This Wednesday, three days before the political movement “Open Russia” hopes to mobilize nationwide protests against the Kremlin, Russia’s Prosecutor General blacklisted the group as an “undesirable organization,” banning all its activities.
This Saturday, Open Russia is planning anti-Putin demonstrations across Russia.
A prominent Kremlin critic and Russian opposition figure who has been in a coma since last week has been diagnosed with “acute poisoning by an undefined substance”, his wife has said.
Vladimir Kara-Murza, 35, who works for Mikhail Khodorkovsky’s Open Russia foundation, had been in Russia to screen a documentary film about his friend Boris Nemtsov, the opposition leader and former deputy prime minister who was gunned down near the Kremlin in 2015.
Former leading shareholders of the Yukos oil company have been awarded $50bn in damages against Russia, by far the biggest compensation award ever made in an arbitration case.
The panel in the Permanent Court of Arbitration in The Hague ruled that Russia had destroyed the oil company once headed by jailed oligarch Mikhail Khodorkovsky and expropriated its assets, for political reasons.
“Yukos was the object of a series of politically motivated attacks by the Russian authorities that eventually led to its destruction,” the three-person panel found.
It added that Moscow had aimed to “bankrupt Yukos, assign its assets to a state-controlled company and incarcerate [Mr Khodorkovsky] who gave signs of becoming a political competitor” to Russian president Vladimir Putin.
Former Yukos assets today form the bulk of state-controlled Rosneft, the world’s biggest quoted oil producer, now subject to US sanctions over Russia’s interference in Ukraine.
The ruling in favour of a handful of Russian shareholders and an employee pension fund is set to exacerbate tensions with the west as the US and EU weigh even tougher sanctions against Moscow over its continuing support for separatist rebels in eastern Ukraine.
It will make it difficult for Moscow to sustain its argument that the authorities’ pursuit of Yukos and Mr Khodorkovsky in the middle of the past decade were legitimate actions against fraud and tax evasion by what was then Russia’s biggest oil company.
Mr Khodorkovsky, who served 10 years in jail on fraud charges before being pardoned by Mr Putin last December, said he had learnt of the ruling “with a feeling of satisfaction”.
“From beginning to end, the Yukos case has been an instance of unabashed plundering of a successful company by a mafia with links to the state,” he said.
Russian shares and the rouble weakened further on Monday morning, extending recent falls prompted by the expectation of tougher sanctions.
Though there is no formal right of appeal, Russia confirmed on Monday it would appeal against the Dutch courts ruling. If the court’s decision is upheld, and Moscow refuses to pay shareholders have the right to pursue Russian state property in other countries through the courts to satisfy the claim.
Rosneft said it did not believe any claim could be brought against the company in connection with the ruling, which it said would not adversely affect its business or assets.
The company was “neither a party nor a participant in these disputes nor a defendant in any published decision”, it said in a statement. Rosneft said it believed that all its acquisitions of former Yukos assets as well as all its other actions in relation to Yukos were legal.
The biggest single beneficiary is the now Israel-based Leonid Nevzlin, a former Yukos vice-president, who owns 70 per cent of GML, the former Yukos holding company that brought the case. Mr Khodorkovsky signed over his Yukos stake to Mr Nevzlin in 2005 during his trial for fraud and tax evasion.
Mr Khodorkovsky reiterated on Monday that he had no further claim over the stake.
Four other Russians – including Platon Lebedev, who was tried and sentenced alongside Mr Khodorkovsky and also pardoned in January – hold the remaining 30 per cent of GML. GML held 60 per cent of Yukos. An employee pension fund that is also party to the litigation owned 10 per cent.
The ruling does not benefit the 55,000 former minority shareholders of Yukos, though it could set a precedent that would help them bring further arbitration cases against Russia.
The European Court of Human Rights is expected on Thursday to issue a damages ruling in a separate case brought by 2004 by Yukos’s then management on behalf of all shareholders.
Mr Khodorkovsky and associates acquired Yukos for a knockdown price in a controversial round of post-communist privatisations in 1995 and built it into Russia’s biggest oil producer. It was the first to embrace western technology and corporate governance standards.
