March 29, 2012, 12:20 / Management

Shuvalov and Shoigu are expected in the regions

The extremely successful business of the family of First Deputy Prime Minister Igor Shuvalov may become the reason for his departure from the executive branch. Most likely, he will head the corporation for the development of Siberia and the Far East, invented by Sergei Shoigu. Shoigu himself is the most likely candidate for the post of governor of the Moscow region Evgenia Pismennaya Dmitry Kazmin D. Grishkin / Vedomosti

Shuvalov surrendered their

Information about the business of the Shuvalov family was disseminated by the former lawyer of the First Deputy Prime Minister and colleague at the ALM Feldmans bureau, Pavel Ivlev, managing partner of ALM Feldmans Artem Dymskoy told the RAPSI agency. From 1993 to 1995, Shuvalov was a senior legal adviser at ALM Consulting, and since 1995, director of the ALM Law Office. According to Dymsky, Ivlev, while working at ALM Feldmans, provided legal assistance to clients of the office, including the Shuvalov family, and the transfer of such documents is a “blatant violation of the law on advocacy.” Ivlev is a defendant in the second Yukos case; he left Russia in 2004. He is also the only known client of Alexei Navalny. Dymskoy promised that the bureau would appeal to the Moscow Bar Association with a demand to deprive Ivlev of his lawyer status. Ivlev declined to comment.

For the first time, information about the trust income of the Shuvalov family appeared in November last year; before that, for several years, neither Shuvalov nor his employees explained through what investments his wife’s extremely high incomes arise. Barron's Online reported exactly how the Bahamian Sevenkey Limited, registered on behalf of Shuvalov's wife Olga, earned about $70 million by participating in the acquisition of 13% of Corus Steel by Alisher Usmanov's structures: having invested $46 million in borrowed money, Sevenkey received $119 million three years later.

A national treasure helped

This was not the only successful transaction of the trust fund, the FT and WSJ found out. According to FT, there was a fiduciary agreement between Sevenkey and Suleiman Kerimov’s Nafta-Moscow company, according to which the latter bought Gazprom shares in 2004 in the interests of the fund even before the liberalization of the gas monopoly’s securities market. If in 2004 a Gazprom share cost an average of 55 rubles, or $1.9, then on December 18, 2007 (the letter to the director of the fund, Sean Hogan, about the sale of shares was dated on this date) it was already $14.57. According to FT estimates, Sevenkey earned about $100 million from operations, according to WSJ sources - about $80 million. Igor Shuvalov himself worked as Putin’s assistant on economic issues from 2004 to 2007, and it was Putin who made the decision to liberalize the circulation of Gazprom shares.

The Gazprom securities market has been artificially divided since 1997: the concern's shares were traded on the only stock exchange in Russia, and only Russians could purchase them, and only depositary receipts were available to foreigners, amounting to up to 10% of the capital. Because of this, the value of shares in the domestic and foreign markets differed by 1.5–2 times. In October 2003, President Vladimir Putin said that liberalization of the Gazprom share market was “a matter of months, not years.” His next promise of rapid liberalization was made in September 2004, but Putin signed the necessary documents for this only at the end of December 2006. By this time, according to Gazprom’s own estimates, foreigners already controlled 27% of its shares, acquiring them in circumvention of the law through gray schemes. The most common was the purchase of shares through a group of cross-owned companies. Such schemes were used, for example, by UFG and the Hermitage Foundation, but because of this they had problems with the authorities.

Foreign Sevenkey also had to act through an intermediary. As follows from Hogan’s correspondence with Nafta managing director Alexei Rodionov (a letter dated December 18, 2007 is available to Vedomosti), Sevenkey transferred money to Kerimov’s company for the purchase of Gazprom shares through so-called back-to-back loans, using the Dutch Amsterdam Trade Bank. That is, the company itself or someone on its instructions deposits funds to the bank, and the latter, having collateral, issues a loan to the person indicated by Sevenkey, explains Paragon Advice Group partner Alexander Zakharov. The deal helped not only to circumvent the ban on the purchase of securities, but also to optimize taxes, explains Zakharov. Kerimov's representative declined to comment.

