By John Helmer, Moscow
United Company Rusal, the Jersey-registered aluminium monopoly of Russia, has announced that “Mr Barry Cheung resigns as Chairman of the Company with effect from 1 October 2012, but will remain as an independent non-executive director of the Company. The Board is pleased to announce that Mr Matthias Warnig, an independent non-executive director of the Company, has been appointed as Chairman of the Company with effect from 1 October 2012.”
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By John Helmer, Moscow
Journalists arranging tuxedo events to give themselves prizes are even sillier than Hollywood actors at the Oscar ceremony. There are also no comedians to tell jokes to neutralize the gastroenteric reflex that is always brought on in audiences by a surfeit of brown-nosing. For the British children in the audience who don’t know what that term means, the Private Eye term is the more onomatopoetic — arslikhan.
Meg Bortin, the second editor of the Moscow Times and one of the shortest termers, has been rolled out for today’s celebration of the 20th anniversary of the Times. The true anniversary actually fell in March, eight months ago. But if that was the point from which to hang the anniversary celebration, Bortin couldn’t call herself the “founding editor in chief”.
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By John Helmer, Moscow
Gazprom, Russia’s largest company, has announced a plan to supply liquefied natural gas (LNG) it isn’t producing to terminals piping ship fuel into a fleet of vessels which the Summa Capital group, directed by Ziyavudin Magomedov, would like to operate — only they don’t exist either. The scheme is more environmentally friendly than any in Russian naval history, only it is a fiction. Why?
The official announcement appeared in Moscow on September 20. Gazprom and Summa Group had signed a Memorandum of Understanding (MoU), the announcement said, “fix[ing] the intentions of the parties to arrange cooperation for LNG utilization as a bunker fuel for marine vessels, including those owned and operated by Summa Group. In the first instance, Gazprom Group and Summa Group will consider the possibility of cooperation in the North Sea and the Baltic Sea regions. Apart from LNG supplies for Summa Group needs, the parties will consider potential development of the bunkering infrastructure in the North and Baltic Seas, particularly LNG storage facilities.”
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By John Helmer, Moscow
Wednesday September 26 was Yom Kippur – the annual Day of Atonement for Jews, the most solemn holiday on the Jewish calendar, when according to the relevant Scripture, God opens his Judgement Book, and takes applications from everyone with an interest in having the black mark removed from his name. God’s finger is moving; in Israel, where Michael Cherney lives, nothing stirs.
In London, according to records of the High Court registry, an application was lodged to postpone the scheduled restart of the proceedings in Michael Cherney v Oleg Deripaska until next Tuesday, October 2. Advocates for each side had already presented their opening arguments to the presiding judge, Andrew Smith, in July, before the court took its summer recess. The trial schedule had provided for witness testimony and cross-examination for several months, starting this week.
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By John Helmer, Moscow
The co-founder of the Mechel steelmaking and coal-mining group, Vladimir Iorikh, always said the over-confidence of partner Igor Zyuzin (parachutist) would get the company into trouble as big as this. So, rather than go down in flames himself when the crash he expected would come, Iorikh sold out to Zyuzin in January 2007, taking $1.5 billion to Switzerland and setting up on his own.
Zyuzin congratulated himself on out-smarting Iorikh when Mechel’s value in the market grew to a peak of $21 billion in May 2008. Zyuzin’s stake of about 67% was then worth $14 billion. Today, with Mechel worth just about one-tenth of that at $2.9 billion, Zyuzin’s stake is worth $1.9 billion; maybe less, because in July Zyuzin started selling shares – a 1.93% bloc was let go to an unidentified buyer at an unreported price. If things continue to get worse for Mechel, Zyuzin’s net worth will be less than his old partner’s. If Iorikh was as prudent as he accused Zyuzin of not being, it’s probable that he vaulted over Zyuzin in the wealth brackets some time ago.
