By John Helmer, Moscow

Russians have an uninhibited good humour at this time of year, but Alisher Usmanov aims to be the spoiler, holding his nose over all the treats. According to Usmanov, the transaction “has the smell of the 90s and oligarch conspiracies. It’s not acceptable for us.”

Usmanov is referring to the transaction, confirmed on December 11, by which Roman Abramovich’s Millhouse holding acquired control of 25.87% of Norilsk Nickel’s shares for the price of 5.87%; Vladimir Strzhalkovsky received $100 million in cash; and Oleg Deripaska as the trustee with the control stake in United Company Rusal will receive a 48.13% share of Rusal’s 27.8% share of $10.9 billion in dividends to be paid out of the Norilsk Nickel treasury over the next three years – that’s $1.46 billion.
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by John Helmer - Friday, December 28th, 2012
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By John Helmer, Moscow

Sergei Stepashin (right) was the prime minister of Russia for three months before Vladimir Putin (left) was appointed to the job in August 1999. Before that, Stepashin was the head of the Federal Security Service, Minister of Justice, and Minister of Interior. He also has a doctorate; a professor’s rank in civvies; and in the military the rank of Colonel-General. For a while in 2005 he was Boris Yeltsin’s preferred candidate to succeed him as president. He is now in his third term as the head of the Accounting Chamber, having been nominated by the Kremlin and accepted by the State Duma in 2000, 2005, and 2010.

The chamber’s job is to scrutinize the spending of public funds and where possible uncover and expose abuses and corruption. It’s the Russian equivalent, in constitutional duty at least, of the Government Accountability Office in Washington, or the National Audit Office in London. Unless he jumps or is pushed, Stepashin is in office until the end of 2017. By the standard of officials of the post-communist period, Stepashin has the right stuff.
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by John Helmer - Thursday, December 27th, 2012
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By John Helmer, Moscow

Along the eastern Mediterranean shore, between Tyre, Lebanon, and Tartous, Syria, it’s 191 kilometres as the crow flies – make that as the drone flies. Tyre was the site of one of the great tests of military technology, tactics, and nerve when the Greek, Alexander the Great, besieged the then Phoenician city in 332 BC, breaching the defences after seven months, killing about a fifth of the population, and despatching the rest into slavery.

The Americans, Turks, French, and British claim they have a better idea for the Syrians. Alexandrine crucifixions no – looting and slavery maybe.
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by John Helmer - Friday, December 21st, 2012
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By John Helmer, Moscow

When precious metal geologists kiss their wives good night, and go to sleep, they dream of pushing upstream from river-borne, alluvial or placer deposits of platinum, to strike the mother lode. In geological theory, this is the El Dorado of the platinum business – a bedrock of high-grade platinum ore, not too far underground, easy and cheap to excavate, in much larger volumes than can be extracted from panning or dredging downstream, where millions of years of erosion have washed the metal in grains or tiny nuggets. Unlike their wives or gold, geologists prefer platinum because its value is relatively stable.

This year, for example, look at the moving line and compare the volatility of the gold price (left chart) compared with platinum’s (right):
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by John Helmer - Thursday, December 20th, 2012
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by John Helmer - Tuesday, December 18th, 2012
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By John Helmer, Moscow

It has taken Alexei Mordashov (image lower right) three and a half years to persuade shareholders of Toronto-listed High River Gold (HRG) to accept his takeover of the company. That’s the longest foreign defence against a Russian takeover in the oligarch record-book. But when the count was completed on December 11, Mordashov’s victory was still a close-run thing. What has happened is that most of the holdout shareholders opted to take cash for their shares, and abandon the business, rather than accept a swap of their HRG shares for shares of Mordashov’s larger goldmine holding, London-listed Nord Gold.

