SOVCOMFLOT SURFS ON A WAVE OF CASH

By John Helmer, Moscow 
  @bears_with

Sovcomflot, Russia’s dominant shipping company and (next to the Chinese) the world’s most valuable energy tanker fleet, announced yesterday that in 2020 its earnings had risen almost 10%, and its profit jumped by over 18%.

However, the stock market is decidedly unimpressed. On the Moscow Stock Exchange, where Sovcomflot shares have been listed since last October, the share price moved up by less than half of one percent on a tiny volume of transactions.   

At its new price of Rb91.12 ($1.24), the market is telling the shipping company it is worth 13% less than the company claimed six months ago, when it issued its share prospectus at Rb105.

Worse yet may materialise in April, when the lock-up period expires for the anchor shareholders; they committed themselves to buying at Rb105 on October 7 and to waiting six months before selling out. At least one of them won’t do that, though. That’s OOO SCF Arctic, a Sovcomflot subsidiary holding part of the tanker fleet. In order to support the planned privatisation of Sovcomflot shares at the target share price, SCF Arctic promised to buy a block of shares from the share-sale bankers if they didn’t want them; that cost the shipping company $47.2 million.

In other words, Sovcomflot was an anchor investor in itself. The state sovereign investor, Russian Direct Investment Fund (RDIF), was the biggest of the other anchors. With state support like this, Moscow market analysts say they aren’t surprised at the lack of commercial investor demand.  “The privatisation was a propaganda exercise”, comments a London shipping expert. “There is a problem in the reporting of Russian companies – the truthful part disguises lots of faking.”

The initial public offering (IPO) last October failed, says Pavel Gavrilov, a stock analyst with BCS Express in Moscow. “Technical difficulties, lack of information, the speculative component, and other factors” were to blame.

Yesterday, Sovcomflot’s chief executive Igor Tonkovidov said that “with swings in global oil demand causing extreme volatility across energy markets, SCF [Sovcomflot] Group has demonstrated resilience to such turbulence and has produced further increase in its key operational and financial metrics.”

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END OF STRING FOR RUSSIAN YO-YO LOAN FRAUD — ILYA YUROV CONVICTED IN LONDON COURT OF STEALING $1.1 BILLION FROM NATIONAL BANK TRUST

by John Helmer, Moscow
  @bears_with

The English read detective stories for the pleasure of unravelling the crime,  proving that even if there are perfect crimes, in the majority of cases the perpetrators don’t get away with them because the detectives are usually cleverer. That’s fiction.

In real life,  Russian crimes are different. In the majority of cases, including less than perfect crimes involving vast sums of money, the majority of the perps get away with them; live richly  in the UK, Tuscany, or on the Cote d’Azur; and enjoy promotional publicity in the Financial Times. In the cases of Mikhail Khodorkovsky and William Browder they have become so famous for their lying, it’s a devil of a job for the truth to prevail against their fictions.

In the minority of Russian cases, the judgements of the High Court in London are thrillers, though complicated in the reading. In the majority of these judgements, the guilty are convicted, and the innocent vindicated.  But that’s a majority of a minority. A rarity in the library of true Russian crimes.

There have been many Russian yo-yo loan schemes since commercial banking began in Moscow just under thirty years ago. The modus operandi is that the controlling shareholder arranges for his bank to make large loans to offshore companies he invents and controls; passes the money from these fronts on to other fronts,  and then into his pockets. His plan from the start is not to repay the loans; the borrowing fronts have no security for their loans when the bank demands repayment, and there’s no cash. That’s the big crime.

The scheme requires dozens of fake entities, thousands of transactions, more than a handful of banks, and accomplices to manage the operations. Because they are in the know, they have to be paid well. They, too,  grow rich.  They commit the smaller crimes and compound the big one. Even if the big criminal is caught, and his underlings at the Russian end sent to prison until they inculpate their bosses, the offshore managers and fixers – those who keep the yo-yo revolving and the string from breaking – usually get away.

In the case of National Bank Trust versus Ilya Yurov (lead image), his partners and their wives, the High Court published its whodunit last week. The story can be followed from the start in 2015 in this archive;  Khodorkovsky makes several crooked cameo appearances. A British national named Benedict Worsley, the most important of Yurov’s managers,  changed sides when the yo-yo turned into a boomerang. To save himself, he agreed to take more money from the bank to assemble the evidence in the court case against the defendants. In the new court judgement, he reportedly switched sides again before the trial opened on October 1, 2018.  Neither side wanted to call him to testify because they all agreed he was a liar. The Worsley tale can be followed here. In the High Court judgement, Worsley is named 733 times. “It would appear that he was something of a fantasist and prone to exaggerate,” the judge ruled, “and that he was prepared to act dishonestly…”

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SERGEI FRANK LOSES HIS FOOTING AT STATE TANKER COMPANY SOVCOMFLOT

By John Helmer, Moscow
  @bears_with

Sergei Frank (lead image, right) is being removed from control of Sovcomflot, the Russian state tanker company and one of the largest oil and gas transporters in the world.  Frank is the only senior Russian state official to have been judged by the British courts to be dishonest and vindictive in litigation; to have perjured himself in courtroom testimony; and to have obstructed justice by a scheme of evidence fabrication against former Sovcomflot executives and partners.

