Former Russian economy minister jailed for eight years for bribery

Former Russian economy minister jailed for eight years for bribery
Alexei Ulyukayev said he had been set up by Rosneft chief Igor Sechin, who refused to give evidence in the trial.
By bne IntelliNews December 15, 2017

Russia's former minister of economic development and onetime central banker Alexei Ulyukayev has been sentenced to eight years of strict regime incarceration for receiving a $2mn bribe from the head of Rosneft oil giant Igor Sechin. The court also banned Ulyukayev from serving as a state official for eight years even after he will have served out his sentence.

Following the announcement, Ulyukayev was escorted from the courtroom. "The sentence is clear," the former minister told the judge.

The conviction of the minister appears to confirm that the power of the infamous siloviki group in the Kremlin, with its close ties to the security services, remains largely unchecked and is able to bend the judicial system to settle business scores.

Ulyukayev was handed the money in cash personally by Sechin,  who has been called the "Oil Tsar", Russia's "Darth Vader", and "the scariest man on Earth".

The prosecution argued that Ulyukayev demanded the bribe to greenlight the acquisition of regional oil gem Bashneft by Rosneft, although the minister publicly opposed Bashneft's privatisation by a state-controlled company.

The defence argued that Ulyukayev was set up by Sechin and Rosneft's security services, and received the money without knowing what he was handed.

The case was based on the testimony of the Federal Security Bureau (FSB) general Oleg Feoktistov, who headed Rosneft's security service. The testimony was given by Feoktistov at a closed court hearing back in September and the judge claimed that she has "no grounds to doubt the testimony of FSB operatives that participated in the detention of Ulyukayev."

Sechin himself refused to appear in court on four occasions. Many observers argued that the case had been manufactured by Sechin in response to the ministry's initial opposition to Rosneft buying Bashneft.

Now Sistema, Bashneft's former owner, is the victim of another controversial legal assault of Rosneft. Sistema is facing over $5bn in damages claims (Rosneft incidentally paid $5bn to acquire Bashneft), is cut off from the shares and dividends of all major assets, and has had its SPO of subsidiary Detsky Mir sabotaged by a hasty court ruling initiated by Rosneft.

Sechin is also widely believed to be personally involved in controversial cases such as the jailing of the head of Russian oil company Yukos, Mikhail Khodorkovsky. Rosneft’s main assets are based on those of Yukos, which was nationalised after Khodorkovsky's arrest in 2003.

Last month Sberbank pulled a controversial and highly critical report on the head of Rosneft and Rosneftegaz written by its top oil analyst after the state-owned oil company objected to the critical analysis and pressured the bank to remove it.

The investment case of Russia's largest oil company Rosneft was questioned by Sberbank CIB analyst Alex Fak because of its aggressive expansionary strategy, in a note that featured a chapter entitled "Rosneft: We Need to Talk About Igor".


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