At 2:30 pm, London time today, Oleg Deripaska lost his appeal of the July 3, 2008, ruling by the High Court Justice Christopher Clarke, ordering him to face trial by the UK High Court on charges of defrauding his patron and business partner, Michael Cherney. Four of the most senior judges in the British courts have now ruled that Deripaska is not to be believed. Here is the court ruling that was issued today: link
Three Japanese grain traders — Itochu, Sojitz, and Mitsui — are competing to establish the first major Russian grain export terminal at a Russian port on the Sea of Japan.
Rapid growth of demand for wheat in the Asian markets, and the price and transport advantages of Russian grain, have been stimulating Asian imports from Russia over higher-priced Canadian or Australian grains that require longer and costlier voyages. Traditionally, Russia has despatched its grain surpluses to the west, and to the southern edge of the Mediterranean. In recent years, Egypt has been the biggest buyer of Russian wheat; as well as the one of the largest importers of wheat worldwide. But for the past three months, Egyptian manipulation of incoming Russian cargoes — ostensibly to deal with weevil infestation but in reality to drive the price lower — has encouraged Russian exporters to reconsider their market strategy. Most Russian wheat bound for Asia is currently shipped from the Black Sea ports via the Suez Canal, and then through pirate-infested waters.
A source at the Russian Grain Union told Fairplay that if there were grain terminals on Russia’s eastern coast, the export capacity would run into millions of tonnes per annum. In the grain season that ended on June 30, Alexander Korbut, Vice President of the Union, said Bangladesh was the biggest Asian buyer from Russia, importing 509,000 tonnes over the year. India bought none this past year, he noted, but in the year before, 1 million tonnes. In 2007-2008, Japan bought 57,400 tonnes; this past year, just 4,800 tonnes. Malaysia is another potentially large importer of Russian wheat; this past season, it imported 10,000 tonnes. Korbut explained the dramatic fall-off in the past season’s exports to India and Japan as the result of falling wheat prices, and for Russia, rising shipment costs, making exports unprofitable. “Earlier there was a deficit of grain, now it’s rather cheap”, Korbut said. (more…)
The Financial Times
Gunvor, Putin and me: the truth about Russian oil trader
May 22 2008 03:00
From Mr Gennady Timchenko.
Sir, Your article “On the offensive” (Analysis, May 15) purported to explain the rise of the oil trader Gunvor. However, it contained many inaccuracies and false claims. In fairness, your reporter attempted some balance, allowing our chairman to challenge some of the falsehoods. I would like to challenge some that went uncontested.
The article devoted much space to me as one of Gunvor’s founders. You wrongly suggest that ties between me and the former Russian president, Vladimir Putin, underlie Gunvor’s success. In fact, media suggestions about the extent of any ties between me and Mr Putin are overblown. (more…)
Evraz, Russia’s largest steelmaker, has received its first rating downgrade from an international ratings agency. It also is the first time Roman Abramovich and Alexander Abramov, who share control of the Evraz group’s Russian and international assets through Mastercroft Limited, a Cyprus registered company, have been downgraded.
According to an announcement and brief report by Fitch Ratings on July 29, both Evraz and Mastercroft, which holds the controlling stake of Evraz shares, were hit with a downgrade of the long-term foreign currency Issuer Default Rating (IDR) and the senior unsecured rating to ‘BB-‘ from ‘BB’. Fitch’s last rating was an upgrade for Evraz, issued in July of 2007. No further action was taken by the agency until three months ago, when Fitch announced it was putting Evraz on a Rating Watch Negative, one step short of the downgrade that was announced yesterday. Fitch’s latest announcement says that the company is still under Rating watch Negative, in the event that fresh news might impact on the group’s revenues.
Fitch’s rating move reflects the assessment that there is a growing probability that Evraz will breach its borrowing covenants because third-quarter and fourth-quarter sales revenues and profitability are no longer judged likely to improve as much as had been hoped. If, as Fitch now expects, the second-half financial results will be flat, the scope for improving earnings and lowering debt will dwindle. (more…)
Under pressure of regional politicians, prosecutors and courts, Vadim Varshavsky (pictured left), owner of the Estar group of midsized and specialty Russian steelmills, has eliminated his legal liability for another one of his lossmaking, idled units, but the terms remain unclear. Varshavsky, who avoids press contact unless it is advertorial, may count himself unlucky that among the enormously indebted of Russia’s metal magnates, the finger of selective justice is pointing only at him. For the time being.
A spokesman for Varshavsky at Estar headquarters in Moscow told CRU Steel News that Estar has signed what it calls a leasing agreement with Metallservis, a metal trading company owned by Oleg Tyurpenko (pictured right). This, Estar claims, gives the latter the run of the Novosibirsk Metal Works (NMZ) for five years. Metallservis has acquired an option at the end of the lease period to buy the now heavily indebted plant. If Tyurpenko exercises the option, he will be the first Russian steel distributor to attempt to move upstream, and incorporate steelmills in his chain of supply.
The Novosibirk regional government has also signed the agreement with an undertaking to underwrite debt restructuring. As of April 1, NMZ, which is also known in the region as the Kuzmin plant, owes Rb2.2 billion ($71 million). How much state budget money will be channeled through Tyuprenko’s hands to keep the mill in operation has not been announced. What seems certain is that noone wants to channel these funds through Varshavsky. (more…)
Alexei Mordashov, owner of the Russian Severstal steel and mining group, has lifted his takeover offer for High River Gold (HRG:CN) by 8 Canadian cents per share, after his earlier bids for the 43% minority shareholding failed at 18 cents and 22 cents. The new offer is 30 cents. If there are any takers, that would oblige Mordashov to reach into his pocket for C$84 million (US$77 million). The institutions holding roughly half of the minorities, and the smaller, individual shareholders, say that’s too little, too late.