Frank’s removal has yet to be confirmed officially; Sovcomflot is making no comments. The chief executive who has dominated the company for almost fifteen years appeared to be fully in charge at the July 24 board meeting. (more…)

GLEB FRANK HAS A BAD CASE OF THE CRABS – FATHER SERGEI FRANK, FATHER-IN-LAW GENNADY TIMCHENKO TOO

By John Helmer, Moscow

In crowded city life, crabs – plural – meant an invasion of lice into warm body parts covered by hair. For readers who are virgins or who have had Brazilian waxing and can’t imagine running into the crabs, the illustration shows the little fellows in the hair of the head. In fact, a case of the crabs usually meant the pubic hair. Rubbing intimately was the way you got the crabs.

Gleb Frank (lead image, left), owner of the Russian Fishery Company, his father Sergei Frank (centre), chief executive of the state shipping company Sovcomflot, and Gennady Timchenko (right), Gleb’s father-in-law, financier of his businesses, and candidate to take over Sovcomflot when it’s privatized, have been rubbing each other intimately. They know where the crabs are and how to catch them.  That’s because they are planning to create an oligopoly of the Russian crab industry, and dominate the Russian crab trade with the United States. That is, if the US Government, in defence of its crab fishermen, doesn’t  hit the two Franks with the same sanctions as have already been imposed on Timchenko because of Timchenko’s other association; that’s with President Vladimir Putin. He discussed the Frank crab-catching plan in a Kremlin meeting on December 14 last year.   

In the newest version of the US sanctions law against Russia, introduced in the US Senate on February 13,  Gleb Frank, Sergei Frank and Sovcomflot are potential targets, not only because they are “family members of persons [“political figures, oligarchs, and other persons that facilitate illicit and corrupt activities, directly or indirectly, on behalf of the President of the Russian Federation, Vladimir Putin”] that derive significant benefits from such illicit and corrupt activities”;  but also because they are “entities operating in the shipbuilding sector of the Russian Federation.” (more…)

PUTIN’S TEA CEREMONY FOR THE OLIGARCHS TURNS TOXIC

By John Helmer, Moscow

In the US war for regime change in Russia, the Christmas dinner for the oligarchs was President Vladimir Putin’s idea in 2014 for demonstrating that he was in command of their loyalty for a price  the oligarchs were afraid to test.

Late last month, the dinner was turned into an afternoon tea ceremony in which the oligarchs confirmed for Putin the price he must pay if he isn’t to lose them to the other side. Mikhail Fridman and his Alfa Bank, Vimpelcom and X5 supermarket group demonstrated which side they believe to be strongest in this war by not attending. Their absence shows they calculate the risk of Kremlin sanctions for their business is now zero.

The absence of Arkady Volozh, controlling shareholder of Yandex, the internet services company, reveals the same calculation.

The presence of Anatoly Chubais, head of Rusnano, the state’s high-technology holding, the most pro-American of the oligarchs and one of the most hated of political names in the country,   reflects the calculation  on Putin’s side that there is now no oligarch price the President can risk not to pay.  (more…)

DWARFS ON THE SHOULDERS OF GIANTS — ALEXANDER VINOKUROV RAIDS MAGNIT SUPERMARKET WITH HELP FROM SERGEI LAVROV AND OTHERS

By John Helmer, Moscow

The collapse of stock market confidence in Magnit, the largest and most valuable Russian retailer in the domestic and London stock markets, has triggered widespread speculation that Sergei Galitsky, 50, the founder and control shareholder of Magnit since 1998, was attacked by corporate raiders led by Andrei Kostin, head of the state VTB Bank, and Alexander Vinokurov (lead image, above), son-in-law of Russian Foreign Minister Sergei Lavrov (below) and business associate of Mikhail Fridman, owner of X5, the second supermarket retailer in Russia and Magnit’s biggest competitor.

As a two-step plan of takeover, the exit of Galitsky (born Arutyunian) and the takeover by VTB and Vinokurov, have been reported in the Russian press as the business deal of the year. But they are  unable to agree on why it has happened. A half-dozen reporters from Russia’s leading business media, who have covered the deal, and sixteen of the analysts they have quoted in their coverage, were asked to say if they knew of business conflicts Galitsky had been having; whether there was reason to believe that Kostin and Vinokurov had been acting in concert to oust Galitsky, drive the share price of Magnit down, and re-sell the asset to a potential competitor in the Russian retail market. Had there had been non-market reasons – asset raid in Russian — they were asked?

