Publication: Monitor Volume: 7 Issue: 17

While the tycoons were meeting with President Vladimir Putin, a scandal was swirling around one of them. The organizers of the annual World Economic Forum in Davos, Switzerland, which opens today, announced that they had withdrawn the invitation of Oleg Deripaska, head of Russian Aluminum (NTV, January 24). Deripaska was actually uninvited last December, after the Financial Times broke the news that three offshore metals trading companies had filed a US$2.7 million suit against Russian Aluminum in a New York court. The charge: violence and fraud in its bid to monopolize the Russian aluminium market. The three companies–which had worked closely with the Novokuznetsk Aluminum Plant (NkAZ), Russia’s fifth-largest aluminium producer–alleged, among other things, that in 1995 Deripaska and his partner Mikhail Chernoy, who was then associated with the Trans World metals company, had threatened Mikhail Zhivilo, who controlled NkAZ. The plaintiffs claimed that Chernoy had earlier ordered the murder of Felix Lvov–representative of AIOC, the U.S. metals company and Trans World rival–and that Deripaska subsequently warned Zhivilo that he would share Lvov’s fate if he refused to cooperate with Trans World. Russian Aluminium, which was formed early last year when Deripaska’s Siberian Aluminum Company joined forces with Roman Abramovich’s Sibneft now reportedly controls as much as 75 percent of Russia’s multibillion-dollar aluminium market. Abramovich was not named in the suit (see the Monitor, December 21, 2000).

Following the World Economic Reform’s withdrawal of its invitation, Deripaska claimed that the suit has not been formally presented to him. Vladimir Khonyakov, Russian Aluminum’s vice president, noted in a letter to the forum’s organizers that many of its members are involved in “various trials, because in any business there is the possibility of disagreements with partners or competitors.” Khonyakov specifically asked the forum’s organizers how they planned to react to the fact that the financier George Soros is set to stand trial this year in France over allegations that he used insider information to earn US$2.2 million from dealing in shares belonging to the Societe Generale bank following its privatization in 1987 (Vedomosti, January 25; Telegraph [UK], December 23). Soros is a member of and regular participant in the World Economic Forum.

The Russian delegation to Davos this year is headed by Aleksei Kudrin, the deputy prime minister and finance minister, and includes Central Bank chief Viktor Gerashchenko; Deputy Foreign Minister Ivan Ivanov; Andrei Illarionov, President Vladimir Putin’s economic adviser; Sergei Kirienko, Putin’s representative in the Volga federal district; Igor Kostikov, head of the Federal Securities Commission; Andrei Kostin, head of Vneshekonombank; Yuri Ponomarev, head of Vneshtorgbank; and Communications Minister Leonid Reiman. One of the main topics for discussion at the forum will be the management of Russian corporations, and there will also be a discussion on how to guarantee the security of foreign investments in Russia (Rosbizneskonsulting, January 25).