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 - Tuesday, September 25th, 2012
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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 - Friday, September 21st, 2012
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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 - Thursday, September 20th, 2012
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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 - Wednesday, September 19th, 2012
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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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by John Helmer - Monday, September 17th, 2012
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By John Helmer, Moscow

There have been demonstrations this month in the Romanian town of Campa Turzii against plans by Russian steel maker Mechel to cut its local steelmill’s workforce by up to a thousand jobs, after rolling job cuts have already reduced the plant’s workforce over recent years. The Romanian government responded on Friday by promising a ministerial investigation into how Mechel acquired the plant in a privatization transaction in 2003, and whether it has met the government’s terms for investment and job security since then.

Liviu Pop, the Minister of Social Dialogue, announced after a meeting with steelworkers: “There are some questions about the privatization of Mechel Campia Turzii in 2003. There are signs that this contract was not respected. The Government is obliged to take the first step and we will have a discussion with ministers of Economy, Finance, Environment, and AVAS [state property agency] to see what is the situation of the privatization contract and its consequences. If irregularities are found, the state organs will be notified of the details. If it is unfair competition, abuse of office , misconduct in office, we will consider revocation of this contract”.
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by John Helmer - Monday, September 17th, 2012
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By John Helmer, Moscow

Private Eye, the only periodical of investigative journalism still made of paper and ink and for sale in the UK, is old enough to be a grandfather in his dodders. So when the editor, Ian Hislop (aged 52), and his anonymous reporters took sides with Pussy Riot last month, it may have been natural for them to find a figure they called a “British grandfather”, and here’s what he reportedly did:
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by John Helmer - Thursday, September 13th, 2012
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By John Helmer,Moscow

Russian government investigators are focusing on a tiny, little known Latvian bank through which Oleg Deripaska (front) has been holding and moving billions of dollars. The Latvian Trade Bank (LTB), as it was known for many years, has recently been renamed Expobank, after it was taken over by Igor Kim, who bought the bank from Alexander Mamut (left).

The bank was a target of investigation by lawyers for Roman Abramovich and Boris Berezovsky, as they prepared for their recent trial in the UK High Court. Its money-laundering business became public during the witness testimony at the trial last October and November. At one point, the bank’s management agreed to submit to the UK court’s jurisdiction and accept a court order to disclose its transaction records.
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by John Helmer - Thursday, September 13th, 2012
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By John Helmer, Moscow

In the history of the Spanish Main, it was always tricky to tell who had title to what, as the Spaniards stole gold and silver from the Aztecs and the Incas, and the British pirated the Spanish galleons as they made their way across the Caribbean. Who can blame the Danes for not trusting the Russians in what has been announced this week as the biggest delivery of treasure by a foreigner, the A.P. Moller-Maersk group, ever unloaded in Russia’s seagoing business.

Are the terms of the complicated shareholding arrangement a scheme for the Russians to take as much cash for themselves before their container business loses its growth prospects, and profit margins shrink under domestic competition from Vladimir Yakunin (Russian Railways), Ziyavudin Magomedov (Summa Capital), and Vladimir Lisin (Universal Cargo Logistics Holding, UCLH), not to mention Vladimir Putin, Igor Sechin, Arkady Dvorkovich, and Dmitry Medvedev? Is the postponement of shareholding control for the enterprise a hedge by the Danes against the possibility that it will prove impossible to take practical operating control of the assets they are now acquiring as a minority stakeholder?
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by John Helmer - Wednesday, September 12th, 2012
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By John Helmer, Moscow

The second day of Yury Privalov’s trial in Moscow for embezzling funds from Sovcomflot ended Monday evening without a ruling from Judge Natalia Morozova. The state shipping group, represented by lawyers from Sovcomflot, one of its offshore subsidiaries, and Novorossiysk Shipping Company (Novoship), have requested leniency and Privalov’s discharge. The state prosecution has asked for a sentence of six years in prison, less the two years Privalov has already served, and a fine of Rb1 million ($30,000). The judge reserved her decision, and promised to issue her judgement in a week’s time on September 17.
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by John Helmer - Tuesday, September 11th, 2012
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