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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By John Helmer, Moscow

At the freedom-flush Moscow parties of the 1990s, I was never sure whether Alexander Venediktov (2) was real, or a Vladimir Mamyshev-Monroe (1) impersonation. Mamyshev-Monroe died last month in what is described as a shallow swimming pool in Indonesia. Venediktov is alive, and like Mamyshev-Monroe does his radio turns on Ekho-Moskvy as performance art. At least those two are/were genuine Russians. There’s a pseudo-Russian in London, calling himself Peter Pomerantsev (3), who claims to have been exiled from Russia at the age of 11 months. He lionizes all that’s bad about Russia for the delectation of the English intelligentsia reading literary papers. He can’t be a Mamyshev-Monroe impersonation; he could be Masha Gessen (4), who does a similar turn for the American intelligentsia, in drag.

Pomerantsev has produced a diary for the current issue of the London Review of Books in which, after a potted version of the last quarter-century of Russian history, he concludes that Mamyshev-Monore and Boris Berezovsky “defined post-Soviet Russia”. By that he means the faker Mamyshev-Monroe (aka performance artiste) was more real than targets like Vladimir Putin whom he mocked. “What place”, Pommy concludes rhetorically, “could he have in a Russia where to watch a grotesque piece of performance art you just had to switch on the news?”
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by John Helmer - Friday, April 26th, 2013
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By John Helmer, Moscow

At a physicists’ teaparty, Albert Einstein once asked Niels Bohr whether the two of them should accept that “the moon does not exist if nobody is looking at it.” Bohr’s reply was that, hard as Einstein might try, so long as the moon was accompanied by noone, Einstein’s proof would be hard to come by.

As a businessman selling off visible assets for cash in the bank, Mikhail Prokhorov is rapidly becoming just such an unprovable moon. So Einstein to Bohr, he’s agreed with his trusted friend and manager, Dmitry Razumov, managing director of the Onexim holding in Moscow, to issue a public strategy statement and give the former’s lunacy more credibility. According to Razumov, the two of them speak once every two or three weeks, depending on Prokhorov’s phases. “He is completely away from the daily management of work items. He did not meet with the management; he isn’t included in the [Onexim] board of directors. However, he is still the main beneficiary. We are meeting relatively regularly to discuss politics and the economy.” Based on paper values, and before counting the impact of commodity price falls, Razumov says Onexim is worth between $13 billion and $15 billion. Here is the April 24 interview.
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by John Helmer - Wednesday, April 24th, 2013
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By John Helmer, Moscow

If necessity is generally judged to be the mother of invention, crude invention – the fake that is exposed swiftly – is generally the product of desperate mothers. The idea that the Oppenheimer family is keen to buy Alrosa shares, reported by one Moscow business newspaper yesterday and reinforced by another, was regarded as ludicrous by miners and diamantaires who know the circumstances in which Nicky Oppenheimer (image centre) and De Beers were ousted from their last Russian venture in 2008. But a little checking by the Moscow reporters should have turned up the evidence that such a deal, even the faintest interest in it, is also impossible until at least August 15, 2014. So who in Moscow is so desperate as to promote an impossible sale of Alrosa shares? And what does a display of desperation do to the future share price?

The Oppenheimers were pushed out of Russia in 2008 in circumstances which have never been publicly admitted. LUKoil’s controlling shareholder, Vagit Alekperov, the De Beers joint-venture partner initially approved by then Prime Minister Vladimir Putin, had a hand in it. So did Alrosa, then ruled by Deputy Prime Minister Alexei Kudrin. Between the three of them, the formal approval by the government’s Control Commission to authorize the mining of the Grib pipe in Arkhangelsk, was privately reversed, first by delay, then on a technicality, and finally by the writing on the wall. Since the same cast of characters is still running the same business in the same way – expect Kudrin’s return shortly – the Oppenheimers can be certain there is noone in Russia whose word could reliably safeguard their investment.
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by John Helmer - Tuesday, April 23rd, 2013
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By John Helmer, Moscow

United Company Rusal has been defeated in a brief but powerful ruling by the US Court of Appeals in New York last week. The order by three judges, issued on April 15, quashes a lower-level US court order for discovery of bank and other evidence against shipping companies Rusal used to transport its bauxite and alumina cargoes a decade ago. That was when Andrei Raikov, former friend of chief executive Oleg Deripaska, headed the company’s procurement division, and Dmitry Osipov ran the shipping companies.

In a blow against Rusal’s offshore structure on the English Channel island of Jersey, the court ruled that RTI (aka Rusal Trading International) fails the legal and statutory tests to qualify on Rusal’s behalf in litigation in the US courts. “We conclude that the present factual record does not support a finding that RTI is an ‘interested person’ with respect to the relevant foreign proceedings,” says the order signed by Judges Robert Katzmann, Barrington Parker, and Miriam Cedarbaum. “We further reject RTI’s argument that it qualifies as an interested person because, by virtue of its corporate relationships, it now oversees the business operations at issue in the foreign proceedings.”
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by John Helmer - Monday, April 22nd, 2013
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By John Helmer, Moscow

Igor Zyuzin (right) is almost entirely dependent on the Russian government for the solvency of his Mechel steelmaking and coalmining group. With between $9 billion and $10 billion in debt, Zyuzin, who owns 65.49% of Mechel’s shares and controls the company as chairman of its board, is now the steel and coal sector’s most heavily indebted proprietor. If not for a series of cash loans, bond purchases and guarantees from state-controlled banks – Sberbank, VTB, Gazprombank, Eurasian Development Bank (EDB), and Transcreditbank – he would be bankrupt.

That is, Mechel, with a bottom-line loss last year of $1.7 billion, would be as bankrupt as the Estar group of steelmills, which Zyuzin took over in 2009, when Estar’s proprietor Vadim Varshavsky went bankrupt. Varshavsky was consigned by state officials and the state banks to go belly up for debts of about $3 billion. Zyuzin has been preserved in his place for three times that debt. He has also been permitted to buy Varshavsky’s old assets at a fraction of their value, using tolling schemes which may be considered asset stripping, a form of larceny, outside Russia — if their terms were known. In other words, Varshavsky’s insolvent steelmills appear to be paying Zyuzin to take them over for Mechel.
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by John Helmer - Saturday, April 20th, 2013
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