Deripaska is out of the game
I would very much like to start by saying that one of the most prominent and closest to the head of state Russian businessmen was “outside the law." But this does not allow the very essence of the law itself, the American law, which put Oleg Deripaska in an “interesting position." As announced on behalf of the Department of Foreign Assets Control (OFAC) of the US Treasury, in 30 days sanctions will be lifted from assets owned by the Russian billionaire in the En + group, EuroSibEnergo and Rusale. Rusal, we recall, is the second largest aluminum producer in the world with huge export volumes. For Russia, this is a strategically important company, and in respect of those, we still have special legislation that seriously limits foreign participation in capital and asset management.
The latest sanctions, which fell under the largest business structure and almost all the most famous Russian businessmen and bankers, were officially introduced in April 2018. Their real action began much later, and not on all fronts, and now, as we see, a rollback is expected. At the same time, Oleg Deripaska himself remains under sanctions, although it is now quite difficult to determine what they are. Probably, yet not only in the freezing of personal secret accounts or mansions in New York and Washington.
In practice, everything turned out just in full accordance with the law, more precisely, with the laws of modern business. We saw the “brutal grin of capitalism” as early as the beginning of 90, and our current “victim” appeared on the privatization stage only a little later than the heroes of the unparalleled voucher combination and the pledge auctions. Today there are doubts whether it can be considered luck that Oleg Deripaska, when mass sawing, got a very significant part of the country's strategic heritage. Which, by the way, out of fears of possible deprivatization, read - nationalization, for the most part was trivially taken offshore. What the state has repeatedly looked at it.
But until recently, any kitchen politician could say just that - “lucky”. The default and permanent crises almost did not touch the head of the strategic Russian Aluminum, who also managed to join Norilsk Nickel, no less strategic. Then, in the Deripaska portfolio, there was an En + group of companies, which settled generally in London, but was mainly engaged in managing Russian assets, primarily energy assets, recorded on Oleg Vladimirovich. Well, when the Chubais team finally broke up the energy monopoly of RAO UES, the oligarch also became one of the owners of EuroSibEnergo.
All this time, such assets have regularly received support from the state, and twice - in fact, in the form of direct injections, if not directly from the budget, then from reserve funds. But how can it be otherwise? These are the structure-forming strategic enterprises. The fact that most of them successfully defended offshore, avoiding not only taxes but also any active use of “strategic” billions within the country, was considered not the greatest sin. In addition, the sin seems to be overwhelmed. Thousands of jobs with not the lowest wages, as well as the struggle to ensure that Russian companies and banks looked better against foreign competitors.
With the beginning of the sanctions wars, there was a persistent feeling that someone had already been squeezed, and Deripaska was not touched. After all, he not only bought a lot of foreign assets to Rusal, not only shoved everything that was possible, and sometimes even not, at offshore companies. He carefully diversified his assets, to put it simply - he laid his eggs in different baskets, and made it seem to be so as not to run up on sanctions. Suppose, they say, only that part of the business falls under them, which cannot be deduced from under the state wing by Russian legislation.
Today, as if Russian companies suddenly went to an unprecedented change in their corporate structures and management system. And all because they have become too vulnerable no longer for the Russian, but for the American, for example, the law. It was under this law that Rusal quickly shut down financial cranes from the best Western banks, and at the same time, almost all of the real foreign assets of the company went down. The aluminum giant has shrunk to indecent size and is now relying again on the state, from which it has long and stubbornly tried to distance itself. Apparently, the oligarch received the go-ahead to rescue the business from the state.
According to the business press, Oleg Deripaska himself is ready for a kind of deal with the American OFAC, reducing its stake in Rusal from 70 to 44,95%. How this will be implemented technically is not yet clear, since even with the additional issue of shares in favor of new American shareholders, by law, American, including for the oligarch, compensation should be provided. Perhaps just cash. In the meantime, only the expansion of the share in Rusal for the state-owned Russian bank VTB is announced as such.
