Looter's Paradise

The Kremlin's victory over Yukos can be seen as a foregone conclusion. An old truth is once again being reaffirmed: After victory, the battlefield belongs to the looters


Time has run out for Yukos. Court marshals arriving in force, the freezing of corporate bank accounts, the warrant of distress, and the default declared by the company's Western creditors - that's it, curtains.
Yukos is only left to sell off its assets. This path to resolving the conflict was suggested by Finance Minister Aleksei Kudrin - that is to say, the government. And the government implements the will of the president who said that the state is not interested in Yukos' bankruptcy.

Of course, few believed that the declared undesirability of bankruptcy was the state's carte blanche to the Yukos owners to retain their control of the company.

The majority of market players interpreted Putin's statement correctly, adjusting it for Russian reality: Yukos will have to share - either with the state itself or with state-affiliated companies. This is the price of saving Yukos from bankruptcy and possibly saving Khodorkovsky and his associates from prison.

Vultures have long been circling over the embattled Yukos in anticipation of easy prey. At this point a command is issued: "You may!" Putin's statement effectively declared an unofficial tender for the company's assets and also a tender for the right to mediate in Yukos's horse-trading with the state. There is something here for everyone to cash in on: Some will get the assets while others will get fat commissions for expediting the deal.

Boris Jordan, president of Group Sputnik, was the first to take a bid. The investment banker, who invariably appears wherever a business is taken away from someone, offered his intermediary services. Jordan's experience in resolving a high-profile "dispute between economic entities" (Gazprom and Gusinsky's NTV) gave cause to think that the Sputnik president was set up with the needed authority. It would seem that by doing the Kremlin's bidding he would help the state to take property from yet another owner - Khodorkovsky. Before long, however, it turned out that the government was conducting no negotiations with Yukos, nor was it going to conduct any.

On whose behalf is Jordan acting then? According to informed sources, he represents the interests of Roman Abramovich ,while the "high-ranking Kremlin source" seeking to convince the media people about Jordan's ability to achieve an out-of-court settlement was Igor Shuvalov, a presidential aide who is closely associated with the Chukotka governor and who knows exactly what the latter wants. And here is what Abramovich wants: by effectively tearing up the deal with Yukos, first regain control of Sibneft and ,second, take possession of the raw materials base of the company in distress. By transferring Yukos under Abramovich's control the Kremlin would replace one tycoon-oligarch with another - a maverick with a loyalist, an outsider with one of its own. That would be the price of freedom for Khodorkovsky. Yes, he would thus lose a substantial part of his assets but still he would be allowed to keep some. In short, Abramovich is ready to save a colleague from both a prison cell and a begging bowl. But the savior's efforts should be generously rewarded.

Clearly discernible in the flock of vultures getting in for the kill also is Oleg Deripaska, an insatiable hostile-takeover artist. According to information leaked in the press, he has already been in negotiations with Vasily Shakhnovsky, a Yukos shareholder, on the sell-off of the company's subsidiary enterprises for $10 billion. In addition, Khodorkovsky will go free. It is a big mystery just how Deripaska is going to secure the release of the Matrosskaya Tishina inmate and how he is going to raise such a huge sum.

There is probably even no need here to mention Rosneft and Surguneftegaz: These are the main contenders for the Yukos assets although victory is not at all a foregone conclusion for either.

After a long silence, the Russian Union of Industria-lists and Entrepreneurs (RUIE) also broke the taboo and spoke up. Here is its proposal: Yukos shareholders buy a stake in Menatep sufficient to foot the tax bill and transfer it to a state-owned company or the state for trustee administration. Clearly, it is not only a sense of corporate and human solidarity with a colleague in distress that compels RUIE fat cats to show concern for the company.

Okay, all of these are high-profile players; their names are well known and their interests understandable. Yet recently, a new, obscure figure got involved in the game: a certain Roman Tsepov. His authority is not officially certified by anyone. He introduced himself to Yukos shareholders as a "silovik from St. Pete," telling about his proximity to Viktor Zolotov, chief of Putin's security service; and Igor Sechin, deputy chief of the Presidential Staff, suggesting that his "principal and agent" was Putin himself.

A madman. Or a con man. There were no other theories. Yet inquiries and thorough analysis of the outsider's background showed that with certain provisos he could well be what he says he is. Although it cannot be entirely ruled out that he is bluffing either.

Roman Tsepov is 42. He hails from St. Petersburg. He worked as a fitter at the Izhorsky plant; then he served in the Internal Affairs Ministry Interior Troops. In the early 1990s, he established Baltik-Eskort, a private security company that provided protection services to, among others, Lyudmila Narusova, the wife of the then-mayor of St. Petersburg; and Kseniya Sobchak, his daughter. Mayor Sobchak's personal security was ensured by Viktor Zolotov, a Federal Protection Service (FSO) officer who was specially assigned to St. Petersburg from Moscow. According to some sources, he also helped Tsepov (who had by that time become co-owner of several companies) in his commercial activities. Tsepov also enjoyed the patronage of the mayor and his deputies: Baltik-Eskort received monopoly rights to provide security services to cruise vessels calling at the St. Petersburg port and to pop stars touring the Northern capital.

Informed sources say that Roman Tsepov has not lost contacts with the "siloviki from St. Pete." At least with those who are now part of an influential Kremlin group. It is unknown whether these people commissioned him to "come to terms" with Yukos. As soon as the "Kremlin representative" asked for a big advance on his services, his powers were called into question. Tsepov's former relationship with Zolotov and Sechin and possibly also with Putin is a hard fact, but the level and quality of his present-day contacts is, basically, a matter of speculation.

The Kremlin's victory over Yukos is all but a foregone conclusion while the battle for control over the company is just beginning. As is known, after victory, the battlefield belongs to looters.


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