Robert R. Amsterdam: Allowing this sale of 'stolen goods' is a disgrace

Share

I was involved in defending Mikhail Khodorkovsky during one of the worst show-trials since the Stalin era. I was forcibly deported from Russia, and other lawyers were, and remain, incarcerated for defending Mr Khodorkovsky. But nothing prepared me for the London Stock Exchange allowing itself to be involved while Mr Khodorkovsky and other entrepreneurs involved with Yukos have been sent to the gulag to silence them.

The imminent flotation of Rosneft, the main Kremlin-controlled state oil company, is anticipated by foreign investors seeking to profit from Russia's growing oil wealth. This flotation presents a new calculus in investment management. Russia has invented the "Kremlin Index", based on the "complicity discount". What price will the Kremlin oil barons need to strike to motivate people to join them in their violations of human rights and the rule of law?

This offering is all about legitimising Rosneft's ill-gotten gains. The lion's share of the value of Rosneft is made up of assets formerly belonging to the Yukos oil company, built into one of the world's largest private oil companies by Mr Khodorkovsky.

With Mr Khodorkovsky and others jailed on specious charges, and Yukos crumbling under the weight of baseless tax claims, Rosneft obtained billions of dollars worth of Yukos assets through a questionable auction orchestrated by the Kremlin.

These are the assets now being brought to the London Stock Exchange, with the assistance of bankers who have been crucial in bringing the expropriated assets to the London Market. Rosneft's acquisition of Yuganskneftegaz, the main production subsidiary of Yukos, was described as the "swindle of the year" by a universally respected Russian presidential adviser, who resigned in protest.

Andrei Illarionov said "the enigma of the year" was to know how a shady front company, created just days before the auction with charter capital of only $300, was able to win Yukos' core production assets for $9.35bn, then transfer these assets to Rosneft in its sale to the latter days after its winning bid.

In a legitimate auction, the Yukos assets could have fetched more than $20bn. Where did the front company gather $9.35bn, given that all foreign banks stayed away from financing bids at the auction for fear of the legal consequences? Mr Illarionov said the funds were "taken from the citizens", adding: "Russia is no longer a free country."

This flotation presents foreign investors with a choice and an opportunity. The choice is whether or not to invest in what I consider stolen goods. Choosing to invest in Rosneft is investing against human rights and the rule of law, since brutal disrespect for both is what made the flotation possible.

At the close of his trial, Mr Khodorkovsky said: "The whole country knows why I have been put in prison. It is so that I do not hinder the pillaging of Yukos."

The opportunity presented by the Rosneft flotation is to take a principled stand, responding with a resounding nyet, to send a clear message to Moscow that the funds and the respect of foreign investors must be earned.

The proposed Rosneft financing raises numerous critical issues for international investors and capital markets. These concerns include the failure of the Russian state to adhere to international standards of disclosure, its attempt to strong-arm international investment banks into supporting its international financing efforts, its riding roughshod over foreign investors in Yukos, and its wilful disdain for the rights in property of investors.

Unless governments and regulators of Western capital markets stop this financing, not only is it probable that investors foolish enough to purchase Rosneft will suffer the sort of shabby treatment meted out to Yukos shareholders, but their tacit support of these Russian initiatives will harm western capital markets.

Robert Amsterdam is International defence counsel of Mikhail Khodorkovsky

React Now

Latest stories from i100
Have you tried new the Independent Digital Edition apps?
iJobs Job Widget
iJobs General

Primary teaching roles in Ipswich

£21552 - £31588 per annum: Randstad Education Cambridge: Randstad Education re...

Science teachers needed in Norwich

£21000 - £35000 per annum: Randstad Education Cambridge: Science teachers requ...

Semi Senior Accountant - Music

£30000 - £35000 per annum: Sauce Recruitment: A successful, Central London bas...

English teachers required in Lowestoft

£21000 - £35000 per annum: Randstad Education Cambridge: Qualified English tea...

Day In a Page

Read Next
Strikes were carried out by manned air force and navy aircraft (File photo)  

Syria air strikes: President Assad now has the enemy he always wanted – Islamist terrorism

Kim Sengupta
 

i Editor's Letter: Take a moment to imagine you're Ed Miliband...

Oliver Duff Oliver Duff
Secret politics of the weekly shop

The politics of the weekly shop

New app reveals political leanings of food companies
Beam me up, Scottie!

Beam me up, Scottie!

Celebrity Trekkies from Alex Salmond to Barack Obama
Beware Wet Paint: The ICA's latest ambitious exhibition

Beware Wet Paint

The ICA's latest ambitious exhibition
Pink Floyd have produced some of rock's greatest ever album covers

Pink Floyd have produced some of rock's greatest ever album covers

Can 'The Endless River' carry on the tradition?
Sanctuary for the suicidal

Sanctuary for the suicidal

One mother's story of how London charity Maytree helped her son with his depression
A roller-coaster tale from the 'voice of a generation'

Not That Kind of Girl:

A roller-coaster tale from 'voice of a generation' Lena Dunham
London is not bedlam or a cradle of vice. In fact it, as much as anywhere, deserves independence

London is not bedlam or a cradle of vice

In fact it, as much as anywhere, deserves independence
Vivienne Westwood 'didn’t want' relationship with Malcolm McLaren

Vivienne Westwood 'didn’t want' relationship with McLaren

Designer 'felt pressured' into going out with Sex Pistols manager
Jourdan Dunn: Model mother

Model mother

Jordan Dunn became one of the best-paid models in the world
Apple still coolest brand – despite U2 PR disaster

Apple still the coolest brand

Despite PR disaster of free U2 album
Scottish referendum: The Yes vote was the love that dared speak its name, but it was not to be

Despite the result, this is the end of the status quo

Boyd Tonkin on the fall-out from the Scottish referendum
Manolo Blahnik: The high priest of heels talks flats, Englishness, and why he loves Mary Beard

Manolo Blahnik: Flats, Englishness, and Mary Beard

The shoe designer who has been dubbed 'the patron saint of the stiletto'
The Beatles biographer reveals exclusive original manuscripts of some of the best pop songs ever written

Scrambled eggs and LSD

Behind The Beatles' lyrics - thanks to Hunter Davis's original manuscript copies
'Normcore' fashion: Blending in is the new standing out in latest catwalk non-trend

'Normcore': Blending in is the new standing out

Just when fashion was in grave danger of running out of trends, it only went and invented the non-trend. Rebecca Gonsalves investigates
Dance’s new leading ladies fight back: How female vocalists are now writing their own hits

New leading ladies of dance fight back

How female vocalists are now writing their own hits