Fugitive Tycoon Said to Be In Britain

gutseriyev.jpgFormer Russneft chief Mikhail Gutseriyev fled Russia via Turkey and is living in London, sources close to the wanted oil tycoon said Wednesday, as a Moscow court upheld a warrant for his arrest on what he has called politically motivated charges.

“He is in London, but has asked his friends to remain quiet during this difficult time,” one source said by telephone from London, declining to give his name in line with Gutseriyev’s wishes. Gutseriyev is observing 40 days of mourning for his son, Chingiskhan, who was killed in a car crash in Moscow on Aug. 22, the source said.

The death of his son came as prosecutors ramped up the campaign against Gutseriyev, who stepped down as head of the country’s seventh-largest oil firm on July 31 after what he called “unprecedented hounding” from tax and law enforcement authorities.

Basic Element, the holding company belonging to Kremlin-friendly oligarch Oleg Deripaska, is currently in talks to buy the embattled firm.

Tax authorities have brought a total of 11 lawsuits against eight current and former shareholders in privately held Russneft, and all the company’s shares and assets have been frozen.

Gutseriyev himself is wanted on charges of illegal business practices and tax evasion. The Moscow City Court on Wednesday rejected an appeal from his lawyers to withdraw an arrest warrant issued Aug. 28. Shortly after the warrant was issued, Gutseriyev was placed on an international wanted list.

“Gutseriyev is an honest man who follows the law, an upstanding person,” his lawyer, Alla Yaminskaya, said after Wednesday’s hearing. “All court decisions relating to this issue are illegal and will be appealed.”

Prosecutors said at the hearing that Gutseriyev had disappeared July 30 and that investigators were only alerted to his whereabouts Aug. 4, when Belarussian authorities said his passport had been used on a flight from Minsk to Antalya, on Turkey’s southern coast.

Prosecutors said they had since lost track of Gutseriyev.

Yaminskaya argued that neither the number nor the name on the passport matched Gutseriyev’s, saying Gutseriyev spelled his first name “Mikail” rather than “Mikhail.”

“Gutseriyev is not the type of person easily confused with someone else. His is a recognizable face,” prosecutor Viktor Gvozdev told the hearing.

Gutseriyev, an ethnic Ingush from North Ossetia, is worth an estimated $2.9 billion according to Forbes.

A former State Duma deputy for the ultranationalist Liberal Democratic Party, Gutseriyev was appointed head of Slavneft, then a state-controlled oil firm, in January 2000. He was ousted from his post two years later, but quickly founded Russneft and built it into one of the country’s top 10 oil producers.

The campaign against him comes as the Kremlin continues to extend its reach over the country’s energy sector and has prompted comparisons with Yukos. Once the country’s largest private oil firm, Yukos was felled by a barrage of billions of dollars in back tax claims, and its founder, Mikhail Khodorkovsky, was jailed for eight years on tax evasion and fraud charges.

At a second hearing Wednesday, the court rejected an appeal to unfreeze shares in Russneft, arguing that the company’s lawyers had not followed proper procedures.

Judge Olga Kononenko said the share freeze would remain in effect.

A source inside Russneft, who also said Gutseriyev had left Turkey for London, said the company had already been sold to Deripaska’s Basic Element holding.

“The deal was made one and a half months ago,” the source said, declining to give his name because of the sensitivity of the case. “All the Russian shareholders have given control of the company to investment structures,” he said. When asked whether that meant Basic Element, he said yes.

The deal was set at $6 billion and Gutseriyev received a payout of $3 billion, the source said.

Basic Element on Tuesday requested approval for the deal from the Federal Anti-Monopoly Service.

A spokesman for Basic Element, Sergei Rybak, said Wednesday that the company was “putting out no figures” about the deal.

“No deal is done until we get approval from the anti-monopoly service,” he said.

Yury Kulebyakin, a lawyer for Russneft, said at the court’s hearing into the share freeze that he was representing five of six companies who hold stakes in Russneft.

“To this day, they own the Russneft shares,” he said.

Russian-registered firms Mlada, Milanfa, Spektr, Yevangelika and Nadyozhnost, along with Cyprus-registered Shaddock Trading, among them hold all of Russneft’s shares, Kulebyakin said.

“Nowhere is it shown that these companies are affiliated with Gutseriyev, and they shouldn’t be punished for what is now happening to him,” Kulebyakin said during a break at the hearing.

Gutseriyev was believed to have owned about 70 percent of the company’s 100,000 shares.

The source inside Russneft said Milanfa held 15,200 of the shares, Yevangelika held 20,000, Nadyozhnost held 9,700, Spektr held 20,000 and Mlada held 15,100, with Cyprus-registered Shaddock holding the remaining 20,000.

A court-appointed share freeze would not necessarily disrupt a potential sale of Russneft, said Steven Wardlaw, the head of U.S. law firm Baker Bott’s Moscow office.

Any such deals would likely call for a future closing date, at which point both parties could decide whether to go ahead with the sale, he said.

Analysts have said the Kremlin likely asked Deripaska to take on the embattled firm. Basic Element’s energy interests are small compared with the holding’s major presence in metals and the automotive industry.

The country’s main state-run firms, Rosneft and Gazprom, remain saddled with tens of billions of dollars in debt.

Relocation by Gutseriyev to London would add to the city’s growing list of Russian dissidents, which includes self-exiled oligarch Boris Berezovsky and former Chechen rebel envoy Akhmed Zakayev. Gutseriyev’s son Chingiskhan graduated from London’s prestigious Harrow School and went to Warwick University.

Gutseriyev has a daughter and another son, whom one source said was 17 and also attending Harrow.

The Moscow Times 6.9.2007
By Miriam Elder
Staff Writer.

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