Mordashov has the company he wanted, but not with a vote of confidence in his or his goldmining future. In the process, not a single Canadian court, Canadian stock market regulator, nor even a Canadian newspaper reporter took the side of the minority shareholders. They have included Sprott Asset Management, one of Canada’s leading independent fund managers; according to its latest performance sheet, its investments in gold and precious metals stocks have been bleeding red for the year to date, the full year, and indeed for the past three years.
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by John Helmer - Monday, December 17th, 2012
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By John Helmer, Moscow

The UK High Court ruled today that Yury Nikitin, a London-based Russian shipping entrepreneur, had engaged in corruption and “dishonest assistance” in order to secure profitable charters from Novoship UK (NOUK). At the time, Novoship was an independent Russian shipping company; since 2007 it has been a subsidiary of the state-owned Sovcomflot.

The 157-page judgement by Justice Christopher Clarke found that bribes had been paid to Nikitin by Vladimir Mikhaylyuk, when the latter was general manager for Novoship in London between 2002 and 2005. Nikitin’s defence that this was not corruption on his part was dismissed by the judge as unconvincing and implausible on the facts. Justice Clarke also condemned Nikitin to repay all charter profits he had made where there were findings of corruption.
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by John Helmer - Friday, December 14th, 2012
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By John Helmer, Moscow

It’s a cliché about greed.

Akira Kurosawa’s 1950 film Rashomon allows four witnesses to an affair of lust, robbery and murder to tell their own versions of what had happened. There is one corpse, and several versions of how it got that way – at the hand of the wife, the bandit, or by suicide. The film originated in two earlier short stories by Ryunosuke Akutagawa. Japanese audiences haven’t been as moved as western ones by either. From the Japanese point of view, dressing up dead samurais, violated ladies, grumpy bandits, and humble woodcutters doesn’t make the lesson of the story fresher than it can be. Who doesn’t know that people do what they do, see what they see, remember what they remember out of their own self-interest?

A debt of $650 million, and accumulating losses of more than $100 million are the interest of this little Russian tale. The characters are Stephen Jennings (image, upper right), founder of the Renaissance Capital (RenCap) group; Suleiman Kerimov (lower right), an investor for himself and others who prefer to hide in the forest; and Mikhail Prokhorov, part-owner of RenCap since 2008 and thus Jennings’s Russian partner. There is no lady, no sex act, and death is avoided, at least so far.
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by John Helmer - Friday, December 14th, 2012
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By John Helmer, Moscow

Oleg Deripaska (image centre) is not having a good week. It started more or less out of harm’s way with a report in a London magazine, Private Eye. This claims that at least two Caribbean companies and one UK entity, which Deripaska uses to channel sales revenues from United Company Rusal to beneficiaries and places other than the shareholder income line on the company’s audited balance-sheet, “have been identified by economic crime specialists as fronts for extensive laundering – of proceeds for illicit arms exports, drugs, counterfeiting, corrupt public contracts, and much else.”

Then there was the collapse of the first Deripaska company to fall into official bankruptcy – Kuban Airlines – largely, aviation industry sources say, on account of lack of capital on the part of the owner to raise the operating margin of aircraft, and the risk of continuing to fly unsafe aircraft on domestic routes when they are banned internationally.
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by John Helmer - Thursday, December 13th, 2012
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By John Helmer, Moscow

There is rule on corruption which everyone in public office in every corner of the world knows – you mustn’t use your office to advance your private profit. When he was Mayor of Moscow Yury Luzhkov was not supposed to put lucrative city business in the way of himself or his wife, Yelena Baturina. So in 2009, when she was accused in a London newspaper owned by Rupert Murdoch – then in a billion-dollar conflict himself with the Moscow city administration — of using up to £100 million to buy a London palace in which to live with the Mayor and their children; and when Luzhkov was accused by innuendo of failing to disclose the deal, Baturina sued in the UK High Court for libel. Six months after this story ran, the newspaper and its proprietor News International, settled out of court, apologizing to Baturina, retracting the claims, and paying her costs and damages.
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by John Helmer - Wednesday, December 12th, 2012
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