Thursday, 29 January 2009

Oligarchs beware

Guardian Unlimited

By Jason Corcoran

Vladimir Putin's denial that he is a 'billionaire-slayer' looks increasingly unconvincing

The Russian prime minister Vladimir Putin will have raised someeyebrows amongst west London's oligarchical clique by rebuffing his image as "a billionaire-slayer".

Putin has been wielding his power to lance the ambition of aspirational tycoons for almost a decade and is showing no signs of stopping now. In an interview with Bloomberg, the Russian leader insisted the country's rules and laws are a level playing field for all of its citizens.

Well, tell that to jailed oil tycoon Mikhail Khodorkovsky, who haslanguished in a Siberian prison since 2005 on back-dated charges of tax evasion in what many viewed as an attempt to silence a political opponent. A court rejected Khodorkovsky's parole request last year, citing reasons such as a refusal to take part in a sewing course.

Putin had told a meeting of oligarchs early in his reign in 2000 itwas either his way or the highway. Some of Russia's wealthiest and most prominent businessmen, such as Boris Berezovsky and Vladimir Gusinsky, were forced to flee Moscow soon after. The pair had controlled TV stations which were critical of Putin's leadership.

Magnates such as Chelsea football club owner Roman Abramovich and Viktor Vekselberg opted to play ball. The former agreed to sell his oil company Sibneft to state behemoth Gazprom while Vekselberg impressed by splashing out a fortune to repatriate Faberge eggs to the Kremlin.

The credit crisis has put the current crop of oligarchs under thespotlight as they strain to repay hefty foreign loans and respond to the Kremlin's call to chip in more taxes to help foot the national budget.

The founder of Russia's leading mobile phone chain, Yevgeny Chichvarkin, was last week reported to have fled to London after appearing on the federal wanted list. He is accused of being involved in the kidnapping and blackmail of a former employee in a case with political undertones. Chichvarkin is joined in exile by the former president of the oil company Russneft Mikhail Gutseriyev, who fled 18 months ago in order to avoid tax evasion and other charges. Russneft has since been acquired by Oleg Deripaska, who is considered to be Putin's favourite industrialist.

Putin has the financial wherewithal and the whim to decide which oligarchs survive. Vnesheconombank (VEB), the state development bank charged with bailing out troubled companies, is chaired by the prime minister. More than 100 businesses are believed to have gone cap-in-hand to VEB, which has dished out $1 billion to Evraz, the steel and mining group part-owned by Abramovich. Deripaska, once Russia's richest man, benefitted when VEB stepped in to refinance a $4.5bn loan that he had taken out to buy a 25% stake in the mining company Norilsk Nickel.

The credit crunch has also shown up the first cracks in therelationship between Putin and his protege Dmitri Medvedev, who replaced him as president last year.

Unlike his mentor, Medvedev has never been a member of the spying classes. A lawyer by training, he claims to want a strong independent judiciary to decide the fate of bent businessmen. He has twice subtly criticised Putin's government for its handling of the crisis but it remains to be seen whether the ruling tandem is wobbling from its course. Putin still controls the strings and Medvedev can only become the puppetmaster if he cuts them.

guardian.co.uk © Guardian News and Media 2009

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