Publication: Russia and Eurasia Review Volume: 1 Issue: 9

By Mikhail Kochkin

On September 12 something quite extraordinary happened in the world of Russian big business: Sergei Kukura, vice president and chief financial officer of the giant oil company Lukoil, was kidnapped. This company, which together with Gazprom generates the lion’s share of the Russian state budget, carries huge (and, in some parts of Russia, unlimited) influence and authority, so news of the kidnapping of the company’s second-in-command came as a bombshell.

As a rule, Russia had previously seen kidnappings only of either journalists or high-ranking military personnel and government officials–and in both cases the setting was Chechnya or neighboring regions. Otherwise, kidnapping and ransom demands tended to be limited to mutual assaults by kingpins of the criminal underworld. Never before, not even in the “wild 1990s,” the frenzied period that saw the “primitive accumulation” of capital in Russia, had such a high-level businessman been kidnapped. And never had information on the circumstances of such a serious matter been so tangled and contradictory.


In brief, the chronology of events was as follows: On Thursday, September 12 in the village of Vnukovo, where Lukoil has a complex of out-of-town executive residences, four unknown masked men, armed with automatic weapons, got out of a vehicle bearing blue police license plates, which was blocking the road, and stopped the Mercedes in which Sergei Kukura was traveling with his driver and bodyguard. The attackers forced Kukura into their own vehicle and set off in an unknown direction. The driver and bodyguard were blindfolded, injected with an unidentified sedative and dumped in the woods.

Lukoil’s president Vagit Alekperov immediately held a press conference at which he promised a reward of 30 million rubles (US$1 million) for information that might help secure Kukura’s release. The next night, Friday, the police received an anonymous call. An unidentified person told them that a video cassette showing Kukura had been left on a grave in the cemetery at Vnukovo, where the Lukoil village is located. On the video, the hostage passed on the kidnappers’ demands for a ransom of US$3 million plus EU3 million, in small bills.

Confidential negotiations continued for a little over a week (with an unnamed Lukoil employee nominated by Kukura himself as intermediary), in which the company insisted on guarantees that their executive should be returned unharmed, while the kidnappers demanded the ransom be handed over first. The investigating team was then sent a second video, in which the captive reiterated the terms for his release and, in the words of the investigators, “looked considerably the worse for wear.” Then there was a pause in the negotiations and for more than 24 hours the bandits made no contact until, at 2 pm on Wednesday, September 25, Kukura was released as suddenly and unexpectedly as he had been kidnapped.It was later revealed that he had been released in Bryansk Oblast, and made his own way back to the Lukoil village near Moscow before contacting the police. He was thrown out of the same vehicle with police plates in which he had been captured, not far from the Lukoil village.

When the victim had recovered sufficiently, he told investigators that he had spent the whole time with a sack over his head and had therefore not seen his kidnappers. In the newest official account, Kukura was freed as a result of a special operation by law enforcement agencies, without any ransom being paid, due to certain information received from an individual who wished to remain anonymous, for which Lukoil was already paying the promised RU30 million. The police are questioning the taxi driver who brought Kukov to Moscow the 400-odd kilometers from Bryansk Oblast, which Kukov had asked him to do after having been thrown out of the car.


Theories as to what actually happened to one of Russia’s leading businessmen have been multiplying daily. For obvious reasons, neither Lukoil nor the investigators have been especially open or forthcoming, so the public has been gleaning what crumbs of information it can from journalists who have links with so-called “confidential” sources–anonymous oil company employees and members of the investigating team. The information vacuum has allowed journalistic imaginations to run free.

Kommersant was the first newspaper to suggest that Kukura’s kidnapping might have been staged by Lukoil itself, with Kukura’s prior agreement. Certain aspects of the intrigue point to this: Kukura’s bodyguard and driver made no attempt to offer resistance to the masked men who carried off their charge, and the kidnappers, in turn, treated the vice-president’s escorts very humanely. The objective of the “kidnapping,” according to Kommersant, citing anonymous sources in the law enforcement agencies, was to buy time to allow Lukoil to sort out some of its affairs without incurring any losses or sustaining any damage to its business reputation. It might, for example, have needed to close a major deal or pay off an overdue loan. It would not have been deemed possible for anyone to apply pressure on the company at such a difficult time. According to the publication, this was a watertight scenario, because it would take some considerable time to investigate all the company’s financial affairs, and it would be very hard to unearth the truth. Nezavisimaya Gazeta also suggests that Kukura was “snatched” by Lukoil. The company supposedly needed to do this in order to bring down the value of its shares on the stock exchange, so that it could then buy them up on the cheap itself.