The new offer was posted on Severstal’s website yesterday. Because HRG’s share price has been held in check by the previous offers, the new one lifted the price on a modest increase in trading to 30 cents. The range for HRG is between last year’s peak of $3.47 in February of 2008, and 4 cents last November. In the year to date, HRG has been restricted between 12 and 24 cents. (more…)
Pressure on the new head of Alrosa, Fyodor Andreyev, to boost rough diamond sales by discounting the price made a prompt appearance in the Russian press — within hours of Andreyev taking his seat on July 15. “The new president of Alrosa has decided to increase sales using discounts”, claimed an anonymous source “close to Alrosa’s supervisory board”, and reported by a Moscow newspaper last week. “A change of marketing policy is being discussed”, the newspaper reported an unnamed representative of the Ministry of Finance as saying — without giving details. Another Russian press agency has claimed that Alrosa plans to reopen its selling window, closed since December, with a $50 million contract, and with a target of $2 billion worth of sales for the full year.
This is premature and wishful thinking, according to Alrosa’s spokesman, Andrei Polyakov, and diamond manufacturers in Moscow. “We cannot speak about discounts while the orders aren’t yet formed”, Polyakov told PolishedPrices.com. “But we have plans for the future”. He said it is “too early to speak of changes in the company’s pricing and marketing policy if we connect these changes with Mr Andreyev’s arrival, because he’s been in his post for two weeks only.” Moreover, he noted, “the pricing policy changes when the situation in the market changes, not the company’s president.” (more…)
On July 27, Russia’s NTV network broadcast an interview with President Dmitry Medvedev (the Russian name means “bear”). The President was asked about the image of the bear in recent Russian history, and for the future. Here is what he replied:
QUESTION: You know, the widespread image of Russia in the world is a certain Russian bear.
PRESIDENT MEDVEDEV: This is close to me.
QUESTION: We constantly see it in caricatures, in other ways; it is constantly written about; this image has spread. In your opinion, what, maybe, is necessary to change in the country so that we look different abroad as well? Are there any problems that prevent us from looking successful on the international arena?
PRESIDENT MEDVEDEV: Well, in my opinion, it is certainly not the image of a bear. To me this image is dear and positive. Speaking seriously, in order to look strong, we, of course, should be modern. Therefore, for us to have a correct image, we should solve our urgent problems, first of all, those social and economic ones. Because, if we can solve them, it will be certainly easier for us to solve international problems. Here we see the objective law – coming back to what we began our conversation with. Therefore, if our international position directly influences the standard of living in our country, then our rate of success inside the country finally reflects in our image outside Russia. And this is also important. (more…)
Time to remember the famous advertisement of Wendy’s, the American burger chain, which contrasted the substance of its product with the paltriness of its rivals. So now let’s ask the biggest unanswered question in Russian political economy — what happened to the stimulus funding the Russian government was supposed to have, and promised to have available a year ago, in the event that a global collapse of demand for steel left Russia’s steel industry dependent on domestic demand, instead of exports?
Not a single owner of a major Russian steel or pipemill, who attended last Friday’s summit meeting with the government, dared to wonder aloud. And there’s not a trace of an answer in the morning-after reports of what was said at the session. Instead, the major steelmakers, who met with Prime Minister Vladimir Putin in Magnitogorsk on Friday, refuse to say whether they believe the government intends to implement their requests for state financial support. In addition to representatives of the steel and pipe mills, the largest of Russia’s steel consumers such as Gazprom, the Transneft pipeline company, and the Russian Railways (RZD) also attended. (more…)
The growing number of tape-recorded disclosures from a bed belonging to Italian Prime Minister Silvio Berlusconi has attracted a rising vote of no-confidence in the prime minister from Italian voters, and unusual interest in what happened on the bed in much of western Europe. One Italian opinion poll published at the end of last week reports that Berlusconi has lost 4 percentage points.
A ranking Russian official has telephoned to make absolutely plain that whatever was done on the bed was Italian, and that nothing can be found there from Russia. He was responding to a request to the Russian Prime Minister’s office to clarify reports that Berlusconi had been heard on tape claiming to a lady friend that a bed in his apartment, on which he proposed she and he lie together, had been the gift of Vladimir Putin, now Prime Minister of Russia.
The Russian official identified himself by name. A subsequent check of the official records has verified his name and position in the Press Office of the Prime Minister. The official requested that he not be identified by name, but his remarks, he said, could be quoted as from the Press Office of the Prime Minister. He spoke in English. (more…)
Severstal, the Russian steelmaker owned by Alexei Mordashov (pictured), sought today to play down a rating downgrade by Fitch, issued earlier this week. At the same time, the company has removed the head of its loss-making North American division; and announced that in Italy, where its Lucchini steel operations are also loss-making, Mordashov has been awarded the Italian state’s Order of Merit.
According to Fitch, it has reduced Severstal’s Issuer Default Rating from BB- to B+, and put the company on watch for possible further downgrades over the next six months. The reason, according to a release by the ratings agency, is “Fitch’s expectation that the current global recession will have a significant negative impact on Severstal’s operating performance and credit metrics….Fitch now does not expect that Severstal will be able to regain a “through-the-cycle” credit profile consistent with the ‘BB’ rating category within 18-24 months of the trough of the current recession.” Fitch also said there is “uncertainty regarding the outcome of negotiations with lenders in respect of potential covenant breaches under its various facilities.”
A source inside Severstal told CRU Steel News: “If you look at other similar ratings, you will see Severstal keeps at the general level of the sector”. The source noted that recently the company has shown positive results, as steel volumes have grown, adding: “the rating agencies are in doubt whether Severstal will be able to keep at that level further.” (more…)
While unpaid Russian workers on shore petition for Prime Minister Vladimir Putin’s help,block highways, or appeal for media coverage, Russian seamen have used a very old weapon to claw back their pay from Russian shipowners — their trade union. The union campaign at sea is without precedent on land.
