Oleg Deripaska Reveals He Had To Pay Russian Mafia To Protect UC Rusal

A publication by The Telegraph reporter Kamal Ahmed, named “Oleg Deripaska: Why I paid crime gangs for protection” has made the big buzz among international financial circles. Not that nobody knew, that Russian economy in the 1990’s was heavily criminalized and in order to survive those, who were attempting to build empires these days had to involve themselves into shady arrangements.

Oleg Deripaska, the billionaire and chief executive of aluminium producer UC Rusal, reveals why he was forced to pay crime gangs for protection, talks of threats to his life and explains why Russia is now a far cleaner economy . In his first in-depth interview Mr. Deripaska has disclosed for the first time his role in the infamous “aluminium wars” of the 90’s, when the Russian privatisation of state commodity assets led to a battle for control over plants and production worth billions of pounds of profit to those who succeeded.

Deripaska says he was far from being involved in the violence, and was one of the few who worked to clean up Russian industry. To do so it was necessary, to pay protection money to criminal gangs, he told The Telegraph reporter. Such confession of Russian “oligarch” who owns and responsible for a publicly listed company could sound unusual. It even could surprise those, who are not familiar with the matter — a long sequence of trials Mr. Deripaska was involved in, and partially organized.  

Later this year Oleg Deripaska would face the brutal battle for control over his aluminium empire in the high court in London. Mr Deripaska is being sued by Michael Cherney, his ex-partner who have multi-billion dollar claims and arguing partial ownership of Rusal. Deripaska denies that Cherney is due any stake in Rusal and simply made any payments for “protection”. New line of defense for Deripaska in this case after experts have found that Deripaska’s signature on Cherney’s primary evidence is genuine, is that he signed a document under duress. That defence rests in turn on claims that Deripaska was the guileless victim of a Russian gangland conspiracy to extort protection money. In turn, Cherney describes such claims as a distraction and cynical tactic.

It is obvious to everyone, including Oleg Deripaska’s lawyers that the trial against Chernoy which is pending in June, would disclose the full story about how he build his aluminium empire, similar to the way Abramovich and Berezovsky had to act on their dispute. They choose the tactic to say everything to press before appearing in the courthouse with necessity to answer uncomfortable questions, hence The Telegraph article with careful explanations of all criminal arrangements Deripaska was “forced” to make in order to survive had appear.

Chernoy is not the only one hunger for Deripaska’s blood. Quite recently another UC Rusal shareholder, Viktor Vekselberg had publicly stated that, being disappointed by business practices and strategy of UC Rusal implemented by Oleg Deripaska, he would be forced to go to trial in order to compensate losses made by "certain contracts between [Rusal] and Glencore were entered into (or are to be entered into) in breach of the shareholder arrangements". Sual’s case names Rusal, Glencore, and Deripaska and his holding company, En+.

In addition to the two major trials we have already mentioned Oleg Deripaska and his company UC Rusal for the last several years has been involved into conflict around Norilsk Nickel ownership with Vladimir Potanin’s holding Interros. This conflict, which partially disappointed Vekselberg and other Rusal minorities, also presented in the long series of trials, which Rusal partially loses. 

Earlier this week the information that Swiss Federal Criminal Court has rejected in full the objection lodged by Oleg Deripaska and UC Rusal to the decision by the Federal Attorney General’s Office not to investigate their allegations hit the market. 

The objection was lodged in response to the decision of Federal Attorney General’s Office not to pursue the criminal complaint against Interros and other parties with allegations of money laundering which was submitted by UC Rusal in August 2011. In explaining its grounds for rejecting the objection, the Federal Criminal Court spoke of "untenable allegations" against Interros and the further parties accused. The Interros Holding Company (RUS) notes with satisfaction the Federal Criminal Court’s ruling, which has confirmed Interros’s confidence in the Swiss legal system.

* – This article originally appeared on Tilde Finance and has been republished with permission.