Online report from the High Court in London. Part 3

History of the issue » Position
Abramovich Position
Berezovsky Witnesses:

From Berezovsky's side: ex-YUKOS shareholder Leonid Nevzlin ; business partner of Boris Berezovsky Yuliy Dubov ; former deputy general director of Aeroflot Nikolai Glushkov ; Berezovsky's friend and common-law wife Elena Gorbunova ; business partner of Boris Berezovsky Alexander Goldfarb ; former deputy general director of LogoVAZ Natalya Nosova and her husband Michael Lindley hide certificate Abramovich's position Roman Abramovich testified in the High Court of London from October 31 to November 10. Mr. Abramovich's main argument was that Boris Berezovsky and Badri Patarkatsishvili were never his business partners. According to the defendant, he turned to Mr. Berezovsky for “protection” - political patronage thanks to Boris Berezovsky’s connections with the family of Boris Yeltsin. Contrary to the words of his lawyer, Roman Abramovich stated in court that the initiative to create Sibneft on the basis of Noyabrskneftegaz and the Omsk Oil Refinery belonged to him. “I came with this idea to Pyotr Aven, who suggested that I discuss this topic with Berezovsky,” said Mr. Abramovich. The defendant nevertheless admitted that without Boris Berezovsky, the purchase of a controlling stake in Sibneft at a loans-for-shares auction in December 1995 would have been impossible. However, Roman Abramovich did not miss the opportunity to emphasize that in the construction of the Sibneft holding and the purchase of aluminum assets, Badri Patarkatsishvili played no less a role, who had no claims against Mr. Abramovich (Boris Berezovsky claims the opposite). During the interrogation, Roman Abramovich confirmed that Noyabrskneftegaz oil was sold to the Omsk Refinery and subsequently to Sibneft at a several-fold inflated price through intermediaries registered in domestic Russian offshore zones. The defendant insisted that the participation of intermediaries did not affect Sibneft’s profits, but only reduced the amount of taxes paid to the budget. The amounts of payments for the “roof” to Boris Berezovsky and Badri Patarkatsishvili, according to Roman Abramovich, amounted to about $80 million in 1996, $50 million in 1997 and 1998, and more in 1999 (the exact figure was not specified). Regarding the episode with Rusal, Mr. Abramovich said that Badri Patarkatsishvili offered him to purchase aluminum assets. It turned out that in the agreement dated February 2000 on the acquisition of KrAZ, KrGES and BrAZ, in addition to Roman Abramovich, Mr. Patarkatsishvili also appears as a buyer, who, according to the defendant, only negotiated, for which he later received a commission. Mr. Abramovich insisted that neither Boris Berezovsky nor Badri Patarkatsishvili participated in the negotiations with Oleg Deripaska; they were only informed of the upcoming deal to merge aluminum assets (Rusal was subsequently created on their basis). Roman Abramovich also admitted that he was on good terms with then-President Vladimir Putin, but denies meeting Berezovsky at Cape d'Antibes on December 7, 2000. At this meeting, according to the plaintiff, Mr. Abramovich acted as an envoy of Vladimir Putin and forced Boris Berezovsky to sell shares in ORT under the threat of leaving Nikolai Glushkov (a close friend and partner of Boris Berezovsky) in prison. According to Roman Abramovich, he was in France only on December 6, 2000, while from December 7 to 9 he was in Russia and met with David Davidovich (Abramovich's partner in the Millhouse Foundation), Mikhail Zurabov (former Minister of Health and Social Development) and Evgeniy Adamov (former head of Minatom). In his written testimony, Roman Abramovich claimed that in January 2001 there was a meeting in Courchevel with Badri Patarkatsishvili, at which he proposed ending the relationship between him and Berezovsky and demanded a final payment of $1.3 billion. In court, Mr. Abramovich stated that he agreed to pay this money so as not to spoil relations with Messrs. Berezovsky and Patarkatsishvili. “And also in this way I bought my freedom,” said the defendant. hide certificate Berezovsky's position Boris Berezovsky filed a lawsuit against Roman Abramovich in 2007. The London High Court agreed on 31 March 2010 that the case could be heard on its merits. Mr. Berezovsky is demanding $5.5 billion in damages from the sale in 2001-2004 of his stakes in Sibneft (21.5%) and Rusal (12.5%). According to the plaintiff, he, together with his business partner Badri Patarkatsishvili, was forced to sell their shares in companies significantly cheaper than their real value under pressure and threats from Roman Abramovich. One of the means of such pressure, according to Boris Berezovsky, was the condition for the release from custody of his close friend and former business partner Nikolai Glushkov.
Former Deputy General Director of Aeroflot Nikolai Glushkov was accused of fraud by stealing airline funds in the amount of 214.9 million rubles. In July 2006, the Savyolovsky Court of Moscow sentenced him to two years probation for embezzling airline funds in the amount of 214.9 million rubles. Mr. Glushkov pleaded not guilty. In 2010, he received political asylum in the UK.

