The conflict between two old partners, who became billionaires in the course of privatization of the Russian non-ferrous metallurgy – that’s Mikhail Chernoi and Oleg Deripaska - lasting a few years, will be considered in the court of England. Such a decision was taken by Lord Chief Justice Clarke. Mr. Chernoi has put an action claiming that about $4 Bn must be paid to him for his share in the aluminum business sold to Deripaska. Mr. Deripaska alleges that to be extortion.   

The litigation case materials are collected in many-volume dossier describing different points of view on relations between the vivid characters of the Russian business. The business press of Great Britain and Russia gives a detailed description of the existing opinions. That way, Vedomosti quoted Mr. Deripaska saying that by 1994 the aluminum industry in Russia had become an arena of fierce struggle among criminal groups, one of which was Izmailovaskaya group, where Deripaska places Chernoi himself. According to him, the criminals offered to businessmen protection in exchange for the share in profits and the “law-abiding businessmen had nothing to do but accepting that patronage”.     

So it turns out that Oleg Deripaska worked and had a friendship with Mikhail Chernoi and became a billionaire under compulsion? And he just waited for the good moment to declare his own adherence to the right principles? Why didn’t he expose Mikhail Chernoi in the 90’s, when that man was in power? Anyway, now it is alleged that he was no partner to him and Oleg Deripaska is not going to pay anything.    

It would seem that is no business of ours, that another bickering by our business people. Well, what’s bad if it is becoming popular with our oligarchs to get in law in London (Boris Berezovsky and Roman Abramovich are having legal proceedings there too)? Thanks God, they don’t shoot one another, as it was before!

The problem, however, is that those people make an attempt on rewriting our history. As the new division on “pure” and “dirty” of the 90’s is offered by the richest man in the country, the whole matter seems to be very serious. Deripaska and Chernoi not only give their arguments to the judge and recall what was happening during long-ago aluminum wars, they seek for understanding in the society – the British and the Russian one. The information space is getting filled with tall tales with the only purpose of convincing us that Mr. X became a billionaire in more moral way than it was done by his partner Mr. Y. Or on the contrary, Mr. Y is more honest than Mr. X. Anyway, we seem to be taken for idiots who do not remember what happened yesterday, or we are tried to be suggested that what we remember is not exactly what really happened.       

What is it done for? Besides particular commodity-money showdowns our business people are concerned about transparency of their businesses. The logic of business development made them come to the West, but development of one’s business there is impossible without a certain level of transparency. Yes, everyone has a skeleton in the cupboard, but in a decent society the skeletons do not sing and dance around a person! This is why Mr. Deripaska set about re-writing his own, and that means ours too, history. 

Brothers Chernoi began to “care” of dying aluminum CIS industry in 1992. Their firms, in particular Trans-CIS Commodities (TCC), suddenly began to receive not just large, but super-large quotas from the Russian government, which was done with participation by Oleg Soskovets (he was the chair of Metallurgy Committee and later was first deputy prime minister). In 1994 Chernoi Brothers with partners controlled two thirds of all the facilities in the market, including 68% of the stock of Sayansky Aluminum Plant (SAP). One may suppose that the stock shares bought by Deripaska’s structures, were considered by Chernoi brothers to be controlled by their alliance.      

Today Deripaska affirms that by 1994 he had become the largest shareholder of SAP using his own means and that Chernoi did not give him any money for buying up the shares. 

Well, I can say I saw that situation with my own eyes. I arrived in the city of Sayanogorsk in June 1994. The SAP was rumored about coming wages for April. That time director of the plant, Gennady Sirazutdinov told me he did not want to work with Chernoi brothers and this is why the plant found itself to be driven into the corner. “Wanting to conclude a contract with us, the foreign firms have bought up the raw materials and are pulling the plug on us. They say ‘either we become friends or you’ll have to stop production’ ”. Under such situation the metal workers had to sell their shares (received over the course of the Russian privatization) so that to be able to support their families. One of those buying up the shares from the workers was AO Alinivest headed by Deripaska. Soon this enterprise got to possess the main package of SAP. Alinvest had concluded an agreement with a local branch of Savings Bank and with some other retail outlets where one could see long queues of those willing to exchange the securities for “live” money. The director of the local Savings Bank branch told me that only during the last week they had bought the SAP shares worth of 80 million rubles. Was it much or little for that-time 26-year-old Deripaska, the former broker at the Russian commodity exchange? 30 September 1994 that-time Prime Minister Viktor Chernomyrdin gave a commission (VCh-P-30885) to investigate the facts presented in my publications and to establish the sources of financing the juridical persons ensuring them to participate in the privatization of the aluminum industry so effectively. Of course, that commission was not executed. And yet some interesting data arrived from the region. For example, Eastern-Siberian regional center for currency and export control established that Alinvest had opened an account with Sayanogorsky branch of the Savings Bank where during “the period from 23.08.94 to September 2004 18.1 billion rubles where passed by special delivery”.               

