RUSSIA AND MYANMAR – BALANCING ON A KNIFE’S EDGE

By John Helmer, Moscow 
  @bears_with

“The person attempting to travel two roads at once will get nowhere”. It’s a well-known Chinese maxim, especially in Myanmar (Burma), China’s backdoor to the Bay of Bengal, the Indian Ocean, and the Indian Navy’s forward defence line.    

Russia’s policy towards Myanmar since the military takeover on February 1 is a case of proving the maxim mistaken. Although experts and officials in Moscow won’t say so aloud, it’s possible for Russia to pursue one strategy with two tactics; three more like.

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THE CATHERINE PRINCIPLE FOR NEGOTIATING WITH THE TURKS – LET ARMS DO THE TALKING

by John Helmer, Moscow
  @bears_with

Between 11:30 Moscow time on Thursday and 14:00,  President Vladimir Putin spent two and a half hours talking with the Turkish President, Recep Tayyip Erdogan, with interpreters present but no one else, and including lunch and toilet breaks. The two presidents then spent three hours and twenty minutes in talks with delegations of their officials before appearing at 17:22 for another sixteen minutes in front of the press. The Turkish clock for the negotiations counted 5 hours 40 minutes; the Kremlin clock, six hours.

The outcome was a document entitled “Additional Protocol to the Memorandum on Stabilization of the Situation in the Idlib De-escalation Area”. This comprises an agreement of three paragraphs amounting to ten lines, and a preamble of four paragraphs repeating what professionals call boilerplate; that’s to say, points with which everyone agrees in principle, and no one in practice.

The difference between the amount of time and effort expended and the outcome isn’t between the mountain and the molehill. It is the result of the Russian side applying the brief script dictated to Putin by the Defence Minister Sergei Shoigu, the Foreign Minister Sergei Lavrov, and the General Staff led by General Valery Gersasimov,  and  confirmed the day before by the Security Council.

The script is dictated by the principle of the tsarina, Empress Catherine II, during the Turkish-Russian wars of 1768 to 1792. The principle is that nothing the Turks say they agree to or sign  can be relied upon; and that everything the Turks can’t achieve with their army will be tested again and again, until and unless they are defeated by the battle of arms and the defence of territory by more force than the Turks can overcome. The corollary of the Catherine principle is that the new agreement between Putin and Erdogan cannot last for long. Because both sides know this, their heads were in the down position, their eyes averted, for longer than has ever been recorded at their summit meetings before.  

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RICHARD SORGE HONOURED BY THE RUSSIAN DEFENCE MINISTER AT TOKYO GRAVE

By John Helmer, Moscow

For the first time since the execution of Richard Sorge in Sugamo prison, Tokyo, on November 7, 1944, the highest representative of the Red Army and of the Russian Defence Ministry has made an official visit of tribute at his grave. 

Sergei Shoigu (lead picture, right), General of the Army and Minister of Defence, visited Sorge’s grave (left) on Wednesday, May 29.  Also taking the salute were senior Russian military officers and Russia’s Ambassador to Japan, Mikhail Galuzin. Shoigu was on an official visit to Tokyo this week for meetings with the Japanese Defence Minister, Takeshi Iwaya, and for a session with the foreign ministers, Sergei Lavrov and Taro Kono.

Not before in Japan has Sorge, one of the greatest agents of the Soviet military intelligence services, been honoured in this fashion by his country.  (more…)

RUSSIANS GO BANANAS IN PHILIPPINES, PROMISE INVESTMENT OF $600 MILLION

By John Helmer, Moscow

This is the Bangsamoro banana, and somebody is slipping on it.

On April 4 two young business partners, a Russian named Lev Dengov and a Turkmen, Merdan Gurbanov, with no known source of capital or past business record, signed an agreement to invest almost $600 million in the Bangsamoro region of the Philippines island of Mindanao. Their agreement commits them to creating one of the largest plantations on the island to grow bananas and pineapples for export;  the development of the regional  port of Polloc for storing and shipping the fruit; and the supply of Russian fertilizers to Filipino planters.

Presiding at the agreement signing was Emmanuel Piñol, the Agriculture Secretary and minister in charge in the Philippines Government. Two weeks later, Piñol publicized the extraordinary deal to the Russian press. Since then, however, he refuses to say how the deal was arranged; where the money will be coming from; and how the investment will be protected in an area which has been a battleground  between government forces and Islamic secession movements for the past fifty years.

