Useful account of a villain, 14 Dec 2004

By	William Podmore (London United Kingdom) - See all my reviews

Abramovich always attaches himself to powerful patrons. In the early 1990s, he befriended President Boris Yeltsin's crony Boris Berezovsky. In 1995, Berezovsky loaned the government $100 million for 51% of Sibneft ('Siberian Oil'), Russia's sixth biggest oil company worth $2.8 billion then (and $15 billion in 2003), and sold it to himself in another sham auction 18 months later for $110 million. Abramovich owned all the bidders in the auction. They robbed the government of $2.7 billion.

Russia's Audit Chamber reported that the sale was conducted with 'multiple legal violations' and 'should be considered invalid'. In 2003, Berezovsky had to flee Russia, and the Blair government gave him political asylum. Labour loves billionaires, however dodgy.

Abramovich broke company law by selling shares in Noyabrsk, Sibneft's extraction arm, to Sibneft at discount. The buyers transferred their shares to Sibneft two months later. He conned workers out of their share vouchers and slashed their wages.

Putin set up tax havens inside Russia, whereby regional governors could offer inward investors huge tax breaks. Abramovich took advantage of this by becoming governor of the province of Chukotka. He evaded regional taxes on Sibneft's profits by selling oil at discount to its subsidiary in Chukotka, which would then sell it to the end user at the higher market price. This gained Abramovich $500 million, far more than he spent on Chukotka, about $230 million. So the region lost $270 million net from his governorship. 'Profit not production' is Russia's mantra nowadays, and not just Russia's.

Abramovich is one of Britain's richest men, worth £7.5 billion at 38 years old. He famously bought Chelsea Football Club in July 2003, which a fellow-capitalist called 'the cheapest insurance policy in history'. The Financial Services Authority is still investigating the insider dealing on Chelsea shares, and seven dodgy offshore trusts' ownership of Chelsea shares. All great fortunes begin in crime.

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