1/11/2014 5:37
RIA Novosti

Analysis & Opinion

Russia is the real loser in the battle between Berezovsky and Abramovich

Russia is the real loser in the battle between Berezovsky and Abramovich
15:15 16/11/2011
RIA Novosti commentator Olga Barykova
Tags: Rusal, Sibneft, Chelsea Football Club, LogoVaz, Alexander Voloshin, Roman Abramovich, Boris Berezovsky

The legal dispute between Boris Berezovsky and Roman Abramovich, dubbed the Trial of the Century in the media, is more like an episode of Celebrity Deathmatch, a television show in which claymation celebrities settle their disputes in the wrestling ring, in profanity-laden fights to the death. However, while in the show there is always a winner, both oligarchs stand to lose in court.

In one corner stands Boris Berezovsky, 65, once the influential politician and founder of the scandal-ridden LogoVaz company, and now an exiled oligarch with a fortune of $900 million. His opponent is Roman Abramovich, 45, the owner of the Chelsea Football Club former governor of the Chukotka Autonomous Area and the current speaker of its Duma. His fortune is estimated at about $14 billion.

Berezovsky is the claimant in what has become the most expensive lawsuit in Britain. He claims that Abramovich forced him to sell a 43% stake in the oil company Sibneft and a share in RUSAL at a price that was considerably undervalued. Berezovsky is suing his former partner for $5.5 billion in losses.

This may seem like an ordinary lawsuit among businessmen disputing a deal, but considering the extensive coverage the trial has received in the British and Russian media outlets, it's clear that for the public these two are not simply two wealthy businessmen.

First, these men embody Russian business, or rather the confluence of business and political power. Second, they testified in court not only their business problems but unseemly details of Russian politics and business in the late 1990s - early 2000s. And the details have been confirmed by credible witnesses like Alexander Voloshin, the former head of the Yeltsin administration.

Experts believe that, owing to their characters and a confluence of circumstances, both Berezovsky and Abramovich played no small role in Russian history - not only in shaping the country's business environment but its politics as well.

The anti-Steve Jobs

In his testimony at the High Court in London, Abramovich called Berezovsky his political "krysha" ("roof" in Russian). He allegedly paid Berezovsky for political protection.

"After the 1996 elections, Berezovsky became a major political figure. In fact he became a kind of political corporation, - the political leader of big business for which all of us (entrepreneurs) worked," Abramovich said in court, adding that Berezovsky was a political fixer.

Speaking in court, Abramovich said that it was essentially impossible to conduct honest business in Russia at that time: "At that time I had the desire to declare everything and to show everything I had to make it all clear, but then I decided it wouldn't lead to anything good."

Thus, the hearings in London have revealed two main principles of doing business in Russia - political protection and tax evasion.

Political protection was the most important element - without this, nothing else was possible. Political analyst Andrei Piontkovsky told RIA Novosti: "All [entrepreneurs] made big money with the help of the apparatchiks. There were no self-made men like Paul Gates or Steve Jobs. And there are none now."

According to Voloshin's testimony in London, "the roof" not only helped people become rich; it could also demand that they give it all back any time.

Power and money

After Berezovsky fell into disfavor, Abramovich inherited his role of political fixer, having learned that power and money are inseparable, Piontkovsky said. He added that both tycoons played a significant role in the consolidation of Russian business by merging business with political power.

As for paying taxes, where political assets were of no use, smart businessmen resorted to the old trick of money laundering. Abramovich admitted this in court. He said he purchased from Berezovsky and his late partner Badri Patarkatsishvili a package of shares of the ORT television network. Abramovich said he paid $150 million for the shares and another $14 million for their certification.

Abramovich did not really say anything new in court. He simply admitted in public that in Russia big business lives according to its own laws, which are often at odds with those of the state. If it had not been for the lawsuit, Abramovich, who always kept a low profile, would not have been so open.

A public squabble

Experts believe that revelations of the tycoons will compromise both of them and Russia as well. They may deal a heavy blow to the image of Russia and give potential investors second thoughts about putting money into the Russian economy.

Prominent journalist and historian Nikolai Svanidze told RIA Novosti: "Berezovsky and Abramovich are hugely responsible for starting this public squabble. Billionaires do not usually fight in public. Both tarnished their own images. Nobody can win this battle and everyone will lose. They will lose and Russia's image will be tarnished. It's like airing dirty laundry before the whole world."

Yevgeny Minchenko, director of the International Institute of Political Expertise, agrees that the lawsuit concerns not only relations between the two businessmen but creates a very unseemly image of Russian business and politics.

In an interview with BFM.ru, he said: "No transparency, some criminal-style deals, and political 'protection' for business all sound bad. This will have a long-term effect. It is also important that fewer people will invest in the Russian economy. Obviously, this is a blow to all Russian business people who have dealings in the West."

What Berezovsky and Abramovich have in common

There are quite a few books about the role Berezovsky and Abramovich played in Russian politics and business. The most famous ones are "Oligarchs as Highwaymen" by Alexander Khinshtein, "Godfather of the Kremlin: The Decline of Russia in the Age of Gangster Capitalism" by Paul Khlebnikov and "Abramovich: The Billionaire from Nowhere" by Dominic Midgley and Chris Hutchins.

In all these works, Berezovsky is portrayed as a trickster, a lucky adventure-seeker, and, if you will, an evil genius of the Russian business. The authors do not gloss over his love of self-promotion and his desire to throw around his political weight. Abramovich is depicted as his opposite: he keeps a low profile, says little, and is a believer in the Russian maxim "money loves silence."

They have only a few things in common - adventurism, love of money, and a desire to get rich. These features plus their persistence and ability to make and exploit connections made them two the most discussed tycoons in the world.

Writers, journalists, and the public are drawn to Berezovsky and Abramovich because they are both flamboyant figures. However, psychologist Mark Sandomirsky noted that Berezovsky is a typical extrovert while Abramovich is a classic introvert, adding that their current legal battle may be rooted in this personality clash.

"It is clear they have different views and make different decisions. Hence, it is probably natural that they have to settle their conflict in court," he explained.

Whatever their differences, the public will always associate the two men with one another as well as with yachts, high-profile divorces and the political events in Russia in the late 1990s-early 2000s.

They will be remembered by history as men who not only embodied the merger of business and political power but flaunted it before the whole world.

The views expressed in this article are the author's and may not necessarily represent those of RIA Novosti.

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RIA NovostiRussia is the real loser in the battle between Berezovsky and AbramovichRussia is the real loser in the battle between Berezovsky and Abramovich

15:15 16/11/2011 The legal dispute between Boris Berezovsky and Roman Abramovich, dubbed the Trial of the Century in the media, is more like an episode of Celebrity Deathmatch, a television show in which claymation celebrities settle their disputes in the wrestling ring, in profanity-laden fights to the death. However, while in the show there is always a winner, both oligarchs stand to lose in court.>>

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