SOVCOMFLOT’S SHARE SALE — LIFEBUOY OR SOFT SOAP

By John Helmer in Moscow

Russia’s Economic Development Minister, Elvira Nabiullina (pictured left), has confirmed the government’s intention to privatize the shares of the oil tanker group, Sovcomflot (SCF), which is currently 100% owned by the state.

Nabiullina, speaking at an investment conference in Moscow, said that in order to increase state budget revenues, the privatisation of “ports…airports, Sovcomflot [is] now [being] discussed,” according to news agency reports.

Nabiullina’s ministry spokesman declined to say if the government has decided on a valuation of SCF for the sell-off, on the volume of shares to be sold, or the revenue target to be aimed at. At her public appearance, Nabiullina claimed the proceeds of the selloff might be “several tens of billions of roubles”.
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GUINEA TO LAUNCH NEW CLAIM AGAINST RUSAL FOR $1 BILLION — RUSAL THREATENS UN RETALIATION

By John Helmer in Moscow

The Guinean Government in Conakry says it has enough evidence to launch a new court claim against Russian aluminium company, Rusal, for at least $1 billion. A local court filing is expected shortly, government sources in Conakry say, citing evidence of inflated costs and allegations of manipulation of financial accounts that have reduced taxes the government says Rusal was obliged to pay in Guinea over several years. At the same time, the Guinean government has decided to engage an internationally recognized accounting firm to analyze both the internal financial accounts, and also Rusal’s export declarations, to support the court claim, and if warranted, increase it.
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HONG KONG EXCHANGE WRESTLES WITH KING KONG PROBLEM – ASKS IF MAIDEN LISTING IS GORILLA IN DISGUISE

By John Helmer in Moscow

Oleg Deripaska, the controlling shareholder and chief executive of Rusal, Russia’s bauxite and aluminium monopoly, is attempting to run the gauntlet of international courts and Hong Kong stock exchange investigators, as time runs out for him to meet his cash-or-list obligations to his shareholding partners, Russian oligarchs Mikhail Prokhorov and Victor Vekselberg. They, like Michael Cherney, Deripaska’s founding partner in the aluminium business, hold signed undertakings from Deripaska that if their private shares in Rusal do not achieve a public market listing by deadline, Deripaska must buy back their shares for cash.

And as Russia’s most indebted man, with about $20 billion in obligations, not counting the share value, Deripaska has no money to spare.

The pressure on the Russians has turned into an unprecedented problem this week for the Hong Kong Exchange (HKEx) listing division, headed by Mark Dickens; and the Hong Kong government market regulator, the Securities and Futures Commission (SFC), headed by Martin Wheatley. Dickens, an Australian with three decades of Australian and Hong Kong market experience, has had no investigative involvement with Russian companies. Wheatley, an Englishman, was with the London Stock Exchange until 2005, before the Russians started to list there.
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VARSHAVSKY RETURNS FROM LONDON TO ROSTOV — CEDES ROSTOV STEELMILL TO MECHEL

By John Helmer in Moscow

Vadim Varshavsky, the owner of the bankrupt Estar group of midsize, specialty steel mills, has made his first public appearance in Russia since his financial group collapsed with debts of up to $4 billion. Until recently, he had been thought to be staying in London, or in another location abroad.

Varshavsky was in Rostov on Saturday to meet the Rostov region governor, Vladimir Chubb, the governor’s spokesman told CRU Steel News. The meeting also included the Mechel group chairman and controlling shareholder, Igor Zyuzin. According to the governor’s office, the meeting was intended to confirm terms of transfer of Varshavsky’s management and financial interest in the operation of four Estar units in the region — the Rostov Electrometallurgical Works (REMZ), the newest of the mills of the Estar group; Lomprom, a scrap unit of the Estar group; a power station supplying electricity to the Rostov mill; and a small coal mine.
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CANUCKS SAVE MORDASHOV FROM SELF-INJURY – HIGH RIVER GOLD MINORITIES BET ON GETTING RICHER

By John Helmer in Moscow

According to Edgar Rice Burroughs, Nemone, Queen of the City of Gold, was one of those notorious Hollywood types – too beautiful, not enough brains, and a perverse streak that enjoyed making people suffer. Tarzan gets help from his pet lion, and together they despatch the worst Nemone sends after them. Nemone is a sore loser, and seeing no purpose in life without getting her own way, she kills herself.

Alexei Mordashov is smarter than Nemone, but he is a sore loser nonetheless. After confronting the combined forces of the minority shareholders in High River Gold (ticker HRG:CN) for six months, and losing, he’s despatched in the space of a single week the chief executive of the company, the head of investor relations, and a member of the HRG board.
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MIKHAIL PROKHOROV AND THE NATIONAL BASKETBALL ASSOCIATION – STRETCH TO FIT

Key: Rear left, Congressman Bill Pascrell, Democrat, New Jersey
Rear right, NBA Commissioner David Stern
Centre, Stuart Levey, Under Secretary of the Treasury for Financial Intelligence
Rack: Mikhail Prokhorov
Front left, Senator Paul Sarbanes, author of financial accountability statute
Front right, Daniel Goelzer, Chairman of Public Company Accounting Oversight Board

For Immediate Release
September 23, 2009

For Information Contact
Paul Brubaker (973) 523-5152

CONGRESSMAN PASCRELL REQUESTS NBA COMISSIONER
DAVID STERN TO INVESTIGATE NEW JERSEY NETS SALE

WASHINGTON – U.S. Rep. Bill Pascrell, Jr. (D-NJ-8) today sent a letter to NBA Commissioner David Stern urging him to thoroughly investigate former nickel mining baron Mikhail Prokhorov, who reached an agreement today to buy the New Jersey Nets.
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DERIPASKA DOPPELGANGER SUSPECTED

By John Helmer in Moscow

A secret meeting in the middle of the night in the presidential palace in the Guinean capital of Conakry, requested by the Russian aluminium oligarch Oleg Deripaska, has triggered a Guinean court ruling and a tax investigation of claims amounting to $700 million. The claims catapult the Guinean government and its leader, Army Captain Moussa Dadis Camara, to the head of the table of international creditors seeking more than $8 billion from the insolvent Russian aluminium monopoly, United Company Rusal.

