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Home  News International DERIPASKA MAY OWE UP TO 60% OF ASSETS TO PARTNERS AND KREMLIN
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DERIPASKA MAY OWE UP TO 60% OF ASSETS TO PARTNERS AND KREMLIN |
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Written by Administrator
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Monday, 14 May 2007 |
(LONDON)-The list of Russia’s richest people published recently by Finance Magazine is topped by Oleg Deripaska, the owner of business empire Base Element (BasEl). With an estimated worth of $21.2 billion, he has passed the long-time leader of Russia’s Top 100, Roman Abramovich by $200 million. Yet Deripaska himself refrains from claiming this position. In an interview with The Guardian, Deripaska noted that his fortune is “half the size.”
According to Russian business experts, Deripaska’s own estimate of $10.5 billion is closer to reality, since a significant part of his business empire belongs to his partners. For example, a substantial share of Deripaska’s fortune is claimed by his former mentor and partner Michael Cherney (Mikhail Chernoy), who founded, with Deripaska, Siberian Aluminum (SibAl), and then Russian Aluminum (RusAl), of which the main component today is BasEl.
According to The Independent, the former partners have fallen out, and Cherney has filed a suit claiming between $3-4 billion in London’s Supreme Court. Cherney refers to a contract whereby Deripaska owes him 20% of RusAl; but in interviews he claims that Deripaska effectively owes him 40% of BasEl.
Up until 2001, Cherney and Deripaska were equal partners in all Deripaska’s business ventures, including SibAl. Deripaska had no assets separate from Cherney. Then the partners joined their aluminum assets with those of Roman Abramovich, forming RusAl, where Cherney held 20%; Deripaska,30 %, and Roman Abramovich the balance, with his partners, of 50%.
Cherney handed his share over to Deripaska to manage for five years. Soon Deripaska bought Abramovich out and claimed 100% ownership of RusAl. According to Cherney, Deripaska has not paid him back and used their joint capital for the buyout and expansion of the empire; hence Cherney insists that the ratio in their holdings – now under Deripaska’s control - be maintained, with 40% going to Cherney, and 60% to Deripaska.
Many Moscow observers also claim that large Russian corporations pay off 10 to 20 percent of their income to the Kremlin and its secret services as an unofficial license for doing business and avoiding expropriation, the fate that occurred to Mikhail Khodorkovsky with Yukos and many other Russian businessmen.
If one considers this pay-off as another unlisted tax, Deripaska also seems to be mentally deducting it from his holdings when he claims that his fortune is only half the size of the $21 billion declared by the media.
Moreover, some analysts recently suggest the Kremlin has upped its “tax,” and Deripaska is forced to pay for protection out of his partners’ shares. This is the real reason why he opts for trial rather than settling with Cherney, hoping that Russian security services will discredit his ex-partner, thus helping Deripaska win the lawsuit. Other emphasize that when the Kremlin implicitly encourages Russian businessmen to avoid their obligations to foreign partners, this serves only to blemish the international image of the Russian authorities. |
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