By John Helmer, Moscow

So far Elsie Leung Oi-Se has been paid $632,000 by United Company Rusal to listen attentively, read carefully, and speak her mind at meetings of the main board of directors, and also the audit committee of the board. Rusal titles her an independent non-executive director. She is one of five of those on the 18-member board; one of the 5-member audit committee. According to her company biography, she is a lawyer by training and career. She has also been a politician in the Hong Kong government, the equivalent of minister of justice.

First appointed to the Rusal board on November 30, 2009, when the company’s application to be listed on the Hong Kong Stock Exchange was running into difficulty, she was paid $16,000 for one month’s work. In 2010 she was paid $199,000; in 2011 $209,000; and in 2012, $208,000. She is the lowest paid of her peers, the other “independent non-executive” Rusal directors.
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by John Helmer - Thursday, May 16th, 2013
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By John Helmer, Moscow

Arkhangelskgeoldobycha (AGD), the LUKoil diamond-mining subsidiary, has made its first detailed presentation of the new mine it is building in Arkhangelsk, with confirmation of the new mine’s diamond grades, volume of production, and financial value. The Grib mine, named after the Russian geologist who first found the deposit, is the first major diamond source to start production in Russia in several years, and the first to be developed independently of the state miner, Alrosa. As chief executive Maxim Mescheryakov, AGD’s chief executive, told a Toronto, Canada, audience, the presentation is designed “to show that we exist; that we are big; and that we commence production this year, fourth quarter. We are talking about 4 million carats delivered to the market annually.”
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by John Helmer - Wednesday, May 15th, 2013
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By John Helmer, Moscow

It’s not a good time to be a steelmaker — not if you are in Russia, not if you are in China, and certainly not if you are in the US or the European Union. But if mining manganese, the vital steel-hardening alloy, is what you do for a living, the coming three years look likely to transform worldwide control, as Russians reach self-sufficiency in manganese supply for the first time; and as a prominent Ukrainian prepares to share a large corner of the global market with the Chinese.

The reason that manganese can prosper while steel is in the doldrums is because almost all of its application is to steelmaking; and because “manganese has no satisfactory substitute in its major applications”, as periodic US Geological Service reports point out.

The new Russian manganese supply is coming from the little-known Siberian Mining and Metallurgical Company (SGMK), controlled by Alexander Rybkin, a former executive of the Evraz steel group. Rybkin’s influence is provincial, limited to his partners – the Evraz group, which has first call on SGMK’s new manganese supplies for its Kemerovo steelmills at Novokuznetsk; and the governor of Kemerovo region, Aman Tuleyev. Until now they have made SGMK’s manganese a captive of Evraz’s demands.
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by John Helmer - Tuesday, May 14th, 2013
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By John Helmer, Moscow

“I have always been fond of the West African proverb, ‘Speak softly and carry a big stick; and you will go far.’” That was Theodore Roosevelt in January 1900, when he was thinking of the Caribbean Sea, and when he was US Vice President. No one has ever found the evidence for its proverbial source; Roosevelt probably invented its origin in West Africa.
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by John Helmer - Tuesday, May 14th, 2013
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By John Helmer, Moscow

The last time Russian beer drinkers did something unusual was in the unseasonably cool summer of 2011, when sales of the big brand beers dropped sharply. Read all about it. It is happening again, on this occasion during winter, only now the drop in consumption is even more dramatic. This time it looks like a combination of government actions and dwindling numbers of susceptible adolescents are driving the big-money big-brand, foreign brewing companies out of the market to the advantage of Russia’s smaller, regional brewers.

The first-quarter report just out from Inbev (Belgium), the Annheuser-Busch conglomerate which makes Budweiser, Stella Artois, Sibirskaya Korona, and Klinskoye acknowledges that “in Russia, beer volumes fell 17.0% driven mostly by a challenging industry impacted by the new sales restrictions, the carryover of the media ban implemented last July, and price increases following the most recent excise tax adjustment. Our estimated market share remains under pressure, and balancing profitability versus share is a major focus.” Just one Inbev beer brand, Bud, “continues to perform well and grew by over 25% in 1Q13.” This downturn follows a 12% decline in volume for last year, as well as a contraction of Russian market share, explained in the annual Inbev report as “driven by the implementation of tax-related and other selective price increases ahead of competitors, and promotional pressure in key account channels.” With higher priced beer, the loss of sales volume was offset for Inbev by a 19% jump in Russian earnings. Inbev currently claims a market share of almost 16%.
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by John Helmer - Wednesday, May 8th, 2013
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By John Helmer, Moscow

The Russian government has forced the chief executive of the state-owned United Shipbuilding Corporation (USC) to resign. Andrei Dyachkov, who was appointed to run the shipyard holding in June of last year, signed a letter of resignation on April 30, and then took sick leave. He is reportedly in hospital for Soviet reasons – he needs to be isolated not from germs, but from his rivals.

