By John Helmer, Moscow

Following a fresh investigation of its business practices in the former Soviet Union, TeliaSonera, the Stockholm-based telecommunications company, reported Friday that it has dismissed four senior executives, including the chief financial officer and the head of its mobile telephone division. A company statement claims that the objective of the investigation was “a risk assessment from a business ethics perspective”. The spokesman of the company, Salomon Bekele, says the targets were geographically limited to its “Eurasia division”, and that TeliaSonera’s business in Uzbekistan and Russia were “excepted”.

According to TeliaSonera’s financial report for the first nine months of the year, issued on October 17, Sweden currently accounts for about 36% of the company’s sales, Eurasia about 22%. But the Eurasia division is the group’s main source of growth, generating SEK5.3 billion ($807.6 million), 11.1% more in sales revenues compared to last year counted in local currencies; in Swedish kronor the growth rate was 3.1%. Earnings (Ebitda) from the Eurasian division jumped 9.5% to SEK8 billion ($1.2 billion). By comparison, the company’s consolidated revenues fell by 1.8%, earnings rose by 1.5%.
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by John Helmer - Tuesday, December 3rd, 2013
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By John Helmer, Moscow

According to Colin Russell, an Australian who was the radioman on board the Greenpeace vessel, Arctic Sunrise, he’s “a good man”. Arrested by Russian coast guards after barricading himself in the radio room on September 19, he was imprisoned in Murmansk and St. Petersburg, until he was granted bail and released last Thursday, November 28. Russell claimed on his release: “I don’t understand the reasons why I’m being detained. It’s two months’ hard time for nothing. I’ve done nothing wrong.”

The initial charges considered against Russell by Russian prosecutors were resisting arrest, disorderly conduct, and piracy. The legal case for the piracy charge has been spelled out, not in the Russian courts, but in the federal US District Court and US Court of Appeals for the 9th Circuit, which covers the northern Pacific coast states and Alaska. If you want to understand why piracy may be charged against unarmed attackers of a vessel at sea, read this US ruling carefully.
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by John Helmer - Sunday, December 1st, 2013
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By John Helmer, Moscow

In the world of mules there are no rules (so Ogden Nash wrote last century). In selling $50 billion worth of nuclear reactors, there are a few.

Sergei Kirienko, the prime minister in charge of the Russian government’s default on its treasury bonds and other financial destruction in 1998, is no donkey. But this week, as the head of the state nuclear power monopoly Rosatom, it’s far from clear what rules Kirienko, and his South African counterparts, had in mind when they initialled their agreement on cooperation this week in Johannesburg.

Russian and South African press reports, as well as officials of both countries, have described the document as an agreement between the two governments for “strategic partnership and cooperation in the field of nuclear energy and industry”, as Vedomosti called it.
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by John Helmer - Thursday, November 28th, 2013
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By John Helmer, Moscow

Interpipe, the Ukrainian pipemaker owned by Victor Pinchuk (left), son-in-law of ex-President Leonid Kuchma (centre, right), has released its first official acknowledgement that it is in default on $106 million of debt owed to its banks. In a statement yesterday on the company website, Interpipe said negotiations are under way with the banks, and that they had been informed in advance of the company’s failure to meet the repayment amount due on November 1. “The creditor banks”, according to Interpipe, “have formed a steering committee of creditors. The parties will have to agree to change the schedule of payments on the main body of the loans, as well as some other changes in the loan agreement conditions. The company plans to continue to pay interest on all borrowings in full. The operating activities of Interpipe run in the normal mode.”

Interpipe’s debts currently exceed $1.3 billion; it has less than $50 million in cash. The banks, which negotiated with Interpipe for an earlier debt restructuring agreement in 2011, include Citi, Barclays, Intesa, ING, and Credit Agricole. The banks are not commenting publicly except for Intesa in Milan; it said this week it is aware of the default and is evaluating the situation with the other lenders.
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by John Helmer - Wednesday, November 27th, 2013
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By John Helmer, Moscow

By releasing on bail all but one of thirty Greenpeace protesters charged for an attack on the offshore Russian oil platform Prirazlomnaya in September, Russian prosecutors and a St. Petersburg court have pre-empted and defeated Greenpeace and the Dutch Government.