Dengov and Gurbanov have also gone incommunicado, leaving behind them a trail of plans for corporate registrations around the world, a six-month old company on the register of UK Companies House;  and a prospectus for a $400 million investment in a self-service crypto-currency payment system in Russia and the CIS states.

Planters Products Incorporated (PPI), the Filipino fertilizer importer which signed in the deal with Piñol,  Dengov and Gurbanov, has cut off its telephone line; its executives don’t answer their emails.

Five of the leading banana importers to Russia, which source most of their fruit from Central and South America, won’t say what they know about the Bangsamoro Banana project, or even if they think a new scheme of importing bananas and pineapples from the Philippines might be commercially viable at any price. (more…)

INDIA AND PAKISTAN FIGHT — RUSSIA SITS ON THE FENCE

By John Helmer, Moscow

When India, one of Russia’s largest and longest-serving allies, was attacked by Pakistan in Kashmir since mid-February, the Kremlin sent condolences, expressed hope for a “prompt settlement”, and authorized Foreign Minister Sergei Lavrov to offer to mediate between the ally and its enemy.  “Russia is ready to offer a negotiating platform for India and Pakistan to settle relations”, Lavrov told the state news agency Tass. “If they want to,  of course.”  The display of Russian equanimity and neutrality between its Indian ally and Pakistan, long a US ally, has produced open anger in the Indian media; dismay among senior Indian politicians, civilian officials and military officers.

“Indians would not admit it,” comments an influential Indian in Moscow, “but there are signs that Putin is fence-sitting. Lavrov even proposed mediation. That would be like India proposing to mediate between Russia and Ukraine over Crimea. On the one hand, Lavrov says India and China will shape the new world order, but on the other,  he talks like a [US] State Department spokesman.”

For the India-Russia alliance, the question Indians ask is: if not now, then when? Russia’s other strategic allies – China, Syria, Cuba, Venezuela – ask the same thing.  (more…)

OLEG DERIPASKA PUFFS RUSAL SHARE VALUE FOR DEBT NEGOTIATION WITH SBERBANK, VTB – GERMAN GREF UNIMPRESSED, SHARE PRICE COLLAPSES

DwB_1649

By John Helmer, Moscow

Insiders at the Russian aluminium monopoly Rusal say that chief executive and control shareholder Oleg Deripaska has been miscalculating the effect of share price surges Rusal has enjoyed on the Hong Kong Stock Exchange in recent weeks. That’s because the share price gains have been quickly reversed – and because Rusal’s most important lender, state owned Sberbank, is unpersuaded that the value of the company is gaining.

Sources on the Hong Kong exchange acknowledge a case officer has been assigned to monitor share trading of Rusal, and that he has been aware of abnormal trade volumes on several days in February and March, along with seesawing in the price of the share. But the Exchange chief executive, Charles Li, is reluctant to confirm what the exchange has done to uncover what happened and enforce exchange trading rules. The exchange is also afraid of being accused of covering up irregular trading practice and inside information. According to Li’s spokesman, Scott Sapp, “HKEx does not comment on individual companies or its regulatory actions.” Sapp then asked not to be named.
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GENERAL GIAP, DESTROYER OF THE FORCE MULTIPLIER, VICTOR OVER TWO EMPIRES

giap

By John Helmer, Moscow

General Vo Nguyen Giap has died in Hanoi, aged 102.

There has been no general of his quality and achievement in modern times. He defeated the French and the Americans, and in two separate wars drove them as decisively out of Vietnam as Kutuzov drove Napoleon out of Russia. Giap, his army and people withstood more conventional bomb weight than was dropped on Germany, Italy and Japan, combined, during World War II. They survived the most massive chemical warfare campaign ever inflicted on earth – that’s the American one. They emerged victors from explosive force “100 times the combined impact of the Hiroshima and Nagasaki atomic bombs.”
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RUSAL SHAREHOLDER CRISIS — BARRY CHEUNG FORCED OFF RUSAL BOARD — MIKHAIL PROKHOROV DITHERS OVER REPLACEMENT — STATE BANKS REFUSE TO REVEAL HOW MANY SHARES THEY CAN VOTE AT SHAREHOLDERS’ MEETING

celebrate

By John Helmer, Moscow

The share price of United Company Rusal, the state-controlled Russian aluminium monopoly, lost 3% in value in Hong Kong Stock Exchange trading on Monday on news that Barry Cheung, a prominent Hong Kong businessman, had resigned from the Rusal board as his own business collapsed, and that he was the target of a Hong Kong police investigation for fraud.

