By John Helmer, Moscow

In the good old days, when Rusal, Russia’s aluminium monopoly, was taking in great volumes of cash and Oleg Deripaska, the controlling shareholder, had his associates emptying it for other business as fast as they could, Deripaska operated a fleet of aircraft, large and small. That the biggest of the fleet, a 5-year old Boeing 337, is now in the catalogue of an aircraft broker for sale, indicates how diminished the company’s fortunes have become, and how little Deripaska himself controls what remains of the cashflow. In the mock-up, that is Deripaska inside the lounge of the aircraft, sitting next to his new creditor, Iskander Makhmudov.
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by John Helmer - Sunday, October 28th, 2012
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By John Helmer, Moscow

Spy novels are a dime a dozen – make that £10 before they are remaindered; the fact that some of them are written by ex-spies or counter-espionage agents doesn’t make them more precious for their veracity or insight. What makes Stella Rimington (right) a cut above (or below) is what she reveals to be her understanding of her enemy’s character, purpose, modus operandi, and pathology, as inculcated in Rimington during her 27-year career as an MI5 officer. In that time she was promoted successfully through every branch (counter-espionage, counter-subversion, counter-terrorism) until she spent her last five years as Director-General. Since then Rimington has been writing fictional thrillers. The last of these, The Geneva Trap, published a few weeks ago, is about several agents of the Russian Foreign Intelligence Service (SVR). It’s what Rimington understands of them that makes the read worthwhile: not for what it reveals about such Russians, but what it reveals about the MI5 mind-set.
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by John Helmer - Saturday, October 27th, 2012
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By John Helmer, Moscow

Russian consumption of wine, beer and vodka declined during the last economic crisis in 2008 and 2009, and the early signs are that this is happening again. But cognac is in a very special category. All the alcoholic drinks, but one, respond to the availability of money in Russian consumers’ hands. When the supply of money dries up, and consumers are thirsty, they opt for moonshine. But even that obeys the laws of money supply and demand. Cognac, however, is a type of currency itself. The volume of cognac sales goes up when the value of bribes is rising.

Last week, the government regulator RosAlkogolRegulirovanie (RAR) announced that it has decided to raise the minimum price in retail of a bottle of domestic brand champagne (0.75l) to Rb115 ($3.71). The move, which follows an earlier one in 2010 to raise the minimum retail price of vodka to Rb125 (for 0.5l), has been requested by the sparkling wine producers association. The objective is to make it easier for the regulators to stop the sale of illegally produced champagne which is averaging Rb99 a bottle. At that price, it currently commands about 40% of the market. When the vodka minimum was raised, the effect, according to the experts, was to drive about one bottle in five of moonshine vodka off the market. A plan to do the same for still wine is under consideration at RAR at present.
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by John Helmer - Wednesday, October 24th, 2012
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By John Helmer, Moscow

When it comes to interior decoration, no one does gilding better than Alisher Usmanov. And when it comes to serving delicacies to journalists, none cooks up the hors d’oeuvres better than he does. In the international stock markets, however, these qualities don’t quite cut the mustard. In consequence, in London this week Usmanov has set the Russian record for the number of attempts at initial public offerings (IPOs) or strategic share sales which have failed for buyers or price, or which he has withdrawn for related, if undisclosed reasons.

In between February and October 2008, there were at least two direct IPO tries for Usmanov’s Metalloinvest holding of iron-ore mines and steelmills, and one reverse listing attempt with Kazakhmys. In 2010 there was an attempt at selling a stake to Mitsui, and then a reverse listing negotiation with Nathaniel Rothschild’s ill-fated Vallar; both misfired. Between 2010 and 2011 another London Stock Exchange (LSE) bid was tried. Add to this reckoning the 2003-2004 negotiation with the Anglo-Dutch steelmaker Corus; abortive schemes to add Ukrainian and Kazakh iron-ore assets to his Mikhailovsky and Lebedinsky mines; and a national metals champion plan to merge with Norilsk Nickel and Rusal in 2009.
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by John Helmer - Tuesday, October 23rd, 2012
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By John Helmer, Moscow

Gennady Timchenko is usually so discreet, he engages lawyers to warn reporters away from peering too closely at his private life. So when his friends, all of a sudden and in unison, start telling a Moscow newspaper that he has decided to move back to Russia, Timchenko is either acting out of character, or he is engaged in damage limitation. The Vedomosti report of October 19 makes Timchenko appear to be running towards Moscow. A day later, a report published in the Geneva newspaper Le Temps makes it appear Timchenko may be running away from Geneva.
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by John Helmer - Sunday, October 21st, 2012
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By John Helmer, Moscow

The London Paralympics aren’t over for BP’s chief executive, Bob Dudley. Even if he wins gold, he’s finishing with fewer limbs than he started with.