Greenpeace and the Dutch had applied for “provisional measures” from the International Tribunal for the Law of the Sea (ITLOS) in Hamburg. Their demand was for the release from arrest and prison, and for permission to leave Russia altogether, for the 30 protesters, including three of them who are Russian citizens. The demand also included the release of the Arctic Sunrise, the converted icebreaker which Greenpeace has been operating this year in the Barents Sea and Pechora Sea, above the Arctic Circle. The Russian government has preempted the vessel release by issuing guarantees of the state icebreaker fleet company which owns the berth at which the Arctic Sunrise is moored; and of the Coast Guard division of the Federal Security Service (FSB), which is guarding it.
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by John Helmer - Monday, November 25th, 2013
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By John Helmer, Moscow

Russia’s state-owned tanker company Sovcomflot has reported third-quarter and nine-month financial results showing that it continues to lose fleet operating revenues and run at a loss. In the nine months to September 30, the company says its time-charter equivalent (TCE) revenues were $657.2 million, down 1.6% on the same period of last year. Fleet operating costs were up by 7% to $284 million, primarily because of a jump in charter hire payments. On the bottom line, Sovcomflot says it ran a 9-month loss of $8.6 million; a year ago it was in the black at $42.5 million.
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by John Helmer - Friday, November 22nd, 2013
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By John Helmer, Moscow

Oleg Deripaska’s (image right) associates inside Rusal say the company is so short of cash, the chief executive has no alternative but to squeeze the President of Tajikistan, Emomali Rahmon (left), and threaten to publish details of his offshore bank accounts, unless he comes across with almost $350 million. But Rahmon, Deripaska’s partner in a highly profitable metal trading scheme between 2004 and 2008, is sitting on a military card which may yet oblige President Vladimir Putin to tell Deripaska to back off. That card is Russia’s military base and arms agreement with Tajikistan, which waits for final ratification at the moment. Coincidentally, the Russian Ministry of Defense is promising to invest an almost identical sum if Rahmon agrees to terms.

Rusal has issued two recent announcements after Swiss arbitration tribunals ruled in its favour and issued awards amounting to at least $350 million; more as the interest accumulates while Rahmon and the Tajikistan Aluminium Company (Talco; aka Tajikistan Aluminium Combine, TadAZ) delays payment. The first of these was the Swiss ruling of October 9, 2013, which Rusal reported this way. “The tribunal granted in full Hamer’s claim that TalCo was in breach of two barter agreements concluded in 2003 under which Hamer supplied TalCo with certain raw materials, and ordered TalCo to pay Hamer damages of US$112,745,501, interest of approximately US$147 million, and costs, fees and expenses of the arbitration proceedings in the amount of US$14,579,385, for a total of approximately US$275 million plus post-award interest. The tribunal also denied in full TalCo’s amended counterclaims in the amount of almost US$400 million (exclusive of interest), which were based on TalCo’s assertions that the said contracts had been procured by corruption. The tribunal rejected such allegations.”
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by John Helmer - Thursday, November 21st, 2013
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By John Helmer, Moscow

While the Greenpeace organization has been drawing worldwide attention to pending charges of a pirate attack against the Prirazlomnaya oil platform in the Barents Sea, Russian prosecutors and the Russian Navy reveal they have abandoned the prosecution of piracy threatening Russian vessels in the Indian Ocean off the Horn of Africa.

Article 227 of the Russian Criminal Code defines piracy as an “assault on a seagoing ship or a river boat with the aim of capturing other people’s property, committed with the use of violence or with the threat of its use”. The penalty for a conviction on one count is prison for between five and ten years. Repeated acts of the same type “with the use of arms or objects used as arms”, according to section 2, draws a penalty of 8 to 12 years. If pirate acts are organized by groups the sentence grows from 10 to 15 years.
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by John Helmer - Tuesday, November 19th, 2013
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By John Helmer, Moscow

The sharp selloff of Mechel, the steel and coal group controlled by Igor Zyuzin, ought to demonstrate — if fresh proof were needed — that this is no longer a commercial operation in the normal sense of the term. Today Mechel is a nationalized enterprise kept solvent by five state banks in order to preserve the economies of several cities and regions across the country.

The stock market gyrations this week, in which almost $330 million in market capitalization was liquidated, should also demonstrate – if that too were necessary – how little a Russian company listing on the New York Stock Exchange provides by way of accountable financial reporting or effective regulation by the US Securities and Exchange Commission (SEC).
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by John Helmer - Friday, November 15th, 2013
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By John Helmer, Moscow

According to United Company Rusal, the Russian state aluminium monopoly, it is one of the most transparent multinational corporations in the world – that’s to say, in the emerging markets of the world, and across sixteen countries. A report of Berlin-based Transparency International (TI), issued on October 16, has ranked Rusal sixth on several measures, with a perfect 100% score on what TI calls “organizational transparency”. The other perfect scorers were Emirates Airlines (UAE), Johnson Electric (Hong Kong), Petronas (Brazil), and Shanghai Electric Group.

As for what organizational transparency means to TI and how it scored Rusal and the others, TI says it asked these eight questions as part of a larger questionnaire:
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by John Helmer - Wednesday, November 13th, 2013
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