More than twenty sources in all, but not one of them agreed to answer the questions on the telephone or by email, notwithstanding promises of strict confidentiality. Their fear is infectious; their reaction is the strongest confirmation so far that Magnit is the target of an ongoing asset raid, which will hold down the value of the company’s shares no matter how much Russian consumer income and  market demand recover to lift Magnit’s financial results.   (more…)

SERGEI FRANK’S LOCKJAW CAUSES $113 MILLION IN RECORD LOSSES AT SOVCOMFLOT

By John Helmer, Moscow

Sovcomflot (SCF), the Russian state shipping company, has been obliged by its accountants Ernst & Young to declare $75.5 million in costs and expenses from court orders by British judges over a series of lawsuits initiated by Sovcomflot’s chief executive, Sergei Frank (lead image, left) thirteen years ago.  The money must be paid to Yury Nikitin,  a former chartering partner of Sovcomflot.  

The figure was released last week in Sovcomflot’s financial report for 2017. It does not include between $30 million and $50 million, which London sources estimate to have been Sovcomflot’s legal expenses and costs of compensating two other victims of Frank’s London litigation —  Dmitry Skarga, Sovcomflot’s chief executive before Frank’s takeover in 2004; and Tagir Izmaylov (Izmailov), chief executive of Novorossiysk Shipping Company (Novoship) before Frank forced a merger between Sovcomflot and Novoship. The charges,compensation and penalties which Sovcomflot has been ordered to pay stem from the rulings by High Court, Court of Appeal, and Supreme Court  judges that Frank was dishonest and vindictive in his claims against Nikitin, Skarga and Izmaylov.

Maritime analyst for Uralsib Bank in Moscow, Denis Vorchik, reported to clients this week the new financial accounting for the London litigation was the main reason for Sovcomflot to report a loss of  $113 million for 2017. (more…)

US GOVERNMENT RIDDLE: WHY ARE SO MANY DOGS NOT BARKING? BECAUSE THE CAATSA GOT THEIR TONGUES

By John Helmer, Moscow

As midnight tolled in Washington, DC, and January 29 slid into January 30, the deadline for the US Government to produce a report to the Congress listing Russian oligarchs close to President Vladimir Putin slipped by in the darkness. No dog barked.*

Required by the Countering America’s Adversaries Through Sanctions Act (CAATSA), enacted with President Donald Trump’s signature last August, the oligarch report was not produced on time. Nor were three other reports – one on sanctions for Russian sovereign debt issues, one on sanctions for business with the Russian defense sector, and one on the extent to which Russian state banks and state asset holdings have re-nationalized key sectors of the Russian economy, such as banking, insurance, real estate, and ports.     

There was no press release from the White House, the US Treasury, or the State Department. The  House Foreign Affairs Committee and the Senate Foreign Relations Committee, which are responsible for administering CAATSA, made no announcement of  what had happened, and  not happened. Despite a media blitz in advance of the deadline, anticipating the release of dozens of Russian oligarch names as potential targets for fresh US sanctions, not a single mainstream US newspaper or broadcaster reported the failure of the list to materialize.

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WE ARE BACK, AGAIN – JUST TWO YEARS TO GO BEFORE THE PROFESSION OF JOURNALISM DISAPPEARS, BUT WILL THE RUSSIAN OLIGARCHS GO FIRST?

By John Helmer, Moscow

Four years ago almost precisely, on January 12, 2014 – just before the Anglo-American war against Russia began in earnest — we reported that the Moscow School of Management at Skolkovo was publishing what it called  a market atlas of the jobs and professions which will be newly needed by the year 2020, and those to be needed no longer.

One of the new ones was what the Skolkovo atlas called a cyber-cleaner (кибердворник). This is a specialist in removing from the internet and all digital data archives whatever information someone pays to have cleaned or deleted entirely, and its substitution with what the specialist is paid to put there – fake news, kompromat, disinformation, PR, advertising, fraud.  One of the professions the cyber-cleaners will replace, according to the atlas, is journalism. (more…)

SANCTION FOR SERGEI FRANK – UK APPEALS COURT APPROVES $75 MILLION PENALTY FOR FAILURE OF 12-YEAR VENDETTA LAWSUIT

By John Helmer, Moscow

Sergei Frank, a former federal transport minister and chief executive of the state shipping company Sovcomflot since 2004, is unique among Russian state officials. He is the only one to have been adjudicated by a series of UK judges to have lied, been dishonest in evidence-gathering, and vindictive in his use of the courts against business rivals. 