The Prosecutor General's Office has already checked these operations, Shuvalov's representative said, there were no violations. A representative of the Prosecutor General's Office confirmed that the inspection was completed, but did not talk about its results. For Vladimir Putin, the information about the business of the Shuvalov family did not come as a surprise, assures the prime minister’s press secretary Dmitry Peskov: “Putin is fully familiar with her from the moment they began working together.” Shuvalov is very scrupulous, he always informed his superiors about income, says Peskov. In his opinion, there is only one criterion here - legal or illegal: “In the case of Shuvalov, it is absolutely legal.”

The First Deputy Prime Minister himself said yesterday that he earned all the money even before joining the civil service (Shuvalov became an official in 1997 - Vedomosti), the funds are in trust and are “the basis of my independence from various influence groups when making decisions by me service decisions."

“As a lawyer, I strictly followed the rule and principle of conflict of interest. For a lawyer, this is sacred,” his representative relayed the words of the First Deputy Prime Minister.

Needed work in the east

However, information about the extensive business of the First Deputy Prime Minister that has become public could hinder his future career in government, three federal officials believe. “Such rich business experience and credit history will interfere with Shuvalov during the anti-corruption campaign. He will have to make excuses all the time,” says one of them. Peskov does not agree with this opinion. The First Deputy Prime Minister himself does everything to remain on the team, takes on complex issues with zeal, and the federal official shares his observations.

Shuvalov will most likely resign from the cabinet even though he has very good relations with future Prime Minister Dmitry Medvedev, says a person close to the Kremlin. But Putin and Medvedev will not offend a loyal soldier (Shuvalov himself previously called himself a soldier, see inset), says Vedomosti’s interlocutor: they will find him “an interesting and necessary job.”

Shuvalov “has a very developed sense of business,” an official from one of the departments of the economic bloc characterizes him: he would look natural at the head of some state corporation. Three other people connected with federal authorities have heard that Shuvalov can head the state corporation. The ideal place would be a corporation for the development of Siberia and the Far East, they note. Shuvalov is well acquainted with the situation in the Far East, he oversaw construction for the APEC summit, he has a good reputation in the region, Vedomosti’s interlocutors argue. The initiator of the creation of the state corporation was the Minister of Emergency Situations Sergei Shoigu. He agreed on the concept with Putin and was going to personally head the state corporation, but these plans changed.

Shoigu - to the region

After the resignation of the Governor of the Moscow Region, Boris Gromov, Shoigu is considered the main candidate for the post of head of the region, several people from United Russia, the government and the presidential administration report. United Russia will present the president with a list of candidates on March 30 or 31. The Moscow region official also said that the region is already waiting for Shoigu’s candidacy. It could be introduced on April 5, another Vedomosti source clarified, and the vacated place will be taken by Shoigu’s current deputy, State Secretary of the Ministry of Emergency Situations Vladimir Puchkov. There are strong protest sentiments in the region, there are many intra-elite conflicts, and only a leader who is very popular among the population can correct the situation, a person close to the presidential administration previously explained.

The Chairman of the Supreme Council of United Russia, Boris Gryzlov, is no longer being considered for this post and will not be included in the list, notes his fellow party member. Minister of Regional Development Viktor Basargin may be on the list, but only to give weight to the list and confirm the high quotations of Basargin himself, explains one of the interlocutors. By the same principle, when Sergei Sobyanin was nominated for the post of mayor of Moscow, Transport Minister Igor Levitin was on the list of four people.

The press service of the Ministry of Emergency Situations did not answer the question about the possibility of appointing Shoigu as governor. According to a source in the department, so far there has been no activity in this regard. In addition, employees of the Ministry of Emergency Situations are still working on a project to create a state corporation, says a government official.