In 2007, Boris Berezovsky was sentenced in absentia for fraud with Aeroflot funds to six years in prison. The court ordered him to compensate for the damage caused.

The process started in London on October 3. At the first hearing of the court, lawyer Lawrence Rabinovich, representing the interests of the plaintiff, said that Messrs. Abramovich and Berezovsky had been friends and partners for a long time, but after Boris Berezovsky quarreled with Vladimir Putin, Mr. Abramovich “betrayed” him. From October 5 to October 17, Boris Berezovsky himself gave evidence in court, and in English. He accused Roman Abramovich of violating the trust and agreement between them. The fact that until 2001 he denied having any shares in Sibneft, Mr. Berezovsky explained by the fact that they had a corresponding agreement. According to Boris Berezovsky, the management of Sibneft was entrusted to Roman Abramovich, but the shareholders did not discuss how it would be carried out. During interrogation, Boris Berezovsky admitted that the deal with Sibneft was sealed not on paper, but simply with a handshake - this is how, according to him, business was done in Russia then.

The interrogation of Roman Abramovich at the High Court in London regarding Boris Berezovsky's claim for damages of $5.5 billion continues. The day before, details of the transaction to acquire Roman Abramovich's anchor asset, Sibneft, were made public. The court will have to find out how much Sibneft and Boris Berezovsky's friendship actually cost the entrepreneur. The difference in the cost of these two components is, in fact, the subject of an unprecedented dispute in terms of cost. Kommersant correspondent ANNA ZANINA is following the hearings in the High Court.

14:20 Today in London it is sunny, everyone is in a cheerful mood. The parties' lawyers came to court first. Abramovich went to his place to testify. Berezovsky is not there yet, but most likely he will come: his personal security is present in the meeting room.

14:22 Evgeny Shvidler (chairman of the board of directors of Millhouse Capital, in 1998-2005 - president of Sibneft) and Evgeny Tanenbuam (now managing director of Millhouse LLC, member of the board of directors of Chelsea, ex-head of the department of Sibneft) support Abramovich with their constant presence at the trial. Today they are also here.

14:32 Abramovich confirms that then the support of Viktor Gorodilov (vice-speaker of the Chukotka Regional Duma, former vice-president of Sibneft for finance) and Konstantin Potapov (deputy of the legislative assembly of the Omsk region, former vice-president and member of the BoD) was very important to him "Sibneft").

In December 1995, Berezovsky and Abramovich acquired at a loans-for-shares auction , and a year later the companies they created bought another 34% of its securities. a controlling stake in Sibneft

14:40 The judge was interested in how exactly Abramovich secured Potapov’s support, and whether there were any additional financial incentives. Abramovich: “No, only the salary, as I remember. But the agreements with Gorodilov and Potapov had nothing to do with loans-for-shares auctions.” Abramovich repeated several times that Berezovsky's role in the loans-for-shares auctions was exceptional and without him he would not have achieved anything. It’s a pity Berezovsky isn’t here and, alas, he doesn’t hear this. Abramovich: “We had a lot of doubts about the auctions, there were a lot of “buts”. Viktor Gorodilov was generally against privatization at first...”

14:44 Abramovich: “The question of Sibneft’s participation in the auction arose only in November, since the Sibneft company itself was registered only in October.