Russia’s seamen said this week they are expecting to collect additional wage arrears, owed by shipowners, of at least $300,000, on top of the $400,000 already collected in this month’s campaign by the Russian Seamen’s Trade Union and the International Federation of Transport Workers (IFT).
Nikolai Sukhanov, head of the Russian union’s branch at Nakhodka, on the Sea of Japan, told Fairplay last week’s enforecement action took three months of preparation, and netted $400,000 in court-enforced collections from Russian shipowners on the mainland. He said $230,000 is still to be paid. He is expecting another $70,000 in arrears from owners of vessels in South Korea, and an unspecified sum from Japan, where 11 vessels were identified by IFT inspectors to be in violation of pay contracts, and are now under arrest orders to pay up. (more…)
The St. Petersburg fight over port terminal andshipping assets has taken a muscular turn, as police raiders, acting at the behest of Bank St. Petersburg, appear to be grabbing assets worth more than a bank valuation allows, and despite a court order invalidating the seizure.
Vitaly Arkhangelsky’s Oslo Marine Group (OMG) says it came under attack at its St. Petersburg headquarters last week,when police ordered personnel out of their offices and started searching office files. Arkhangelsky told Fairplay it was the latest in a series of property raids and asset seizures, which began last month, and involve OMG shipyard, vessel, and port terminal businesses.
Arkhangelsky, 34, blames Bank St. Petersburg (BSP), for improperly seizing assets for non-payment of loans amounting to Rb4 billion ($125 million). He says the asset seizures exceed the value of the loans, adding that at least one of the loan pledge agreements between his group and the bank has been nullified by a local court ruling. But since then, Arkhangelsky adds, BSP has refused to return the West Terminal, a St. Petersburgcargo shipping facility, which BSP grabbed on June 20. Three days later, on June 23, says Yelena Murgina, a spokesman for OMG, a St. Petersburg court ruled that the pledge agreement of the terminal was null and void. (more…)
The reason for an unexpected Chinese advertisement for a billion-dollar iron-ore and steel complex in a remote part of Siberia became clear in Moscow today. It reveals that, starved for cash as most Russian metal and mining companies currently are, they aren’t yet prepared to let the Chinese build competing mines and steelmills on Russian territory.
According to sources at the federal Ministry of Natural Resources in Moscow, and at the Department of Metal Mining Industry in the Transbaikal Territory administration (Chita region), the Xiyang Group sent a company delegation to Moscow this month to try to head off the revocation of the mining licence it holds for an iron-ore deposit in the region, near the Chinese border. The Chinese were officially warned that the licence for the Berezovskoye iron-ore deposit, which was awarded on May 14, 2005, requires investment of Rb16.8 billion (currently $542 million).
The iron-ore deposit is located about 20 kilometres from the Chinese border. Known to Russian geologists since the Soviet period, the deposit is estimated to hold up to 750 million tonnes of iron-ore. Expert studies have identified special problems with processing this ore into concentrate, and thus for consumption by steelmaking blast furnaces. This, together with the remoteness of the location for electricity, coking coal supply and rail connexion, have deterred development in the past. (more…)
Silvio Berlusconi, the Prime Minister of Italy, has named a bed in his Roman home, Palazzo Grazioli, after the Prime Minister of Russia, Vladimir Putin, according to a conversation Berlusconi had last November with a young lady he was inviting to join him in the bed. The bed itself is described as having curtains.
The house belongs to a family of grain-grinders and bakers, who took cash from the ladies they married and invested it in land that grew the grain they used to mill and bake. They did well, and celebrated by buying the house, which they then redecorated in the 1860s. (more…)
Court documents and testimony, presented recently in the Colorado District Сourt in Denver, expose substantial new evidence that LUKoil has operated a significant business in the state. The new evidence, secret until now, stretches back for ten years, and shows a flow of cash every month from an alleged front company in Colorado to a LUKoil company in Israel. The evidence reinforceS the likelihood that LUKoil and its Russian subsidiary, Arkhangelskgeoldobycha (AGD), will be ordered to face trial on charges of defrauding Archangel Diamond Corporation (ADC) of its rights to develop the Grib diamond mine project.
ADC is a Toronto-registered company which in 1996, in partnership with AGD, discovered the Grib pipe in the Verkhotina licence area of Arkhangelsk. Drilling, sampling and assaying by De Beers have estimated the value of the diamond deposit at between $8.2 billion and $9.7 billion at the diamond prices prevailing in the first quarter of 2008. ADC’s stake in the original project was 40%. Through a cutout in Luxembourg, De Beers holds a control stake of 54% in ADC, plus a $10 million loan that was called for repayment in May.
In addition to its stake in the future Grib mine project, ADC’s biggest current asset is its US lawsuit against LUKoil. This claims recovery of $30 million in investment, $400 million in ADC’s share of profits, and another $800 million in potential profits. (more…)
Far Eastern Shipping Company (Fesco), the third largest of Russia’s fleet companies and the dry-cargo leader, reveals plummeting profit for last year will be followed by loss-making this year.
The bad news has taken some time to be disclosed by the publicly listed shipping company, which operates a fleet of 63 vessels, with an aggregate 866,000 tonnes in deadweight. A writedown of $166 million was taken in fleet value for the year. 52 of the vessels are mortgaged to secure loans from ING, Calyon, Citibank, and Vneshtorgbank. In all, Fesco’s liabilities total just over $1 billion, with $541 million classified as due for short-term repayment.