Guinean government officials say that Deripaska, who is chief executive and controlling shareholder of Rusal, made the arrangement to meet Camara through an intermediary, Raoul Delaware. A British passport-holder from Mauritius, he is well-known in Conakry from his involvement in international business deals during the 25-year rule of President Lansana Conte. Conte died last December. He has been replaced by the Guinean Army.
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GUINEAN MINING MINISTER SAYS USE-OR-LOSE IS THE NEW CONCESSION POLICY, NOT RENEGING ON PAST DEALS

By John Helmer in Moscow

Mahmoud Thiam, the US-trained banker turned resource policymaker for the Guinean government (pictured right), says that the nine-month review he has initiated of the country’s major mineral and mining concessions is not intended to reopen or renege on every deal done with foreign miners during the 25-year rule of Lansana Conte, Guinea’s president until last year. When Conte died suddenly in December, he was replaced by the Guinean Army, led by Captain Moussa Dadis Camara. Thiam, who was educated in France and the US, and worked at Merrill Lynch and UBS, was appointed Minister of Mining, Energy, and Hydraulics last January.

“We view concessions as legally binding,” Thiam told Minesite.com, and “we intend to respect them.” Distinguishing his approach from mine licence and privatization investigations under way elsewhere in Africa, Thiam said: “we have tried to avoid a blanket questioning , which can be time-consuming and expensive. Freezing everything and putting everything in question is not the right approach. We didn’t come to renege.”
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SOVCOMFLOT FACES UK HIGH COURT TRIAL BEFORE SHARE SALE

By John Helmer in Moscow

The state-owned tanker company Sovcomflot will try to sell up to 20% of its shares in a public offering, the former board chairman Igor Shuvalov (pictured right) said yesterday. But the timing may be delayed if a UK High Court trial, focusing on the company’s internal affairs, goes against the management; this is now supervised by Sergei Naryshkin, the Kremlin chief of staff, who has replaced Shuvalov as chairman of the Sovcomflot board.

Shuvalov, a deputy prime minister in the Russian government, told a Bloomberg television interviewer yesterday that to claw back cash to offset the government’s deficit spending, a programme of privatization sales is being considered. Sovcomflot CEO Sergey Frank (pictured left) had proposed the share sale, and postponed it more than once before last year’s financial crash intervened. Before Frank took over the company, CEO Dmitry Skarga commissioned JP Morgan to advise on the placement of a 10% stake. According to Shuvalov, he would like to run the IPO before the end of this year.
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THE STATE DUMA ISSUES ANNOUNCEMENTS ON THE DISAPPEARANCE OF DEPUTY VADIM VARSHAVSKY WITH AT LEAST $3 BILLION IN DEBTS

By John Helmer in Moscow

The State Duma, the lower house of the Russian parliament, was last elected in December 2007. The outcome was the following distribution of seats: United Russia, 315; Communist Party, 57; Liberal Democratic Party of Russia, 40; and Fair Russia, 38.

Vadim Varshavsky, 49, was elected to the Duma in 2005 on the United Russia slate, and reelected in 2007. He represents the Kamensky district of the Rostov region, where he owns a steelmill. Varshavsky is also a member of the Duma Committee on Industry. After defaulting on debts estimated to total between $3 billion and $4 billion, Varshavsky has decamped. A bank creditor says it has received telephone-calls from him, but does not know where he is calling from.

Varshavsky has also disappeared from his deputy’s seat. Representatives of the parliamentary parties and the Duma committee of which Varshavsky is a member, have responded with the following statements:
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THE SHORT HISTORY OF BALLS – MIKHAIL PROKHOROV TO APPLY FOR A $700 MILLION BANK LOAN TO FINANCE THE NEW JERSEY NETS AND THE WORLD’S MOST COSTLY ARENA


By John Helmer in Moscow

Mikhail Prokhorov is an accomplished athlete, whose sports include skiing, basketball, kickboxing, and waterskiing. He is also an upstanding Russian patriot, dedicated to the introduction of high-technology skills to Russians who have been crippled in their ball-handling skills by seventy years of Marxism-Leninism.

In response to the reports appearing here on his business plans for American basketball and Italian football, Igor Petrov, Prokhorov’s spokesman, has invited readers to take note of the following announcement, issued on September 22, of Prokhorov’s intentions to raise an international bank loan of $700 million, secured by his personal guarantee, for the advancement of Russian basketball, and a place to watch the game in the middle of Brooklyn.
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DONKEYS EATING FIGS CAN BE FUNNY, BUT TRY THIS HILARITY TEST — DID BERLUSCONI ASK PUTIN TO TELL PROKHOROV TO SPEND $330 MILLION TO SAVE ROMA?

By John Helmer in Moscow

Dying of laughter isn’t the worst way to go.

In the ancient world, it befell to the Stoic philosopher Chrysippos to be contemplating one day the relationship between altruism and heroism. Into his viewfinder two donkeys appeared. It isn’t clear whether they started drinking wine from a cup Chrysippos had absent-mindedly left behind. Or whether he deliberately fed them with the drink. What happened next has been famous for 2,216 years. After imbibing, the donkeys started nibbling on a basket of figs Chrysippos had ordered for lunch. But at that sight, Chrysippos started to laugh; he couldn’t stop; and he died of the joke. To be sure, Chrysippos’s ticker was past 70 years old, and he may already have accelerated it fatally by beating his asses to the brew. But of one thing noone is in doubt – the wine, the donkeys, and the figs made a hilarious and fatal combination.

