Gun battles and ‘extortion’ in latest Russian oligarch legal battle
Billionaire aluminium tycoon Oleg Deripaska being sued by Michael Cherney in high court for 20% of Rusal
guardian.co.uk, Monday 9 July 2012 12.02 BST
London’s latest legal battle between oligarchs from the former Soviet Union kicks off on Monday with a $2.5bn case featuring gun battles and alleged extortion payments at the heart of the fight to control the country’s nascent aluminium industry in the 1990s.
Oleg Deripaska, the billionaire metals tycoon whose friendships with Lord Mandelson and financier Nat Rothschild have ensured his name is well known in the UK, is being sued by Michael Cherney – an Uzbekistan-born Israeli who claims that he is owed 20% of the shares in Rusal, the aluminium giant controlled by Deripaska.
While Deripaska admits to having paid Cherney $250m following a 2001 meeting in London’s Lanesborough Hotel, he will argue that the sum was a final instalment of an extortion – or krysha – payment to organised crime groups represented by Cherney.
Deripaska says he began the payments in the mid-1990s after his associate, Valery Tokarev, was shot and seriously injured along with a colleague.
Cherney, an interpol fugitive who is wanted for questioning in Spain over a money laundering case, lives in exile in Israel. He filed his lawsuit against Deripaska in 2006 in London on the grounds that he could face assassination if he returned to Russia, where he also fears he might not gain access to a fair hearing and may face “trumped up” charges.
In a 2008 ruling on where the case would be heard, Mr Justice Christopher Clarke said “a considerable body of evidence has been put in relating to Cherney’s alleged criminality” while indicating: “Mr Deripaska, himself, is the subject of serious allegations … In July 2006 the US authorities revoked Mr Deripaska’s visa.
“According to the Wall Street Journal, the entry ban related to concerns by US law enforcement officials that Mr Deripaska had ties with organised crime in Russia.”
Cherney’s spokeswoman said: “Michael Cherney has never stood trial for any crime and has never been convicted of any crime.” Deripaska has travelled to the US since 2008 and been photographed at public events in America.
Cherney’s case centres around two documents that he claims detail the pair’s agreement. The first, a contract signed by both parties at the Lanesborough, states that Cherney is entitled to 20% of Rusal and that Deripaska will hold the shares in trust on his behalf. The second supplementary document details how the shares are to be sold.
However, Deripaska argues that the first agreement is a sham contract designed to hide the real nature of the krysha payments and he disputes that the supplement was even intended for Cherney.
Deripaska will further argue that the principle vehicle that Cherney used to extort him was Ismailovskaya, one of the most powerful organised crime groups to emerge after the fall of the Soviet Union which was then run by the feared Anton Malevsky.
Separately, Monday’s Times reports on court papers from a German money-laundering case containing testimony from Uzbek businessman Dschalol Hajdarov.
The case, which will adjourn for the summer after this week and resume in September, follows last year’s battle between two more Russian oligarchs, Boris Berezovsky and Roman Abramovich.
It also follows the recent unsuccessful libel action by Rothschild against the Daily Mail which hinged on his connections to Deripaska, as well as an arbitration hearing involving Deripaska and his fellow Rusal shareholder Viktor Vekselberg.