This week in London, in a unanimous ruling by three judges of the Court of Appeal, Frank has been judged to have foolishly postponed the day of reckoning by unjustified criticism of his judges, and ordered to pay $75 million to a UK-based Russian shipowner. This puts an end to the 12-year vendetta which Frank has waged over allegations which this week’s ruling says were properly “dismissed because the transactions were not dishonest or in breach of trust”.

Frank is also unique among Russian state officials. Despite all the judgements against him, and the millions of dollars of penalties for his misjudgements which Sovcomflot has had to pay, he hasn’t been sacked. Not yet. (more…)

US SENATE STRIKES FOR RUSSIAN EQUALITY – THE OLIGARCHS TARGETED IN NEW SANCTIONS BILL

By John Helmer, Moscow

Not since the German government arranged for Vladimir Lenin to return to Russia, crossing German territory in a sealed train on April 16, 1917, has a foreign state at war with Russia done something as revolutionary as the US Senate did on June 15, 2017.  That is when, by a vote of 98 to 2, the senators  began the process of attacking the Russian oligarchs. They are the men who have dominated the Russian economy for more than twenty years, concentrating more national wealth in their  hands than can be found in any other major state in the world today. 

Unremarked by the senators themselves;  unreported by the American press;  and unnoticed, almost, in Russia, the new measure —  if adopted by the full Congress and signed into law by President Donald Trump —  will target the oligarchs’ lines of credit to international banks; the brokers,  repositories and clearinghouses of  their shares and bonds; their trade with the US and Europe; their US companies, bank accounts, boats on the high seas and homes abroad. If targeting the oligarchs is followed by formal sanctions, the aim will be to destroy their power at home and abroad. The Communist Party of the Russian Federation hasn’t contemplated this much. (more…)

THE CRIMINAL CASE OF SERGEI MASLOV – PROTÉGÉ OF GENNADY TIMCHENKO, BAD DEBTOR, OR FALL GUY?

By John Helmer, Moscow

When it happened eight months ago, the arrest of little known public works contractor Sergei Vladimirovich Maslov (lead image, right) made a sensational bang. The outcome, eight months later, is a silent ringing one; that’s ringing as in Russian telephone justice.  

At his palatial home at Arkhangelskoye, outside Moscow, on October 19, Maslov refused to let the police in, so they used sledge hammers on his front door before they took him away. A commercial television company chartered a helicopter to fly slowly over the mansion to film its tennis court, guest house, banya, servants’ quarters, garages and gardens. The cameras were invited in to film Maslov’s rooms and make an inventory of his closets, shoes, safes, as well as the objets d’art on the walls. His garage was opened to reveal several luxury autos. Pictures of Maslov’s motor yacht, berthed somewhere in Italy, surfaced in print

The message was that Maslov was very rich.  But the charge against him was that he was only slightly  crooked. He has been charged with defrauding a bank which had gone bust two years earlier of Rb1 billion ($16 million). Also arrested and charged was an accomplice, Vladimir Karamanov. He let the police into his home when they knocked; his face and possessions haven’t been displayed on television. The two men were flown by police to Rostov-on-Don; held on remand for a month; and then released in November to go home, purportedly under house arrest.

This week the Leninsky District Court of Rostov-on-Don  refuses to say if there is a continuing arrest order for either Maslov or his property; if a new hearing has been scheduled;  or if the prosecutors have dropped the case.  Lawyers for Maslov refuse to say what the status of the charges against Maslov are, or if there remains any case for him to answer. These are signals that whoever ordered the police into action last October has decided enough is enough.

Sources who know the players and their businesses agree Maslov was targeted by someone much richer and more powerful, who also sponsored the press coverage. The sources say Maslov’s recent business has been tied to Gennady Timchenko (lead image, left); so the sources are divided in their suspicion between Timchenko and his rival in the gas business, Igor Sechin, chief executive of Rosneft. According to one source, “either it was a pressure from Timchenko & Co. to extract money from Maslov, who pretended to be a Timchenko man and grabbed more than he was entitled to. Or it’s one of the battle fronts of the silent war between Sechin and Timchenko over new gas production and Novatek. To me, it looks like the first scenario. Timchenko initiated the arrest. Under pressure Maslov agreed to return money. Charges have been softened or dropped.”

This morning in Moscow Timchenko categorically denies both. (more…)

AFTER PRIVATIZATION, ALROSA INTRODUCES PIRATIZATION

By John Helmer, Moscow

Alrosa, the largest diamond miner in the world, and a public shareholding company listed on the Moscow Stock Exchange, has replaced its chief executive, Andrei Zharkov (lead image, left) , twelve months before his contract was due to expire.  On Monday the company refused to announce the change, or explain the reason. It refused even to disclose that Zharkov’s contract, which commenced on April 23, 2015, is for a three-year term ending in 2018. Nor has the company confirmed that Zharkov’s replacement is Sergei Ivanov Junior (right side, 1st) the 37-year old son of former Kremlin chief of staff, Sergei Ivanov (right side, 3rd).  