The most interesting question in this story is where that money came from. This is the real question and not the one about who looks more like a criminal, who and with whom were friends and who made whom become a billionaire.  

There was an opinion, in 1994, that Alinvest (controlled by Deripaska) and Russkiy Capital (controlled by Chernoi brothers) had been carrying out a well coordinated joint policy.  

So there is a point in assumption that Deripaska might have bought the shares for Chernoi brothers. 

10-11 February 1995 Alinvest finished buying up the SAP shares. Before that, Deripaska had been appointed by his partners to be General Director of SAP. Interestingly, that was done 15 November 1994. On same day Boris Yeltsin gave a commission to Prime Minister Chernomyrdin (Pr-1646) to hurry up checking of privatization of aluminum giants and to prevent change of proprietors and directors before the checking was over.    

Next day, in the center of Moscow killed in a car accident was Yuri Koletnikov, the deputy chair of Roskommetallurgy. And 17 November Viktor Chernomyrdin signed again a commission (VCh-P6-36074) requiring accelerating of checking of the aluminum complex. Same day he issued an urgent requirement (VCh-P6-36198) of suspending any changes related to management of the enterprises of the industry.

However, no one was taking note of the president and prime minister. I keep two extracts from the register of the SAP shareholders dated December 1994 and January 1995. That’s visual evidence of passing the shares from hands into hands and of well coordinated actions by Deripaska and Chernoi brothers. In those documents the Deripaska’s Alinvest and Chernoi brothers’ Russkiy Capital just disappeared from the top ten of SAP co-owners. The shares controlled by them got distributed to off-shores, the owners of which were failed to be established afterwards.       

What for such a big number of absolutely non-transparent firms was created getting the divided shares? Anyway, it’s representatives of Chernoi brothers who voted on behalf of those firms at the shareholders’ meetings. And no of those firms had more than 20% of stock of the Siberian aluminum and aluminous enterprises.  

Returning to the cursed question of the money, one may assume that Alinvest received it from those for whom the shares were later bought for. But where did Chernoi brothers get the money from? Well, that was known as far back as 14-15 years ago.    

Advent of Lev and Mikhail Chernoi to aluminum industry coincided with the moment of its turning into a point of confluence of capitals of unknown origin. A significant part of the means, embezzled through forged letters of advice and forged cheques “Rossiya” and non-repayable credits to front firms, had been legalized at the aluminum and aluminous plants. Those means were transferred to metallurgy enterprises by a number of mediators as payment under contracts concluded by the enterprises with Mirabel and Trans-CIS Commodities (TCC) firms controlled by Chernoi brothers. The documented evidence proves that only within the period of 2-14 October 1992 2.7 bn rubles were stolen without master keys and the general loss by Central Bank was estimated to be 7.3 bn rubles. Part of that money was “laundered” with aluminum plants and part was just converted into dollars and transferred to abroad, as it is considered by interior ministry.       

There is no direct evidence that all that was done by Chernoi brothers personally, but due to odd coincidence it’s their firms that gained out of all that mess.

Vladimir Putin could not have been mistaken. Since Deripaska was the most “equidistant” among other Russian oligarchs and was received most frequently in the Kremlin, there is no doubt that he is more moral than his opponents – that’s Ruben brothers, Chernoi brothers (Lev first and then Mikhail), Mikhail Zhivilo, Anatoly Bykov, Boris Berezovsky etc. And as all of them are out of favor now, of course, there is no sense paying them any money, even when you for example owe them something or failed to meet your contract obligations. I think Mr. Chernoi is no original here; he is just the last in the long queue of the former Deripaska’s brothers who also “misunderstood” the nature of their agreements with him.  

