http://news.bbc.co.uk/2/hi/programmes/newsnight/8146052.stm

by John Helmer - Wednesday, July 15th, 2009
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By John Helmer in Moscow

The Caspian Energy Group, led by Ilya Kokarev, said this week it is confident the Russian courts will rule shortly to uphold its right to seats on the board of the Red Barricades Shipyard. This is the only standout among the Astrakhan yards to resist consolidation by Caspian Energy, which already incorporates Lotos, Astrakhan Third International, and the Korabel shipyard (Astrakhan Shipbuilding Production Association, ASPO).

After a year of negotiations, legal challenges, and the purchase of a 25% shareholding in Red Barricades, Kokarev said he expects the ruling to give him 2 seats on the board. “We’ve tried to start a dialogue but they don’t want to listen,” he told Fairplay.

The Red Barricades director, Alexander Ilichev, has branded Kokarev’s bid a hostile takeover, and appealed to the government in Moscow to protect his company under the wing of the state holding, United Shipbuilding Corporation, supervised by deputy prime minister Igor Sechin. The government remains silent. Noone picks up at the listed telephone numbers of Red Barricades in Astrakhan.
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by John Helmer - Wednesday, July 15th, 2009
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By John Helmer in Moscow

Sergei Stepashin, the head of the Accounting Chamber, Russia’s state auditor, has issued a press leak, claiming he was responsible for the firing of Alrosa chief executive, Sergei Vybornov, after a Chamber audit of Alrosa earlier this year had identified multiple problems, and what Stepashin is publicly quoted as calling “numerous infringements in company activity”. According to reports by news agency Interfax and a Moscow daily business paper, Stepashin, a former Russian prime minister, has claimed that the results of the audit led to the firing. “For this reason,” Stepashin is quoted, “we recommended the replacement of the president of Alrosa.”

Among the “infringements” triggering Stepashin’s call to remove Vybornov, it is now being reported that Alrosa sold rough diamonds to the state stockpile agency Gokhran at a price alleged to have been greater than the export price of the stones.

According to independent testimony by one of the auditors who took part, Angelica Zadorozhnaya, the Accounting Chamber investigated Alrosa’s books early this year. She told PolishedPrices.com that the completed audit report had then gone to the collegium, as the Accounting Chamber’s highest body is known, in April. She also said that this session decided to impose a state secrecy classification on the report.
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by John Helmer - Tuesday, July 14th, 2009
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July 14, 2009

Tim Whehell and BBC Newsnight for beating the English language of a UK High Court ruling into the opposite of what it said about the nature of Russian justice, its beneficiaries and victims

http://news.bbc.co.uk/2/hi/programmes/newsnight/8146052.stm
Letters
Sent: 17 July 2009 14:47
To: Tim Whewell
Subject: Your evidence please
Dear Tim:

In your recent broadcast on Oleg Deripaska, you make the following claim about the ruling of Justice Christopher Clarke in the Cherney v Deripaska High Court action (at minutes 0538-0550 of the tape):

“…The judge said that Deripaska had agreed a final global payment to end Mr Cherney and Mr Malevsky’s protection of his business, words used by Mr Deripaska himself in his statement to the court.”

Please provide me with your substantiation of the judge’s words, as I have searched the ruling and cannot find them; or anything approaching your interpretation of Justice Clarke’s opinion on the substance of the case. At 0526 minutes, you state: “the ruling didn’t deal with the substance of the claim”. Twelve seconds later you seem to have contradicted yourself.
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by John Helmer - Tuesday, July 14th, 2009
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By John Helmer in Moscow

The President of Turkmenistan, Gurbanguly Berdimuhamedov, said Friday his country is interested in diversifying gas export routes, and will participate in the Nabucco project. His statement came ahead of the signing on Monday of an intergovernmental agreement between Austria, Turkey, Hungary, and Romania to build the 3,300-km pipeline across their territories. It’s one thing to agree to sign up in favour of studying the construction and economics of the pipeline; but none of the signatories is rich or anti-Russian enough to bid up the price of the gas to make piping the Nabucco way profitable.