The official announcement of the switch was made by Prime Minister Dmitry Medvedev, when he called Ivanov Junior into his office on Monday afternoon. Medvedev told Ivanov “the Alrosa company is the world’s largest [in diamond mining] and has backbone value for our country, in particular for development of the Far East. Therefore, I would ask you to concentrate on this.  It is necessary to work actively according to all production and economic programs with the [federal] Government, with the Ministry of Finance, to build up a fully fledged relationship with the regional authorities because the company has unconditional value for the Republic of Sakha-Yakutia. You should put all these factors into the set of your priorities as the company’s chief executive.”

Even after the ceremony at the prime ministry and the signing of the government’s appointment paper for Ivanov, Alrosa management was in denial. By the next day the company website had not removed Zharkov from the chief executive’s page; there was no mention of Ivanov. According to Alrosa spokesman Andrei Ryabinnikov, speaking on Monday afternoon: “we do not comment on the details of the employment agreement with Mr. Zharkov. We report all new appointments in the company in special press releases.”

Sources close to Alrosa in Moscow and in diamond trade centres abroad believe Zharkov’s abrupt ouster was the outcome of a power play between former Finance Minister Alexei Kudrin, an economic advisor to the Kremlin, and Yury Trutnev, the deputy prime minister in charge of the Russian Far East.  For many years the dominant state official on the Alrosa board, Kudrin was defeated.  Trutnev, victorious, leaked first word of Zharkov’s replacement by Ivanov on February 27.

The sources also reveal that Zharkov, a long-time protégé of Kudrin and subordinate of the current finance minister Anton Siluanov (lead image, right centre) was removed for pushing too hard the share sell-off and cash collection schemes of the Finance Ministry, also touted by Kudrin.  The Sakha republic, where most of Alrosa’s mines are based, and which holds 25% of the company’s shares, opposed Zharkov, and got Trutnev to agree. Medvedev and President Vladimir Putin then decided that the man they could trust to satisfy the locals, but remain under their thumb, was Ivanov Junior.

 “This is piratization by the state,” explains a London source. “It makes nonsense of the privatization of Alrosa shares, of the 34% free float, of the governance rules of the company. It is simply state companies reverting to form – that’s Soviet form but with less control than in the Soviet days.  It’s now a gang of men wearing state uniforms feathering their nests.”   State piratization is so sensitive that noone inside Alrosa, and almost noone in the Russian diamond industry, will admit what is happening. (more…)

SERGEI FRANK ARRANGES PHANTOM PRIVATIZATION FOR STATE SHIPPING COMPANY SOVCOMFLOT

By John Helmer, Moscow

Sovcomflot, the wholly state owned shipping company, is to be privatized by the sale of 25% less one share on the Moscow stock exchange, the Minister of Economic Development Maxim Oreshkin said at the Sochi investment forum this week. The announcement, decided last month in the government’s privatization plan for 2017,  was made in an aside to reporters,  and Oreshkin allowed no questions.

After fifteen years of attempts to sell and list Sovcomflot shares on international stock exchanges, the reversion to Moscow is an immediate blow to the government’s plans, and to the management role of Sovcomflot’s chief executive, Sergei Frank (lead image, lower left). In the longer term, Russian shipping insiders believe, it is a potential opportunity for a personal takeover by Kremlin favourite and the dominant oil transportation oligarch, Gennady Timchenko (lower right). According to Moscow newspaper reports,  Oreshkin’s ministry has decided to sell another 50% stake in Sovcomflot by the year 2019, retaining for the state just 25% plus one share. Frank himself has been attempting a state-financed management buyout, and the state controlled oil company Surgutneftegas is also a contender. Read more

The company, whose Soviet-era name means “Modern Commercial Fleet”, has failed to secure western underwriters and approval from stock market regulators in London, New York, and elsewhere, for an open-market listing. Instead, the Russian state treasury is to collect the privatization cash target of Rb24 billion (currently $414 million) from a scheme financed by the Central Bank and state banks, Sberbank and VTB. “This is fake news,” commented a Moscow shipping insider.” Just like last year’s Rosneft share sale.”  (more…)

OLIGARCHS ON THE SKIDS* – PRESIDENT PUTIN GOES DOWN MARKET FOR CAPITAL RECEPTION – NEXT YEAR LABOUR UNION BOSSES

By John Helmer, Moscow

President Vladimir Putin hosted his annual supper for the largest holders of capital in Russia on Monday evening. Compared to his table in December 2015, he added 15 extra seats, and for the first time men of little capital have been invited. Representatives of small business and even one Moscow house builder with a reputation for destroying city heritage sites were seated too. With a first-time invitation to sit down  also came rehabilitation for Sergei Frank, chief executive of the state shipping company Sovcomflot, whose business practices have been judged by the British High Court, Court of Appeal, and Supreme Court to be dishonest

