Roman Abramovich just 'wants to have fun', but legal battles are putting his billions at risk

By Tim Webb
Tuesday 09 July 2013 05:20

Two former business partners are planning separate legal actions against him, at least one in the UK, to recover billions of dollars that they claim he has in effect stolen, it has emerged in the last fortnight.

And he could sell his stake in Sibneft, the Russian oil company he controls, to the state-owned gas giant Gazprom, it was reported last week.

Conspiracy theorists - who do a roaring trade in Russia - say he is selling the last of his biggest assets to stop them being stolen by the Kremlin or covetous rivals. Others say that Mr Abramovich does not need the hassle of running a business since he has so much money.

"He has made a vast fortune. Now he wants to have fun by owning things like Chelsea," says Eric Klaus, the chief strategist and head of equities at investment banking boutique Sovlink. So is the net closing in at home and abroad on Mr Abramovich, or not?

Of the two legal actions, the biggest in financial terms is being launched by Boris Berezovsky, the UK-based oligarch who fled Russia in 2000 to escape fraud charges.

At the height of his powers, the colourful businessman, along with half a dozen fellow oligarchs, was responsible for getting Boris Yeltsin re-elected as president in 1996, with a stunningly effective media campaign using Mr Berezovsky's television station, ORT.

Mr Berezovsky, who has been granted political asylum in the UK, claims that Mr Abramovich later pressured him to sell his stakes in ORT, Sibneft and Rusal, one of the world's largest aluminium companies, for knockdown prices. He alleges that Mr Abramovich, his former protégé, was acting on the orders of President Vladimir Putin. A spokesman for Mr Abramovich declined to comment.

Speaking to The Independent on Sunday from Israel, Mr Berezovsky said that he hoped his legal action would inspire others to use the rule of law - notoriously weak in Russia - to recover lost assets.

"I want to create a process for other Russian businessmen who were also under threat and blackmail from government and regional authorities. I want to show them the way that it's possible through legal action," he said.

Lawyers from Carter-Ruck, the firm that has also represented actor Ewan McGregor and supermodel Naomi Campbell, are still working out the details of the claim. Mr Berezovsky said that the damages sought from Mr Abramovich would be at least $7bn (£4bn), and could be claimed from his UK assets, such as Chelsea Football Club.

He added that Mr Putin could also be named in the action, though sources close to Mr Berezovsky said the difficulties involved in suing a head of state in another country meant this was unlikely.

It is not unusual for oligarchs - the name given to the businessmen who acquired great wealth and political power when Russia turned capitalist in the 1990s - to fall out with each other. When the rule of law is so feeble, and is subject to shifting political allegiances, disputes are common.

But what is significant about Mr Berezovsky's action is that it will take place in the UK, rather than in Russia where fair hearings are hard to come by. More importantly, if he is successful, Russian recognition of a British court's ruling is not necessary to recoup any damages, as Mr Abramovich holds many of his assets here. Whether a UK judge can get to the bottom of these business dealings, which are sure to be less than transparent by Western standards, is another matter.

The other case relates to the AIM-listed Russian oil company Sibir Energy, which together with the influential mayor of Moscow, is taking legal action outside Russia against Sibneft, its business partner.

The plaintiffs allege that Sibneft was responsible for diluting Sibir's 50 per cent stake in the two companies' Russian joint venture, worth an estimated $1.5bn, to under 1 per cent. Sibneft says that the stake was diluted with Sibir's knowledge, for which it was paid.

So are the legal actions encouraging Mr Abramovich to sell up and quit Russia? Not at all, claims Mr Klaus from Sovlink. He has always wanted to sell his stake in Sibneft - the aborted merger with fallen oil giant Yukos two years ago was his original exit strategy, he says.

"Roman Abramovich isn't trying to take his money out of Russia. In fact, he has been trying to exit business altogether for several years. If he was worried about being attacked by the Kremlin, it seems a bit late to be worried now."

And if he sells Sibneft, that could mean even more money for his playthings - like Chelsea.

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