Oleg Deripaska breaks his silence

[TonyGosling]

Stop bribing courts, Medvedev tells oligarchs
Wed Oct 21, 2009
By Dmitry Zhdannikov

MOSCOW, Oct 21 (Reuters) - President Dmitry Medvedev told Russia's richest businessmen on Wednesday to stop paying bribes after the tycoons complained to him about corruption and poor legislation.

At a meeting in the Kremlin with the Russian Union of Industrialists and Entrepreneurs, commonly known as the "oligarchs' lobby", Medvedev responded to the tycoons' complaints by criticising them for bribery.

"I suspect these are often the businessmen who are paying (bribes) to them (the courts). It is the obligation of every businessman to report (corruption) to law enforcement agencies," a visibly irritated Medvedev said during the part of the discussion broadcast on television.

The comment came in response to remarks by indebted tycoon Oleg Deripaska, once Russia's richest man, who complained about Russia's notoriously corrupt court system.

Medvedev has made the fight against corruption a priority but so far has had few concrete results.

Apart from the comment on bribes, Medvedev's second ever meeting with the oligarchs' lobby was a relatively calm one, contrasting with when Vladimir Putin was president and would ask tough questions and move stock prices with his harsh remarks.

Medvedev called on the tycoons to give ideas for "exit strategies", what Russia should do as it starts emerging from an economic slump.

Gross domestic product fell by almost 10 percent in the first half of 2009, in sharp contrast with a decade of growth fuelled by high commodities prices.

A recent rise in oil prices has given hope for renewed growth in 2010 but analysts say reliance on oil revenues has weakened the incentive for Russia to modernise its economy.

The tycoons, who received unprecedented help from the state to stay afloat and refinance debts this year, spoke little about possible "exit strategies" and instead flagged worries about legislation and disputes with each other.

Russia's fourth richest man, the oil-to-banking oligarch Mikhail Fridman, who owns major retailer X5, complained about a bill which may cap food prices and tackle regional dominance, and about a competition law which sets prison terms for breaking anti-monopoly rules.

The meeting continued behind closes doors and participants said the dialogue continued in a similar vein.

"It was a disappointment that we didn't see a clear strategy to diversify the economy," said Boris Titov from mid-sized business lobby group Delovaya Rossiya.

http://www.reuters.com/article/bondsNews/idUSLL10692820091021?sp=true

[TonyGosling]

Medvedev, oligarch lock horns over corruption
By Anna Smolchenko (AFP)
http://www.google.com/hostednews/afp/article/ALeqM5iWVf4rCyRpXtXmCneMW 04kw9-Tuw

MOSCOW — President Dmitry Medvedev rebuked Russia's former richest man Wednesday after the oligarch bluntly told a Kremlin meeting that favorable court rulings were impossible without paying shady mediators.

Oleg Deripaska, the chief of the world's largest aluminium firm UC Rusal, said receiving a fair ruling without paying a mediator between courts and companies had become next to impossible.

"Courts have overgrown with institutions without which one can't receive a fair ruling," Deripaska told the open and televised meeting. "Everyone knows one has to pay for that."

Medvedev, whose face creased with displeasure at Deripaska's comments, shot back by indicating that it was business that bred corruption.

The president called on the country's top tycoons -- most of whom were present at the meeting -- to help the government fight corruption by reporting any court abuses to the authorities.

The comments were a rare public complaint from Deripaska, known for his tight-lipped behavior and who in the past has gone to great pains to project himself as an ultra-loyal tycoon.

"You said ... it was a surprise for you," Medvedev told Deripaska in a rare show of public anger. "A question arises: who pays them, those mediators? I suspect it is business and not someone else that pays them."

Medvedev said that corrupt officials have always existed but their numbers might have increased during the crisis and called on companies to report court abuses to the authorities.

"This is our common task," Medvedev said. "This is the highest form of corruption when growths of such kind appear in the court system."

In June, Deripaska was the centre of attention when Prime Minister Vladimir Putin launched a lacerating attack on the oligarch, describing one of his factories as a "rubbish dump" and saying workers had been held hostage, with unpaid wages.

Deripaska also complained that existing bankruptcy legislation did not allow for the genuine restructuring of assets, in a thinly veiled jab at Mikhail Fridman, a fellow billionaire present at the meeting.

"Sometimes even one small creditor is able to spoil several months of work by banks and management of enterprises," Deripaska said.

He and Fridman have been locked in a bitter battle which saw Alfa Bank, in which Fridman is the main shareholder, file bankruptcy suits against two key units of UC Rusal last month.

Earlier this month, the courts threw out bankruptcy claims against the company in an apparent victory for Deripaska.

Medvedev also said at the meeting with the tycoons the state should reduce its economic role, warning state corporations set up by his predecessor Putin could ultimately cease to exist.

"I believe that we at some point have let the creation of state corporations out of control," Medvedev said.

"This does not mean that they should be shut down," he said, suggesting instead that they should be transformed into joint-stock companies.

Joint-stock companies in Russia are divided between open joint-stock companies whose shares may be publicly traded and closed joint-stock companies whose shares are distributed among a limited number of shareholders.

Under ex-president Putin, now the prime minister, the government created a series of state champions to spur growth in sectors such as car making, civil aviation, nanotechnology, the nuclear industry and arms building.

Analysts say the opaque structure of these state giants has allowed Putin associates like Sergei Chemezov, head of the Russian Technologies conglomerate, to operate unchecked and attempts to rein them in have got nowhere so far.

http://www.google.com/hostednews/afp/article/ALeqM5iWVf4rCyRpXtXmCneMW 04kw9-Tuw