The company said it is planning on a $150 million loan coming through from the European Bank for Reconstruction and Development (EBRD). However, Richard Wallis, an EBRD spokesman, revealed to Fairplay that there is no sign of loan approval or the required preliminaries. “The EBRD cannot disclose confidential information about due diligence that might have been carried out regarding any company”, Wallis said. A year ago, the London-based EBRD paid $120 million for a 3.77% shareholding in Fesco. The EBRD has now lost most of its investment on paper: the stake is currently worth $32 million. After verifying that nothing new has been posted on Fesco since then, Wallis added: “I am declining to comment on any potential project until it appears as such on the EBRD website.” (more…)
Loose Canadian stock listing rules, a compliant exchange regulator, and rubber-stamp directors have made it easy for a Russian raider to attack minority shareholders of High River Gold (HRG:TX), and threaten them with dilution and delisting, unless they give in to a low-ball buyout offer. That is what minority shareholders of High River Gold are this week charging against the majority shareholder, Alexei Mordashov, and his Moscow-based Severstal Resources group. But because at least some of the institutional minority stakeholders are powerful Russians – maybe as powerful as Mordashov — the outcome of the tussle over HRG may be decided in Moscow, not Toronto.
So far, Mordashov has instructed his appointees Nikolai Zelensky, the chief executive of HRG, Alexei Khudyakov, the HRG board chairman, and Alexander Grubman, a newly appointed chief executive at Severstal Resources, to apply maximum pressure on the minorities to accept a buyout offer of 22 Canadian cents per HRG share. Mordashov has started with an estimated 57%; the minorities with 43%. The offer started on May 22 at 18 cents, and was raised to 22 cents on June 9. The deadline for acceptances is July 31. Two weeks later HRG issues its first-half financial results. The deadline for the purported review of delisting by the Toronto Stock Exchange is August 18. (more…)
The Caspian Energy Group, led by Ilya Kokarev, said this week it is confident the Russian courts will rule shortly to uphold its right to seats on the board of the Red Barricades Shipyard. This is the only standout among the Astrakhan yards to resist consolidation by Caspian Energy, which already incorporates Lotos, Astrakhan Third International, and the Korabel shipyard (Astrakhan Shipbuilding Production Association, ASPO).
After a year of negotiations, legal challenges, and the purchase of a 25% shareholding in Red Barricades, Kokarev said he expects the ruling to give him 2 seats on the board. “We’ve tried to start a dialogue but they don’t want to listen,” he told Fairplay.
The Red Barricades director, Alexander Ilichev, has branded Kokarev’s bid a hostile takeover, and appealed to the government in Moscow to protect his company under the wing of the state holding, United Shipbuilding Corporation, supervised by deputy prime minister Igor Sechin. The government remains silent. Noone picks up at the listed telephone numbers of Red Barricades in Astrakhan. (more…)
Sergei Stepashin, the head of the Accounting Chamber, Russia’s state auditor, has issued a press leak, claiming he was responsible for the firing of Alrosa chief executive, Sergei Vybornov, after a Chamber audit of Alrosa earlier this year had identified multiple problems, and what Stepashin is publicly quoted as calling “numerous infringements in company activity”. According to reports by news agency Interfax and a Moscow daily business paper, Stepashin, a former Russian prime minister, has claimed that the results of the audit led to the firing. “For this reason,” Stepashin is quoted, “we recommended the replacement of the president of Alrosa.”
Among the “infringements” triggering Stepashin’s call to remove Vybornov, it is now being reported that Alrosa sold rough diamonds to the state stockpile agency Gokhran at a price alleged to have been greater than the export price of the stones.
According to independent testimony by one of the auditors who took part, Angelica Zadorozhnaya, the Accounting Chamber investigated Alrosa’s books early this year. She told PolishedPrices.com that the completed audit report had then gone to the collegium, as the Accounting Chamber’s highest body is known, in April. She also said that this session decided to impose a state secrecy classification on the report. (more…)
In your recent broadcast on Oleg Deripaska, you make the following claim about the ruling of Justice Christopher Clarke in the Cherney v Deripaska High Court action (at minutes 0538-0550 of the tape):
“…The judge said that Deripaska had agreed a final global payment to end Mr Cherney and Mr Malevsky’s protection of his business, words used by Mr Deripaska himself in his statement to the court.”
Please provide me with your substantiation of the judge’s words, as I have searched the ruling and cannot find them; or anything approaching your interpretation of Justice Clarke’s opinion on the substance of the case. At 0526 minutes, you state: “the ruling didn’t deal with the substance of the claim”. Twelve seconds later you seem to have contradicted yourself. (more…)
The President of Turkmenistan, Gurbanguly Berdimuhamedov, said Friday his country is interested in diversifying gas export routes, and will participate in the Nabucco project. His statement came ahead of the signing on Monday of an intergovernmental agreement between Austria, Turkey, Hungary, and Romania to build the 3,300-km pipeline across their territories. It’s one thing to agree to sign up in favour of studying the construction and economics of the pipeline; but none of the signatories is rich or anti-Russian enough to bid up the price of the gas to make piping the Nabucco way profitable.
Several sources of gas supply for the 31 billion cubic metre-capacity gas route are available — Azerbaijan, Turkmenistan, Iran, Kazakhstan, and Uzbekistan. However, Gazprom has been negotiating first-refusal gas purchase agreements with Azerbaijan and Turkmenistan in order to lower the gas volume available to make Nabucco economically feasible to operate. The suppliers understand that if Gazprom takes this pricing risk up front, Nabucco won’t be built, and Gazprom’s alternative pipeline to the same countries — South Stream, under the Black Sea — will put a handy safety net under the suppliers’ long-term revenue projections. They also understand that the only way to persuade Gazprom to do something as costly as this is to make the Nabucco option look even more costly. (more…)
Regional mining officials in Kemerovo and the regional coalminers’ union say that ArcelorMittal had already begun closing down two coalmines and dismissing miners, before the Kemerovo region’s governor, Aman Tuleyev (picture left), issued an ultimatum to stop last Friday. If the charges cannot be resolved in negotiations this week, the legal impact of the claims against the company put in doubt all future operations by ArcelorMittal in Russia.
