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Wednesday, 12 July, 2000, 15:15 GMT 16:15 UK
Analysis: Kremlin war on big business
Vladimir Gusinsky
Vladimir Gusinsky has been charged with embezzlement
By BBC News Online's Stephen Mulvey

Russia's new President Vladimir Putin has promised to cut the country's big businessmen down to size, and all the signs are that he has now started to put his words into action.

A wave of investigations which began to build last month and has now broken with a loud crash, leaves a handful of top "oligarchs" facing possible charges of tax evasion or fraud.

These include

  • Vagit Alekperov, the head of Russia's largest oil company
  • LUKoil, Vladimir Potanin, head of the Interros group
  • Vladimir Kadannikov, a former deputy prime minister who is head of the country's largest carmaker, Avtovaz.

Russia's biggest independent media baron, Vladimir Gusinsky - a powerful voice of opposition to the Kremlin - has already been charged with embezzlement, and briefly detained.


The investigation into Avtovaz is perhaps the most sensational development, because of its potential to expose to scrutiny the business dealings of a tycoon who was until recently one of the country's major powerbrokers - Boris Berezovsky.

Boris Berezovsky
An arrest warrant against Boris Berezovsky in 1999 was quickly withdrawn
Mr Berezovsky is currently suing the Forbes magazine for libel, after it accused of him of being a criminal godfather linked to a series of assassinations.

He is also thought to be one of the handful of Kremlin insiders who chose Vladimir Putin as Boris Yeltsin's successor - though in recent days he has talked about leading a party of "constructive opposition".

The youthful Russian reformer, and one-time deputy prime minister, Boris Nemtsov has described the latest events as the start of a war between government and big business.

But such is the power of Russia's oligarchs that the outcome of any war between them and the Kremlin would be hard to predict.

Wide implications

Top businessmen put rivalries aside and issued a joint protest against the arrest of Vladimir Gusinsky last month.

Mr Gusinsky
Vladimir Gusinsky: Now not the only top business target
They control the most influential Russian media, and the country's most profitable industries - oil, gas and metals.

The action against Vladimir Potanin's Interros group could have widespread implications, as it calls into question the legality of a privatisation that took place in 1995.

It was around this time that a series of privatisations put the country's blue chip companies into the hands of a select group of powerful bankers - creating the so-called "oligarchy" that now appears to be under threat.

The launch of a criminal action for tax evasion against LUKoil and Avtovaz is also a shot across the bows of other businesses.

The Russian Government has, in the past tried many tricks to recoup unpaid tax, but the criminal law has rarely, if ever, been applied for this purpose against the most prominent tycoons.

Litmus test

Despite the widening range of the investigations, it remains the case that the main thrust of the government's attack has so far been directed overwhelmingly towards Mr Gusinsky, and Media-Most.

Tatyana Dyachenko
Boris Yeltsin's daughter, Tatyana: Focus of Kremlin refurbishment scandal
While the authorities were filing charges against Mr Gusinsky alone, they were vulnerable to the charge of persecuting one individual, on political grounds.

The latest attacks directed at other targets provide a defence against this charge - but only if they are followed through with equal vigour.

There are two further investigations in particular that may serve as litmus tests of Mr Putin's intentions to clean up Russian business.

These are the inquiries into alleged irregularities at Aeroflot, and the reports of backhanders received by Kremlin officials in return for refurbishment contracts handled by the Swiss firm Mabetex.

Both could involve Mr Yeltsin's immediate family members, among others.

Mr Putin awarded immunity from prosecution to Mr Yeltsin and his family immediately after taking over as Russia's acting head of state.

But the truth about these affairs must come out if Mr Putin really wants to earn a reputation as the man who created a level playing field on the ruins of "crony capitalism".

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See also:

12 May 00 | Europe
Media group to sue KGB
13 Jun 00 | Europe
Russian media mogul arrested
05 Feb 99 | Europe
Police raid Berezovsky firms
18 Apr 99 | Europe
Berezovsky back to face the music
08 Sep 99 | The Economy
Yeltsin linked to bribe scandal
28 Mar 00 | Business
Russia's new oligarchs
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