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August 16, 2005
Election 2008: Abramovich vs. Sibir Energy

It's very hard for a non-Russian to understand politics in Russia. The person that is elected to Parliament by a majority of the population in his constituency doesn't really mean anything. Usually it's an unknown person who is not going to be making any decisions. Executive disputes and litigation become parliamentary and executive politics in Russia. One of the biggest recent political moves involves the financial claims of Sibir Energy against Russian oligarch Roman Abramovich's Sibneft.

A good friend of Mikhail Luzhkov, Shalva Chigrinsky used to have half the stock of Sibneft-Yugra, co-owned with Roman's Sibneft. However in the years 2002-2003 he lost almost all of it to the oligarch, and now he barely has 1% of the company's stock. Though the loss happened 2 years ago, it was only few weeks ago, when Gazprom started seriously speaking about purchasing Sibneft, that the Kremlin and its friends started worrying. When Gazprom claims the ownership of an entity, the Russian government (Kremlin) becomes the owner, and there is nothing you can do against the Russian federal government in the courts.

The Russian legal system doesn't work, and the Russian governor Abramovich doesn't live in Russia, so Mr. Chigrinsky sued Abramovich on the Virgin Islands. The first judgement was an injunction on the sale of 49% of stock of Sibneft-Yugra. The court was trying to force Abramovich to uncover his financial statements. However, Abramovich's lawyer waived these small misunderstandings, and everything is going well for the oligarch so far.

The situation is reminiscent of the sale of Yuganskneftegas, when a Houston federal bankruptcy court prohibited auctioning off the company. Gazprom didn't receive credit from Western banks, but as everyone remembers, international laws and courts can’t stop Gazprom and the Russian Government.

While all the oligarchs are hiding and running, Abramovich is the only one who openly lives the life of a billionaire in London, and having immunity from Russian prosecution as the governor of the poor Siberian state of Chukotka. Abramovich is close to the Kremlin's second generation (Yeltsin and Putin), and while he is unsure about the next "family" that is going to take charge of the country, he is cutting a deal to bail out, get cash for something he seized long ago. If Putin blesses this move, nothing will stop it.

Leonid Nevzlin, former partner of Khodorkovsky, says I'm unsure if Abramovich is Putin's wallet, or if Putin is Abramovich's bodyguard";. Nevzlin is hiding in Israel from the Russian Government that wants to see him in prison with Khodorkovsky for fraud and massive tax evasion. Abramovich is known to be the sponsor of the "shift" operation, when an unknown KGB officer became the president of the country in few months and the Yeltsin "family" was pushed aside.

However, Luzhkov said that he will fight "until "the last bullet" to defend the interests of his friend.

Connections, money and the power of an oligarchy in Moscow and London - this is the true face of Russian politics. And as I said before, the nation's opinion really doesn't matter, because if you show them another "hero" like the one they were presented with (Putin) six years ago, they would vote for him. If you wish, you could hire Tom Cruise to be the president of Russia. Why not? The decisions are still not made by him, or by the nation.



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Dotted Divider Line

Russia Blog presents up-to-date news, facts and commentary on the state of events in Russia and the former Soviet Union. The blog is managed by Yuri Mamchur, Director of Discovery Institute's Real Russia Project, a member of MBA class 2011 at Vanderbilt University's Owen Graduate School of Management, and a composer in his spare time.


 






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