Wednesday, March 15, 2006

Who the hell are Rosukrenergo?

Created in Summer 2004, Rosukrenegro is one of the many 3rd party dealies which seem to be connected to Gazprom making them famous in the financial world for the opacity and various kickbacks on every deal. For some background on the company you could do a lot worse than reading this. So, are they connected to Ukrainian Criminals or to Russian politicians?
  1. We know that half of the company belongs to Gazprom who is represented on the board by K. Chuychenko, who is a KGB agent from S. Petersburg and an old friend of Medvedev.
  2. According to the FT, the director is Oleg Palchikov, who used to be part of yet another uknown company, the EuralTransGas and is regarded as someone who has done business with the infamous Mogilevych.
  3. According to rumors, Rosukrenergo is controlled by the Igor Sechin circle.
Financial Times

Kiev is investigating whether an international organised crime group controls the supply of natural gas from Turkmenistan to Europe, the chief of the Ukrainian security service has told the Financial Times.

Olexander Turchinov, head of the SBU, the Ukrainian security service, said his agency was investigating whether Rosukrenergo, a Swiss-registered company half-owned by Gazprom, the Russian state oil group, and other companies involved in the Turkmen gas trade were indirectly controlled by Semyon Mogilevich, a Ukraine-born Russian citizen on the FBI’s wanted list.

Mr Mogilevich is considered to be a top crime boss in the former Soviet Union.

Mr Turchinov said: "The surname Mogilevich isn’t in the [gas trade] agreements or in the ownership documents [of the companies involved], but there are many indications that a group of people under his control could be involved."

The probe is part of a broader investigation into suspected money-laundering, smuggling and tax evasion stemming from the Turkmen gas trade. It will further aggravate Kiev’s strained relations with Russia and Gazprom, while highlighting the new Ukrainian government's struggle to overcome corrupt practices.

Rosukrenergo was set up in July 2004 as an intermediary between Gazprom and Naftogaz, the Ukrainian state oil and gas company, for the transit of Turkmen gas into Ukraine following a meeting covering the matter between Leonid Kuchma, the former Ukraine president, and his Russian counterpart, Vladimir Putin. Gazprom owns 50 per cent of Rosukrenergo, with the other half held by Centragas Holding, a company registered in Austria with undisclosed owners.

Mr Turchinov said he was investigating whether Rosukrenergo managers were under the control of Mr Mogilevich.

Wolfgang Putschek, Centragas chief executive, denied that Rosukrenergo had any ties with Mr Mogilevich. Mr Putschek said the beneficial owners of Centragas did not want their identities disclosed, but he was confident they had no ties to organised crime.

Denis Ignatyev, a Gazprom spokesman, said Mr Turchinov’s investigation "might be" part of a larger effort by Ukrainian authorities to spread "negative news about the former regime", which was thrown out of power in last winter’s Orange Revolution.

Mr Ignatyev said it was Ukraine’s responsibility to screen Centragas’s owners. "If the [Ukrainian] government signs something saying these are our representatives, we don’t ask further questions."

However, he said Gazprom probably did know who the owners of Centragas were. He said Gazprom would have no right to disclose their identities, but he doubted they could have ties to "a person like" Mr Mogilevich.

Mr Mogilevich was described in an article published on a US Justice Department internet site in 2003 as the leader of a gang of more than 300 criminals, operating in more than 30 countries, involved in "murder, extortion, trafficking in women for prostitution, smuggling, money laundering, bank and securities fraud and, in numerous countries, the corruption of public officials".

Mr Mogilevich and three associates who allegedly helped him control companies in the US and Canada in the 1990s were indicted by a US federal grand jury in 2003 on 45 counts, including securities fraud, money laundering and a charge under the Racketeering Influence and Corrupt Organisations Act.

That case, and separate claims that Mr Mogilevich was involved in a $7bn money-laundering ring with employees of the Bank of New York, inspired the US Congress to hold hearings in 1999 on the threat Russian organised crime posed to financial systems.

Mr Mogilevich gave interviews in 1999-2001 in which he insisted he conducted only legal business. He has not spoken to any media since the US indictment, which resulted in international arrest warrants being issued for him and two associates. The fourth man indicted has pleaded not guilty and is awaiting trial.

Sunday, March 12, 2006

Arms Sale to Algiers

More arms sales as Reuters reports that 'Moscow links its decision to write off $4.74 billion of Algeria's Soviet-era debt to Algiers' commitment to buy $7.5 billion worth of Russian arms'.

Russian Interest in Iran

TIME runs an article here that goes some way in explaining the amount of interest Russia has showed in Iran and why it has ‘for months been stalling the West's efforts to refer Iran's nuclear program to the UN Security Council’. The premise is very basic:
Putin had expected a cash windfall from Iran for the Russia-supplied nuclear capacity; the laurels of a global power-broker for defusing the Iranian nuclear crisis; and the praise of his increasingly nostalgic citizens for restoring the lost empire's glory.
This is not surprising considering that ‘Russia's projected income from just supplying seven nuclear reactors to Iran runs into $10 billion — and way more for maintenance, fueling, etc.’
Putin's massive supplies of conventional weapons to Iran, including air defense missiles and armor, have strengthened that specter — much to Russia's own peril. From 1990 through 1996, Russia supplied over $5 billion worth arms to Iran. Then, Russia heeded a U.S. request to stop military supplies, but resumed them in 2000, just as Putin became president. Last October, Moscow and Tehran signed a deal on military supplies worth $300 million annually. Russia will also supply $700 million worth of surface-to-air missiles. The Iranian arms market now promises Russia some $10 billion over next several years.
The article concludes by stating that Moscow might not get paid this figure of more than $20 billion since the Iranian government does not exactly guarantee stability.
These tantalizing riches risk falling into the same chasm, as the unpaid billions owed to Russia by Saddam Hussein's regime, and other Moscow-backed rogue regimes. Russia risks ending up unpaid, friendless — and facing a volatile nuclear neighbor, connected to terrorist groups and armed with Russian weapons, right on her unstable southern border.

Saturday, March 11, 2006

FT: A Russian phoenix struggles to stay free

A Russian phoenix struggles to stay free The Financial Times ran an article on the 20th of February about VSMPO-Avisma, a company which is trying to fight off the attention from Putin's goverment. As Arkady Ostrovsky puts it:
Instead, he (Vyacheslav Bresht) and his business partner are in the trenches fending off stealth attempts by the Russian state to take control of his company. The planned IPO has been put off and the two biggest customers – Boeing and Airbus – are nervous.
What appears to be going on is the latest example of a state-owned company trying to muscle in on a private business under the banner of “defending national strategic interests”. The Kremlin has already secured control over some of the country’s largest companies, including Yukos and Sibneft.
The threat comes from Rosoboronexport, a secretive state-owned arms export agency that has already seized control of Avtovaz, a car manufacturer in which it has no shares. It is likely to wrest similar control over Kamaz, a truck maker. VSMPO appears to be its next target.