The history of Rome also has something to do with figs, for it was a fig-tree on the banks of the River Tiber that snared the basket containing the twins Romulus and Remus, who were floating away from their homicidal uncle; he was disposing of them, he thought, to save his inheritance. They were suckled by a she-wolf, according to legend. Then Romulus grew up to murder Remus, also for inheritance purposes.
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WATCH MICKY DRIBBLE THE BALL – PROKHOROV’S AMERICAN MOVE IS A BUZZER BEATER BEFORE KREMLIN DISQUALIFIER

By John Helmer in Moscow

In the original game of basketball, invented by Dr James Naismith in 1892, there were 13 rules. Rule 5 was the disqualifier. In the playbook of Russia’s Deputy Prime Minister Igor Sechin, there is just one rule – and that’s the disqualifier. Mikhail Prokhorov’s decision to buy into the American National Basketball Association is his signal he’s out of the Russian game.

Prokhorov has been acutely sensitive to the coverage he has been getting in the American media for some time, and according to a source in his circle, that is because he does not want to be seen by the Kremlin as getting too close to the US Government. Taking ski vacations in Aspen, Colorado, is one thing; shaking hands with the President of the United States is another (in a crowded room).
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THE BEAR GOES TO THE BANK – A 19TH CENTURY MACHINATION REVIVED, OR MEDVEDEV TREADS IN TSAR ALEXANDER’S FOOTSTEPS TO RESCUE VEKSELBERG FROM SWISS CRIMINAL INVESTIGATION

By John Helmer in Moscow

Russia’s President Dmitry Medvedev has presented two bears to Switzerland, with the warning that if any harm comes to them, or to Victor Vekselberg, a Russian oil and aluminium oligarch, all the Russian money that goes into, or is presently sitting in Switzerland, may vanish.

The Swiss Foreign Ministry says that no Russian head of state has ever visited Switzerland. But the Kremlin’s memory is a little longer. It reports that Tsar Alexander 1 (pictured) was there in 1819. In fact, for many years before, there had been a mutual soft-spot between the tsar and the Swiss. This had produced Alexander’s veto of a Prussian and Austrian military scheme to invade Switzerland on the way to attacking Napoleon. But the Swiss found their own way round that, and on January 14, 1813, following an army of Austrians and Bavarians, Alexander celebrated the Russian New Year in Basel. As Swiss schoolchildren used to be taught, the anti-Napoleonic alliance had rescued the Swiss from the French, turning them out of Geneva, Valais and Neuchatel, and creating thereby the confederation of Swiss cantons with something close to its modern political geography. The neutrality of the new state was from the beginning a pro-German, pro-Russian, anti-French idea.
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BEWARE THAT GLOW IN THE URANIUM PILE, IT’S STRONG ARMZ AT WORK — BUT ARMZ IS ALSO AFTER FOREIGN MINER CASH

By John Helmer in Moscow

Shares of uranium mining companies, like other energy sources, generally follow the commodity price, so when oil and the others collapsed a year ago, the Russian uranium miner, Priargunsk Chemical and Mining Company (ticker PNGO:RU), went down with them. From a historical peak of $800 per share struck in April of 2007, it drifted down, despite the upward movement of spot uranium prices, to the 2008 peak of $585 on May 22, 2008. Then in July, the share price started diving, and hit bottom of $100 on February 16. How then to explain the 140% takeoff from then to this week’s price of $240?

Part of the answer is that the glow of the share is coming from tiny trades of 300 or less shares. Just 18% of the company’s share issue is potentially open to trading; 82% is closely held by the state-owned uranium mine holding called Atomredmetzoloto; ARMZ for short. The other part of the answer is the upward pull of the Russian stock market (RTS) index as a whole, driven primarily by the rising spot price of crude oil.
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MONKEY BUSINESS ON THE BORDER — VOLGOTANKER CHALLENGES INTERPOL RED NOTICES — VISA BLACK-BALL NETWORK DENIED BY AUSTRALIAN ENVOY

By John Helmer in Moscow

Hard on the heels of a Russian Foreign Ministry warning to Canada against denying an entry visa to Senator Mikhail Margelov last week, a veteran of Volgotanker, once Russia’s largest oil transportation fleet, announced today that he is challenging Interpol for encouraging the arrest of travellers on charges trumped up in Moscow.

Ilya Katsnelson (pictured top), the Copenhagen-based US executive associated with the now bankrupt Volgotanker group in Russia, is challenging Interpol for continuing to issue a red (arrest) notice on the instruction of the Russian prosecutor-general. The US, Germany, and Denmark have all rejected the Russian claims against Katsnelson. On July 29, the Danish Ministry of Justice formally issued its rejection of a Russian extradition request for him. Katsnelson told Fairplay he is charging Interpol with multiple violations of the UN and European Conventions on Human Rights for maintaining the red notice on its database.
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AL-ZAIDI IS FREE – NUMBER OF SHOES THROWN AT EX-PRESIDENT GEORGE BUSH: 98,542,514

On December 14, 2008, as then President George Bush was speaking at a press conference in Baghdad, Mountazer al-Zaidi rose abruptly from about twelve feet away, lifted his right arm, and tossed a shoe at the president’s head while shouting in Arabic: “This is a gift from the Iraqis; this is the farewell kiss, you dog!” Bush ducked and the shoe narrowly missed him. A few seconds later, the journalist tossed his other shoe, this time shouting, “This is from the widows, the orphans and those who were killed in Iraq!”

Watch again what happened: http://video.nytimes.com/video/2008/12/14/multimedia/1194835546483/bush-makes-final-visit-to-iraq.html

This morning in Baghdad, Al-Zaidi was released from prison after nine months.

The game website Sock and Awe records that, as of this morning, a total of 98,542,514 shoes have been flung through the internet at Bush, in solidarity with Al-Zaidi.