Putin’s address was shorter than usual. “Despite the unfavourable situation on the global markets and in the political sphere,” he said, “we have indeed seen changes for the better. We have succeeded in stabilising the situation in the economy. This is a clear and evident fact today. We need now to set in place a strategy for confident growth, and this is something we can achieve together. Of course, there are still many outstanding problems and many reasons for dissatisfaction. There is still much to change and improve in order to feel more confident. But at least we all agree what we need to do, how we need to do it, and what timeframe is realistic.” (more…)

FINALE OF THE SOVCOMPLOT – UK JUDGE DISMISSES APPEAL AGAINST $72 MILLION IN PENALTIES AND COSTS; REJECTS RUSSIAN BANK SURETY; ORDERS IMMEDIATE CASH DOWN-PAYMENT

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By John Helmer, Moscow

 It’s the job of the Dorchester doorman to know his hotel guests’ sins; cater to them discreetly; but  keep them under his top-hat, forever secret.

During more than a decade of Sergei Frank’s trips to London to direct High Court litigations against the men he succeeded at Sovcomflot, the Russian state shipping company, he could count on the discretion of the hotel doorman.  After the final ruling came down on Thursday, Frank, chief executive of Sovcomflot (lead image, right), can’t be sure that his humiliation by more than a dozen British judges will not now make him a laughingstock.

In a new 4-page judgement , Frank’s appeal against $72 million in compensation and costs to be paid to Sovcomflot’s ex-shipping partner, Yury Nikitin, has been dismissed, and he has been ordered to start paying immediately, with a down-payment of £1 million.

“There is no doubt,” ruled Sir Stephen Males, the presiding judge, “that, overall, the defendants [Nikitin’s companies] were the successful party. They obtained a judgment for US $59.8 million on the inquiry.” More than that, according to Males, the award of the costs of litigating should be paid to Nikitin, plus interest on further delays the shipping company takes. Not to do so, according to the judgement, “would fail to recognise the overall success which the defendants achieved.” (more…)

SOVCOMFLOT TO PAY $70 MILLION PENALTY FOR DISHONESTY — LONDON COURT ENDS 11-YEAR LITIGATION WITH COUP DE GRACE

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By John Helmer, Moscow

Sovcomflot, Russia’s state-owned shipping company and one of the largest oil and gas tanker operators in the world, has today been ordered by a London court to pay compensation of $70 million, plus legal costs, to Russian shipowner and Sovcomflot’s former charter partner, Yury Nikitin.

The penalty, imposed by Justice Sir Stephen Males of the High Court, has been imposed after the judge ruled that Sovcomflot’s chief executive, Sergei Frank (lead image) and his company, had fabricated evidence in the case, given dishonest testimony in court, and improperly frozen hundreds of millions of dollars of Nikitin’s funds for years. Frank and Sovcomflot were judged to have been more culpable than the court’s findings that Nikitin had been dishonest to win new vessel and tanker charter business.

In a judgement released on October 7, Males put an end to a sequence of court actions and appeals which commenced in 2005, and have subsequently gone through the High Court, the Court of Appeal, and the Supreme Court, and been reviewed by almost a dozen of the most senior judges on the British bench. The penalty puts a stop to eleven years of what one judge called Frank’s “vindictive claim”.
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SERGEI FRANK AND SOVCOMFLOT SUFFER FINAL DISGRACE – UK HIGH COURT ORDERS MULTI-MILLION DOLLAR COMPENSATION

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By John Helmer, Moscow

The Russian state shipping company Sovcomflot and its chief executive Sergei Frank (lead image, right) have been ordered to pay “tens of millions of dollars” in punitive compensation to exiled shipowner, Yury Nikitin (left). A UK High Court judgement late last month concluded a record 11-year litigation by condemning Frank’s dishonesty in fabricating evidence in the case, and freezing hundreds of millions of dollars of Nikitin’s funds. Frank and his Sovcomflot subordinates were judged to have been more culpable than the court’s findings that Nikitin had been dishonest in paying bribes to win new vessel and tanker charter business.

The High Court judgement, which has gone almost unreported in Moscow, was issued on August 26. The 40-page ruling by Justice Sir Stephen Males flatly contradicts international bond and share sale prospectuses which Sovcomflot has been circulating in international markets. The judgement may blackball Frank as unfit to manage or direct an internationally listed company in future.

“The potentially devastating consequences of a freezing order have often been recognised,” ruled Justice Males. “It is only just that those who obtain such orders to which they are not entitled, a fortiori when they are guilty of serious failures to disclose material facts and have pursued claims described by the trial judge as ‘obviously unsustainable’, should be ordered to provide appropriate compensation for losses suffered.”