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By John Helmer, Moscow
Russian banks have been reflecting ponds for their owners since they began twenty years ago; wishing-wells too. That explains why Commerzbank accepted less than $200 million for its 14.4% shareholding in Promsvyazbank earlier this year, fixing the valuation of the bank at $1.4 billion; and why the bank owners, Alexei and Dmitry Ananiev, imagine that London investors should pay $500 million for a 25% stake; that’s a very wishful 50% premium.
You can tell how handsome they are (above Alexei, below Dmitry), but do the Ananiev brothers qualify for such a premium?
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By John Helmer, Moscow
The full text of Justice Dame Elizabeth Gloster’s judgement in the UK High Court case of Boris Berezovsky v Roman Abramovich runs to 356 pages, 1253 sections, one appendix, and 555 footnotes. She is kindly toward the case lawyers, the computer system operators, the courtroom administrators, and the simultaneous translators. She is unapologetic about the length of the judgement, citing Blaise Pascal to the effect that she lacked “the leisure to make it shorter” (footnote 555 gives the original French in case of appeal against the judge’s translation).
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By John Helmer, Moscow
After more than forty years, the last great Soviet state secret is out. And in its wake, a sensitive Chinese state secret, too.
Russian geologists reported over the weekend that the Popigai crater on the border between the Krasnoyarsk and Sakha regions of north eastern Siberia, formed by the 100-kilometre wide impact of a meteorite about 35 million years ago, could contain trillions of carats of small diamonds. The secret has been locked up in the Soviet archives since the discovery of the crater at least forty years ago.
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By John Helmer, Moscow
Swiss bankers aren’t famous for their sense of humour. So it will come as no surprise that the Gnomes of Zurich were serious when they recently sent a questionnaire to 22 of the richest crooks and liars in Russia, asking them for their assessment of the prospects for Russian wealth management — and printed their answers with a straight face. According to UBS, 55% of their 22-person sample say corruption is the biggest problem they currently have in increasing (or keeping) their wealth; well ahead of macro-economic problems like falling demand; global problems like the collapse of commodity prices and producer share prices; and domestic commercial problems like the weakening rouble, rising costs, and dwindling bank credit.
The twenty-two made the UBS sample if they were domiciled in Russia and admitted to a net worth of at least $50 million apiece. One in 10 of the sample (that’s two) “belong to families worth between $250 million and $500 million, with one family worth in excess of half a billion dollars.” Of the remaining 20, 13 reported a family fortune of between $50 million and $100 million. Three put themselves in the wealth bracket between $100 million and $250 million. Richer crooks and liars may have returned the UBS questionnaire unanswered. But those responding acknowledged that when it comes to running their businesses and making money, they don’t give a fig for accountability, transparency, or the conventional standards of corporate governance. According to the report, “the percentage of respondents adhering to a corporate governance code has fallen substantially to just 23% [five]. Of the remainder, 41% say they are in the process of implementing a code, but 36% simply state that they do not comply with any corporate governance code.”
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By John Helmer, Moscow
Yury Privalov, the Sovcomflot shipping manager charged with embezzlement from the company, has been sentenced to four and a half years in prison, and fined Rb1 million ($32,250), Judge Natalia Morovoza ruled this evening in the Dorogomilovsky court of Moscow. Privalov was not in court to hear the verdict; he is reported by his lawyer as having had a “hypertensive emergency” on Sunday evening, and been hospitalized at the Bakulev Scientific Centre for Cardiovascular Surgery.
Morozova began reading the judgement at 10 am on Monday, and continued reading the 300-page document until 8 pm. A guilty verdict was not in doubt, as Privalov had already pleaded guilty. There was no testing of the evidence in court; and no cross-examination of witnesses. The prosecution had requested a sentence of six years’ imprisonment and a fine of Rb1 million. Sovcomflot had requested Privalov’s discharge on a non-custodial sentence. The jail term announced by Morozova includes the 22 months already served by Privalov in a Swiss prison between 2006 and 2008, when he was challenging extradition to Russia.
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