According to the Financial Times version of the negotiation to date between Rosnft, BP, TNK-BP, and between Igor Sechin, Bob Dudley, and Mikhail Fridman, a deal in which Rosneft buys out the 50% Russian shareholding in TNK-BP, and then buys out the equally sized BP stake for a total of about $56 billion, “ would mark a victory for Bob Dudley, BP’s chief executive, extricating the UK oil major from a partnership with a group of Soviet-born billionaires that has been plagued by often tempestuous shareholder conflicts. The deal would give BP $15bn-$20bn in cash plus a stake of 10-20 per cent in Rosneft, one person close to the situation said.”
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by John Helmer - Thursday, October 18th, 2012
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By John Helmer, Moscow

The disclosure of the costs Roman Abramovich incurred in defending against and defeating Boris Berezovsky’s claims — confirmed by an order of Justice Dame Elizabeth Gloster on October 12 — have turned out to be less for Berezovsky to pay than had been speculated in the press. But that’s because he had a contingency fee agreement (CFA) with his law firm, Addleshaw Goddard, which in turn carried an insurance policy. Berezovsky’s obligation to pay his lawyers depending on his winning. If he lost, as he did, Addleshaws’ insurer paid. The details of a “partial CFA deal with the client” have been reported in the London lawyer media.

What the order for Berezovsky to pay Abramovich £35 million ($56 million) also means is that Michael Cherney’s (Chernoy) legal bill for his similarly long, comparably complex and costly case against Oleg Deripaska was probably about the same amount. Consequently, it is possible to deduce how much Deripaska agreed to pay Cherney for the settlement they announced on September 27 – and how Deripaska financed the pay-out.
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by John Helmer - Tuesday, October 16th, 2012
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By John Helmer, Moscow

Vladimir Ashurkov was advertising his principles last week in the Moscow Times. He is currently executive director of the Foundation for Fighting Corruption, one of the organs of the political opposition led by Alexei Navalny. Ashurkov is described by the newspaper as the principal fund-raiser for Navalny, and himself a candidate for election to the coordination council of the opposition movements.

He has identified his last employer from 2006 to 2012 as Mikhail Fridman’s Alfa Group. Before that, between 2004 and 2006, Ashurkov confirms he was vice president for strategic development of Sergei Generalov’s holding, Industrial Investors. Those were the years when one of Generalov’s strategic developments was a deal to acquire the Georgian mining company called Madneuli; borrow heavily from Deutsche Bank against its future gold production; and spend the money acquiring goldmining companies in Armenia and elsewhere in the name of GeoProMining, a Caribbean island-registered entity.
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by John Helmer - Monday, October 15th, 2012
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By John Helmer, Moscow

A case that has been going through the courts in London for months, and will be argued afresh in November before the Supreme Court, Britain’s highest tribunal, reveals not only how easy it was for a group of alleged fraudsters to borrow $225 million from state-controlled VTB Bank. Also revealed is how VTB bank officials in Moscow ignored risk and security warnings against the loan from their subordinates in London, and channelled bank fees and commissions amounting to at least 10% of the loan through a fake consultant. That, the British courts have concluded, was an offshore entity intended to avoid Russian tax. More likely it was a kickback scheme to enrich the VTB bankers in Moscow making the loan approval. VTB’s misrepresentations on this and other scores have been judged to be so serious, the High Court has tossed out several claims by VTB, and charged the bank with “deliberate material non-disclosure” (aka lying, deceit).

Why VTB intends to reveal so much about its own banking practices in London without prosecuting the ripoff in Moscow is difficult to understand because VTB refuses to answer a single question about the case. The intimation is that VTB is afraid of launching a criminal or civil fraud case in Moscow for fear that prosecutors will turn up evidence that VTB bankers were in cahoots with the alleged fraudsters to share more than $20 million of the loan proceeds between them.
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by John Helmer - Monday, October 15th, 2012
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By John Helmer, Moscow

Never was a Russian design more nobly intended for the edification of London’s upper class since Karl Marx scribbled away at the British Museum Library. Never were the fetish of the object and the alienation of labor more artfully combined. Had Mr Bean done it, the Prime Minister and the Mayor of London, maybe a naked prince and duchess too, would have fallen over each other to be photographed shaking the artful dodger’s hand.

And how modest the graffito: “Vladimir Umanets 12 A Potential Piece of Yellowism”. Imagine if Karl had scribbled “you have nothing to lose but your potential chains”. Who would have united for that? Would we be bitterly complaining the Romanovs alive and still on their thrones?
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by John Helmer - Wednesday, October 10th, 2012
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