Clash Amongst London's Russian Tycoons
Monday saw the High Court of London kick off a major lawsuit drama—Boris Berezovsky vs. Roman Abramovich. Abramovich, worth a whopping $13.4 billion and ranked 9th on Russia's 200 richest list, is accused by Berezovsky of ousting him for a staggering $5 billion!
Both titans of industry attended the hearing, according to RIA "Novosti". Some compared this courthouse showdown to the Battle of Stalingrad, while others described it as a tussle between Britain's two most famous oligarchs.
Berezovsky's lawsuit against his former partner, filed back in 2007, sheds light on their alleged partnership troubles in the early 2000s. At the time, Berezovsky held political asylum status while Abramovich was Governor of the Chukotka Autonomous Okrug (he later resigned at his own request).
Berezovsky's lawsuit alleges that, under pressure, they were forced to sell their stakes—in ORT, "Sibneft," and "Rusal"—to Abramovich at discounted prices. If they didn't comply, Berezovsky warns his partnership would have faced the consequences of Putin's "expropriation" scheme.
The primary focus of Berezovsky's claims revolves around the sale of "Sibneft" shares. According to the lawsuit, the trio had agreed to split the asset equally if Abramovich bought it. When Berezovsky and Patarkatsishvili ended up controlling 86% of "Sibneft" as a result of corporate restructuring, they allegedly decided to distance themselves from the oil giant. That decision led to Abramovich's structures becoming the sole beneficiaries of the company, although the income was supposed to be shared among the three.
In 2000, Berezovsky claims Abramovich forced them to sell their "Sibneft" stake for a measly $1.3 billion. Fast-forward to 2005, and Abramovich manages to sell 70% of "Sibneft" to Russia's "Gazprom" for an impressive $13.1 billion, leaving Berezovsky and Patarkatsishvili feeling swindled.
The situation with "Rusal" isn't much better, Berezovsky alleges. He and Patarkatsishvili held 25% of the company's shares each, while Abramovich had an identical share. Similar to "Sibneft", Abramovich managed the entire package. However, in 2003, Abramovich sold his 25% stake in "Rusal" to Oleg Deripaska for a whopping $1.75 billion without consulting his partners. This move is said to have slashed their block package's worth, preventing them from reaping the benefits when they sold their stake in "Rusal" a year later.
Abramovich's lawyers refute all claims, stating that the case relies entirely on unsubstantiated verbal agreements. BBC Russian reports that Andrew Popplowell, Abramovich's lawyer, deemed the case's provability lackluster. Nevertheless, the High Court agreed to hear the case in 2010, with Berezovsky seeking $3.1 billion (£2 billion) from Abramovich for "Sibneft" and an additional $554 million for "Rusal."
According to the Financial Times, this 15-week trial has already begun and both business titans are expected to take the stand. Today, both men were spotlighted in court, with Abramovich appearing cheerful while Berezovsky's attorney, Laurence Rabinowitz, accused his client's nemesis of deceit and extortion. In response, Abramovich reportedly listened to Rabinowitz's impassioned speech calmly, through headphones. Experts predict that former presidential administration chief Alexander Voloshin may testify on Abramovich's behalf.
- The new lawsuit filed by Berezovsky, involving the sale of ORT, Sibneft, and Rusal shares, is set to bring finance-related conflicts within the business world and politics to the forefront of general-news discussions.
- The ongoing trial in the High Court of London, pitting two of Britain's most famous oligarchs against each other, has the potential to reshape the industry of finance, given the substantial amount of money in dispute.
- The latest development in the high-profile legal battle between Berezovsky and Abramovich, initially sparked in 2007, underscores the importance of fair business practices and agreements in emerging industries, such as finance and politics.