When Rusal wanted to promote Cheung’s importance in Hong Kong, it trumpeted the news among the press releases on the company website. Thus, in March of 2012, Rusal announced that the company “congratulates its Chairman Mr Barry Cheung for a successful campaign which helped Mr Leung Chun-ying (“CY Leung”) win the office of Hong Kong’s fourth Chief Executive in yesterday’s election. Mr Leung’s five-year term will begin on July 1, 2012. Mr Leung’s winning was the culmination of a long and active campaign supported by a highly professional campaign office headed by Mr Cheung.” A few weeks later, following voting at the Annual General Meeting (AGM) of shareholders, another Rusal press release announced that Cheung had been re-elected to a second term, and that he had convened a meeting of the new board.
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ROMAN ABRAMOVICH FLIES INTO HONG KONG TO DISCUSS WHAT (RUSAL) BUSINESS WITH WHOM (ELSIE LEUNG)?

hk_scratcher

By John Helmer, Moscow

Roman Abramovich (left) landed in Hong Kong on Tuesday afternoon. Abramovich is an influential shareholder in Norilsk Nickel, Russia’s largest mining and metals company, on whose dividends the loss-making United Company Rusal now depends to stay out of the red. Rusal is the Russian aluminium monopoly, but Hong Kong is home to Rusal’s share listing, and its dwindling share price. According to the latest Rusal financial report, the company ran a $47 million loss in the quarter to March 31. Adding $99 million of its share of Norilsk Nickel’s profit put Rusal’s red line into the black by $52 million. But for the annual general meeting (AGM) of Rusal shareholders to consider such matters, Abramovich is 24 days early. The Rusal AGM is scheduled at the Grand Hyatt Hotel in Hong Kong, at 10 in the morning of June 14.

At this meeting, a director on the Rusal board, Elsie Leung Oi-Sie (right), is facing a vote of no-confidence. A parallel motion proposes her replacement by a Russian candidate, Dmitry Vasiliev. The moves have been initiated by the 15.8% shareholder bloc of Victor Vekselberg and Len Blavatnik for reasons reported here. They may be supported by Mikhail Prokhorov with his 17.02% of the Rusal shares; his spokesman said today it’s too early to announce how he will vote. If counted together, the vote against Leung may start with almost 33% of the shareholder votes. Another 10.03% of Rusal’s shares are classified as a public float, according to the company website. The largest part of that, 3.15%, was acquired at the initial public offering (IPO) by the state bailout bank, Vnesheconombank (VEB).
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REPLIES FROM ELSIE LEUNG

leung_without_monkeys

Hong Kong
May 17, 2013: 0850

Dear Mr. Helmer:

I have no wish to comment on whatever article you wished to write, but since you have put it to me and I have to disagree with you in many of the statements made, in particular:
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FIRING LINE FOR ELSIE LEUNG – INDEPENDENT NON-EXECUTIVE RUSAL DIRECTOR

leung

By John Helmer, Moscow

So far Elsie Leung Oi-Se has been paid $632,000 by United Company Rusal to listen attentively, read carefully, and speak her mind at meetings of the main board of directors, and also the audit committee of the board. Rusal titles her an independent non-executive director. She is one of five of those on the 18-member board; one of the 5-member audit committee. According to her company biography, she is a lawyer by training and career. She has also been a politician in the Hong Kong government, the equivalent of minister of justice.

First appointed to the Rusal board on November 30, 2009, when the company’s application to be listed on the Hong Kong Stock Exchange was running into difficulty, she was paid $16,000 for one month’s work. In 2010 she was paid $199,000; in 2011 $209,000; and in 2012, $208,000. She is the lowest paid of her peers, the other “independent non-executive” Rusal directors.
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THE MANGANESE REVOLUTION TO BRING BHP DOWN TO EARTH

By John Helmer, Moscow

It’s not a good time to be a steelmaker — not if you are in Russia, not if you are in China, and certainly not if you are in the US or the European Union. But if mining manganese, the vital steel-hardening alloy, is what you do for a living, the coming three years look likely to transform worldwide control, as Russians reach self-sufficiency in manganese supply for the first time; and as a prominent Ukrainian prepares to share a large corner of the global market with the Chinese.

The reason that manganese can prosper while steel is in the doldrums is because almost all of its application is to steelmaking; and because “manganese has no satisfactory substitute in its major applications”, as periodic US Geological Service reports point out.

