to Glencore, a minority shareholder in Rusal and Rusal’s principal trader. The fix isn’t stable and the revenue benefit for Rusal is neither certain nor predictable, the traders warn.
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by Editor - Sunday, November 16th, 2014
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By John Helmer, Moscow

It can be no surprise, not even to Russian dunces, that Suleiman Kerimov, the only Russian oligarch and senator of the Russian parliament who has never answered a question in public, has been trying to cash out of Polyus Gold, and can find no takers. Especially not at the current price of gold.

Why then would Polyus Gold report this week that it has discovered that Natalka, in Magadan, the largest new goldmining project in Russia, has vastly less gold in reserve and resource than it has revealed to shareholders before? Why reveal that the loss of future gold sale revenues just announced would be worth $52 billion at the current gold price?

Answer: having no alternative to recover his capital from Polyus Gold by selling out, Kerimov is sacrificing market capitalization of his company stake, and by halting the expenditure of cash on the Natalka mine, Kerimov has decided to put the money into his own pocket as dividends.
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by Editor - Friday, November 14th, 2014
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By John Helmer, Moscow

There is no word in the language of Australian soldiers or sailors for tit-for-tat.

American military strategists, the uniform and the armchair types, are much better acquainted. The latter understand exactly why a squadron of the Russian Pacific Fleet has sailed to a position within helicopter (and nuclear-armed missile) range of Brisbane, ahead of President Vladimir Putin’s visit to the G20 state summit over the weekend.
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by Editor - Thursday, November 13th, 2014
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By John Helmer, Moscow

The Supreme Court, the final court of appeal in the UK, issued a rejection notice on November 10, denying the Sovcomflot subsidiary, Novoship, an appeal against its defeat in the Court of Appeal on more than $150 million in claims against former chartering partner, Yury Nikitin, and companies associated with him. A three-judge panel of the court ruled the Sovcomflot group’s “application does not raise an arguable point of law”. The court also penalized Sovcomflot and Novoship by ordering them to pay the legal costs of Nikitin against whom they have been litigating in London for a decade.
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by Editor - Thursday, November 13th, 2014
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By John Helmer, Moscow

One day in October the Financial Times newspaper went public with an endorsement of the truthfulness of Sergei Pugachev (lead image). On the same day, further down the Thames Embankment on the Strand, Pugachev was trying to convince the High Court of the same thing. Two reporters of the newspaper, Catherine Belton and Neil Buckley, fell for him. Justice Sir David Richards, the High Court expert on insolvency, didn’t. By British standards of evidence, that makes Belton and Buckley fools, liars, worse.
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by Editor - Wednesday, November 12th, 2014
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By John Helmer, Moscow

The Polish Foreign Ministry continues to declare that when Radosław Sikorski was foreign minister, Edward Lucas (lead image), a reporter for The Economist, was awarded the Bene Merito medal. This is the ministry’s announcement, dated November 13, 2009, and currently to be read on the ministry’s website. The ministry says Sikorski “has awarded” — that’s the ministry’s official continuous past tense — its medal to “Edward Lucas – journalist, European correspondent of “The Economist”. For bringing closer to many readers all over the world issues dealing with Poland’s interests to many readers all over the world in a well-disposed way.”
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by Editor - Tuesday, November 11th, 2014
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By John Helmer, Moscow

Coca-Cola, the world’s largest beverage company, is having trouble swallowing in Russia. That’s to say, increasing numbers of Russian consumers have stopped drinking Coca-Cola, as well as the company’s other carbonated drinks and juices, forcing the closure of a half-billion dollars in beverage plant investment – and the concealment in US stock exchange reports of just how bad the situation is.
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by Editor - Tuesday, November 11th, 2014
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By John Helmer, Moscow

Former Federation Council Senator and the Kremlin’s troubleshooter for Africa and maritime piracy, Mikhail Margelov (image left) has been appointed a vice president of Transneft, the state oil pipeline company. The October 29 announcement says Margelov “will be responsible for supervision of foreign economic activity and public relations.” Igor Dyomin, the press spokesman for Transneft’s chief executive, Nikolai Tokarev (right), said there will be no other personnel changes. “Why ? If everyone works efficiently? There is no plan of major reforms after Margelov has come into the company.”
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by Editor - Friday, November 7th, 2014
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