HAND IT OVER, AND SIN NO MORE

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Arrest warrant issued for Mikhail Gutseriyev of Russneft

Only a month ago, Mikhail Gutseriyev – head of the Russneft oil company – was a prosperous individual: ranked 31st on Forbes Russia’s Rich List. Now he is losing his company, and a Moscow court has issued a warrant for his arrest – just after his son was killed in a car crash.


Some weeks ago, the Lefortovo Court in Moscow approved a request from the Interior Ministry’s Investigtion Committee and froze 100% of the Russneft oil company’s shares; but this ruling hasn’t come into force, since the company has appealed against it. The Moscow City Court is due to consider this appeal on September 5. But Russneft’s lawyers will now have to defend Russneft owner Mikhail Gutseriyev himself, as well as his assets.

Only a month ago, Gutseriyev – president and owner of the Russneft oil company – was a prosperous individual: ranked 31st on Forbes Russia’s Rich List. On a similar list in Finans magazine, Gutseriyev was ranked 23rd, with a fortune of $5.2 billion. What’s more, his oil tycoon status has been achieved within the past five years; he started from scratch and built up Russia’s seventh-largest oil company. More recently, however, it’s as if Gutseriyev has been cursed. The Arbitration Court had seven criminal cases against him, on charges of tax evasion, illegal business activities (breaching license terms in the process of oil production, and numerous other sins.

Eventually, Gutseriyev gave in and announced that he would resign as head of Russneft and quit business entirely, selling his company to aluminum tycoon Oleg Deripaska (just as Deripaska was declaring that he is prepared to hand over all his assets to the state at any moment, if the state wishes him to do so). Business newspapers reported that Gutseriyev would receive $3-3.5 billion for surrendering his company. And the business community expected the incident to end there.

But Gutseriyev decided to slam the door on his way out: publishing an open letter in the Russneft corporate newspaper, in which he related how it was suggested that he should withdraw from the oil business “quietly,” and then he was subjected to unprecedented harassment to make him “more amenable.” Gutseriyev said: “The actions of the law enforcement agencies and taxation authorities against our company are unprecedented! Russian and Soviet history have never witnessed a greater case of disrespect for the law.”

And now the pendulum of the Russneft case is swinging again. The company’s shares have been frozen, and a warrant for the owner’s arrest has been issued in absentia. Actually, Gutseriyev wasn’t in hiding. He had just buried his son, killed in a car crash. The funeral was held in Gutseriyev’s home region of Ingushetia.

Theories:

1. The federal authorities are striving to concentrate all major oil and gas assets in state hands before the presidential election. If this is true, we can expect that the Russneft case won’t be the last.

2. Gutseriyev’s problems started soon after he took to buying up YUKOS assets without the Kremlin’s permission. Earlier, Gutseriyev had supported Murat Zyazikov’s rival in Ingushetia’s election.

3. The law enforcement agencies suspect that Russneft might have been funding terrorists.

4. And here’s what Gutseriev himself has to say: “I’m being forced to sell my company, under pressure from the authorities. The company has been targeted by the security and law enforcement agencies. I am firmly convinced that all the actions of certain individuals within the authorities are aimed against myself personally. The chief factor in all of Rossneft’s problems is personal. The basic question – whether or not Russneft should be ours – is all about the company’s president.”

Andrei Cherepanov, head of the National Development Project:

We know perfectly well that all of Russia’s corporations have been guilty of economic law-breaking at some point. The question is: why are they being punished at this particular time? What’s more, the search for law-breakers is obviously selective: some are punished, others left alone. In short, the Gutseriyev case suggests certain conclusions.

Valery Tsvetkov, deputy director, Market Institute, Russian Academy of Sciences:

This is a process of gathering assets under the state’s aegis – a kind of “nationalization.” Tycoons bought their assets for next to nothing, and if they have failed to manage the assets properly, the state can take them back. Roman Abramovich received an offer he couldn’t refuse: the state bought Sibneft from him – the goose that lays the golden egges. And state-controlled structures are interested in Gutseriyev’s Russneft. What’s more, Gazpromneft and Rosneft are competing with each other, and whichever company can accumulate the most assets will be stronger. Gutseriyev was caught in the crossfire. The next moves were obvious: audits, back-taxes claims.

State intervention in the economy is on the rise worldwide. Look at China, or the United States. And Germany recently passed a law to prevent foreign companies from penetrating the natural monopolies.”

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