14:55 “My initial plan was to privatize 49%, and then buy another 5%, that is, until November I did not even think about participating in loans-for-shares auctions,” Abramovich emphasized. He agreed that Berezovsky played a large role in influencing Viktor Gorodilov and Alfred Koch (the former head of the State Property Committee, which was responsible for privatization in Russia, was interrogated in the Sibneft case in 2001 ).

14:57 People continue to arrive at the court, a small crowd has gathered at the doors, there are no seats.

On December 28, 1995, 15 minutes before the start of the auction, the management of SAMECO revoked the power of attorney of its representative and the company dropped out of the auction . Inkombank was not allowed to participate.

14:59 Abramovich talks about the big role of Badri Patarkatsishvili (former business partner of Boris Berezovsky) in negotiations with SAMECO (Inkombank was behind it). Badri got SAMECO to withdraw its bid to participate in the auctions.

15:25 In 1996, Runikom (Abramovich’s company) was the exclusive supplier of Rosneft abroad.

15:28 Rabinovich: “Has Berezovsky agreed with Mepatep that they will submit a bid slightly less than NFC?” Abramovich: “There was such an agreement, and yes, most likely, Berezovsky negotiated with Menatep.”

15:29 Rabinovich forces Abramovich to confirm several times that Berezovsky and Badri played a big role in participating in and winning the 1995 auctions. Abramovich: “I expected that after gaining control of Sibneft, my profit from trading companies would increase to $100 million.”

15:30 Berezovsky is not here, but Gorbunova is smiling for him. Abramovich drinks water all the time. They are discussing the transfer of the Runicom company from a high-tax zone to an offshore one. It turns out that the shares of the new company “Runicom Limited” registered in Gibraltar were first issued in favor of Shvidler. The entire business of Runicom CA was transferred to this company.

Testimony of Roman Abramovich

“Having found myself in Chukotka and seeing the dire situation this region was in at that time, in order to improve its economic situation, I decided to become a State Duma deputy from Chukotka.”

15:32 A break for 10 minutes was announced.

15:44 Rabinovich: “All the oil sold by Runicom came from Sibneft?” Abramovich: “No, about 60% came from Sibneft.”

15:48 Rabinovich: “Did you make a profit from the difference between Russian oil prices and prices on the world market?” Abramovich: “There was also a difference in the price of insurance and transport... It seems the margin was about 2%.”

"In the trial, both opponents use the legends that surround them"

16:00 Abramovich confirmed that the bulk of the money from the sale of oil was earned on logistics, a wide range of petroleum products, and a large number of transactions with his own companies (meaning Runicom - Kommersant).

16:28 Rabinovich says that the price of oil in Russia in 1996 was about $10.5 per barrel, and Runicom sold it at world prices of $17.5, i.e. his margin was more than 2%.

16:34 Abramovich: “You forgot the costs of taxes, transport, freight, transshipment - these insignificant but important details of oil exports. He categorically disagreed that Runicom’s profit was $7 from each barrel of oil. Rabinovich: “That is . you did not profit from the difference in oil prices in Russia and world prices?" Abramovich: "I did not." It is clear how important it is for Abramovich to prove that he did not profit from this price difference.

16:38 Abramovich confirmed that since 1998, Noyabrskneftegaz stopped selling crude oil to the Omsk Refinery directly and began working through intermediaries using internal offshore zones. Rabinovich names ZATO (closed administrative-territorial entity - Kommersant) and regions of preferential taxation that then existed in Russia. The chain looked like this: Noyabrskneftegaz - intermediary - Omsk Oil Refinery - Sibneft. Abramovich does not dispute this.

16:41 Judge: “What does the manner in which Abramovich made his profit have to do with the case?” Rabinovich explained that Abramovich paid Berezovsky from this money. The judge remained perplexed, but allowed Rabinovich to continue if he considered these issues important.

16:43 Abramovich reads documents to himself at the request of Rabinovich. In theory, there should be silence in the hall, but everyone is rustling and whispering.

