Mandelson's oligarch friend 'was linked to assassination'

Accusation emerges as £700m battle over aluminium deal begins at High Court

Cahal Milmo
Tuesday 10 July 2012 01:35
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A Russian billionaire with links to Vladimir Putin and the upper echelons of British society was linked to the murder of a banker yesterday as he was accused of lying on a "grand scale" to avoid paying an exiled oligarch more than £700m.

Oleg Deripaska, whose British connections include Lord Mandelson, was said in court submissions to have been the member of an organised crime group that ordered the assassination of businessman Vadim Yafyasov in 1995. The allegation, which Mr Deripaska denies, was made in the opening day of legal action brought against him in London's High Court by Michael Cherney, a Ukrainian-born businessman who lives in Israel.

Their multimillion-pound dispute – the latest litigation between warring eastern European billionaires in Britain's courts – centres on the ownership of the world's largest aluminium company, Rusal.

On the opening day of the trial yesterday, lawyers for Mr Cherney, 60, said Mr Deripaska was seeking to "rewrite history" by misrepresenting the relationship between the two men.

The case, which will lift the lid on events during the so-called 1990s "Aluminium Wars" between oligarchs to gain control of post-Soviet Russia's metal reserves, revolves around a meeting between Mr Cherney and Mr Deripaska in London in 2001. Mr Cherney claims the meeting resulted in two written agreements being drawn up in which Mr Deripaska made a preliminary payment of $250m (£161m) to him and agreed to hold his stake in what became Rusal. Mr Cherney alleges payment for his share of Rusal was never forthcoming while Mr Deripaska counter-claims that his accuser was at the heart of a network of organised criminals and the money was being extorted as part of a "krysha", or mafia, protection racket.

The Commercial Court heard that Mr Deripaska, 44, was lying about the true nature of his relationship with Mr Cherney, who will give evidence to the trial via video link because he fears arrest under an outstanding warrant for alleged money laundering offences.

Mr Deripaska, who has an estimated fortune of $9bn, is one of the best-connected oligarchs to emerge from the break up of the Soviet Union.

In written opening submissions, Mr Howard said: "It is Mr Cherney's position that Mr Deripaska is telling lies on a grand scale. He is doing so in the hope of avoiding his obligations to Mr Cherney... Mr Deripaska has sought to rewrite history."

It emerged that the judge, Mr Justice Andrew Smith, had rejected a request for nine witnesses for Mr Deripaska to give evidence anonymously.

A spokesman for Mr Deripaska said: "Mr Deripaska has stated that Mr Cherney is a criminal with whom he was forced to enter into a krysha relationship in post-Soviet Russia. He was never business partners with Mr Cherney and he rejects the entirety of the claim brought against him."

Roman Abramovich versus Boris Berezovsky – judgement pending

What is at stake? Mr Berezovsky claims he is owed £3.2bn in damages after allegedly being intimidated by Chelsea Football Club owner, Mr Abramovich, into selling shares in the Russian oil company, Sibneft, for a "fraction of their true worth". But Abramovich denies the allegations.

Lev Leviev versus Arcadi Gaydamak – High Court ruled in favour of Leviev

What was at stake? Mr Gaydamak brought a $1bn claim against Mr Leviev, the world's largest polisher and cutter of diamonds, for alleged non-payment of cash from an Angolan diamond venture. The High Court ruled in favour of Mr Leviev on June 29. The dispute centred on a mining venture set up during Angola's civil war. Mr Gaydamak plans to appeal.

Oleg Deripaska versus Michael Cherney – began yesterday

What is at stake? The claim, valued at between £1.3bn and £2.3bn, is over the ownership of the world's largest aluminium company, Rusal. Mr Cherney claims he was the business partner of Mr Deripaska and is entitled to 20 per cent of Rusal. But Deripaska says the payment was protection money, a claim Cherney denies.

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