Confusing thing here is a try to attract the public attention to their inside bickering, and the long PR war intended to accuse the disgraced oligarchs – Berezovsky and Chernoi – of all whole bag of tricks, including celebrated political murders of the recent years. Seemingly, the interests of Deripaska have coincided with those by the top Russian authority. Everyone dislikes Berezovsky and Chernoi. Especially those who owes them something.

Not long ago, a given up case was renewed about machination with forged avisos where mentioned are Chernoi brothers. And when killed was Andrei Kozlov (the first deputy chair of the Central Bank), a hypothesis appeared immediately about possible involvement of Mikhail Chernoi. There is only one argument presented for that, but it is just amazing one! The matter is that the killers, who executed that order, come from Ukraine. And at the moment Mr. Chernoi has a building business there. Another “evidence” is that the killed Mr. Kozlov must have known something about the forged avisos. Informational agencies and pro-Kremlin media caught up this mysterious hypothesis. And recently a whole unmasking book was published being dedicated to Mikhail Chernoi and hinting at his possible involvement in Kozlov’s murder. Of course, the figure of Mr. Deripaska is advantageously set off in the book.              

Well, all that looks like a remake of the 90’s: same instruments and methods used and the information is taken mainly from the newspapers of that time. But is this mission possible? Only people sympathizing with Deripaska very much may not note that any charges against Chernoi blacken the reputation of Deripaska himself. He does not look clean against the Chernoi’s background. According to several reports, that were submitted to the government and the parliament, the melting furnaces of the Siberian aluminum plants used to launder the dirty money. And no one has been held responsible for that.   

As for resolute breaking off relations with former partners of doubtful reputation… The man who tries to make up his own past, whatever it was, does not seem better than a man whose life was full of bad deeds.  

Another thing that is daunting in this whole story is the position by the state. Thanks to the PR war with Chernoi brothers and with Berezovsky and other rich “emigrants” we can see the wish by the state to get its hands on that entire staff. But statements by the officials are made in same style like it is done by the business magazines, publishing opinions: they discuss who the most dishonest rascal is and they say nothing about money stolen and about origin of the money. In the meantime, the Central Bank has not been able to return anything from that embezzlement. Actually, it is principally impossible to establish where that stolen money is working now.    

Then again, no one is trying to see into that absorbing topic. This is a pity. If the Russian leadership applied to those western banks, where the means profited out of Russian metals are deposited, and submitted the solid evidence of the criminal origin, then the banks would not risk their reputation. But whose accounts should be drawn an attention to? Chernoi’s? Deripaska’s? Or someone else’s?    

Comment by Mikhail Chernoi:

The story of the “commission” by V.Chernomyrdin given for investigating the situation in the aluminum industry was written about in details in a documentary book by Colonel Valery Streletsky, one of the heads of the Executive Protective Service, published in 1998. “Investigation” was started with initiative by our competitors within the frames of struggle about tolling. However, nothing criminal was proved to have been done by our business group.

As for the origin of my initial capital, tens of articles are written about that. I and my brothers were pioneers of the cooperative movement in Uzbekistan. We were engaged in consumer goods production. And we were one of the first to start barter trade with the West. I and Sam Kislin, we earned hundreds million of dollars out of barter of coal, metals and cars. All that was done before I came to aluminum business.   

In the case of the forged avisos I was involved only as a witness. The Investigative Committee of the Russian Prosecutor’s Office established I have had nothing to do with criminal actions, if such actions were taken in the aviso case. The interior ministry and justice ministry have advised officially the foreign law enforcement bodies that I had never been suspected, let alone sentenced, in any criminal case.  <...> I shall repeat: the Investigative Committee of the Russian Prosecutor’s Office has examined ALL the documents related to forged aviso cases and has established my absolute non-involvement in any illegal actions.  

I do not know why my partners are trying to renounce the signed by them obligations to me. I allow that your hypothesis might be true.  

In case Mr. Deripaska pays me the cost of my share of 20%, then the Rusal Company - that was established by me, Mr. Deripaska and other partners - would gain more confidence from the foreign investments. I hope Mr. Deripaska will demonstrate to the whole world that Rusal is a transparent company which can guarantee the rights of any share holder.   

P.S. Oleg Deripaska did not respond to the letter by Novaya Gazeta.