But the oligarch was arrested on corruption charges in 2003 after he became a political threat to Mr Putin. Yukos was pursued by multibillion-dollar back tax claims and penalties and eventually bankrupted.
The three-person arbitration panel backed the claimants’ expropriation claim, brought under the Energy Charter Treaty, which sets rules for cross-border energy co-operation. Russia signed the treaty in 1994 but never ratified it, and withdrew in 2009.
The panel did conclude that “certain facets of [Yukos’s] tax optimisation scheme” had left the main shareholders “vulnerable” to actions by the Russian authorities. It reduced its total putative damages assessment of $67bn by 25 per cent to reflect that.
“This is a mega-litigation”, said Emmanuel Gaillard, head of Shearman & Sterling’s International Arbitration Group, which represented the claimants. He added that he expected Russia ultimately to pay the damages.
“Russia cares about being a powerful international player, and to be an international player it has to respect the rules of the game,” he said.
Analysts said that with international reserves at $470bn, $175bn of which are government reserves, the Russian government had enough cash in its sovereign funds to pay the damages.
“However, this is a significant amount of money – it is equal to around one-ninth of the annual federal budget and 2.5 per cent of GDP. I am sure the government will do its best to resist paying these damages,” said Vladimir Tikhomirov, chief economist at BCS Prime, the Moscow brokerage.
Stocks have stumbled around the world over the past couple weeks, cutting billions – at least temporarily – from many of the world’s wealthiest individuals. Just in the past week Google GOOGL-1.39% head honchos Larry Page and Sergey Brin each lost about $1.4 billion as the tech giant’s stock dropped 6%.
But who has sustained the biggest losses, even when markets were up? Using the annual billionaires list as a benchmark, we looked at which tycoons’ fortunes have dropped the most over an eight-month period from Feb. 14 through Oct. 15.
The biggest billionaire losers (by percentage of net worth) weren’t victims of a random market dip, but rather are facing serious risks that threaten their companies’ financial future.
If you’re a Russian oligarch, a surefire way to see your fortune crumble is to run afoul of Vladimir Putin’s administration. Yevtushenkov, owner of oil and telecom conglomerate Sistema, is currently under house arrest after beingarrested in early September as part of a money-laundering scheme.
Sistema’s stock has plummeted 65% since the beginning of September. Many assume politics played a role, and the development has drawn comparisons to the 2003 arrest and subsequent imprisonment of Mikhail Khodorkovsky, whose oil company Yukos was broken up and absorbed by the government (he waspardoned and released late last year). Here’s John Lough, a reporter for The Moscow Times:
“It is hard to escape the conclusion that Putin has deliberately chosen to make an example of Yevtushenkov and send a signal to keep big business on its toes. The core message is that there are new rules and no one is untouchable.
Why has Putin chosen now to remind the business elite who is in charge? The answer is almost certainly related to the multiple pressures on the Russian economy resulting from sluggish growth, the increasingly visible effects of Western sanctions and recognition that the boom years are over. This is increasing the competition for rents among business groups.
In these circumstances, it is logical for Putin to fear dissent among the business elite and the formation of interest groups that could unite to challenge his course in Ukraine.
By showing that a loyal figure such as Yevtushenkov is not invulnerable, Russia’s business leaders have been put on notice that the slightest sign of protest could lead straight to a prison cell.”
Singal owns steel company Bhushan Steel, a major supplier to automakers that has been struggling of late under the weight of extensive debts. The company reportedly owes some $6 billion in loans to banks, and had to fend off rumors just this week that it was being put up for sale.
To make matters worse, his son and company vice-chairman Neeraj Singal is embroiled in a bribery scandal with Syndicate Bank, and was allegedly arrested in August after a six-day search by authorities. The company’s stock is down 75% since March.
Luo Fei and Wu Xiong are both large shareholders of Biostime Pharmaceuticals, one of the largest suppliers of baby formula in China. Fei is CEO of the company, which about one year ago brushed off a $27 million fine as part of a price fixing scandal and saw its shares continue to soar, earning Fei and Xiong each spots on the Billionaires List.
