Putin squeezes Abramovich to keep the roubles flowing east

President orders Chelsea's billionaire owner to remember the needs of his homeland
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The Independent Online

Roman Abramovich, the billionaire owner of Chelsea Football Club, is coming under severe and very public Kremlin pressure to continue ploughing some of his vast wealth into his native Russia, and to remain in political office there.

Roman Abramovich, the billionaire owner of Chelsea Football Club, is coming under severe and very public Kremlin pressure to continue ploughing some of his vast wealth into his native Russia, and to remain in political office there.

The pressure, which is being personally exerted by President Vladimir Putin, comes amid signs that Mr Abramovich is seeking stealthily to unwind his political and business interests in Russia as part of a strategy to move the entirety of his wealth to a more stable jurisdiction, such as the UK, where he spends much of his time. That strategy is, however, anathema to Mr Putin, who is known to believe strongly that the country's super-rich are honour-bound to reinvest some of their fabulous wealth into society. He is said to be anxious that Mr Abramovich maintain close ties with the country that made him its richest citizen.

Forbes magazine said earlier this year that the controlling stake the Chelsea boss and his partners own in the oil giant Sibneft meant Mr Abramovich was now worth $14.7bn (more than £8bn). In London that wealth allows him to do as he pleases, but in Russia it is a different story.

At a time when the oligarch class is reeling from the sentencing of Mikhail Khodorkovsky to nine years in jail, following what many considered a Kremlin-staged show trial, Mr Abramovich knows he has to tread carefully.

At issue is his position as governor of Russia's remote Arctic Chukotka region, which lies across the Bering Strait from Alaska. The famously reclusive oligarch was elected to the office in 2000, but his five-year mandate, which has thrilled the locals and placated the Kremlin, is due to run out in December.

Although Mr Abramovich has long since delegated the day-to-day running of the impoverished region of 50,000 to his deputy, he is known to have had enough of what his aides call "a project". "He has tried politics, and it is not for him," a source close to the oligarch told The Independent on Sunday. But the $1.5bn his staff say he has ploughed into the remote area has transformed its infrastructure and standard of living - a recent poll found that 20 per cent of the locals viewed him as "a god".

The role was initially seen by many as "political insurance" - a way of keeping an increasingly anti-oligarch Kremlin happy. But more recently Mr Abramovich has obviously felt less vulnerable, and is on record as saying he does not want another five-year term. He has argued that the undertaking is expensive, even for him, and has even claimed that the air in the region is "too dry" to spend long there. However the Kremlin and the grateful people of Chukotka, who know him as "Uncle Roman", are not about to let him - or his wallet - withdraw without a fight.

Mr Putin shows every sign of appointing Mr Abramovich for a further five years, despite the businessman's own undisguised lack of enthusiasm. Konstantin Pulikovsky, the official who recommends candidates to Mr Putin, said recently: "I have no reasons not to put forward Roman Arkadyevich for another term. He was able to raise the territory out of the abyss."

In a sign that Mr Putin is pressuring a man whose lavish Moscow barbecues he used to attend, the two recently held a high-profile meeting in the Kremlin, and state TV broadcast a stage-managed excerpt of the meeting. A stern-looking Mr Putin was seen quizzing the billionaire - who, almost unprecedentedly, was wearing a tie - on Chukotka's economic performance, and demanding to know why production levels had fallen. As Mr Abramovich was forced to explain this apparent blemish in an otherwise glowing picture, his bearing was awkward, his shoulders slouched and his manner deferential. The encounter looked more like an interview between teacher and naughty pupil than one between the President of the world's largest country and its richest citizen.

Continuing to preside in Chukotka may not be the only sacrifice Mr Abramovich must make to keep on the right side of Mr Putin. Rumours are rife that he will sell his stake in Sibneft to a state-owned entity, further helping the Kremlin to consolidate its grip on the nation's energy resources. Having seen what happened to Mr Khodorkovsky, who used to be Russia's richest man, Mr Abramovich will want to think carefully before he turns down the governorship of a region which is a world away from his beloved Stamford Bridge.