The new Russian manganese supply is coming from the little-known Siberian Mining and Metallurgical Company (SGMK), controlled by Alexander Rybkin, a former executive of the Evraz steel group. Rybkin’s influence is provincial, limited to his partners – the Evraz group, which has first call on SGMK’s new manganese supplies for its Kemerovo steelmills at Novokuznetsk; and the governor of Kemerovo region, Aman Tuleyev. Until now they have made SGMK’s manganese a captive of Evraz’s demands.
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THE BOOTMAKER’S PRICK – JAPAN IS SUFFERING FROM A CASE OF ШИЛО В ЖОПЕ

By John Helmer, Moscow

In Russian, it’s called шило в жопе; literally, a bootmaker’s awl in the arse. In New York Yiddish, it’s shpilkes in tukhas, which is a bit gentler because the sharp instrument in the posterior is a needle. The meaning, in general and in the Japanese case, is a case of self-induced agitation from which acts of aggressive and misguided frustration are likely to follow.

Yesterday, the Japanese Foreign Ministry issued this announcement to the BBC: “Today, around 03:00 (06:00 GMT), military fighters belonging to Russian Federation breached our nation’s airspace above territorial waters off Rishiri island in Hokkaido.” There has been no comparable public announcement of an alleged Russian airspace penetration since 2008. This one comes a few days in advance of the visit to Washington of the new Japanese Prime Minister, Shinzo Abe. Forty-eight hours earlier, Japan’s Defence Minister, Itsunori Onodera, announced that on January 30 “something like fire-control radar was directed at a Japan Self-Defence Maritime escort ship in the East China Sea.” He claimed the reason for the delay between the radar signal and the public disclosure was the time required to determine that a Chinese fire-control radar had indeed locked on the Japanese vessel, and that Japanese officials, US advisors and others judged that publicity would be a good thing.
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RUSSIA WARNS THE SYRIAN OPPOSITION ALLIANCE NOT TO BITE THE BEAR’S SENSITIVE PARTS

By John Helmer, Moscow

In the Kremlin corridors under the new management, it is generally acknowledged that one of the stupidest things former President Dmitry Medvedev ever did was to order Russia’s representative on the UN Security Council to abstain from the vote and veto of the no-fly zone resolution aimed at the Muammar Qaddafi regime in Libya. That was on March 17, 2010. The Russian intelligence services already knew that US and British submarines were in place under the surface of the Mediterranean, ready to fire missiles to start a war that was intended to end in Qaddafi’s death. It did.
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SHADOW THEATRE – THE RUSAL PUPPET SHOW GOES EAST

By John Helmer, Moscow

Barry Cheung (second left), the new board chairman of United Company Rusal and the first non-Russian chairman of a Russian monopoly, is viewed by his countrymen and business peers as a technocrat, a politician, and a businessman, in that order.

The one business he reports in the curriculum vitae released by Rusal is the Bermuda-registered, Hong Kong-listed Titan Petrochemicals Group Limited. This company says it has concentrated on selling floating and land-based oil storage services for Chinese oil buyers, as well as bunker fuel for vessels, after dropping out of the business of oil trading in 2008. Cheung says he was chief executive officer between July 2004 and January 2008, and then vice chairman of the Titan board. A search of Titan’s annual reports from 2008 to 2011 reveals that Cheung was replaced as chief executive in 2007 and moved to deputy chairman of the board; but he resigned from that post in June 2008.
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HONG KONG STOCK EXCHANGE FAILS THE TRANSCONTAINER CRASH TEXT – RUSSIAN STATE GIVES GREEN LIGHT TO LONDON INSTEAD

By John Helmer in Moscow

Transcontainer, the state-owned Russian Railways box transport company, has revealed that it will not list shares in its initial public offering on the Hong Kong Stock Exchange.

The announcement confirms that for state-owned shares, the Kremlin sees little value, and considerable risk, in associating with the Hong Kong Exchange (HKEx). The Transcontainer IPO plan, which is being managed by JP Morgan and Morgan Stanley, also reveals that in the investment markets for Russian shares, Hong Kong is regarded as the market of last resort for Russian companies unable to meet the disclosure requirements, governance tests, and investor risks that prevail in London, New York, Paris, and Frankfurt.
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SAPIENCE VERSUS PORK — TOBY THE SAPIENT PIG HAS A HUNCH RUSAL’S SHARE SALE IS AN INSIDER DEAL BETWEEN THE KREMLIN, THE UNDERWRITERS, AND SOMEONE IN CHINA WHO IS HAVING TROUBLE WITH THE HONG KONG SECURITIES AND FUTURES ORDINANCE