Yuri Udartsev, deputy head of the Industry Department at the Kemerovo regional government, told CRU Steel News said the focus of attention is “the two mines — Pervomaiskaya and Anzherskaya. ArcelorMittal is preparing to close them down, and has already started dismissing the miners. At the current rate [of coal prices], these two mines have no prospects for the future. That is why the regional government could not remain neutral in the situation. [Governor] Tuleyev proposed to ArcelorMittal either to take measures to save the mines, or their license for the Zhernovskoye deposit will be revoked.”
The governor’s aide, Oleg Shishko, confirmed that in the text of a telegramme Tuleyev sent Lakshmi Mittal (picture right) last Thursday, and posted publicly in Kemerovo on Friday, the governor charged “there is no transparency in their [mining] activity, there are serious infringements of technological discipline at conducting mining works”. As CRU Steel News reported on July 10, Tuleyev threatened that if the two mines are closed down, he will revoke ArcelorMittal’s licence to develop the Zhernovskoye-3 coal deposit. (more…)
After months of bluster, denials that his job was under threat, and attempts to intimidate reporting with phantom lawsuits, Sergei Vybornov has issued a lengthy interview to a Moscow reporter, in which he intimates that his ouster — made official by the Alrosa board last Friday — was the result of plotting by rivals in the Sakha republic, and among international and Russian diamond-buyers unhappy with Vybornov’s new marketing deals. The text of the interview was published in Kommersant in its July 13, 2009, edition.
Asked to say why he had left Alrosa, Vybornov said he had not quarreled with the Sakha President, Vyacheslav Shtirov, a former CEO of Alrosa, or with anyone else. Sakha sources claim that Shtirov, who had helped Vybornov take the CEO post away from Alexander Nichiporuk in February 2007, has been trying to oust Vybornov for more than six months. But that conflict, the sources have also claimed, has been subsumed by the deterioration of Alrosa’s financial position since the collapse of the diamond markets last autumn. An investigation of the company’s books by the Accounting Chamber, the state auditor in Moscow, was for a time blocked by Vybornov. The results of the audit have been classified secret, Chamber sources have told PolishedPrices.com. (more…)
Fyodor Andreev (also spelled Andreyev — see picture) is the new chief executive officer of Alrosa, the state owned Russian diamond miner, and will take up his functions this week, a high company source told PolishedPrices.com today.
It turns out that Alrosa’s CEO has a seat on the company’s Supervisory Board (board of directors) after all. But that is because Sergei Vybornov, the CEO since February 2007, has been replaced by Andreev, whose appointment to the board PolishedPrices.com reported on June 22. At the time, it was also reported that removal of the CEO from the board was unprecedented.
Vybornov continued to fight the ouster move, issuing a statement the next day that “the President of Alrosa [the chief executive] in any case participates in the Council work as the head of an executive office of the company.” A company announcement is expected to be made on Monday, and Andreev takes over in Vybornov’s place later in the week, the high company source said Sunday.
Andreev returns to Alrosa after leaving in 2003. At that time, he was chief financial officer, and had piloted Alrosa through several debt issues on the international financial markets. In 2001 Andreev had introduced international accounting standards reporting to enable Alrosa to develop an international credit rating, and lower the cost of its borrowings. (more…)
This is the strange tale of a mining company which noone admits to owning, at least not in the fareastern Primorsk region of Russia, where it is the principal source of work and income, not to mention cancer exposure, for the village of Svetlogorye (“Clear Mountain”, population 700); and where, until very recently, the mine turned out almost all the tungsten in ore and concentrate form that Russia produces each year.
The mining company, Russian Tungsten (in Russian, Russkiy Volfram), is the owner of one of the major deposits of tungsten in the world. It also appears to have just passed into the control of Vasily Usoltsev (pictured), a deputy of the Russian parliament, who is avoiding questions about why the strategic mine collapsed last year; and how it happened very recently that a mining group he is associated with managed to take over the mine from an offshore company registered in the middle of the Indian Ocean, in Seychelles.
Tungsten in its fabricated state, because of its super-hardness, conductivity and high temperature resistance, has many applications — from light bulbs and cathode-ray tubes to electron microscopes, rocket engines, radiation shields, bullets, grenades, and missiles. The principal mine source for the ore and concentrate in Russia is Russian Tungsten at Svetlogorye in the east. At the other end of the country, at Nalchik, in the Russian Caucasus, ZAO Wolfram is Russia’s sole refiner of tungsten metal. (more…)
The two well-known controlling shareholders of the Evraz steel group, Russia’s largest steelmaker, are to pay at least $400 million into the cash reserve of the company to help reduce its current debts, and avoid a breach of bankers’ covenants governing Evraz’s loan position. Through an announcement yesterday by Evraz, Lanebrook — the Cyprus-registered vehicle through which Abramovich and Abramov hold an estimated 78% of Evraz’s shares — has undertaken to subscribe to the group’s public offering of $600 million in convertible bonds and $300 million in shares. The Lanebrook group will subscribe $200 million for the bonds, and $200 million for the shares. The balance will be sought from the market in an offering that is being managed by Goldman Sachs, Morgan Stanley, and Deutsche Bank.
The bonds, with a coupon of 7.25 % annual interest, mature in 2014, but they can be converted before then into the company’s general depositary receipts (each comprising three shares). This conversion will be allowable sixty days from placement at $21.12, 28% above the placement price. That price, according to Moscow brokerage reports on Thursday morning, was $16.50 per share, about 10% below the Tuesday closing price. By the end of Russian trading on Wednesday, Evraz’s share price had dropped 11.4%.