At the same time, a much more serious blow to Deripaska as an entrepreneur would be serious restrictions in the management rights of the aluminum giant. Indeed, in the new conditions only 35% of its shares will remain voting, and for the rest a special option is provided - they are automatically added to the decision that wins when voting. Apparently, this is the main essence of the fact that sanctions are removed from companies, but not from their owner.
No less serious changes related to the sanctions will also affect the composition of the management of the companies, which until now were virtually completely controlled by Deripaska. So, the board of directors of the En + group of companies, which primarily controls the energy assets of the oligarch, must be at least half composed of US and UK citizens. As for Rusal, the sanctions directly affected the current chairman of the board of directors, Viktor Vekselberg, Oleg Deripaska’s long-term partner. He must leave his post. And it is planned to remove the companies from the Deripaska list from the sanctions within 30 days.
The fact that US sanctions are not at all comprehensive, but purely selective, was not said only by the lazy one. The system and methods of their circumvention have already turned into something very similar to the big sport. With workouts for wear, with expensive sports schools and notorious social elevators, but also with scandals and doping. In short, nothing superfluous - just business. However, the US sanctions became targeted against Oleg Deripaska and companies under his control only in April 2018, when Washington directly pointed to the businessman’s proximity to the Kremlin.
It took quite a bit of time, as in Washington, they said that sanctions can be lifted if the oligarch goes to reduce their own shares in the capital of companies under the sanction. Interestingly, by that time, the actual sanctions against the companies of the Russian billionaire had not yet begun to act. The American Ministry of Finance has extended the deadline for imposing sanctions on Rusal several times, and this practice has worked. But it not only helped to cool the aluminum market, which could overheat much after the April measures, and thus bring the same Oleg Deripaska not a headache, but additional profits. She also gave the oligarch more time for the most important thing - the transfer of control over Rusal and over the En + group based in London. None of the analysts recall the loss of positions in EuroSibEnergo - Deripaska doesn’t seem to be in charge there.
If now the case turns into a reshuffle on the boards of directors and an increase in the share of VTB, we will have the right to say that someone got off easy. But the cruel realities of business have once again confirmed the well-known truth - companies and banks that do not have a reliable state roof, easily, even effortlessly, turn into a racketeering object. And he does not necessarily have a place to be only within his own country.
But it’s still not entirely clear how the presence of such a large number of US and UK citizens in the management structures of companies, albeit private ones, albeit more than half offshore, but somehow of “strategic” importance for Russia, corresponds. Or does it actually turn out that the business is separate and the strategy is separate?
The latest sanctions, which fell under the largest business structure and almost all the most famous Russian businessmen and bankers, were officially introduced in April 2018. Their real action began much later, and not on all fronts, and now, as we see, a rollback is expected. At the same time, Oleg Deripaska himself remains under sanctions, although it is now quite difficult to determine what they are. Probably, yet not only in the freezing of personal secret accounts or mansions in New York and Washington.
In practice, everything turned out just in full accordance with the law, more precisely, with the laws of modern business. We saw the “brutal grin of capitalism” as early as the beginning of 90, and our current “victim” appeared on the privatization stage only a little later than the heroes of the unparalleled voucher combination and the pledge auctions. Today there are doubts whether it can be considered luck that Oleg Deripaska, when mass sawing, got a very significant part of the country's strategic heritage. Which, by the way, out of fears of possible deprivatization, read - nationalization, for the most part was trivially taken offshore. What the state has repeatedly looked at it.
But until recently, any kitchen politician could say just that - “lucky”. The default and permanent crises almost did not touch the head of the strategic Russian Aluminum, who also managed to join Norilsk Nickel, no less strategic. Then, in the Deripaska portfolio, there was an En + group of companies, which settled generally in London, but was mainly engaged in managing Russian assets, primarily energy assets, recorded on Oleg Vladimirovich. Well, when the Chubais team finally broke up the energy monopoly of RAO UES, the oligarch also became one of the owners of EuroSibEnergo.
All this time, such assets have regularly received support from the state, and twice - in fact, in the form of direct injections, if not directly from the budget, then from reserve funds. But how can it be otherwise? These are the structure-forming strategic enterprises. The fact that most of them successfully defended offshore, avoiding not only taxes but also any active use of “strategic” billions within the country, was considered not the greatest sin. In addition, the sin seems to be overwhelmed. Thousands of jobs with not the lowest wages, as well as the struggle to ensure that Russian companies and banks looked better against foreign competitors.
