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By John Helmer, Moscow

Mikhail Abyzov (lead image from 2014) was arrested yesterday on charges of embezzlement and fraud, and is in prison on remand. The case against Abyzov for theft of Rb4 billion ($62 million) from regional electricity companies is the most significant criminal case against a Russian figure so far this year. This is because Abyzov’s fate also threatens Anatoly Chubais, once the head of the state electricity utility, United Energy System (UES); and Prime Minister Dmitry Medvedev for whom Abyzov operated as a political financier and as Minister for Open Government.

“The President received the report [on the Abyzov case] in advance [of his arrest],”, Kremlin spokesman Dmitry Peskov has announced

Abyzov’s application for bail and the prosecutor’s motion for extension of his imprisonment will be considered in an arraignment hearing this morning in Moscow. The Bell, an offshore internet publication representing the US faction in Russian business, reports that Abyzov often travelled to Russia from one of his homes in the US and Italy,  and “did not suspect” he was under investigation. The Bell is reporting today that several others who worked with Chubais in the privatization of UES have already fled the country. 

At a press conference yesterday, a spokesman for the Investigative Committee of the Prosecutor-General outlined the charges covering some of Abyzov’s business activities between 2011 and 2014. He is alleged to have had five accomplices. “All stolen money was channeled abroad,” the spokesman said.  “The unlawful actions, committed by the accomplices, put at risk the sustainable development and energy security of some of the country’s regions.”

Abyzov’s lawyer has announced a not-guilty plea.   

The state news agency Tass also reports that the FSB is investigating “information suggesting that Abyzov, after being appointed minister for Open Government affairs, had an opportunity to control the operations of several companies and could be behind the withdrawal of multibillion loans from those companies, which were later channeled to offshore zones.”

Abyzov’s original get-very-rich scheme started when he was Chubais’s debt collector, converting debts owed to UES by regional energy companies  into shareholdings controlled by cut-out companies, off the UES books, and under the control of Abyzov and his associates. A lengthy study by Moisei Gelman, editor in chief of Promyshlennye Vedomosti, was published in April 2012, detailing evidence to substantiate the allegations. Gelman’s indictment of Abyzov stops at 2005. Gelman says he hasn’t investigated Abyzov’s activity since then. The privatization of electricity debt, Gelman alleged, involved bankruptcy and other asset raiding methods.  When UES was privatized itself, starting in 2006, Abyzov left. But he has continued to work indirectly, if not openly, with Chubais.  For the story, click to read.  

Anatoly Chubais (left) with Mikhail Abyzov; no date is available. For more details, read this report from April 2017.  

At his office at the state high-technology holding Rusnano, Chubais was asked to comment on Abyzov’s arrest. He refused.

President Dmitry Medvedev chairs meeting on February 8,  2012, with (left to right) Arkady Dvorkovich and Mikhail Abyzov, on Medvedev’s staff,  Sergei Ivanov, chief of the Kremlin staff

The fortune Abyzov made was also invested in the political campaigns of Dmitry Medvedev, first to remain as president past 2012, and since then to remain as prime minister. Medvedev’s  spokesman has declared Abyzov innocent of using Medvedev’s patronage or his government office for criminal enrichment of either of them. According to Oleg Osipov, press secretary to Medvedev, “as far as I understand, the [indictment] actions that are meant are not related to the discharge of official duties  of the Cabinet member of the previous government. It is known that his business partners brought claims against him. Probably, these claims should have been settled in a different fashion. At the same time, if it is proved that he kept control over operations of certain businesses when working in the Russian government, then this fact means violation of the law in itself.  The Prime Minister is definitely aware of the current information agenda.”    

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