RUSSIA’S AFRICA TROUBLESHOOTER IN HOT WATER WITH CANADA

By John Helmer in Moscow

Canada has refused an entry visa for Mikhail Margelov, the Kremlin’s special representative to Africa. The reason, according to Canadian sources, is Margelov’s past connexions to the KGB, the Soviet intelligence agency.

While officially, the Canadian Embassy in Moscow and government in Ottawa refuse to comment publicly on individual visa issues, a Moscow newspaper has published Margelov’s account in which he says “my conclusion is that they rejected me because of something in my biography… Since I got visas in 2005 and 2006…in my biography three things have changed: a young son was born; I have grown thinner by 10 kilograms; and in December 2008 the President appointed me the special representative for Sudan.” Margelov makes no secret of his family and career ties with the KGB. He has told Business Day he studied Arabic under intelligence agency auspices, and then taught the subject at an agency school in the 1980s.
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WEST AFRICAN UMPIRES TEACH DERIPASKA TO PLAY CRICKET — RUSAL HIT FOR SIX, DERIPASKA OUT FOR A DUCK

By John Helmer in Moscow

A Republic of Guinea tribunal ruled this week in Conakry that United Company Rusal, one of the largest bauxite, alumina and aluminum producers in the world, unlawfully acquired its shareholding control of the Friguia alumina refinery in the country in 2006, and should make restitution.

The judgement comes before the federal court in Nigeria rules on a parallel case, challenging Rusal’s takeover of the Aluminium Smelter Company of Nigeria (Alscon) in the same year. But before the Nigerian court decides, a report from the National Committee on Privatisation has already gone to Nigeria’s President Umaru Yar’ Adua (pictured top centre), concluding that violations of the privatisation rules and subsequent investment conditions for Alscon should lead to the revocation of Rusal’s concession in that country.

The West African decisions have come despite recent visits to both countries by Deripaska himself. He was in Nigeria in June, where he had, according to his company website, “a series of consultations with Nigerian government authorities and businessmen”. Nigerian sources claim he sought a meeting with Yar’ Adua, but was turned down. Six weeks later in early August, Deripaska was in Guinea. This time the company says he “had a series of meetings with the management of the company’s operations in Guinea and representatives of local communities.”
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RUSSIAN BUSINESS GENIUSES FIGHT CASH BURN, AS S&P ISSUES GLOBAL WARNING — EVRAZ FACES “SIGNIFICANT DOUBT AS A GOING CONCERN”

By John Helmer in Moscow

In the sharpest warning issued to date by an international ratings agency about a major Russian steelmaker, Standard & Poors (S&P) said yesterday there is “significant doubt about the group’s ability to continue as a going concern.”

Evraz is Russia’s largest steel and mining group. It is controlled by the Millhouse holding of Roman Abramovich and Eugene Shvidler (pictured left to right, respectively) , plus the last of the founding shareholders, Alexander Abramov, and his protege Alexander Frolov. Until recently, these men have been considered among the most bankable of Russian metal magnates, and Abramovich the most secure of Russian oligarchs.

The S&P report, authored by analysts Alex Herbert and Andrey Nikolaev, downgrades Evraz’s corporate credit and unsecured debt ratings from BB- to B+. The move, according to S&P, reflects “our opinion that there is heightened uncertainty about the willingness of banks to agree to waive or amend financial covenants, and the ability of Evraz to address its currently very weak liquidity. This follows the announcement by Evraz of operating results for the six months to June 30, 2009, that were even weaker than we had previously anticipated. Evraz faces a difficult combination of very low cash flow generation caused by the severe steel industry downturn and substantial adjusted debt from previous debt-financed acquisitions. In addition, the group has persistently high short-term debt and faces potential financial covenant breaches, which may be more difficult to address than management expects.”
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PORT LOGS REVEAL PAST “DISAPPEARANCES” OF MV ARCTIC SEA — CAPTAIN CRIES “ANOTHER HOAX” — RUSSIAN GOVERNMENT INSISTS LUMBER, NOT LIES

By John Helmer in Moscow

Port logs for the MV Arctic Sea — the small Turkish-built, Russian-owned vessel recently reported at the centre of an alleged piracy and extortion attempt — reveal that the timber-carrier has been making regular voyages between Finnish ports and either Algerian or French Mediterranean ports for the past three years. However, the disappearance reported to have occurred between July 24 and August 24, triggering a spate of feverish speculation in Tel Aviv and London about secret missile smuggling, appears not to be the first time the Arctic Sea has disappeared; or at least gone missing from the maritime record known as the international Automatic Identification System (AIS).

Each year recently, according to AIS records, the vessel appears to be missing from the logs in the Mediterranean for up to 20 days at a time. In April of this year, the Arctic Sea is missing from AIS port-call records between April 1, when it transited the Gibraltar Straits, moving east, and April 11, when it returned through the straits, moving west. A similar gap in the log records appeared a year earlier, between February 13, 2008, when the Arctic Sea sailed east past Gibraltar into the Mediterranean, and 20 days later, on March 4, when it transited the Gibraltar Straits moving westwards. In 2007, the gap in the logs appears between April 26, when the vessel entered the Mediterranean, and May 14, when it exited. In all cases, the vessel appears to have taken on cargo at Loviisa and Kotka (Finland), and Tallinn (Estonia).
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DOWN WITH THE ALUMINIUM GAUNTLET – DERIPASKA FACES REPLACEMENT IF RUSAL IS TO REVIVE

By John Helmer in Moscow

Two weeks ago, without fanfare, the US Government decided it will not allow General Motors (GM), in which the government owns the controlling 60% stake, to sell its European automobile division to a Russian combination of the state savings bank Sberbank, Oleg Deripaska’s GAZ auto plant, and Deripaska’s Canadian partner, Frank Stronach’s Magna. Compared to the refusal of the US to grant Deripaska a visa to enter the country, this was a more powerful, definitive, and public message.

