UK court to rule on Russian oligarchs' battle

Reuters News
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Posted: Aug 28, 2012 11:54 AM
UK court to rule on Russian oligarchs' battle

LONDON (Reuters) - An odyssey through the intrigue of the post-Soviet carve-up of Russia's vast natural resources will end on Friday when a British judge rules in multi-billion-dollar court battle between two powerful tycoons.

Judge Elizabeth Gloster will rule on whether Boris Berezovsky was extorted out of his business empire by Roman Abramovich, the owner of Chelsea soccer club.

Berezovsky, a former mathematician who became a Kremlin powerbroker under late President Boris Yeltsin only to fall foul of Vladimir Putin, says Abramovich used the threat of Kremlin retribution to intimidate him into selling at a knockdown price.

Abramovich, a commodities trader whom Berezovsky helped to riches during the chaos following the 1991 fall of the Soviet Union, denies the accusations, for which Berezovsky has demanded as much as $6.5 billion in damages.

"I am a genetic optimist but I shall not say anything more until we see the verdict," Berezovsky told Reuters by telephone. The summary of the decision is expected at 09:30 GMT on Friday.

A spokesman for Abramovich declined to comment.

Berezovsky claimed Abramovich threatened to have his assets expropriated by the Russian authorities under President Putin unless he sold them to Abramovich for $1.3 billion.

Abramovich said that he paid Berezovsky the money for political cover - known in Russia as a "krysha", or "roof" but that his former partner had not helped turn Sibneft, the main asset in question, into one of Russia's biggest oil companies.

Russia's state gas monopoly Gazprom bought control of Sibneft from Abramovich for $13 billion in 2005.

With Kremlin intrigue, informal agreements on billion-dollar assets and a jet-setting background of ski resorts and luxury hotels, the case reveals the heady atmosphere of post-Soviet Russia.

Tycoons like Berezovsky and Abramovich became known as oligarchs in Moscow by wielding power in the chambers of the Kremlin after earning fortunes trading the assets of a former superpower.

The oligarchs became rich beyond the dreams of their Soviet childhoods, and they came to personify the materialism of post-Soviet Russia: brash and dangerous.

After 2000, Putin used public distaste for the oligarchs to cement his power in the Kremlin, threatening Berezovsky with jail and then carving up the business empire of Mikhail Khodorkovsky, once Russia's richest man and now in jail.

Berezovsky left Russia in late 2000 and has directed a stream of criticism against Putin, who has allowed a new group of businessmen and officials to amass vast power and wealth.

Berezovsky also accuses Abramovich of selling, without permission, his shares in aluminum producer RUSAL.

(Reporting by Guy Faulconbridge; editing by Andrew Roche)