In 1998, Sibneft began a large-scale restructuring . The company issued an additional issue of 500 million shares, which were subsequently exchanged for shares of subsidiaries. In addition, the company abolished the positions of general directors of these enterprises and introduced its own management into them.

16:50 Abramovich: “We really reduced the amount of taxes, but this did not affect Sibneft’s profits.” Rabinovich: “But wasn’t oil sold to Sibneft 2-3 times more expensive thanks to intermediaries?” Abramovich: “I don’t remember. In my opinion, the scheme with intermediaries only affected taxes.” Rabinovich: “These companies were subsequently merged with Sibneft and then their profits were merged, but before that, Sibneft shareholders could not claim the income of intermediary companies.” Abramovich insists that all profits from oil deals were accumulated in Sibneft.

16:55 Rabinovich begins to refer to articles in the Russian press, mentioning a 2002 Vedomosti article about the Accounts Chamber's report on Sibneft. About the next document handed over to Abramovich, the defendant remarked: “This is an article from Kompromat.ru! I won’t say that everything they write is true.” During the process, Berezovsky resorts to any possible sources. As if he wasn’t the one who spoke “about denigration.”

In 1999, Roman Abramovich became a State Duma deputy in the Chukotka single-mandate electoral district. In December 2000, he was elected governor of the Chukotka Autonomous Okrug. Left this post in 2008.

17:04 Rabinovich: “Let's go back to the intermediaries. They sold oil at prices 2-3 times higher, and do you want to say that Sibneft received the same profit if this scheme with intermediaries did not exist?” Abramovich fidgeted: “It’s difficult for me to perceive the question by ear, it seems like yes.” Then Abramovich added that the tax savings did not go to Sibneft, but went to him, but he spent it on the needs of Chukotka;))

17:10 We left for lunch at the most interesting part.

Boris Berezovsky (left)
Photo: Andrew Winning, Reuters

18:02 After the break, Boris Berezovsky appeared. He, like yesterday, is in very high spirits.

18:05 Abramovich clearly doesn’t like questions about where the profits from intermediary firms went, and where the firms themselves then went (the judge tried to get confirmation that they were all later merged into Sibneft, but Roman Arkadyevich could not answer. He explained that at that time he had already worked as the governor of Chukotka and was generally poorly versed in these issues).

18:12 Berezovsky's lawyer Rabinovich is trying to prove that Sibneft lost hundreds of millions of dollars due to intermediaries, citing studies by Renaissance Capital and other companies that analyzed Sibneft's risks. The risk analysis was carried out for 2001.

18:17 Abramovich replied that at that time he was no longer working at Sibneft. In 1999, he became a State Duma deputy. Rabinovich: “After the consolidation of intermediary companies with Sibneft in 2000, Sibneft’s profits increased sharply.” According to Rabinovich, Sibneft’s EBITDA indicators, which increased to $1.6 billion after the merger of intermediary firms, also speak of Sibneft’s lack of profit.

18.20 Abramovich: “I can’t say for sure that this is so, I don’t know. I can only express my assumptions and guesses.” He added that the “tax savings” were supposedly going to the Chukotka budget and charitable foundations.

18:21 Roman Abramovich frowns at the questions asked of him.

18:25 Abramovich spoke about his payments to Berezovsky: “The first payment is $16 thousand, the first large payment is $8 million.” Rabinovich: “Your affidavit does not mention a payment of $8 million. According to Abramovich, this payment was made in March 1995.

18:30 According to Abramovich, he spent a lot of time preparing his third testimony .

18:31 Rabinovich: “You came up with this. There was no such payment. You have no confirmation of this payment!” Abramovich: “There was a payment, I remember it!” Rabinovich: “Without documents, do you remember the month and year so accurately?” Abramovich: “I’m not sure about March, but it definitely happened before the creation of Sibneft.”

18:35 Rabinovich: “Do you remember about the request for payment for $10 million in the fall of 1995? Of this, $4 million was transferred by Runicom directly to Logovaz.” Abramovich: “I remember that $5 million of them were taken in cash.”