Izvestia (which is co-owned by Lukoil itself) put forward a different version of events. This newspaper’s view was that someone gave Lukoil information which the company was able to use to apply pressure to the kidnappers, so that they were forced to let Kukura go. It is for this information that the oil company intends to pay up the promised 30 million rubles. Izvestia reports that negotiations with the kidnappers were carried out exclusively by representatives of Lukoil, rather than by the law enforcement agencies. But, at the beginning of that week, the criminals for some reason refused to come to an agreement on the handover of the ransom, and then released Kukura. The newspaper also put forward a theory that the vice president was kidnapped by policemen, who are now being sought amongst the ranks of the Internal Affairs Departments of Moscow city and Moscow oblast. They may have taken Kukura in order to question him about his secret personal investments or even to obtain some incriminating evidence against Lukoil president Vagit Alekperov. The view of Gazeta newspaper is that one of the company’s sacked senior regional managers staged the kidnapping in an effort to pressure the company’s management to stop their legal action against him, and at the same time to share their “spoils” with him. The deal was worth not US$6 million, but several tankers, plus a share in the oil business, says Gazeta.

If these theories prove unfounded, then Kukura really was kidnapped in classic gangster fashion (as Lukoil’s press service still maintains) for a ransom of US$6 million, but the bandits subsequently lost their nerve about what they had done. But this is hard to believe, given Lukoil’s reputation in Russia as an omnipotent clan, with powerful, far-reaching connections. For any group of gangsters, even the toughest, to kidnap Lukoil’s vice president would be tantamount to suicide. Everything points to the fact that some serious organization was involved in the affair: The victim had been under close surveillance, and the kidnapping was carried out using police uniforms and a vehicle with special license plates, none of which ordinary gangsters would have been likely to risk.

Soon after Kukura’s release a startling new version of events was put forward: It emerged that the kidnappers had left the video recordings of the hostage on the grave of another Lukoil vice president, Vitaly Shmidt, who died in very mysterious circumstances five years ago. Shmidt died shortly after drawing up a plan for the company’s global restructuring. He was proposing to nationalize Lukoil’s network of foreign offshore companies and, according to unofficial sources, was trying to subordinate them to himself in order to take control of the company’s main financial operations. The son of the executive, who had supposedly died of a heart attack, insisted that his father’s heart was sound and that his death had not been due to natural causes. After Shmidt’s death, his family were stripped of most of their shares, and his partners were put out of business. Thus the kidnapping of Sergei Kukura may have been an attempt by people close to Shmidt to get compensation for losses amounting to considerably more than US$6 million. This theory is also indirectly borne out by information from anonymous company sources, to the effect that Sergei Kukura was indeed released without any ransom payment, but on specific conditions, some of which were financial. However, the possibility cannot be ruled out that the kidnappers used the old and murky Shmidt affair as a smokescreen, and that the videos were left on his grave to lay a false trail for the investigators and public opinion.


New information on the affair is becoming available almost by the hour, and it is quite likely that the public will soon be presented with the final official version of events. However, it remains an open question whether Russia’s business world in general and Lukoil in particular will emerge from this with tainted reputations. Only recently, Lukoil, Russia’s biggest oil company, started trading on American stock markets, published open lists of its shareholders and introduced international accounting standards. Similar moves towards increased openness and transparency have been made by other major Russian companies too, and the world had begun to get used to the idea that Russian business had changed, and that the experience of the early 1990s could be forever consigned to oblivion. All these positive developments may now be wiped out with a single stroke.

Regardless of what actually lay behind Kukura’s kidnapping–a special services plot, a power struggle between the big oil companies, or internal wrangling within Lukoil itself–each and every one of these explanations and motives sends the same message: that all is not so clean and straightforward in Russian business. Kukura’s kidnapping created a real threat, for he knew of all the confidential plans for the company’s deals and had access to state secrets. Now Lukoil itself may worry about foul play and its president, Alekperov, may expect something incriminating to surface. A large-scale war “without rules” in the Russian business world, which has not yet completely shaken off its semi-criminal past, has the potential to ruin the reputation of Russian companies for many years to come.

Only with a scrupulously honest and frank report on the findings of the investigation, and openness from the company itself, will there be a chance of smoothing over the alarming implications of this incident, and drawing a line under the flood of information from “anonymous sources.” Time will tell if Kukura’s kidnapping was an isolated escapade or the beginning of a dangerous new tendency in big business in Russia.

Mikhail Kochkin is a postgraduate in linguistic studies and a volunteer with “Eurocontact” NGO in Volgograd.