“If the Kremlin still hopes to privatize Sovcomflot with the sale of shares to international investors,” commented a London investment banker, “it will have to replace Frank, and purge the company and the board of everyone responsible for the London case.”
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US LIFTS KREMLIN CAPITAL BLOCKADE — SOVCOMFLOT FLOATS $750 MILLION BOND, US BANKS SUBMERGE TIMCHENKO TAKEOVER RISK

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By John Helmer, Moscow

A Russian state bond for $750 million is such an obvious target, European bankers are asking why didn’t US government warfighters against Russia shoot down last month’s Sovcomflot issue. This followed by just four weeks the campaign by the US Treasury to stop US investment banks and the international security clearance companies, Euroclear and Clearstream, from trading the bond issued in May by Russian state bank, VTB.

Sovcomflot, Russia’s state-owned shipping company and one of the world largest oil tanker groups, successfully placed $750 million in 7-year bonds at 5.375% on June 23 . VTB and Sberbank were the Russian underwriters, J P Morgan and Citigroup were the American bank underwriters. Sovcomflot’s prospectus confirms its bond has been cleared to trade with all three global clearance agencies — Depository Trust Company (DTC) of New York, Euroclear of Brussels, and Clearstream of Luxemburg. Says a London bond trader: “The DTC is dominated by Citi, Morgan Stanley and J P Morgan. Euroclear is owned by J P Morgan. These Americans can hardly be sanctions busters unless the US Treasury has all of sudden decided to go soft on the Russian oil and gas business, and on Russians who have been on the sanctions lists for two years. Is the war petering out, like the Obama Administration?”
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RUSSIAN LAW ON INCOME AND ASSET DISCLOSURE HITS AND RUNS

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By John Helmer, Moscow

Disclosure by Russian officials of state companies of their annual incomes and property is required by Russian law. There are four exceptions. The first is when the officials required to disclose don’t want to. The second is when the prime ministry is persuaded to let them. The third is when the Kremlin is persuaded not to disagree. The fourth is when President Vladimir Putin says it’s up to Prime Minister Dmitry Medvedev to settle the matter.
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ST. HELENA ON EAST 75TH STREET — ABRAMOVICH MAKES A MOVE TO NEW YORK CITY

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By John Helmer, Moscow

Roman Abramovich has bought two houses, and is negotiating for at least one more, on East 75th Street in New York for about $70 million. The New York papers are reporting that Abramovich is planning to live there with his family because his wife prefers it for her work. Abramovich’s spokesman insisted yesterday that Abramovich’s “main residence is Moscow”.

So why is the well-known crony of President Vladimir Putin buying American assets which may be sequestered, the transactions reversed, his funds frozen or lost, by US Treasury sanctions and by the US Government’s campaign to oust Putin from office? Has Abramovich been offered a guarantee of asset protection from the Obama Administration if he is buying for the one individual the US Government wants to put in exile there – Putin himself?
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SERGEI FRANK DISMISSED BY THE HIGHEST UK COURT – ANOTHER $4 MILLION LOST ON VENGEANCE LITIGATION

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By John Helmer, Moscow

The Supreme Court, the final court of appeal in the UK, issued a rejection notice on November 10, denying the Sovcomflot subsidiary, Novoship, an appeal against its defeat in the Court of Appeal on more than $150 million in claims against former chartering partner, Yury Nikitin, and companies associated with him. A three-judge panel of the court ruled the Sovcomflot group’s “application does not raise an arguable point of law”. The court also penalized Sovcomflot and Novoship by ordering them to pay the legal costs of Nikitin against whom they have been litigating in London for a decade.
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MIKHAIL MARGELOV APPOINTED TO TRANSNEFT FOR “FOREIGN ECONOMIC ACTIVITY AND PUBLIC RELATIONS” – WHAT CAN BE RELATED NOW OF THE SECHIN-TIMCHENKO-TOKAREV ALLIANCE? MAKE THAT TRANSNEXT

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By John Helmer, Moscow

Former Federation Council Senator and the Kremlin’s troubleshooter for Africa and maritime piracy, Mikhail Margelov (image left) has been appointed a vice president of Transneft, the state oil pipeline company. The October 29 announcement says Margelov “will be responsible for supervision of foreign economic activity and public relations.” Igor Dyomin, the press spokesman for Transneft’s chief executive, Nikolai Tokarev (right), said there will be no other personnel changes. “Why ? If everyone works efficiently? There is no plan of major reforms after Margelov has come into the company.”
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SOVCOMFLOT LOSES ANOTHER UK COURT APPEAL, LOSES COSTS