The affair has been leaking into the press slowly for weeks, and was accelerated last month when Dmitry Rogozin, the deputy prime minister in charge of the military industrial complex, gave Dyachkov a public dressing-down. But the real power behind the shove into Dyachkov’s back, according to sources close to the shipyards, is Igor Sechin, currently chief executive of Rosneft and formerly chairman of the USC board. Dyachkov is not the first to be ousted by Sechin. Roman Trotsenko was ousted in June 2012. Before him, Sechin got rid of Alexander Buzakov in November 2009, and others before that. Their tale was told here. Indeed, the only continuity in supervision of Russian shipbuilding since 2008, according to an official close to Sechin, has been Sechin himself.
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by John Helmer - Tuesday, May 7th, 2013
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By John Helmer, Moscow

Righteous indignation is to investigative journalism what Joseph Goebbels was to truth. So what was really going on in the last days of April when the London media celebrated the Russians who this year topped the UK Rich List, but discovered something going badly, maybe criminally wrong at Eurasian Natural Resources Corporation (ENRC), a London-listed mining company controlled by three Kazakhs and the Kazakh government? If the London newspapers spell the name of one of ENRC’s owners, Alexander Mashkevich, in three different ways — Mahkevitch, according to the Telegraph; Machkevitch to the Guardian; and Mashkevich at the Financial Times and The Times — what to make of the reliability of the anonymous leaks, unseen documents and innuendo from the dismissed or the disgruntled, on which the media campaign against ENRC depends?

This isn’t a question to be answered right now. Instead, it’s what is already happening to take advantage of ENRC’s falling share price and market value that is in focus. For by the time the UK regulators get around to completing their investigations, and deciding what to do about them, the Kremlin will have intervened to coordinate and finance a multi-billion dollar takeover of control at ENRC. By then too, ENRC will no longer be a regulated entity on the London Stock Exchange (LSE).
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by John Helmer - Monday, May 6th, 2013
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By John Helmer, Moscow

The Nigerian judge Okechukwu Okeke has retired from his Lagos court rather than appear for the trial, scheduled in Lagos on April 30, of the Russian crew of the security tender, Myre Seadiver. Sources in Lagos told Fairplay the trial has been postponed for a second time on account of the judge’s absence. Okeke presided at the February 18 hearing at which the 15-man crew was formally charged, four months after they had been arrested and imprisoned. He released the crew from prison and remanded them to the Russian Embassy, setting April 10 for trial on the charges of arms smuggling and illegal entry to the country. When the judge did not appear on April 10, lawyers at court said they were unable to contact Okeke for an explanation. Yesterday the lawyers were told the judge had retired from the case.
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by John Helmer - Sunday, May 5th, 2013
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By John Helmer, Moscow

In the research for its profile on Alisher Usmanov, BBC Radio-4 was told by its sources in Russia that claims Usmanov is close to the Kremlin have been invented; and that Usmanov has never been granted a personal audience with President (Prime Minister) Vladimir Putin.

The BBC programme was broadcast on April 28. For the story and the soundtrack, click here.

The BBC researchers were unable in time to verify that Usmanov has never met Putin in a one-on-one session. So that part of the interview material was omitted from the broadcast. The day after, Usmanov’s spokesman Yulia Mazanova has responded: “Regarding meetings of AB Usmanov with Russian President Vladimir Putin, I can report that Mr Usmanov as a member of the Board of RSPP [Russian Union of Entrepreneurs and Industrialists] regularly participates in the meetings of the President of Russia Mr. Putin and the Russian business community.”
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by John Helmer - Tuesday, April 30th, 2013
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By John Helmer, Moscow

Alisher Usmanov’s fortune began with a business of making plastic bags when they were in short supply in Moscow in the last days of the USSR. At least, that’s the asset in the self-start, self-made fortune story which reporters for global rich lists have been persuaded to believe about Usmanov. How much capital he accumulated in plastic bags and how this recommended him as a debt collector for Rem Vyakhirev and others in the early Gazprom leadership – Usmanov’s next step up the fortune ladder — have yet to be clarified.

Last autumn there was also much the UK Financial Services Authority (now renamed Financial Conduct Authority) and the UK Listing Authority wanted to be clarified, because the UK regulators refused to allow Usmanov’s telecommunications company Megafon to make its initial public offering (IPO) on the London Stock Exchange. Earlier UK refusals to allow Usmanov to sell shares in his iron-ore mines and steelmills through the Metalloinvest holding weighed on that judgement. The story of how the “clarifications” were added to the prospectus, and the Megafon share sale allowed, has been told here and here.
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by John Helmer - Monday, April 29th, 2013
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