By John Helmer in Moscow

Hong Kong Exchange executives and the Hong Kong stock market regulator appear to be cracking and splitting under the strain of a phantom share listing and sale for United Company Rusal, Russia’s aluminium monopoly and one of the world’s leading producers of bauxite, alumina and primary aluminium. Although anonymous sources insist in press leaks that Rusal’s listing application has been approved, the exchange and the Securities and Futures Commission of Hong Kong refuse to say this, or issue any of the notices, announcements, and public disclosures that are standard in such cases.
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AND THE WAGES OF SIN ARE… AUSTRALIAN COURT ORDERS $11 MILLION IN PENALTIES AND COSTS FOR KAZAKH MINING AND OIL PROJECT SKIMMING

By John Helmer in Moscow

To all junior miners, resource project developers, and investors in the risky wilds of Kazakhstan, be of good cheer — a Supreme Court judgement issued on December 11 in Sydney, Australia, has awarded the equivalent of US$11.4 million in compensation, penalties, and costs against a group of lawyers who have been found guilty of engaging in dishonest business practices.

Justice Clifford Einstein had ruled in October that the Kazakhstan-based law firm of Michael Wilson & Partners had been defrauded by three lawyers who had been employed by Wilson; and who had secretly moonlighted to earn fees and share bonuses for stock market listings and other transactions involving several major Kazakh resource projects — Sunkar Resources’s Chilisai phosphate project; Frontier Mining’s Benkala copper project; Roxi Petroleum; Max Petroleum; two other Central Asian mining projects, Urals Gold and Ablai; and four projects tied to these and other operators in the same region — Karamandybas (oil and gas), Ravninnoye (oil), Beibars Munai (oil), Lancaster, and Kangamiut (seafoods).
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ASK TOBY THE SAPIENT PIG – WHAT IS HAPPENING TO OLEG DERIPASKA? WHAT NEXT FOR RUSAL?

Relayed by John Helmer in Moscow

Question for Toby: has the Hong Kong Stock Exchange rejected the share listing application by United Company Rusal?

Toby’s answer: Affirmative grunt.

For at least two months the Hong Kong Stock Exchange and its listing division, and in parallel the state regulator, the Securities and Futures Commission (SFC) have been studying the proposal for listing and sale of shares by United Company Rusal, the first Russian company to attempt to list in the China market. Although the exchange and the commission don’t explain their action in individual cases, it is now plain that they could not agree to approve the listing in several sessions of the 28-member listing committee. The reports of their meetings – on November 19, 26, December 3 and 7 – have been cryptic, with anonymous sources claiming different reasons for deferral and inaction, until now the negative outcome is obvious.
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FLASH! HONG KONG EXCHANGE POSTPONES APPROVAL OF RUSAL SHARE SALE AGAIN — KREMLIN MAKES NEW OFFER TO BUY RUSAL SHARES IF NOONE ELSE WILL

By John Helmer in Moscow

In signals issued just ahead of today’s scheduled meeting of the Hong Kong Exchange Listing Committee, the committee announced a further postponement of its ruling on the Rusal application until December 7. The exchange has issued no public explanation. Media reports claim the reason is that the 28-member committee lacked the minimum required forum of 5 members to sit on the Rusal review. Earlier reports from the exchange had indicated that 8 members had been selected from the 28-member complement for the review. Today’s reports from Hong Kong suggest that 4 of these had dropped out for today’s meeting. The hint is that the applicant and its underwriters are being discreetly invited to take the initiative of withdrawing before next Monday, relieving the exchange of the responsibility of casting a vote on Rusal’s application. This option allows what one underwriter in London suggests as justification — market demand so late in the year is not sufficiently favourable for the share sale.
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THE 30 BILLION DOLLAR BITE – HOW BANKS OWED BIG MONEY BY RUSAL ARE POLISHING UP THE HONG KONG STOCK EXCHANGE SALE OF RUSAL SHARES

Put a little Hong Kong whitewash on your Rusal brush, and look at the difference it makes to your teeth…
 

Before After

By John Helmer in Moscow

A left turn and quick walk out of the Hong Kong Stock Exchange (HKEx) building on the waterfront in Central Hong Kong will take you to the ferry for Macau, where, in less than sixty minutes , you can be at the roulette wheel of the Sands Macau; and within a comparable interval you can gamble away a fortune. This Thursday, inside a closed meeting-room of the exchange, a handful of insiders will decide whether the HKEx intends to spin a wheel of its own, and offer a betting opportunity to a selected group of financial institutions. The HKEx wager is much bigger; the odds less chancy.
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GENGHIS JUNIOR MEETS HIS MATCH — KAZAKH MINING AND OIL PROJECTS SKIMMED BY KANGAROO LAWYERS

By John Helmer in Moscow

One celebration drink too many in Bar Vogue, in downtown Almaty, has turned out to leave a very bad taste for lawyers advising hard-rock mining and oil project start-ups in Kazakhstan.