Until now, no Russian proprietor of a major steel company has paid out of pocket for the company’s debt obligations. The stock markets have failed to see the generosity in Lanebrook motive, however, interpreting in the move a dilution of minority shareholders, and pressure on the minorities to sell back to the controlling shareholders at a discount to the market price. Industry reports in Moscow have suggested that behind the Lanebrook facade, Abramovich and his Millhouse partners hold 36% of Evraz; Abramov’s stake amounts to 24%; chief operating officer Alexander Frolov, 12%; the Privat group of Ukraine, 10%; with a remaining freefloat of the London-listed stock at more than 17%. (more…)
A revival of government accusations in Moscow about Belarus milk exports was dismissed by Belarus officials on Friday. The government in Minsk has accepted a temporary cut-off of the dry-milk trade, but it continues resisting Russian pressure to sell its dairy production plants.
The Belorussians charge the Russian government with playing the cat’s paw in a scheme by Russia’s dairy giants, Wimm-Bill-Dann (WBD) and Unimilk, to buy out milk plants across the border at the lowest possible price. To get the asset price down, the Russian dairy giants have lobbied the Kremlin to arrange a cut-off of revenues for their Belarussian targets.
As Agriprods.com has reported, over the month of June, the two governments traded public barbs over the milk trade, one of Belarus’s major exports worth more than $1 billion per annum. They then agreed to cool the rhetoric, but Belarus has been obliged to accept an agreement on an export quota for this year. This requires an immediate halt to new shipments for several months. In turn, that will enable the Russian producers of fresh milk to recover market share and charge more for their products. (more…)
When it comes to investigating, Sergei Stepashin, the former prime minister, is like a small dog with a big bone. Transfer pricing, tolling, and related metal trading schemes that evade huge sums of tax are his bone. Stepashin’s problem is that no sooner does he get his teeth into something, than much bigger dogs than he is bark in his ear — and he drops it.
In January, for example, when Stepashin got his teeth into Oleg Deripaska’s aluminium trading business.
At the end of that month, the Accounting Chamber completed its first-ever investigation of the cashflow and trading sheets of United Company Rusal, headed by Deripaska. Letting the Chamber audit his books was one of the conditions Deripaska was forced to accept when he agreed the previous November to a $4.5 billion loan bailout by Vnesheconombank (VEB); that saved him from forfeiting his 25% shareholding in Norilsk Nickel to a syndicate of foreign banks.
The Accounting Chamber has investigated tax avoidance schemes used in Russian aluminium trading before; the Chamber has directly and publicly challenged aluminium tolling contracts, which allow offshore companies to claim arm’s length ownership of Rusal metal in trade, and avoid domestic and export taxes. (more…)
Agatha Christie’s whodunit entitled And Then There Were None – the concluding words of the children’s counting rhyme — is reputed to be the world’s best-selling mystery story.
There’s no mystery now about the war of Europe and North America against Russia; it is the continuation of Germany’s war of 1939-45 and the war aims of the General Staff in Washington since 1943. Defense Minister Sergei Shoigu (left) and President Vladimir Putin (right) both said it plainly enough this week.
There is also no mystery in the decision-making in Moscow of the President and the Defense Minister, the General Staff, and the others; it is the continuation of the Stavka of 1941-45.
Just because there is no mystery about this, it doesn’t follow that it should be reported publicly, debated in the State Duma, speculated and advertised by bloggers, podcasters, and twitterers. In war what should not be said cannot be said. When the war ends, then there will be none.
Alas and alack for the Berlin Blockade of 1948-49 (Berliner Luftbrücke): those were the days when the Germans waved their salutes against the unification of Germany demilitarised and denazified; and cheered instead for their alliance with the US and British armies to fight another seventy years of war in order to achieve what they and Adolf Hitler hadn’t managed, but which they now hope to achieve under Olaf Scholtz — the defeat of the Russian Army and the destruction of Russia.
How little the Germans have changed.
But alas and alack — the Blockade now is the one they and the NATO armies aim to enforce against Russia. “We are drawing up a new National Security Strategy,” according to Foreign Minister Annalena Baerbock. “We are taking even the most severe scenarios seriously.” By severe Baerbock means nuclear. The new German generation — she has also declared “now these grandparents, mothers, fathers and their children sit at the kitchen table and discuss rearmament.”
So, for Russia to survive the continuation of this war, the Germans and their army must be fought and defeated again. That’s the toast of Russian people as they salute the intrepid flyers who are beating the Moscow Blockade.
Last week the International Atomic Energy Agency’s (IAEA) board of governors voted to go to war with Russia by a vote of 26 member countries against 9.
China, Vietnam, India, Pakistan, Egypt, Senegal and South Africa voted against war with Russia.
The IAEA Secretary-General Rafael Grossi (lead image, left) has refused to tell the press whether a simple majority of votes (18) or a super-majority of two-thirds (23) was required by the agency charter for the vote; he also wouldn’t say which countries voted for or against. The United Nations Secretary-General Antonio Guterres then covered up for what had happened by telling the press: “I believe that [IAEA’s] independence that exists and must be preserved is essential. The IAEA cannot be the instrument of parties against other parties.” The IAEA vote for war made a liar of Guterres.
In the IAEA’s 65-year history, Resolution Number 58, the war vote of September 15, 2022, is the first time the agency has taken one side in a war between member countries when nuclear reactors have either been attacked or threatened with attack. It is also the first time the IAEA has attacked one of its member states, Russia, when its military were attempting to protect and secure a nuclear reactor from attack by another member state, the Ukraine, and its war allies, the US, NATO and the European Union states. The vote followed the first-ever IAEA inspection of a nuclear reactor while it was under active artillery fire and troop assault.