Several sources of gas supply for the 31 billion cubic metre-capacity gas route are available — Azerbaijan, Turkmenistan, Iran, Kazakhstan, and Uzbekistan. However, Gazprom has been negotiating first-refusal gas purchase agreements with Azerbaijan and Turkmenistan in order to lower the gas volume available to make Nabucco economically feasible to operate. The suppliers understand that if Gazprom takes this pricing risk up front, Nabucco won’t be built, and Gazprom’s alternative pipeline to the same countries — South Stream, under the Black Sea — will put a handy safety net under the suppliers’ long-term revenue projections. They also understand that the only way to persuade Gazprom to do something as costly as this is to make the Nabucco option look even more costly.
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by John Helmer - Monday, July 13th, 2009
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By John Helmer in Moscow

Regional mining officials in Kemerovo and the regional coalminers’ union say that ArcelorMittal had already begun closing down two coalmines and dismissing miners, before the Kemerovo region’s governor, Aman Tuleyev (picture left), issued an ultimatum to stop last Friday. If the charges cannot be resolved in negotiations this week, the legal impact of the claims against the company put in doubt all future operations by ArcelorMittal in Russia.

Yuri Udartsev, deputy head of the Industry Department at the Kemerovo regional government, told CRU Steel News said the focus of attention is “the two mines — Pervomaiskaya and Anzherskaya. ArcelorMittal is preparing to close them down, and has already started dismissing the miners. At the current rate [of coal prices], these two mines have no prospects for the future. That is why the regional government could not remain neutral in the situation. [Governor] Tuleyev proposed to ArcelorMittal either to take measures to save the mines, or their license for the Zhernovskoye deposit will be revoked.”

The governor’s aide, Oleg Shishko, confirmed that in the text of a telegramme Tuleyev sent Lakshmi Mittal (picture right) last Thursday, and posted publicly in Kemerovo on Friday, the governor charged “there is no transparency in their [mining] activity, there are serious infringements of technological discipline at conducting mining works”. As CRU Steel News reported on July 10, Tuleyev threatened that if the two mines are closed down, he will revoke ArcelorMittal’s licence to develop the Zhernovskoye-3 coal deposit.
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by John Helmer - Monday, July 13th, 2009
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By John Helmer in Moscow

After months of bluster, denials that his job was under threat, and attempts to intimidate reporting with phantom lawsuits, Sergei Vybornov has issued a lengthy interview to a Moscow reporter, in which he intimates that his ouster — made official by the Alrosa board last Friday — was the result of plotting by rivals in the Sakha republic, and among international and Russian diamond-buyers unhappy with Vybornov’s new marketing deals. The text of the interview was published in Kommersant in its July 13, 2009, edition.

Asked to say why he had left Alrosa, Vybornov said he had not quarreled with the Sakha President, Vyacheslav Shtirov, a former CEO of Alrosa, or with anyone else. Sakha sources claim that Shtirov, who had helped Vybornov take the CEO post away from Alexander Nichiporuk in February 2007, has been trying to oust Vybornov for more than six months. But that conflict, the sources have also claimed, has been subsumed by the deterioration of Alrosa’s financial position since the collapse of the diamond markets last autumn. An investigation of the company’s books by the Accounting Chamber, the state auditor in Moscow, was for a time blocked by Vybornov. The results of the audit have been classified secret, Chamber sources have told PolishedPrices.com.
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by John Helmer - Monday, July 13th, 2009
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By John Helmer in Moscow

Fyodor Andreev (also spelled Andreyev — see picture) is the new chief executive officer of Alrosa, the state owned Russian diamond miner, and will take up his functions this week, a high company source told PolishedPrices.com today.