Deripaska conceded this week in an interview with a Moscow newspaper that his attempt to go international with the acquisition of Opel of Germany (as well as the UK’s Vauxhall and Sweden’s Saab units) has failed, because of the US government’s veto. Asked if the “attitude towards Russian business abroad is still ambiguous”, Deripaska replied: “Unfortunately, yes. But in the Opel case, the US Department of State’s prejudices are also a problem.”
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ARCHANGEL DIAMOND FIGHT GOES INTO ROUND-2 — ALEKPEROV BEGINS TO WAVE THE TOWEL — LUKOIL TO SELL GRIB DIAMOND PIPE

By John Helmer in Moscow

No sooner had De Beers and Archangel Diamond Corporation (ADC) revived last Friday, September 4, their US litigation plan of attack against LUKoil and its senior management, headed by Vagit Alekperov, than Alekperov issued an unprecedented statement saying he is thinking of selling out of diamonds altogether.

Until now,Alekperov has insisted, both privately and publicly, that he would never sell the mining rights to the deposit at Verkhotina, in the Russian northwestern region of Arkhangelsk. According to US court documents, Alekperov, together with his one-time friend and business partner, Alisher Usmanov, was responsible for the takeover of the mining licence in 1998, two years after its discovery, through Arkhangelskgeoldobycha (AGD), a regional state geology organization, which was privatized and ultimately taken over by LUKoil.
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RUSSIAN WINE MARKET DRIES UP, BUT BLACK SEA PLONK GAINS — FRENCH COGNAC LOSES VARSHAVSKY TASTE

By John Helmer in Moscow

The Russian wine market has been drying up, though it’s on account of falling incomes, not because of recent exhortations by mental health specialists and President Dmitry Medvedev to curb drinking.

“The average statistical man in our country is a drunkard,” according to Alexander Nemtsov, a department head at the Moscow Research Institute of Psychiatry. That’s because Russians drink about 15 litres of pure alcohol a year, 80% of it in high-proof form.

Medvedev has responded with a recent appeal to “stop the growing consumption of alcohol among young people. The habit of drinking with and without a reason may lead to heavy alcohol addiction in a rather short time. According to the data we have, one-third of young men and almost 20% of young women use such drinks daily or every other day…The sale of alcohol to people under the age of 18 is banned in Russia now as it has always been. It’s no secret that this requirement is often ignored, which it was not in Soviet times.”
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ARCHANGEL DIAMOND MOVES INTO FIRE POSITION — DE BEERS DROPS LIQUIDATION PLAN, AGREES NEW COURT ATTACK ON LUKOIL

By John Helmer in Moscow

De Beers has accepted a new plan which makes litigation in a Denver, Colorado, courtroom against LUKoil the centrepiece of the diamond-miner’s survival strategy; and the prospect of multi-million dollar compensation the Toronto-listed company’s most valuable asset.

A new document, filed this week in the US Bankrupty Court in Denver (case number 09-22621-HRT), sets out the terms of the agreement to revive the court case against Russians charged with contract violations and fraudulently withholding the mining licence rights for the Grib pipe in northwestern Russia of Archangel Diamond Corporation (ticker: AAD:V). De Beers owns 56% of ADC’s shares. In legal jargon, the new plan converts an involuntary bankruptcy scheme under Sect 7 of the US bankruptcy code into a section 11 voluntary arrangement. The first scheme had been proposed in July by ADC’s principal lawyer, Bruce Marks (pictured right), and two minority investors, Firebird Global Master Fund, a US investor, and Clive Hartz, an Australian. They acted after De Beers had threatened ADC with foreclosure on a loan of almost $10 million, and the abandonment of the two legal claims ADC has been waging — in the Coloroado District Court, and in the Stockholm international arbitration tribunal.
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THE DUTCHMAN FLIES AGAIN — MOSCOW NEWSPAPER HOAX OVER ARCTIC SEA THREAT

By John Helmer in Moscow

Depending on how fanciful you wish to be, the Flying Dutchman is either a reference to the nautical refraction phenomenon that makes phantom ships appear at sea, like mirages, in conditions of temperature inversion; or else it’s a tale of a half-mad Dutch sea captain, whose 17th century navigational ineptitude caused him to confuse his position inside False Bay, off the southern South African coast, and to be lost with all hands.

A lesser Dutch phenomenon that has been plying Russian waters since 1990 is the Moscow Times, a newspaper that was started, and is still run, by Derk Sauer (pictured); who offered it to Mikhail Khodorkovsky; and sold it another two times over through the late Leonid Rozhetskin. Some of the lesser, and some of the greater humourists of post-revolutionary Russian journalism got their first bylines into print there. But fun and fact are two different phenomena: as the Sauer crew peer from their poop deck, they have the bad habit of seeing their own vessel as much mightier than it is.
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HOW RUSSIA IS RULED, CHAPTER 69 — PUTIN TAKES FRANCHISE IDEA FROM RONALD MCDONALD, LENDS MONEY TO IGOR ZYUZIN

By John Helmer in Moscow

Ronald McDonald is the most famous brand-name franchise in the world.

It operates 32,000 sales points, with more than 58 million clients, in about 118 countries around the world. Currently, the McDonald’s Corporation has a market capitalization of $61 billion; this is only 16% below the peak of its pre-crisis value last year.

This is what the McDonald’s Corporation says about how it does business: “McDonald’s has always been a franchising company and has relied on its franchisees, our Owner/Operators, to play a major role in the System’s success. McDonald’s remains committed to franchising as a predominant way of doing business. We are actively seeking highly qualified business people to join our System as Owner/Operators. Owning a McDonald’s restaurant is a tremendous opportunity. We are seeking individuals with significant business experience who have successfully owned or managed multiple business units or have led multiple departments and who have significant financial resources. We are a family of over 2400 Owner/Operators passionate about satisfying our customers, growing our business, making money and having fun.”
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RUSSIAN VERSION OF BLIND MAN’S BUFF — VARSHAVSKY LEAVES CREDITORS CIRCLING IN THE DARK, AS DEBT CALCULATION EXCEEDS $3 BILLION

By John Helmer in Moscow

A blindfold has been tied over the whereabouts of Russian member of parliament and steelmaker, Vadim Varshavsky, as estimates of his liabilities multiply, and questions are raised of how his borrowings were spent, and where the money is now.