In a 216-page judgement issued this month, after three years of litigation across half the globe, a group of Australian lawyers was found guilty of stealing clients from their employer, the Kazakhstan-based law firm of Michael Wilson (see left image) & Partners (MWP). The judge, Clifford Einstein, presiding in the New South Wales Supreme Court, ruled on October 6 that John Emmott, Robert Nicholls, and David Slater had conspired together to exploit their positions in MWP to breach their employment contracts and fiduciary duties to MWP by secretly creating a competing firm of their own, Temujin International, registered in the British Virgin Islands.
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THE RED SICKLE MAKES A COMEBACK — RUSSIAN WHEAT FLOW TO SHIFT TO FAREASTERN PORTS

By John Helmer in Moscow

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.
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COURT CASTS SHADOW OVER RUSAL LISTING

By John Helmer in Moscow

MOSCOW – It is the clash of the titans of the global nickel, aluminum, copper, bauxite, cobalt and platinum markets – Vladimir Potanin’s Norilsk Nickel, Russia’s largest mining company, versus Oleg Deripaska’s United Company Rusal, the world’s biggest aluminum producer.

Deripaska, Russia’s richest man, is seeking to take over Norilsk, but his campaign has run into an unprecedented series of international court rulings, blowing the whistle on his business tactics. Blackening reputations, a court in Britain has ruled, is a red-card offense – whether committed in Russia, England, Switzerland, West Africa or Central Asia.

Hong Kong’s market regulators are obliged to follow carefully, because Rusal has publicly said it may try to sell its at present unlisted shares on the Hong Kong market if it fails to gain admission to the London Stock Exchange. No significant Russian company has previously listed on the Hong Kong exchange (HKEx) while, with the exception of the HSBC and Standard Chartered banks, there are no large non-Chinese companies on the bourse that are also co-listed outside Asia.
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CHINA STUMBLES IN FORGING RUSSIA GAS DEALS

By John Helmer in Moscow

China is a power behind global commodity flows as well as prices. But Beijing has been slow to understand that it is the horse that pulls the cart; the whip hand belongs to the coachman.

Chinese negotiators have already made one colossal mistake in pricing their supply of liquefied natural gas (LNG). They are making a second in trying to draw out of Russia a discount for natural gas. For China to insist on tying Gazprom down to the extraction cost of Siberian gas – at a fraction of the price Gazprom sells its gas to Western Europe – is producing an impasse in current negotiations and slowing down Russia’s readiness to invest in the pipeline systems, on which Chinese calculations depend.

President Dmitry Medvedev visited China last month. Ahead of the visit, he was reported as cautioning that Russian plans to export natural gas to China were under way, but that “technological details are still being discussed” and “negotiations were ongoing to finalize the price formula of Russian gas supplies to Chinese consumers”.
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IMF BLOWS WHISTLE ON TAJIK CORRUPTION

By John Helmer in Moscow

The wind-chill factor this winter in Tajikistan has produced record low temperatures and uncounted miseries for a population struggling with inadequate electricity supply and failing heat. Tajik newborns have been reported as having died from hypothermia while in hospital wards.

But on March 5, a single whistle-blow from the International Monetary Fund (IMF) sent a chill through the one well-heated residence in the country. That’s the presidential palace of Emomali Rakhmonov (aka Rahmon), the head of the land-locked Central Asian country since 1992.

For the IMF revealed publicly for the first time, and at the level of the fund’s board of directors, that the National Bank of Tajikistan (NBT) and the Finance Ministry in Dushanbe have been fiddling the country’s accounts for several years, falsifying the flow of funds and concealing the disappearance of as yet uncounted millions of dollars of international loan funds.

On March 5, the “Executive Board of the International Monetary Fund (IMF) met today to review a report from the Managing Director on noncomplying disbursements to the Republic of Tajikistan and a breach of obligations under Article VIII, Section 5 of the IMF’s Articles of Agreement”.
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AFTERSHOCK OF NORD STREAM EXPLOSIONS RUMBLES WARSAW — POLISH POLITICIANS GO “NUTTERS”

By John Helmer, Moscow
  @bears_with

The Polish government in Warsaw, facing re-election in less than a year, wants all the credit from Washington for their joint operation to sabotage the Nord Stream gas pipelines on the Baltic seabed.