It turns out that Alrosa’s CEO has a seat on the company’s Supervisory Board (board of directors) after all. But that is because Sergei Vybornov, the CEO since February 2007, has been replaced by Andreev, whose appointment to the board PolishedPrices.com reported on June 22. At the time, it was also reported that removal of the CEO from the board was unprecedented.

Vybornov continued to fight the ouster move, issuing a statement the next day that “the President of Alrosa [the chief executive] in any case participates in the Council work as the head of an executive office of the company.” A company announcement is expected to be made on Monday, and Andreev takes over in Vybornov’s place later in the week, the high company source said Sunday.

Andreev returns to Alrosa after leaving in 2003. At that time, he was chief financial officer, and had piloted Alrosa through several debt issues on the international financial markets. In 2001 Andreev had introduced international accounting standards reporting to enable Alrosa to develop an international credit rating, and lower the cost of its borrowings.
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by John Helmer - Sunday, July 12th, 2009
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By John Helmer in Moscow

This is the strange tale of a mining company which noone admits to owning, at least not in the fareastern Primorsk region of Russia, where it is the principal source of work and income, not to mention cancer exposure, for the village of Svetlogorye (“Clear Mountain”, population 700); and where, until very recently, the mine turned out almost all the tungsten in ore and concentrate form that Russia produces each year.

The mining company, Russian Tungsten (in Russian, Russkiy Volfram), is the owner of one of the major deposits of tungsten in the world. It also appears to have just passed into the control of Vasily Usoltsev (pictured), a deputy of the Russian parliament, who is avoiding questions about why the strategic mine collapsed last year; and how it happened very recently that a mining group he is associated with managed to take over the mine from an offshore company registered in the middle of the Indian Ocean, in Seychelles.

Tungsten in its fabricated state, because of its super-hardness, conductivity and high temperature resistance, has many applications — from light bulbs and cathode-ray tubes to electron microscopes, rocket engines, radiation shields, bullets, grenades, and missiles. The principal mine source for the ore and concentrate in Russia is Russian Tungsten at Svetlogorye in the east. At the other end of the country, at Nalchik, in the Russian Caucasus, ZAO Wolfram is Russia’s sole refiner of tungsten metal.
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by John Helmer - Friday, July 10th, 2009
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By John Helmer in Moscow

The two well-known controlling shareholders of the Evraz steel group, Russia’s largest steelmaker, are to pay at least $400 million into the cash reserve of the company to help reduce its current debts, and avoid a breach of bankers’ covenants governing Evraz’s loan position. Through an announcement yesterday by Evraz, Lanebrook — the Cyprus-registered vehicle through which Abramovich and Abramov hold an estimated 78% of Evraz’s shares — has undertaken to subscribe to the group’s public offering of $600 million in convertible bonds and $300 million in shares. The Lanebrook group will subscribe $200 million for the bonds, and $200 million for the shares. The balance will be sought from the market in an offering that is being managed by Goldman Sachs, Morgan Stanley, and Deutsche Bank.

The bonds, with a coupon of 7.25 % annual interest, mature in 2014, but they can be converted before then into the company’s general depositary receipts (each comprising three shares). This conversion will be allowable sixty days from placement at $21.12, 28% above the placement price. That price, according to Moscow brokerage reports on Thursday morning, was $16.50 per share, about 10% below the Tuesday closing price. By the end of Russian trading on Wednesday, Evraz’s share price had dropped 11.4%.

Until now, no Russian proprietor of a major steel company has paid out of pocket for the company’s debt obligations. The stock markets have failed to see the generosity in Lanebrook motive, however, interpreting in the move a dilution of minority shareholders, and pressure on the minorities to sell back to the controlling shareholders at a discount to the market price. Industry reports in Moscow have suggested that behind the Lanebrook facade, Abramovich and his Millhouse partners hold 36% of Evraz; Abramov’s stake amounts to 24%; chief operating officer Alexander Frolov, 12%; the Privat group of Ukraine, 10%; with a remaining freefloat of the London-listed stock at more than 17%.
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by John Helmer - Thursday, July 9th, 2009
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