The Rostov Electrometallurgical Works (REMZ), the newest of the mills of the Estar group, owned by Vadim Varshavsky, is being considered by state administrators for a handover to other Russian steel groups in order to prevent its collapse. The minimill was launched for operational testing in late 2007, with a capacity for 750,000 tonnes of liquid steel per annum, and a product portfolio of long products intended for the southwestern Russian construction sector. After a highly publicized commissioning in February of 2008, Rostov’s production reached design capacity by mid-2008, and had been slated for growth in 2009, according to company statements. This has not materialized.
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WHO SENT THE POISON PILL TO ALEXEI MORDASHOV — RUSSIAN REGULATOR HITS SEVERSTAL’S CHEREPOVETS MILL

By John Helmer in Moscow

Russia’s industrial and mining sectors are so thoroughly dominated by the handful of proprietors known as oligarchs, the only time that federal government regulators dare to interfere with their operations by attempting to enforce the law is when the regulators get their cue from a senior government official. And the only time that happens is when the official decides it is time to transfer ownership of an asset, or put the oligarch on notice that his franchise is about to cost him more — much more.

Responding to what it says was a recent individual complaint, Russia’s federal environmental safeguards regulator, Rosprirodnadzor (RPN), announced yesterday that it has started an “off-schedule inspection” of Severstal’s lead Russian mill at Cherepovets.Monday’s official notice by the regulator says the inspection will take eight days, and be focused on “compliance with the environmental protection legislation of the Russian Federation in the field of protection of atmospheric air, treatment of waste of production and consumption, protection of water objects, geological studies, rational usage and protection of mineral resources.” The announcement also claims that the check was started on “a complaint of a Cherepovets citizen… he specified that OAO Severstal dumps chemicals on the soil and breaks the rules of waste storage.”
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THE BANANA POTENTIAL – RUSSIAN FRUIT APPETITE SLIPS, BUT DEMAND FOR BANANAS STIFFENS TO ENABLE JFC TO RECOVER FROM INVESTMENT FOLLY

By John Helmer in Moscow

Despite sinking Russian consumer incomes, the banana is holding firm, enabling the St. Petersburg-based Joint Fruit Company (JFC), to increase its share of sales at the expense of its domestic rivals. With turnover of $500 million in 2007 (the latest figure JFC has released), JFC says there has been no slipping of growth in demand and sales of bananas this year, and its Bonanza! brand is expected to turn the crisis conditions to its advantage.

Russians don’t eat as much fruit as they should, but the first fruit to break through when the Iron Curtain came down was the banana. With average annual consumption of fruit at just 53 kilograms for Russians — half the US consumer level – this year’s loss of real income (in May this was down 20%, compared to the year before) has pushed Russians into cutting their fruit imports, but eating more bananas.

The reduction in fruit imports to Russia has amounted to 6% so far this year, according to a report by maritime analyst Alexei Bezborodov. The cutback is less than the 41% reduction in imports as a whole, but it marks a sharp reversal in the fruit segment of the refrigerated container (reefer) trade, which has been feeding 12% annual growth in fruit consumption. This year, according to a market analyst in St. Petersburg, the Russian fruit market will shrink by 5% overall.
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RED HAS TURNED YELLOW – THE GREEK AND CYPRIOT COMMUNISTS ARE FLYING A DIFFERENT FLAG IN THE UKRAINE WAR



By John Helmer, Moscow
  @bears_with

The Ukraine war is splitting the communist parties of Europe between those taking the US side, and those on the Russian side.

In an unusual public criticism of the Greek Communist Party (KKE) and of smaller communist parties in Europe which have endorsed the Greek criticism of Russia for waging an “imperialist” war against the Ukraine, the Russian Communist Party (KPRF) has responded this week with a 3,300-word declaration:  “The military conflict in Ukraine,” the party said, “cannot be described as an imperialist war, as our comrades would argue. It is essentially a national liberation war of the people of Donbass. From Russia’s point of view it is a struggle against an external threat to national security and against Fascism.”

By contrast, the Russian communists have not bothered to send advice, or air public criticism of the Cypriot communists and their party, the Progressive Party of Working People (AKEL). On March 2, AKEL issued a communiqué “condemn[ing] Russia’s invasion of Ukraine and calls for an immediate ceasefire and the withdrawal of the Russian troops from Ukrainian territories….[and] stresses that the Russian Federation’s action in recognising the Donetsk and Luhansk regions constitutes a violation of the principle of the territorial integrity of states.”

 To the KPRF in Moscow the Cypriots are below contempt; the Greeks are a fraction above it.

A Greek-Cypriot veteran of Cypriot politics and unaffiliated academic explains: “The Cypriot communists do not allow themselves to suffer for what they profess to believe. Actually, they are a misnomer. They are the American party of the left in Cyprus, just as [President Nikos] Anastasiades is the American party of the right.” As for the Greek left, Alexis Tsipras of Syriza – with 85 seats of the Greek parliament’s 300, the leading party of the opposition – the KKE (with 15 seats), and Yanis Varoufakis of MeRA25 (9 seats), the source adds: “The communists are irrelevant in Europe and in the US, except in the very narrow context of Greek party politics.”

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IF IT SMELLS ALLURING, IT’S RUSSIAN – IN WARTIME L’ORÉAL (FRANCE) AND ESTÉE LAUDER (US) MAKE A BAD SMELL



By John Helmer, Moscow
  @bears_with

The war plan of the US and the European allies is destroying the Russian market for traditional French perfumes, the profits of the French and American conglomerates which own the best-known brands, the bonuses of their managers, and the dividends of their shareholders. The odour  of these losses is too strong for artificial fresheners.