But since March, Biostime shares have steadily dropped on the company’s poor financial performance. Analysts for Standard Chartered downgraded the company to ‘underperform’ in August after its half-year results missed expectations.
Biostime’s earnings per share declined 35% year-over-year to 0.47 renminbi (USD $.08) and sales grew a slight 6.2% to 2.19 billion renminbi (USD $360 million). According to the bank, the company’s outlook is “dim” thanks to slowing growth in infant formula sales and higher raw materials prices.
Anna Duritskaya is reportedly afraid for her life after watching her boyfriend and Russian opposition leader Boris Nemtsov gunned down on the streets of Moscow, with sources close to the Ukrainian model saying she fears Vladimir Putin will target her next.
Duritskaya was walking with Nemtsov near the Kremlin on Friday night when a masked gunman fired several shots at him, killing the Russian leader. Duritskaya said she was not able to identify the assassin.
“She was crying and she was saying Boris had been killed and he’s lying next to me,” her mother, Inna Duritskaya, told CNN. “She was in such shock she couldn’t say anything else.”
Inna said her daughter was questioned for hours and is now afraid that Russian authorities working at the order of Vladimir Putin will try to pin the murder on her. Anna Duritskaya has been staying at an apartment with an aide to Nemtsov and is reportedly under round-the-clock armed guard.
Anna’s mother shares the fear that Russian authorities will blame the murder on her as a way to stir up political strife.
“I think they want to make her guilty, they want to set her up,” Inna Duritskaya said. “What are their reasons to keep her? Everyone knows she had nothing to do with it. I think my daughter is kept because this murder should be linked to Ukraine. Somehow I am sure that the task is to link it to Ukraine and she is the only and the easiest way to do so.”
The killing and its strange circumstances have prompted conspiracy theories, with many pointing the finger at Putin. Nemtsov was one of Putin’s most vocal critics, and in the past, others who dared speak out against Putin have endured a similar fate.
Russian journalist Anna Politkovskaya, a prominent Putin critic, was killed in 2006. Mikhail Khodorkovsky, one of the nation’s most prominent business leaders, was sent to prison for 10 years after accusing Putin of corruption.
The murder of Boris Nemtsov itself was surrounded in mystery. He was killed just feet from the Kremlin, and several CCTV cameras at the scene of his death had been turned off, while others returned only grainy images. His killer remains unidentified.
Anna Duritskaya said she now just wants to return to her mother in Kiev, and doesn’t believe she will be able to attend boyfriend Boris Nemtsov’s funeral.
Russia is readying a ban on the import of clothing from the EU and US, a senior aide to Vladimir Putin has said.
Speaking to Russian publication Just Style, Andrei Belousov said: “We have a number of non-agricultural products, where our European partners are more dependent on Russia than Russia on them.
“The Ministry of Economic Development has already prepared a next package of retaliatory sanctions to western sanctions. Among them are expected to be the imposition of a ban on the imports of clothing from western countries.”
The ban is likely to hit suits, t-shirts, shirts, sweaters, cardigans and shawls. This will be in addition to the 1 September ban the Kremlin issued on a host of other non-clothing textiles.
Previously, those in the textiles sector had warned that the ban would have a more negative effect on the Russian market than those in the West. In August, the CEO of British fashion group Karen Millen, Mike Shearwood, told the Financial Times:
“The government may impose sanctions believing that they will impact Russia. They will hurt domestic businesses as well. They need to bear that in mind when taking any actions.”
Now, an influential figure in Russia’s textiles sector has issued a similar warning. Anna Lebsak-Kleimans, the chief of Fashion Consulting Group International, said:
“In the case of the adoption of a new package of sanctions, restrictions will mainly affect the premium segment as the majority of EU production is positioned in this segment. This will have a negative effect as local producers will not be able to replace them. At the same time, sanctions will have a negative effect on the middle-priced and budget segment of the market.”