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By John Helmer, Moscow

The British Court of Appeal has issued a ruling to deny the Sovcomflot group and its Novoship subsidiary the right to appeal a corruption judgement to the Supreme Court, the highest of the British courts. The judgement puts an end to nine years of attempts by Sovcomflot group chief executive Sergei Frank and Russian government officials to have the British courts convict Yury Nikitin, their former chartering partner, of bribery and corrupt profiteering in the business of shipping oil.
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UK COURT OF APPEAL SPRINGS SURPRISE ON SERGEI FRANK IN THE SOVCOMFLOT SAGA — YURY NIKITIN KEEPS $169.4 MILLION IN PROFITS, PURSUES $180 MILLION COUNTER CLAIM

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By John Helmer, Moscow

In a unanimous three-judge ruling issued on Friday, the UK Court of Appeal has rejected a claim from Novoship, the state shipping company which is part of the Sovcomflot group, for recovery of more than $243 million in profits and interest. Novoship had claimed the money was earned corruptly by vessel charterer, Yury Nikitin. The court upheld Nikitin’s appeal, overruling a High Court judgement of December 2012, and decided that Nikitin’s profits had been earned honestly.

In a judgement written for the appellate court by Lord Justice Sir Andrew Longmore, the court upheld an order for Nikitin to pay $410,304.39. That amount, Nikitin’s lawyers say, had been offered at the start of the court case, but refused. According to Mike Lax, Nikitin’s solicitor, “as soon as Novoship alleged that the money was tainted, Mr Nikitin offered to repay it, even though he did know the background. We made a Part 36 offer to this effect at the commencement of the litigation which was not accepted by Novoship. Since Novoship have done no better than the offer we made from the outset, it is likely that Novoship will also have to pay most of our costs and their own costs of the litigation.”
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WHO IS EMPLOYING THE DECOY TO BLAST FYODOR ANDREYEV? LEV LEVIEV SAYS IT ISN’T HIM. WHAT DID THE ALROSA CHIEF EXECUTIVE DO TO DESERVE YURY TRUTNEV’S SHOT?

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By John Helmer, Moscow

Diamonds are a bit like champagne: even in the worst of times, demand can grow among consumers, and for producers, sales revenues and profits too.

Good news isn’t usually the honey which attracts this particular bear; and Alrosa has been producing plenty of it. Released early this month, the company’s financial report for 2013 and operational report for the first quarter of 2014 show that production of rough stones is up, with higher grades for each tonne of ore and higher volumes of ore out of the company’s newest mines. Rough diamond prices are rising, so sales revenues grew at 11% last year, and are forecast to accelerate to 16% this year. Compared to its major global rivals, Alrosa has been able to maintain its output at the minehead, while the others – De Beers, Rio Tinto — have retreated, and BHP Billiton has left the business altogether.
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ELENA TIMCHENKO AND KSENIA FRANK SHOW FRIENDSHIP FOR RUSSIA, AND SOMETHING ELSE

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By John Helmer, Moscow

Never let it be said that in Russia deeds done out of the goodness of the heart go unnoticed by the state. Nup. Not even when philanthropies are paid for with cash accumulated in violation of the state’s policy of deoffshorization. Nup, nup. There is even a special award minted by the Kremlin and intended to recognize the good which offshorizers do in friendship for Russia. Called the Order of Friendship, the ribbons are blue and black, colours which appear on no flag of any country in the world, and symbolize thereby the freedom of the blue sky and the black hole in which we are all obliged to dwell beneath.
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SOVCOMFLOT STILL IN THE RED

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By John Helmer, Moscow

Russia’s state-owned tanker company Sovcomflot has reported third-quarter and nine-month financial results showing that it continues to lose fleet operating revenues and run at a loss. In the nine months to September 30, the company says its time-charter equivalent (TCE) revenues were $657.2 million, down 1.6% on the same period of last year. Fleet operating costs were up by 7% to $284 million, primarily because of a jump in charter hire payments. On the bottom line, Sovcomflot says it ran a 9-month loss of $8.6 million; a year ago it was in the black at $42.5 million.
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LEAKED LETTER REVEALS SOVCOMFLOT DROPPED ITS CASE AGAINST CHIEF EXECUTIVE DMITRY SKARGA IN MOSCOW IN 2011, BUT KEPT ATTACKING HIM IN THE LONDON COURTS FOR THREE MORE YEARS — AND KEEPS ATTACKING IN MOSCOW

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By John Helmer, Moscow

New evidence has surfaced from the Russian state shipping company Sovcomflot showing that the current chief executive Sergei Frank ordered the company’s lawyers to continue their attempts to prosecute his predecessor Dmitry Skarga in the London and Moscow courts, while telling the General Prosecutor in Moscow they were dropping their case against him.

Last week Frank’s eight-year campaign against Skarga came to an end when the Supreme Court, the highest of the English courts, dismissed Sovcomflot’s application to appeal against two High Court judgements and one Court of Appeal judgement, all exonerating Skarga of Sovcomflot’s allegations, and requiring Sovcomflot to pay more than £8 million ($13 million) in compensation of his costs. The latest episode of that story was reported here.
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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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