18:40 Rabinovich: “In the documents, the basis for this payment is stated “under an agreement on the settlement (of payment).” That is, there was such an agreement?” Abramovich: “Probably, as far as I remember, Boris Berezovsky asked for this money for Alexander Korzhakov (former head of Boris Yeltsin’s Security Service - Kommersant).

18:43 Rabinovich suppresses Abramovich’s attempts to talk about repaying Berezovsky’s debts to Mikhail Denisov (Berezovsky’s companion at the time of Logovaz. - Kommersant).

18:46 Lawrence Rabinovich: “Until 1996, you paid Berezovsky only for real transactions, it was payment for cars!” Abramovich grinned: “We didn’t buy cars from Berezovsky. I drove a Bentley then; Logovaz didn’t sell them.”

18:49 Rabinovich: “How much did you pay Berezovsky?” Abramovich: “In 1996, about $80 million, in 1997 - $50 million, in 1998 - about the same amount, and in 1999 - I don’t remember exactly, but more, because then we paid for Kommersant, for TV-6 ..."

18:50 Berezovsky’s lawyer asked where Abramovich remembers these figures. Abramovich: “This is based on my memories, on documents, on discussions with other people, for example, with Lev Cherny (a businessman, in the 90s, together with his brother, he controlled the largest Russian metallurgical enterprises. - Kommersant.).”

18:54 Rabinovich: “Besides the “Big Balance”, you have not presented any other documents on payments.” Here the lawyer misspoke, calling the “big balance” a “big theater”. Abramovich: “Confirmations of payments were bank transfers. We also paid using Berezovsky’s bank cards for his chateau in the south of France.”

18:59 “There was no general document on all payments to Berezovsky and Patarkatsishvili, but every year we summed up how much we paid,” said Roman Abramovich.

19:00 Rabinovich: “So, some documents existed? Where are they now? Destroyed?” Abramovich: “Not destroyed: they simply no longer exist. Moreover, part of the payments were made in cash.”

19:03 Lawrence Rabinovich: “Did you pay both Boris Berezovsky and Badri Patarkatsishvili?” Abramovich: "Yes."

19:04 Boris Berezovsky's face expresses some regret. As if about those long-past times.

19:05 Roman Abramovich did not rule out that Berezovsky did not know the exact amount of payments: “This could well be: it is in Berezovsky’s character.”

19:08 “Requests for payments were made mainly verbally. Badri called and said where and how much to pay. Sometimes cash was needed,” said the defendant. Rabinovich: “Did Berezovsky himself call you?” Abramovich: “I called when I needed money. Of course I did.”

19:10 Berezovsky, without looking away, looks at Abramovich.

19:12 Judge: “What are the disagreements regarding payments? Only for 1995? Write them down for me on paper.”

19:13 10-minute break.

19:34 Let's continue. Berezovsky's lawyer voiced the plaintiff's position that he agreed in 1996 to distance himself from Sibneft at the request of Roman Abramovich. According to Rabinovich, this was due to Berezovsky's active participation in Russian politics.

19:46 Abramovich confirmed that before the 1996 elections, the main political risk for business was the possibility of renationalization: “I did not see any other risks.” “But were these risks higher for people involved in politics?” the lawyer asked. “Yes,” Abramovich replied.

20:00 According to Abramovich, “if the communists had won the elections, the oil business would have been nationalized in any case, even one that was not associated with Berezovsky.”

20:02 Rabinovich tried to get confirmation from the defendant that the political risks for companies associated with Berezovsky were higher than for others. Abramovich, avoiding answering, said that in the event of a communist victory, any business had risks.

20:10 Roman Abramovich said that he was tired and no longer understood the questions well. Boris Berezovsky periodically lowers his head and covers his face with his hands.

20:14 Abramovich asked his lawyer why he was referring to March 1996. Berezovsky laughed silently. Rabinovich: “Then you entered into an agreement with Berezovsky.” Abramovich: “There was no such agreement!”

20:15 Judge Gloucester: "Yes, today was a tough day." The meeting is over. The interrogation of Roman Abramovich will continue tomorrow.

Moscow time.

The report was conducted by Anna Zanina

Author:

Anna Zanina

Themes:

Roman Abramovich vs Boris Berezovsky