Oligarch paints court adversary as extortionist linked to mob

Well-connected Oleg Deripaska denies he owes Michael Cherney £730m stake in Rusal

Michael Cherney, the exiled East European billionaire who is suing a fellow oligarch for more than £700m is a longstanding criminal who used a notorious network of gangsters to help extort huge sums from Russian businessmen, the High Court heard today.

Lawyers for Oleg Deripaska, the Russian billionaire with close links to Vladimir Putin and members of British high society, hit back at claims that he is trying to dodge a legitimate debt owed to a former business partner by painting a picture of Mr Cherney as an extortionist who travelled on a false Polish passport and was once deported from Britain.

Mr Cherney, 60, a Ukrainian-born industrialist who lives in exile in Israel and is the subject of an Interpol arr est warrant issued in Spain, has brought a multi-million pound lawsuit against Mr Deripaska claiming that he is owed £730m from a disputed stake in Rusal, the world’s largest aluminium company.

Earlier this week, the court heard claims that Mr Deripaska, 44, who counts Lord Mandelson among his acquaintances, was himself close to members of the feared Izmaylovskaya crime syndicate and had ordered the murder of a business rival. The billionaire denies the claims.

Thomas Beazley QC, acting for Mr Deripaska, told the Commercial Court yesterday that his client was the victim of an “old-fashioned extortion racket” or krysha, the Russian word for “roof” used by mafia gangs to denote a protection scam.

It is claimed Mr Deripaska, who said he paid out around $500m to gangs to protect his family and business empire in the 1990s, was terrorised into forming an alliance with Mr Cherney after a series of attacks on associates and members of staff in 1994.

Mr Beazley said: “We say Mr Cherney surrounded himself with criminal characters. They were his network, part of his modus operandi. He used them to pressurise and put pressure on Mr Deripaska.”

The court heard that Mr Cherney, who has dismissed the claims of criminality against him as “scandalous”, fled Russia in 1994 following allegations of his involvement in a banking fraud and obtained false Polish passports and driving licences for himself and family members.

When he and his wife tried to travel to Heathrow using the forged papers in the same year, they were stopped by immigration officers and deported back to Switzerland. Shortly before the deportation, the Swiss authorities had stopped a car carrying two men in which further forged passports in the names of Mr Cherney and his family were found along with a loaded Walther PPK handgun and two silencers.

The court heard that Mr Cherney had told Swiss police he knew nothing about the contents of the car and had bought his own forged passports from a man he knew as Dmitri whom he had met on a beach in Florida and paid $2,000 after receiving assurances that they were legitimate documents.

Mr Beazley said: “The conduct of Mr Cherney is what would be expected of organised criminals, but not people who were legitimate businessmen.”

The case continues.