SIBNEFT REPORTEDLY THE TARGET OF NEW CRIMINAL CHARGES.

Sibneft, the Russian oil company said to be controlled by Chukotka Governor Roman Abramovich, has reportedly become the focus of new criminal probes. An unnamed official from the Prosecutor General’s Office was quoted yesterday as saying that it plans to summon Abramovich in the near future concerning, first, the process by which Sibneft was privatized, and, second, certain schemes by which Sibneft sold oil abroad. Investigators have reportedly launched three separate fraud investigations aimed at Sibneft, involving charges that the company, directly or through front companies, concluded fictitious contracts for exports to CIS countries, which are supposed to be exempt from value-added tax, and then asked the government for VAT refunds. The oil, however, was apparently sold inside Russia and thus not eligible for VAT refunds. Sibneft’s president, Yevgeny Shvidler, and its chief accountant, Tat’yana Breyeva, have reportedly already been questioned about these operations. The investigators are also looking into certain preferences that Sibneft allegedly received from the Railways Ministry, which is headed by Nikolai Aksenenko, who was at one time reportedly close to both Abramovich and his erstwhile mentor, Boris Berezovsky. All of these various machinations, which cost the federal budget some 500 million rubles (about US$17.8 million), reportedly led to a Tax Police raid on Sibneft’s offices in Moscow last summer, during which documents were seized. The investigation, however, seemed to then fade away (see the Monitor, August 31, 2000).

While the various alleged financial schemes were the focus of the new criminal cases, officials from the Prosecutor General’s Office were quoted yesterday as saying that they were more interested in the issue of how Sibneft was privatized, and that Alfred Kokh, the current Gazprom-Media chief who was head of the State Property Committee at the time of Sibneft’s privatization, had already been questioned in this regard (Vremya Novostei, May 29). Sibneft was privatized during the notorious 1995 loans-for-shares scheme. However, because of the scheme’s pretense–that the state was simply allowing banks to hold shares in state enterprises in trust in return for loans–the deal was not consummated until 1997, when a controlling share in Sibneft permanently passed into the hands of offshore companies generally assumed to be controlled by Berezovsky and Abramovich. The biweekly newspaper Novaya Gazeta reported yesterday that prosecutors are now revisiting a probe carried out earlier by the Audit Chamber, the state agency that monitors the use of federal money, which found that the purchasers of the controlling stake in Sibneft should have paid US$2.2 billion for it rather than the US$110 million they actually did (Novaya Gazeta, May 28).

If the reports that the legality of Sibneft’s privatization is now under question are accurate, it would mark a serious change in policy, given that President Vladimir Putin has on several occasions pledged not to challenge the results of the controversial privatizations of the 1990s. He repeated that pledge during a meeting with twenty-one leading business tycoons last July, saying that while both business and the state should follow “the rules” strictly, there would be no “redistribution of property” (see the Monitor, July 31, 2000). The month before that, the Moscow city prosecutor’s office had filed a lawsuit claiming that a controlling share in Norilsk Nickel–which was handed over to Vladimir Potanin’s Oneksimbank in 1995 through the loans-for-shares scheme and formally sold off to affiliates of Interros, Potanin’s holding, in 1997–had been “illegally disposed of” and should be returned to the government. The court, however, dismissed that suit. Last October, First Deputy Prosecutor General Yury Biryukov told the State Duma that while his office was continuing to investigate the Norilsk deal and to seek reimbursement for revenue the state lost as a result, there would be no attempt to renationalize property (Moscow Times, October 21, 2000; see also the Monitor, June 22, 2000). In both the Norilsk and Sibneft cases, however, it is not clear whether the moves challenging the legality of these privatizations came from Putin himself or from his subordinates–such as the Prosecutor General’s Office, perhaps with the backing of other top law enforcement officials. It is also not clear whether such moves are indeed aimed at overturning the results of these privatization deals or simply at intimidating the tycoons who won them. Whatever the case, the issue could come up at Putin’s next meeting, set for the day after tomorrow (May 31), with the oligarchs–who are now grouped under the Russian Union of Industrialists and Entrepreneurs.

VOLOSHIN, VAVILOV REPORTEDLY TARGETED IN NEW FRAUD PROBE.