INVESTORS IN RUSSIA BEWARE - SOMEONE WILL BE NEXT.
Komsomolskaya Pravda, May 5, 2005
WHICH OLIGARCHS ARE POTENTIAL TARGETS
Who is the next in line on the Kremlin's hit-list? Author: Sergei Abramchuk
[Khodorkovsky and his partners in YUKOS are likely to be convicted, and that will raise the question of who is next in line. After all, everybody bent the rules. Nobody even challenges this assumption. Will the authorities show that their demand to respect tax discipline is not a one-time action?]
On May 16, a verdict will be issued in the trial of Mikhail Khodorkovsky and Platon Lebedev. If the two are acquitted, which is actually unlikely, other business leaders may relax. It will mean that the state will leave them alone for a time. Even the tactics of relations with big business may be revised. Tactics - not strategy. It is clear that oligarchs will never be permitted to regain their former might and influence in affairs of state. But Khodorkovsky and his partners in YUKOS are more likely to be convicted, and that will raise the question of who is next in line. After all, everybody bent the rules. Nobody even challenges this assumption. Will the authorities show that their demand to respect tax discipline is not a one-time action?
So who has been in the focus of attention of the Federal Tax Service more often than others? There were reports on back tax claims against Vympelkom. Alpha Group is one of its major shareholders. News agencies reported last months that almost $1 billion worth of taxes were demanded from TNK-BP - and only for 2001. Again, Alpha Group is one of its shareholders. It is possible to regard all of that as isolated episodes in life of Russian businesses - or as symptoms of an attack on Alpha Group. If its management feels that something is seriously wrong, then it must be taking some steps. The first and most obvious one is as follows: attract some major foreign company as a partner. And here you are, Alpha sold half of Tyumen Oil Company to British Petroleum.
Investments abroad are the next logical step. Alpha Group expanded into cell communications market in Ukraine and tried to expand in Turkey as well. The Turkish deal never took place but the trend - invest abroad - is unmistakable. Observers even took the Alpha vs Kommersant scandal as an attempt on the part of the former to convince the Kremlin of its loyalty. (Alpha sued a newspaper that belonged to Boris Berezovsky, the Kremlin's staunch critic.) In the meantime, the correlation of power in the presidential administration is changing. The faction known as the people from St.Petersburg is gaining influence. This is clearly seen from the latest Presidential Address to the Federal Assembly, which reflects the"patriotic stand" of the mentioned faction. It insists on restriction of foreign presence in strategic sectors of the economy - defense complex, infrastructure, oil and gas...
Mikhail Fridman is one of the first wave of oligarchs. The fate of this wave of"wrong oligarchs" (the term coined by Khodorkovsky) is known: Vladimir Gusinsky, Berezovsky, and Leonid Nevzlin are abroad (the latter two are on the wanted list). Khodorkovsky himself is awaiting a verdict.
We approached some experts recently, asking who they think would be the next"wrong" oligarch. Half of them pointed to Fridman.
On the other hand, the authorities do have a lot of candidates to choose from for harassment and prosecution. Besides, Putin implied in his Address that the Kremlin does not associate big business with a national threat. It only wants taxes paid by everyone - from janitors to business tycoons.
Translated by A. Ignatkin
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