It comes as a series of prominent Russian figures lined up to take swipes at the sanctions regime against Russia. The former Foreign Minister Igor Ivanov told RIA Novosti, the Russian news outlet, that they should be lifted without precondition.
He said on Monday: “The sanctions must be lifted without any preconditions, and by doing that, the countries will demonstrate that they are really willing to cooperate to solve the Ukrainian conflict,” adding that “the sooner such dialogue is restored, the faster we will rebuild our relations of co-operation and mutual understanding”.
A Russian oil tycoon, Mikhail Khodorkovsky, the former head of Sibneft, has said the West can’t afford to maintain the sanctions regime.
Khodorkovsky, formerly Russia’s wealthiest man and who was imprisoned by Vladimir Putin’s government, said: “The West is not capable of taking that level of loss itself, the costs that would bring really influential sanctions on the Russian economy. I’m not all that sure that such sanctions are possible in the first place, at least in the short term.”
The former oil tycoon and adversary of president Vladimir Putin has launched a pro-European political platform from exile
The former tycoon Mikhail Khodorkovsky, who spent a decade in jail after challenging the Kremlin, says he would be ready to lead Russia if called upon.
Khodorkovsky’s statement, at the launch of an online movement called Open Russia, appears to break his promise to steer clear of politics, which he made after being pardoned by president Vladimir Putin in December.
“I would not be interested in the idea of becoming president of Russia at a time when the country would be developing normally,” he was quoted as saying by Le Monde newspaper.
“But if it appeared necessary to overcome the crisis and to carry out constitutional reform, the essence of which would be to redistribute presidential powers in favour of the judiciary, parliament and civil society, then I would be ready to take on this part of the task.”
Open Russia is intended to unite pro-European Russians in a bid to challenge Putin’s grip on power.
“A minority will be influential if it is organised,” Khodorkovsky said during a ceremony broadcast online from Paris.
Khodorkovsky and his allies said political change could come quickly and insisted the time had come to think of Russia’s future after Putin.
He stressed that his project – named after his charity that was shut down after his imprisonment – would be an online “platform” for like-minded people, not a political party.
But he did not anticipate Putin would approve.
“I expect him to be upset,” Khodorkovsky said.
Russian activists and prominent emigres including Paris-based economist Sergei Guriyev and London-based businessman Yevgeny Chichvarkin – both of whom fled the country under pressure from security services – joined the online ceremony.
Khodorkovsky, who lives in Switzerland with his family, openly supported the Ukrainian uprising that ousted a Moscow-backed president in February, but indicated he did not want a bloody revolt for Russia.
The former head of the defunct Yukos oil firm sakd all those supporting a pro-European course for Russia should before parliamentary elections scheduled for 2016.
“We support what they call the European choice or a state governed by the rule of law,” he said.
“We believe that the statement ‘Russia is not Europe’ is a lie that is being imposed on society on purpose.
“This is being done by those who want to rule the country for life, those who want to spit upon law and justice,” Khodorkovsky said in a thinly veiled reference to Putin.
“We are Europe, both in terms of geography and culture.
“We are not simply Russian Europeans. We are patriots. And true patriots even during pitch-dark reactionary times should serve their country and their people.”
Khodorkovsky’s supporters expressed hopes his project would raise awareness among Russians and help them see through state propaganda.
“It is time to open our mouths,” Chichvarkin said.
“We are ahead of a long, hard and dangerous path,” the former deputy finance minister and economist Sergei Aleksashenko said.
Russian state media appeared to enforce a blackout on news coverage of Khodorkovky’s project.
His spokeswoman Olga Pispanen said the project’s website, openrussia.org, became the target of distributed denial of service attacks.
Attempts to prevent activists from joining the ceremony were reported in the central Russian cities of Nizhny Novgorod and Yaroslavl.
While many scoffed at Khodorkovsky’s effort to rally Russians while in exile, some said the project could pay off in the long run.
“Such a project is sorely needed,” political analyst Mark Urnov said, calling it an “antidote” to the country’s grim reality.
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