by John Helmer - Friday, October 9th, 2009
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By John Helmer in Moscow

The board of Vnesheconombank (VEB), the state bailout bank chaired by Prime Minister Vladimir Putin, agreed yesterday to extend for a year a $1.8 billion loan to the Evraz group, controlled by Roman Abramovich’s Millhouse holding.

The loan was first issued in mid-November 2008, and is the largest single government financing for the Russian steel sector since the global crisis began a year ago. It was sought to enable Evraz to repay foreign bank loans, which had been raised to pay for Evraz’s expansion abroad, primarily for purchase of steelmills in North America. At the time of last year’s VEB rescue, Evraz was the third most heavily indebted Russian company, with a total of $9.9 billion in net foreign debt outstanding. Only the two state-owned energy companies, Rosneft and Gazprom, were more heavily indebted abroad than Evraz.

Its short-term (6-12 month) debt at the time of the VEB loan was $4.2 billion; $2.1 billion was due and payable by December 31. Although it is a state institution funded by public money, VEB does not issue transaction or audited financial reports, not even in open form to the Russian parliament. Nor has VEB disclosed the terms by which it has secured loans to borrowers.
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by John Helmer - Friday, October 9th, 2009
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By John Helmer in Moscow

Sergey Frank, the chief executive of state owned Sovcomflot (SCF), one of the top-5 tanker companies in the world, is now into his fourth straight day of cross-examination in the UK High Court for what is turning out to be an unexpectedly dramatic examination of the way high Kremlin officials have fought each other over the management of Russia’s oil shipping concession.
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by John Helmer - Thursday, October 8th, 2009
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By John Helmer in Moscow

It took several shots over a thousand years before people who scribble for a living could get the jingle about their business quite right. Euripides tried it with: “The tongue is mightier than the blade”. To the modern ear that sounds a little on the sado-erotic side. Shakespeare had the phallic inspiration: “many wearing rapiers are afraid of goosequills”. The great Nap got into the right ballpark, but struck out with: “four hostile newspapers are more to be feared than a thousand bayonets.”

Then along came Edward Bulwer-Lytton, who arranged in 1839 for the lead in his play about Cardinal Richelieu to say: “the pen is mightier than the sword”. Even more forgotten than Bulwer-Lytton, though, is what the stageboard Richelieu says next: “Behold the arch-enchanters wand – itself a nothing! – but taking sorcery from the master-hand to paralyse the Caesars”.
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by John Helmer - Wednesday, October 7th, 2009
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By John Helmer in Moscow

Alrosa appears to be selling all of its rough diamond production this year to the state stockpile agency, Gokhran, exceeding earlier estimates of the state budget funds previously allocated to sustain the state-owned company’s mining operations. Both Alrosa and Gokhran are under the control of Russia’s Finance Minister, Alexei Kudrin (pictured right).

According to a report by Interfax, in September Alrosa has sold Gokhran rough worth an estimated Rb20.4 billion ($669 million). For the 9-month period just ending, Interfax reports that Alrosa has sold a total of Rb32.5 billion ($1.1 billion) worth of diamonds to the state repository. Alrosa’s chief executive, Fyodor Andreyev (pictured left), and his spokesman, Alexei Polyakov, were unavailable to confirm the numbers, but a Gokhran source has confirmed their accuracy. Alrosa is not clarifying either its production target for the year, or its sales target.
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by John Helmer - Wednesday, October 7th, 2009
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By John Helmer

On July 31, the UK Court of Appeal upheld the ruling of High Court Justice Christopher Clarke that the administration of law in Russia is liable to be manipulated by powerful Russian businessmen and politically influential individuals pursuing vendettas for their financial gain. “Improper interference by State actors” was the phrase accepted by the three appeal court judges to refer to the behaviour of the Russian prosecutor-general, ministries of Interior and Justice, police, and courts.
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by John Helmer - Wednesday, October 7th, 2009
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By John Helmer

Sergey Frank, Sovcomflot’s chief executive, has testified in the High Court that he knew nothing about an illegal information- gathering operation, targeted against his rival and former CEO, Dmitry Skarga, but that the figure in charge, who is referred to in the court evidence, may have been Russia’s Deputy Prime Minister, Igor Shuvalov, chairman of the SCF board until last year.

Frank and his company charge Skarga and SCF’s former chartering partner, Yury Nikitin, with fraudulent ship sale and lease-back transactions, and receiving kickbacks on hull sales and shipyard orders. The lawsuit was initiated almost four years ago, after Frank, a federal transport minister, had been dropped from the government, and appointed to the shipping company instead. Skarga was then moved by the Kremlin to the Federation Council, the upper house of parliament, to be Senator for Volgograd.
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by John Helmer - Tuesday, October 6th, 2009
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By John Helmer in Moscow

Noone can say that Alexei Mordashov (pictured left), owner of Severstal, Russia’s third largest steelmaker, and Anatoly Kruchinin, the chief executive of the Russian steel operations (right), are overdoing it when it comes to human sacrifice.

In 1487, when the Aztecs had rebuilt the Great Pyramid of Tenochtitlan after flooding, they sacrificed 80,400 people in reconsecration ceremonies over the course of four days. Mordashov’s atonement for the loss pyramid he has run up buying loss-making American steelmills as a haven for his personal capital has so far been the sacrifice of 9,500 Russian steelworkers over 11 months. This is Mordashov’s way of increasing the profitability of his Russian steel operations, in order to subsidize the losses of the American mills, and keep Severstal’s anxious bankers at bay.
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by John Helmer - Tuesday, October 6th, 2009
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To Muratov D.A.
Editor in chief
“Novaya Gazeta”
101990, Moscow, Potapovsky per., 3

From: Law firm “Ivanyan and partners”, lawyers of “Gunvor” company of T. Tornqvist and G.N. Timchenko

Subject: Publication in “Novaya gazeta” dated 24.08.09 and letters addressed to T. Tornqvist and G.N. Timchenko dated 11.08.09 and 31.08.09.

September 4th, 2009.

Dear Dmitry Andreyevich,
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by John Helmer - Sunday, October 4th, 2009
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By John Helmer in Moscow

On Thursday, the Russian state shipping company Sovcomflot (SCF) opened its three-year old, $800 million claim in the UK High Court; Justice Andrew Smith is presiding.

Preliminary applications were heard on the first day, along with a presentation by the barrister representing Sovcomflot. Presentations for the defence commence today. Next Monday, Sergey Frank, the SCF chief executive, is scheduled to testify. It is rare for a Russian state official to testify in a foreign court proceeding; Frank was the Minister of Transport before he was appointed to the shipping company. Frank’s spokesman in Moscow declines to say whether he will appear.

The Russian defendants in the case are Frank’s predecessor at SCF, Dmitry Skarga, and the former chartering partner of the company, Yury Nikitin. They claim the court case is a fight for commercial advantage between two rival management groups, and their allies in the Russian oil trade. They deny Frank’s allegations of fraud.
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by John Helmer - Friday, October 2nd, 2009
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