Givaudan, the Swiss-based world leader in production and supply of fragrances, oils and other beauty product ingredients, has long regarded the Russian market as potentially its largest in Europe; it is one of the fastest growing contributors to Givaudan’s profit worldwide. In the recovery from the pandemic of Givaudan’s Fragrance and Beauty division – it accounts for almost half the company’s total sales — the group reported “excellent double-digit growth in 2021, demonstrating strong consumer demand for these product categories.”    Until this year, Givaudan reveals in its latest financial report, the growth rate for Russian demand was double-digit – much faster than the  6.3% sales growth in Europe overall; faster growth than in Germany, Belgium and Spain.    

Between February 2014, when the coup in Kiev started the US war against Russia, and last December, when the Russian non-aggression treaties with the US and NATO were rejected,   Givaudan’s share price jumped three and a half times – from 1,380 Swiss francs to 4,792 francs; from a company with a market capitalisation of 12.7 billion francs ($12.7 billion) to a value of 44.2 billion francs ($44.2 billion). Since the fighting began in eastern Ukraine this year until now, Givaudan has lost 24% of that value – that’s $10 billion.  

The largest of Givaudan’s shareholders is Bill Gates. With his 14%, plus the 10% controlled by Black Rock of New York and MFS of Boston, the US has effective control over the company.

Now, according to the US war sanctions, trade with Russia and the required payment systems have been closed down, alongside the bans on the importation of the leading European perfumes. So in place of the French perfumers, instead of Givaudan, the Russian industry is reorganizing for its future growth with its own perfume brands manufactured from raw materials produced in Crimea and other regions, or supplied by India and China. Givaudan, L’Oréal (Lancome, Yves Saint Laurent), Kering (Balenciaga, Gucci), LVMH (Dior, Guerlain, Givenchy), Chanel, Estée Lauder, Clarins – they have all cut off their noses to spite the Russian face.

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THE WAR AGAINST FOOD – WHO IS TO BLAME



By Nikolai Storozhenko, introduced and translated by John Helmer, Moscow
  @bears_with

This week President Joseph Biden stopped at an Illinois farm to say he’s going to help the  Ukraine ship 20 million tonnes of wheat and corn out of storage into export, thereby relieving  grain shortages in the international markets and lowering bread prices around the world.  Biden was trying to play a hand in which his cards have already been clipped. By Biden.  

The first Washington-Kiev war plan for eastern Ukraine has already lost about 40% of the Ukrainian wheat fields, 50% of the barley, and all of the grain export ports. Their second war plan to hold the western region defence lines with mobile armour, tanks, and artillery  now risks the loss of the corn and rapeseed crop as well as the export route for trucks to Romania and Moldova. What will be saved in western Ukraine will be unable to grow enough to feed its own people. They will be forced to import US wheat, as well as US guns and the money to pay for both.

Biden told his audience that on the Delaware farms he used to represent in the US Senate “there are more chickens than there are Americans.”  Blaming the Russians is the other card Biden has left.  

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EXILE



By John Helmer, Moscow
  @bears_with

The problem with living in exile is the meaning of the word. If you’re in exile, you mean you are forever looking backwards, in geography as well as in time. You’re not only out of place; you’re out of time — yesterday’s man.

Ovid, the Roman poet who was sent into exile from Rome by Caesar Augustus, for offences neither Augustus nor Ovid revealed, never stopped looking back to Rome. His exile, as Ovid described it, was “a barbarous coast, inured to rapine/stalked ever by bloodshed, murder, war.” In such a place or state, he said, “writing a poem you can read to no one is like dancing in the dark.”

The word itself, exsilium in Roman law, was the sentence of loss of citizenship as an alternative to loss of life, capital punishment. It meant being compelled to live outside Rome at a location decided by the emperor. The penalty took several degrees of isolation and severity. In Ovid’s case, he was ordered by Augustus to be shipped to the northeastern limit of the Roman empire,  the Black Sea town called Tomis; it is now Constanta, Romania. Ovid’s last books, Tristia (“Sorrows”) and Epistulae ex Ponto (“Black Sea Letters”), were written from this exile, which began when he was 50 years old, in 8 AD, and ended when he died in Tomis nine years year later, in 17 AD.  

In my case I’ve been driven into exile more than once. The current one is lasting the longest. This is the one from Moscow, which began with my expulsion by the Foreign Ministry on September 28, 2010.  The official sentence is Article 27(1) of the law No. 114-FZ — “necessary for the purposes of defence capability or security of the state, or public order, or protection of health of the population.” The reason, a foreign ministry official told an immigration service official when they didn’t know they were being overheard, was: “Helmer writes bad things about Russia.”

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IN THE FOG OF WAR THERE’S THE GUTERRES CERTAINTY AND THE CADIEU CERTAINTY – GORILLA RADIO SEES THROUGH THE COVER-UP



By John Helmer, Moscow
  @bears_with

Antonio Guterres is the Secretary-General of the United Nations (UN), who attempted last month  to arrange the escape from Russian capture of Ukrainian soldiers and NATO commanders,  knowing they had committed war crimes. He was asked to explain; he refuses.   

Trevor Cadieu is a Canadian lieutenant-general who was appointed the chief of staff and head of the Canadian Armed Forces last August; was stopped in September; retired from the Army this past April, and went to the Ukraine, where he is in hiding. From whom he is hiding – Canadians or Russians – where he is hiding, and what he will say to explain are questions Cadieu isn’t answering, yet.

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DID UN SECRETARY-GENERAL GUTERRES COMMIT A WAR CRIME AT AZOVSTAL?

By John Helmer, Moscow
  @bears_with

Antonio Guterres, the United Nations Secretary-General, is refusing this week to answer questions on the role he played in the recent attempt by US, British, Canadian and other foreign combatants to escape the bunkers under the Azovstal plant, using the human shield of civilians trying to evacuate.