There is a first time for everything but this is the end of the IAEA. On to the scrap heap of good intentions and international treaties, the IAEA is following the Organisation for the Prohibition of Chemical Weapons (OPCW), and the UN Secretary-General himself. Listen to this discussion of the past history when the IAEA responded quite differently following the Iranian and Israeli air-bombing attacks on the Iraqi nuclear reactor known as Osirak, and later, the attacks on Pakistan’s nuclear weapons sites.
The International Atomic Energy Agency (IAEA) decided this week to take the side of Ukraine in the current war; blame Russia for the shelling of the Zaporozhye Nuclear Power Plant (ZNPP); and issue a demand for Russia to surrender the plant to the Kiev regime “to regain full control over all nuclear facilities within Ukraine’s internationally recognized borders, including the Zaporizhzhya Nuclear Power Plant.”
This is the most dramatic shift by the United Nations (UN) nuclear power regulator in the 65-year history of the organisation based in Vienna.
The terms of the IAEA Resolution Number 58, which were proposed early this week by the Polish and Canadian governors on the agency board, were known in advance by UN Secretary-General Antonio Guterres when he spoke by telephone with President Vladimir Putin in the late afternoon of September 14, before the vote was taken. Guterres did not reveal what he already knew would be the IAEA action the next day.
Never mind that King Solomon said proverbially three thousand years ago, “a merry heart doeth good like a medicine.”
With seven hundred wives and three hundred concubines, Solomon realized he was the inventor of the situation comedy. If not for the sitcom as his medicine, the bodily and psychological stress Old Solly had to endure in the bedroom would have killed him long before he made it to his death bed at eighty years of age, after ruling his kingdom for forty of them.
After the British sitcom died in the 1990s, the subsequent stress has not only killed very large numbers of ordinary people. It has culminated today in a system of rule according to which a comic king in Buckingham Palace must now manage the first prime minister in Westminster history to be her own joke.
Even the Norwegians, the unfunniest people in Europe, have acknowledged that the only way to attract the British as tourists, was to pay John Cleese of Monty Python and Fawlty Towers to make them laugh at Norway itself. This has been a bigger success for the locals than for the visitors, boosting the fjord boatman’s life expectancy several years ahead of the British tourist’s.
In fact, Norwegian scientists studying a sample of 54,000 of their countrymen have proved that spending the state budget on public health and social welfare will only work effectively if the population is laughing all the way to the grave. “The cognitive component of the sense of humour is positively associated with survival from mortality related to CVD [cardio-vascular disease] and infections in women and with infection-related mortality in men” – Norwegian doctors reported in 2016. Never mind the Viking English: the Norwegian point is the same as Solomon’s that “a sense of humour is a health-protecting cognitive coping resource” – especially if you’ve got cancer.
The Russians understand this better than the Norwegians or the British. Laughter is an antidote to the war propaganda coming from abroad, as Lexus and Vovan have been demonstrating. The Russian sitcom is also surviving in its classic form to match the best of the British sitcoms, all now dead – Fawlty Towers (d. 1975), Black Adder (d. 1989), You Rang M’Lord? (d. 1988), Jeeves and Wooster (d. 1990), Oh Dr Beeching! (d.1995), and Thin BlueLine (d. 1996).
The Russian situation comedies, alive and well on TV screens and internet streaming devices across the country, are also increasingly profitable business for their production and broadcast companies – not despite the war but because of it. This has transformed the Russian media industry’s calculation of profitability by removing US and European-made films and television series, as well as advertising revenues from Nestlé, PepsiCo, Mars, and Bayer. In their place powerful Russian video-on-demand (VOD) streaming platform companies like Yandex (KinoPoisk), MTS (Kion), Mail.ru (VK), and Ivi (Leonid Boguslavsky, ProfMedia, Baring Vostok) are now intensifying the competition for audience with traditional television channels and film studios for domestic audiences. The revenue base of the VOD platforms is less vulnerable to advertisers, more dependent on telecommunications subscriptions.
Russian script writers, cameramen, actors, designers, and directors are now in shorter supply than ever before, and earning more money. “It’s the Russian New Wave,” claims Olga Filipuk, head of media content for Yandex, the powerful leader of the new film production platforms; its controlling shareholder and chief executive were sanctioned last year.
By Olga Samofalova, translated and introduced by John Helmer, Moscow @bears_with
It was the American humourist Mark Twain who didn’t die in 1897 when it was reported that he had. Twain had thirteen more lively years to go.
The death of the Russian aerospace and aviation industry in the present war is proving to be an even greater exaggeration – and the life to come will be much longer. From the Russian point of view, the death which the sanctions have inflicted is that of the US, European and British offensive against the Soviet-era industry which President Boris Yeltsin (lead image, left) and his advisers encouraged from 1991.
Since 2014, when the sanctions war began, the question of what Moscow would do when the supply of original aircraft components was first threatened, then prohibited, has been answered. The answer began at the Federal Aviation Administration (FAA) in 1947 when the first Supplemental Type Certificate (STC) or Parts Manufacturing Approval (PMA) was issued by Washington officials for aircraft parts or components meeting the airworthiness standards but manufactured by sources which were not the original suppliers.
China has been quicker to implement this practice; Chinese state and commercial enterprises have been producing PMA components for Boeing and Airbus aircraft in the Chinese airline fleets for many years. The Russian Transport Ministry has followed suit; in its certification process and airworthiness regulations it has used the abbreviation RMA, Cyrillic for PMA. This process has been accelerating as the sanctions war has escalated.
So has the Russian process of replacing foreign imports entirely.