With the beginning of the sanctions wars, there was a persistent feeling that someone had already been squeezed, and Deripaska was not touched. After all, he not only bought a lot of foreign assets to Rusal, not only shoved everything that was possible, and sometimes even not, at offshore companies. He carefully diversified his assets, to put it simply - he laid his eggs in different baskets, and made it seem to be so as not to run up on sanctions. Suppose, they say, only that part of the business falls under them, which cannot be deduced from under the state wing by Russian legislation.
Today, as if Russian companies suddenly went to an unprecedented change in their corporate structures and management system. And all because they have become too vulnerable no longer for the Russian, but for the American, for example, the law. It was under this law that Rusal quickly shut down financial cranes from the best Western banks, and at the same time, almost all of the real foreign assets of the company went down. The aluminum giant has shrunk to indecent size and is now relying again on the state, from which it has long and stubbornly tried to distance itself. Apparently, the oligarch received the go-ahead to rescue the business from the state.
According to the business press, Oleg Deripaska himself is ready for a kind of deal with the American OFAC, reducing its stake in Rusal from 70 to 44,95%. How this will be implemented technically is not yet clear, since even with the additional issue of shares in favor of new American shareholders, by law, American, including for the oligarch, compensation should be provided. Perhaps just cash. In the meantime, only the expansion of the share in Rusal for the state-owned Russian bank VTB is announced as such.
At the same time, a much more serious blow to Deripaska as an entrepreneur would be serious restrictions in the management rights of the aluminum giant. Indeed, in the new conditions only 35% of its shares will remain voting, and for the rest a special option is provided - they are automatically added to the decision that wins when voting. Apparently, this is the main essence of the fact that sanctions are removed from companies, but not from their owner.
No less serious changes related to the sanctions will also affect the composition of the management of the companies, which until now were virtually completely controlled by Deripaska. So, the board of directors of the En + group of companies, which primarily controls the energy assets of the oligarch, must be at least half composed of US and UK citizens. As for Rusal, the sanctions directly affected the current chairman of the board of directors, Viktor Vekselberg, Oleg Deripaska’s long-term partner. He must leave his post. And it is planned to remove the companies from the Deripaska list from the sanctions within 30 days.
The fact that US sanctions are not at all comprehensive, but purely selective, was not said only by the lazy one. The system and methods of their circumvention have already turned into something very similar to the big sport. With workouts for wear, with expensive sports schools and notorious social elevators, but also with scandals and doping. In short, nothing superfluous - just business. However, the US sanctions became targeted against Oleg Deripaska and companies under his control only in April 2018, when Washington directly pointed to the businessman’s proximity to the Kremlin.
It took quite a bit of time, as in Washington, they said that sanctions can be lifted if the oligarch goes to reduce their own shares in the capital of companies under the sanction. Interestingly, by that time, the actual sanctions against the companies of the Russian billionaire had not yet begun to act. The American Ministry of Finance has extended the deadline for imposing sanctions on Rusal several times, and this practice has worked. But it not only helped to cool the aluminum market, which could overheat much after the April measures, and thus bring the same Oleg Deripaska not a headache, but additional profits. She also gave the oligarch more time for the most important thing - the transfer of control over Rusal and over the En + group based in London. None of the analysts recall the loss of positions in EuroSibEnergo - Deripaska doesn’t seem to be in charge there.
If now the case turns into a reshuffle on the boards of directors and an increase in the share of VTB, we will have the right to say that someone got off easy. But the cruel realities of business have once again confirmed the well-known truth - companies and banks that do not have a reliable state roof, easily, even effortlessly, turn into a racketeering object. And he does not necessarily have a place to be only within his own country.
But it’s still not entirely clear how the presence of such a large number of US and UK citizens in the management structures of companies, albeit private ones, albeit more than half offshore, but somehow of “strategic” importance for Russia, corresponds. Or does it actually turn out that the business is separate and the strategy is separate?
Information