In Guterres’s meeting with President Vladimir Putin at the Kremlin on April 26 (lead image), Putin warned Guterres he had been “misled” in his efforts. “The simplest thing”, Putin told Guterres in the recorded part of their meeting, “for military personnel or members of the nationalist battalions is to release the civilians. It is a crime to keep civilians, if there are any there, as human shields.”  

This war crime has been recognized since 1977 by the UN in Protocol 1 of the Geneva Convention.  In US law for US soldiers and state officials, planning to employ or actually using human shields is a war crime to be prosecuted under 10 US Code Section 950t.  

Instead, Guterres ignored the Kremlin warning and the war crime law, and authorized UN officials, together with Red Cross officials,  to conceal what Guterres himself knew of the foreign military group trying to escape. Overnight from New York, Guterres has refused to say what he knew of the military escape operation, and what he had done to distinguish, or conceal the differences between the civilians and combatants in the evacuation plan over the weekend of April 30-May 1.May.

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THE LAST DITCH IS POLAND – RUSSIA’S PHASE-3 PLAN FOR WESTERN UKRAINE



By Vlad Shlepchenko, introduced & translated by John Helmer, Moscow
  @bears_with

The more western politicians announce pledges of fresh weapons for the Ukraine, the more Russian military analysts explain what options their official sources are considering to destroy the arms before they reach the eastern front, and to neutralize Poland’s role as the NATO  hub for resupply and reinforcement of the last-ditch holdout of western Ukraine.

“I would like to note,” Defense Minister Sergei Shoigu, repeated yesterday, “that any transport of the North Atlantic Alliance that arrived on the territory of the country with weapons or material means for the needs of the Ukrainian armed forces is considered by us as a legitimate target for destruction”.  He means the Ukraine border is the red line.

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THE MATLIN PLOT, THE BROWDER PLOT AND THE NEW YORK TIMES PLOT



By Lucy Komisar,  New York*
  @bears_with

Here’s a story the New York Times has just missed.

US politicians and media pundits are promoting the targeting of “enablers” of Russian oligarchs who stash their money in offshore accounts. A Times article of March 11   highlighted Michael Matlin, CEO of Concord Management as such an “enabler.” But the newspaper missed serious corruption Matlin was involved in. Maybe that’s because Matlin cheated Russia, and also because the Matlin story exposes the William Browder/Sergei Magnitsky hoax aimed at Russia.

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YELLOW COAL, THE FUEL MADE OUT OF RACE HATRED — MAY DAY MESSAGE FROM SIGIZMUND KRZHIZHANOVSKY, 1939



By John Helmer, Moscow
  @bears_with

In 1939 a little known writer in Moscow named Sigizmund Khrzhizhanovsky published his idea that the Americans, then the Germans would convert human hatred into a new source of energy powering everything which had been dependent until then on coal, gas, and oil.

Called yellow coal, this invention originated with Professor Leker at Harvard University. It was applied, first to running municipal trams, then to army weapons, and finally to cheap electrification of everything from domestic homes and office buildings to factory production lines. In Russian leker means a quack doctor.

The Harvard professor’s idea was to concentrate the neuro-muscular energy people produce when they hate each other.  Generated as bile (yellow), accumulated and concentrated into kinetic spite in machines called myeloabsorberators, Krzhizhanovsky called this globalization process the bilification of society.

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IS CAESARISM THE PROBLEM, THE SOLUTION, A FANCY DRESS COSTUME, OR A PROPAGANDA CARTOON?



By John Helmer, Moscow
  @bears_with

In imperial history there is nothing new in cases of dementia in rulers attracting homicidal psychopaths to replace them.  It’s as natural as honey attracts bees.

When US President Woodrow Wilson was incapacitated by a stroke on October 19, 1919, he was partially paralysed and blinded, and was no longer able to feed himself, sign his name, or speak normally; he was not demented.

While his wife and the Navy officer  who was his personal physician concealed his condition, there is no evidence that either Edith Wilson or Admiral Cary Grayson were themselves clinical cases of disability, delusion,  or derangement. They were simply liars driven by the ambition to hold on to the power of the president’s office and deceive everyone who got in their way.  

The White House is always full of people like that. The 25th Amendment to the US Constitution is meant to put a damper on their homicidal tendencies.

What is unusual, probably exceptional in the current case of President Joseph Biden, not to mention the history of the United States,  is the extent of the president’s personal incapacitation; combined with the clinical evidence of psychopathology in his Secretary of State Antony Blinken;  and the delusional condition of the rivals to replace Biden, including Donald Trump and Hillary Clinton.

Like Rome during the first century AD, Washington is now in the ailing emperor-homicidal legionary phase.  But give it another century or two, and the madness, bloodshed, and lies of the characters of the moment won’t matter quite as much as their images on display in the museums of their successors craving legitimacy, or of successor powers celebrating their superiority.  

Exactly this has happened to the original Caesars, as a new book by Mary Beard, a Cambridge University professor of classics, explains. The biggest point of her book, she says, is “dynastic succession” – not only of the original Romans but of those modern rulers who acquired the Roman portraits in marble and later copies in paint, and the copies of those copies, with the idea of communicating “the idea of the direct transfer of power from ancient Romans to Franks and on to later German rulers.”

In the case she narrates of the most famous English owner of a series of the “Twelve Caesars”, King Charles I — instigator of the civil war of 1642-51 and the loser of both the war and his head – the display of his Caesars was intended to demonstrate the king’s self-serving “missing link” between his one-man rule and the ancient Romans who murdered their way to rule, and then apotheosized into immortal gods in what they hoped would be a natural death on a comfortable bed.

With the American and Russian successions due to take place in Washington and Moscow in two years’ time, Beard’s “Twelve Caesars, Images of Power from the Ancient World to the Modern”,  is just the ticket from now to then.

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