It also wants to intimidate the German chancellor in Berlin, and deter both American and German officials from plotting a takeover by the Polish opposition party, Civic Platform, next year.

Blaming the Russians for the attack is their cover story. Attacking anyone who doesn’t believe it, including Poles and Germans, Warsaw officials and their supporting media claim they are dupes or agents of Russian disinformation.

Their rivals, Civic Platform (PO) politicians trailing the PiS in the polls by seven percentage points,   want Polish voters to think that no credit for the Nord Stream attack should be earned by the ruling Law and Justice (PiS) party. They also want to divert  the Russian counter-attack from Warsaw to Washington.

“Thank you USA” was the first Polish political declaration tweeted hours after the blasts by Radoslaw Sikorski (lead image, left), the PO’s former defence and foreign minister, now a European Parliament deputy. In support and justification,  his old friend and PO ministerial colleague, Roman Giertych, warned Sikorski’s critics: “Would you nutters prefer that the Russians find us guilty?”

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THE BORNHOLM BLOW-UP REPEATS THE BORNHOLM BASH — POLAND ATTACKS GERMANY AND BLAMES RUSSIA

By John Helmer, Moscow
  @bears_with

The military operation on Monday night which fired munitions to blow holes in the Nord Stream I and Nord Stream II pipelines on the Baltic Sea floor, near Bornholm Island,  was executed by the Polish Navy and special forces.

It was aided by the Danish and Swedish military; planned and coordinated with US intelligence and technical support; and approved by the Polish Prime Minister Mateusz Morawiecki.

The operation is a repeat of the Bornholm Bash operation of April 2021, which attempted to sabotage Russian vessels laying the gas pipes, but ended in ignominious retreat by the Polish forces. That was a direct attack on Russia. This time the attack is targeting the Germans, especially the business and union lobby and the East German voters, with a scheme to blame Moscow for the troubles they already have — and their troubles to come with winter.

Morawiecki is bluffing. “It is a very strange coincidence,” he has announced, “that on the same day that the Baltic Gas Pipeline  opens, someone is most likely committing an act of sabotage. This shows what means the Russians can resort to in order to destabilize Europe. They are to blame for the very high gas prices”.   The truth bubbling up from the seabed at Bornholm is the opposite of what Morawiecki says.

But the political value to Morawiecki, already running for the Polish election in eleven months’ time, is his government’s claim to have solved all of Poland’s needs for gas and electricity through the winter — when he knows that won’t come true.  

Inaugurating the 21-year old Baltic Pipe project from the Norwegian and Danish gas networks, Morawiecki announced: “This gas pipeline is the end of the era of dependence on Russian gas. It is also a gas pipeline of security, sovereignty and freedom not only for Polish, but in the future, also for others…[Opposition Civic Platform leader Donald] Tusk’s government preferred Russian gas. They wanted to conclude a deal with the Russians even by 2045…thanks to the Baltic Pipe, extraction from Polish deposits,  LNG supply from the USA and Qatar, as well as interconnection with its neighbours, Poland is now secured in terms of gas supplies.”

Civic Platform’s former defence and foreign minister Radek Sikorski also celebrated the Bornholm Blow-up. “As we say in Polish, a small thing, but so much joy”.  “Thank you USA,” Sikorski added,   diverting the credit for the operation, away from domestic rival Morawiecki to President Joseph Biden; he had publicly threatened to sabotage the line in February.  Biden’s ambassador in Warsaw is also backing Sikorski’s Civic Platform party to replace  Morawiecki next year.  

The attack not only escalates the Polish election campaign. It also continues the Morawiecki government’s plan to attack Germany, first by reviving the reparations claim for the invasion and occupation of 1939-45;  and second, by targeting alleged German complicity, corruption,  and appeasement in the Russian scheme to rule Europe at Poland’s expense. .

“The appeasement policy towards Putin”, announced PISM, the official government think tank in Warsaw in June,  “is part of an American attempt to free itself from its obligations of maintaining peace in Europe. The bargain is that Americans will allow Putin to finish building the Nord Stream 2 pipeline in exchange for Putin’s commitment not use it to blackmail Eastern Europe. Sounds convincing? Sounds like something you heard before? It’s not without reason that Winston Churchill commented on the American decision-making process: ‘Americans can always be trusted to do the right thing, once all other possibilities have been exhausted.’ However, by pursuing such a policy now, the Biden administration takes even more responsibility for the security of Europe, including Ukraine, which is the stake for subsequent American mistakes.”

