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Archive for September, 2014

House Arrest for Russian Billionaire

September 23, 2014 by admin No Comments »

One of Russia’s top billionaires, Vladimir Yevtushenkov was placed under house arrest on Tuesday this week while an investigation into money laundering charges against him is completed. Yevtushenkov is the head of Sistema holding company, which owns the Bashneft oil company in Bashkiria and is Russia’s 15th richest man with an estimate personal fortune of $9 billion.

Russia’s top investigative agency, The Federal Investigative Committee said that it had launched its probe into the 65 year old billionaire because it had “sufficient grounds to believe that AFK Sistema board chairman Vladimir Yevtushenkov is involved in the legalisation of property acquired by criminal means.” Legalisation of property is a phrase used to describe money laundering.

There are however a number of Russian commentators and business men who have drawn attention to the parallels between this case and that of the politically motivated moves against the former oil tycoon Mikhail Khodorkovsky, who ended up spending a whole decade in jail while his firm, Yukos, was dismantled by the Russian state.

The main beneficiary of the Yukos affair was Rosneft, the oil giant with close ties to Russian President Vladimir Putin, and they have been eager to acquire Bashneft assets since early this year. With the Investigative Committee reporting directly to the President, the similarities between the two cases have been striking, and the authorities are keen to play down any appearance of history repeating itself.

Nevertheless, news of Yevtushenkov’s arrest spread rapidly through Moscow’s political and business circles, prompting uncertainty at a time when confidence in the Russian economy is wavering.

The head of the Union of Industrialists and Entrepreneurs, Alexander Shokhin, was quick to highlight the parallels with the Yukos affair when he talked to the Interfax news agency, going so far as to label it “Yukos 2”.

Yukos used to be Russia’s biggest oil company but was broken up after being forced into bankruptcy in 2003, when Khodorkovsky was arrested. Vladimir Putin had warned the growing class of oligarchs to stay out of politics, and the asset stripping of Yukos was seen at the time as a solid strike against them. The most profitable parts of Yukos were snapped up at a reduced price by Rosneft, which was a minor player in the oil industry at the time, and by other state companies in opaque auctions.

Khodorkovsky was released from prison last year, and now lives in Switzerland in what has been described as a self-imposed exile, while Rosneft is directly controlled by Igor Sechin, a top lieutenant of President Putin, who is widely believed to have orchestrated Yukos’ dismantling and Khodorkovsky’s downfall.