The weakest link in the British government’s four-year long story of Russian Novichok assassination operations in the UK – prelude to the current war – is an English medical expert by the name of Guy Rutty (lead image, standing).
A government-appointed pathologist advising the Home Office, police, and county coroners, Rutty is the head of the East Midlands Forensic Pathology Unit in Leicester, he is the author of a post-mortem report, dated November 29, 2018, claiming that the only fatality in the history of the Novichok nerve agent (lead image, document), Dawn Sturgess, had died of Novichok poisoning on July 8, 2018. Rutty’s finding was added four months after initial post-mortem results and a coroner’s cremation certificate stopped short of confirming that Novichok had been the cause of her death.
Rutty’s Novichok finding was a state secret for more than two years. It was revealed publicly by the second government coroner to investigate Sturgess’s death, Dame Heather Hallett, at a public hearing in London on March 30, 2021. In written evidence it was reported that “on 17th July 2018, Professor Guy Rutty MBE, a Home Office Registered Forensic Pathologist conducted an independent post-mortem examination. He was accompanied by Dr Phillip Lumb, also an independent Home Office Registered Forensic Pathologist. Professor Rutty’s Post-Mortem Report of 29th November 2018 records the cause of death as Ia Post cardiac arrest hypoxic brain injury and intracerebral haemorrhage; Ib Novichok toxicity.”
Hallett, Rutty, Lumb, and others engaged by the government to work on the Novichok case have refused to answer questions about the post-mortem investigations which followed immediately after Sturgess’s death was reported at Salisbury District Hospital; and a cause of death report signed by the Wiltshire Country coroner David Ridley, when Sturgess’s body was released to her family for funeral and cremation on July 30, 2018.
After another three years, Ridley was replaced as coroner in the case by Hallett in March 2021. Hallett was replaced by Lord Anthony Hughes (lead image, sitting) in March 2022.
The cause-of-death documents remain state secrets. “As you have no formal role in the inquest proceedings,” Hallett’s and Rutty’s spokesman Martin Smith said on May 17, 2021, “it would not be appropriate to provide you with the information that you have requested.”
Since then official leaks have revealed that Rutty had been despatched by the Home Office in London to take charge of the Sturgess post-mortem, and Lumb ordered not to undertake an autopsy or draw conclusions on the cause of Sturgess’s death until Rutty arrived. Why? The sources are not saying whether the two forensic professors differed in their interpretation of the evidence; and if so, whether the published excerpt of Rutty’s report of Novichok poisoning is the full story.
New developments in the official investigation of Sturgess’s death, now directed by Hughes, have removed the state secrecy cover for Rutty, Lumb, and other medical specialists who attended the post-mortem on July 17, 2018. The appointment by Hughes of a London lawyer, Adam Chapman, to represent Sergei and Yulia Skripal, opens these post-mortem documents to the Skripals, along with the cremation certificate, and related hospital, ambulance and laboratory records. Chapman’s role is “appropriate” – Smith’s term – for the Skripals to cross-examine Rutty and Lumb and add independent expert evidence.
Hughes’s appointment of another lawyer, Emilie Pottle (lead image, top left), to act on behalf of the three Russian military officers accused of the Novichok attack exposes this evidence to testing at the same forensic standard. According to Hughes, it is Pottle’s “responsibility for ensuring that the inquiry takes all reasonable steps to test the evidence connecting those Russian nationals to Ms Sturgess’s death.” Pottle’s responsibility is to cross-examine Rutty and Lumb.
The US Army’s Special Operations Command (SOCOM) has been firing several hundred million dollars’ worth of cyber warheads at Russian targets from its headquarters at MacDill Airforce Base in Florida. They have all been duds.
The weapons, the source, and their failure to strike effectively have been exposed in a new report, published on August 24, by the Cyber Policy Center of the Stanford Internet Observatory. The title of the 54-page study is “Unheard Voice: Evaluating Five Years of Pro-Western Covert Influence Operations”.
“We believe”, the report concludes, “this activity represents the most extensive case of covert pro-Western IO [influence operations] on social media to be reviewed and analyzed by open-source researchers to date… the data also shows the limitations of using inauthentic tactics to generate engagement and build influence online. The vast majority of posts and tweets we reviewed received no more than a handful of likes or retweets, and only 19% of the covert assets we identified had more than 1,000 followers. The average tweet received 0.49 likes and 0.02 retweets.”
“Tellingly,” according to the Stanford report, “the two most followed assets in the data provided by Twitter were overt accounts that publicly declared a connection to the U.S. military.”
The report comes from a branch of Stanford University, and is funded by the Stanford Law School and the Spogli Institute for Institutional Studies, headed by Michael McFaul (lead image). McFaul, once a US ambassador to Moscow, has been a career advocate of war against Russia. The new report exposes many of McFaul’s allegations to be crude fabrications and propaganda which the Special Operations Command (SOCOM) has been paying contractors to fire at Russia for a decade.
Strangely, there is no mention in the report of the US Army, Pentagon, the Special Operations Command, or its principal cyberwar contractor, the Rendon Group.
Maria Yudina (lead image) is one of the great Russian pianists. She was not, however, one who appealed to all tastes in her lifetime, 1899 to 1970.
In a new biography of her by Elizabeth Wilson, Yudina’s belief that music represents Orthodox Christian faith is made out to be so heroic, the art of the piano is diminished — and Yudina’s reputation consigned again to minority and obscurity. Russian classical music and its performers, who have not recovered from the Yeltsin period and now from the renewal of the German-American war, deserve better than Wilson’s propaganda tune.
Those lighting Mikhail Gorbachev’s funeral pyre are torching the truth of the matter – that Gorbachev was a liar of monumental vanity who betrayed his country out of greed and incompetence, outpointed by his adversaries in Moscow, Washington, and London because they knew him better than he knew himself.