“Where does this place Poland? Almost 18 years ago the Federal Republic of Germany, our European ally, decided to prioritize its own business interests with Putin’s Russia over solidarity and cooperation with allies in Central Europe. It was a wrong decision to make and all Polish governments – regardless of political differences – communicated this clearly and forcefully to Berlin. But since Putin succeeded in corrupting the German elite and already decided to pay the price of infamy, ignoring the Polish objections was the only strategy Germany was left with.”

The explosions at Bornholm are the new Polish strike for war in Europe against Chancellor Olaf Scholz. So far the Chancellery in Berlin is silent, tellingly.

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LEMONS, MIMOSAS, AND STALIN’S SHOVEL

By John Helmer, Moscow
  @bears_with

The only Russian leader in a thousand years who was a genuine gardener and who allowed himself to be recorded with a shovel in his hand was Joseph Stalin (lead image, mid-1930s). Compared to Stalin, the honouring of the new British king Charles III as a gardener pales into imitativeness and pretension.   

Stalin cultivated lemon trees and flowering mimosas at his Gagra dacha  by the Black Sea in Abkhazia.  Growing mimosas (acacias) is tricky. No plantsman serving the monarchs in London or at Versailles has made a go of it in four hundred years. Even in the most favourable climates, mimosas – there are almost six hundred varieties of them — are short-lived. They can revive after bushfires; they can go into sudden death for no apparent reason. Russians know nothing of this – they love them for their blossom and scent, and give bouquets of them to celebrate the arrival of spring.

Stalin didn’t attempt the near-impossible, to grow lemons and other fruit in the Moscow climate. That was the sort of thing which the Kremlin noblemen did to impress the tsar and compete in conspicuous affluence with each other. At Kuskovo, now in the eastern district of Moscow, Count Pyotr Sheremetyev built a heated orangerie between 1761 and 1762, where he protected his lemons, pomegranates, peaches, olives, and almonds, baskets of which he would present in mid-winter to the Empress Catherine the Great and many others. The spade work was done by serfs. Sheremetyev beat the French king Louis XIV to the punch – his first orangerie at Versailles wasn’t built until 1763.

Stalin also had a dacha at Kuskovo But he cultivated his lemons and mimosas seventeen hundred  kilometres to the south where they reminded him of home in Georgia. Doing his own spade work wasn’t Stalin showing off, as Charles III does in his gardens, like Louis XIV before him. Stalin’s spade work was what he had done in his youth. It also illustrated his message – “I’m showing you how to work”, he would tell visitors surprised to see him with the shovel.  As to his mimosas, Stalin’s Abkhazian confidante, Akaki Mgeladze, claimed in his memoirs that Stalin intended them as another lesson. “How Muscovites love mimosas, they stand in queues for them” he reportedly told him.  “Think how to grow more to make the Muscovites happy!”

In the new war with the US and its allies in Europe, Stalin’s lessons of the shovel and the mimosas are being re-learned in conditions which Stalin never knew – how to fight the war for survival and at the same time keep everyone happy with flowers on the dining table.

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AND THEN THERE WERE NONE

By John Helmer, Moscow
  @bears_with

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.  

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RUSSIANS RAISE THEIR GLASSES – THE TOAST IS TO BEATING THE BLOCKADE OF MOSCOW



By John Helmer, Moscow
  @bears_with

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.  

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THE INTERNATIONAL ATOMIC ENERGY AGENCY GOES TO WAR — GORILLA RADIO GOES NUCLEAR

By John Helmer, Moscow
  @bears_with

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.

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INTERNATIONAL ATOMIC ENERGY AGENCY TAKES UKRAINE SIDE IN WAR IN SEPTEMBER 15 VOTE, MAKING UN SECRETARY-GENERAL GUTERRES EITHER A LIAR OR A FOOL

By John Helmer, Moscow
  @bears_with

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.  

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THE RUSSIAN SITUATION COMEDY IS NO LYING MATTER – THE JOKE IS ON THE OFFICE OF FOREIGN ASSETS CONTROL

By John Helmer, Moscow
  @bears_with

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 Blue Line (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.  

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RUSSIAN AVIATION INDUSTRY CORRECTS YELTSIN YAW – BOEING, AIRBUS DITCHED



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.

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FOR WANT OF A NAIL THE KINGDOM WAS LOST – ENGLISH PATHOLOGIST GUY RUTTY FACES CHALLENGE TO THE RELIABILITY OF HIS NOVICHOK EVIDENCE



By John Helmer, Moscow
  @bears_with

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.

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