It seemed that a period of disgrace behind. After spending several months under house arrest at the end of 2014, Vladimir Yevtushenkov, the Russian oligarch, has transferred Bashneft, a medium size oil company, the state. As he later recalled, at that time he told the President: “If you like, tomorrow some other company and wants it to take.” The President publicly expressed his approval towards the system, and the company g-on Yevtushenkov, the shares of which prior to this fell sharply. Later g-n Yevtushenkov appeared on the annual receptions in the Kremlin, and was also a member of the delegation of the RF President in the Crimea at the end of last year.
Now he is again going through difficult times, since Rosneft, the state oil giant, filed against the “System” the claim with the requirement to pay damages in the amount of 171 billion rubles (2.8 billion US dollars). Rosneft is headed by Igor Sechin, a confidant of Putin, which, according to many in Moscow, was behind the criminal case against Mr. Yevtushenkov in 2014 (Rosneft and Mr. Sechin denied involvement in the case). At the end of last year “Rosneft” bought “Bashneft” the state for 5.3 billion U.S. dollars. The company now claims that the “System” allegedly illegally gained assets in the restructuring process “Bashneft”.
This case illustrates the appetite of “Rosneft” to the conclusion of transactions, as well as the strong political influence of Mr. Sechin. After the acquisition of “Bashneft”, “Rosneft” has sold 19.5% of their shares of the Swiss commodity trader Glencore and the Qatari investment Fund (Qatar Investment Authority) for 10.2 billion euros (11 billion U.S. dollars), despite us sanctions. Mr. Sechin also recently struck a deal to acquire stake in Indian Essar Oil Ltd amounting to 12.9 billion U.S. dollars. The official representative of “Rosneft” Mikhail Leontyev said that the case against Mr. Yevtushenkov “nothing personal”, although representatives of business circles in Moscow consider the conflict a confrontation of two giants.
Assets that the “System” supposedly withdrew from Bashneft, include energy company. Rosneft also said that the company “Bashneft” was damaged in the result of the decision of “the System” to buy the shares of minority shareholders during the restructuring of 2013-14, and the repayment of Treasury shares of the company. “System” refers to all charges “baseless”. The company notes that while it was ruled by “Bashneft”, its market value increased eight times, and the volume of production has increased by almost 50%. According to Andrey Polischuk, oil and gas analyst at Raiffeisenbank, “all the investors were mostly satisfied.”
Investors in Russia will be closely watching the progress of the trial. According to Oleg Kuzmin, an economist at investment Bank Renaissance Capital in Moscow, this situation underscores the fragility of property rights in Russia. Stock quotes “System” has lost more than a third of its value the next day after filing a lawsuit in early may. At the end of last month, the court entered an interim measure, arresting belonging to the “System” shares of MTS (the biggest Russian Telecom operator), “meds” (private medical clinics) and BESK (electricity distribution company in Bashkiria).
This conflict also sends a signal about the growing tension in Syria amid ongoing problems in the economy. Monitoring of Mikhail Krutikhin from RusEnergy consulting company, is “the struggle between the leaders of the clans”. The system of Russian state institutions have been faltering, but there was always some unwritten rules, known as “concepts” and understandable for both local and foreign players, who still helped to do business. So, g-n Yevtushenkov, is known for his loyalty to the Kremlin and storonevychi policy before his arrest was considered one of the favorites of the Kremlin. His reconciliation with Mr. Putin was to restore him to his former position. The President of “Sistema” Mikhail Shamolin said: “even the claims of the conceptual plan to show us it is impossible.”
“It is not clear what are the rules of the game”, — said Konstantin Simonov, Director of the national energy security Fund. Independent members of the Board of Directors of the “System” appealed to the Kremlin with a request to act as referee, but Mr. Putin has so far mostly refrained from speaking on this issue. Some believe that this conflict is the new version of the corporate raider culture 90 years, only now, instead of Kalashnikovs for raids use lawyers and court procedures.