Russian Economy Minister Ulyukayev charged with extorting $2mn bribe in Bashneft sale

Russian Economy Minister Ulyukayev charged with extorting $2mn bribe in Bashneft sale
Alexei Ulyukayev was detained on November 15 for taking an alleged $2mn bribe in the Bashneft sale.
By bne IntelliNews November 15, 2016

Russian Economic Development Minister Alexei Ulyukayev was taken into custody early on November 15 and charged with exacting a $2mn bribe to facilitate the recent sale of the Bashneft oil company.

Ulyukayev is accused of extorting the money by threatening representatives of state oil giant Rosneft, which in October bought a controlling stake in Bashneft for $5bn, Interfax news agency cited Investigative Committee (IC) spokesperson Svetlana Petrenko as saying.

Marking the most senior arrest of a Russian state official since the Soviet period, Federal Security Service (FSB) operatives took the 60-year-old minister into custody in the middle of the night. The FSB had been tapping Ulyukayev’s phone since early summer, Petrenko said.

A source in law enforcement told Interfax: “The money was passed to Ulyukayev during an investigative experiment under the control of law enforcement authorities.” There was no complaint about the conduct of Rosneft officials, the source said.

Ulyukayev is said to have signed off on the evaluation of the 50% stake in Bashneft before its controversial sale to Rosneft in a deal that critics said merely moved state money from one pocket to another.

The sale was crucial to government efforts to bring the budget deficit below 3.7% by year’s end, with proceeds being paid straight into Treasury funds. A separate 19.5% stake in Rosneft itself is also expected to be sold this year for $11bn to help contain the deficit.

The Investigative Committee said the case against Ulyukayev did not compromise the legality of the Bashneft acquisition by Rosneft, which is controlled by Igor Sechin, a close associate of President Vladimir Putin.

“These are very serious charges that require very serious evidence,” Putin’s spokesman Dmitry Peskov said in a first reaction from the Kremlin. “In any case, only the court can decide anything. It is known that the court does not always agree with investigators, and vice versa,” Peskov said in the early morning of November 15, adding that he did not know if the president had yet been informed of the events.

However, unnamed sources close to Kremlin told Gazeta.ru that Putin had previously approved the “design of the case” and arrest of Ulyukayev, who having headed the ministry since June 2013 is now likely to be replaced by Strategic Initiatives Agency head Andrei Nikitin.

Other sources in the government told the media outlet that Ulyukayev was close to resigning in October over the precision of the macro outlook prepared by the finance ministry, and even wrote his resignation letter.

His detention on corruption charges drew shocked reactions in the business community.

“Were Ulyukayev to be accused of running over an old lady on the highway, that would look more believable,” the head of Russian Union of Entrepreneurs and Industrialists, Alexander Shokhin, told Gazeta.ru.

“Neither experts nor officials doubted the sale price of Bashneft being the market one, thus taking a bribe for the market valuation is a strange accusation,” Shokhin added, reminding of Rosneft’s influence on the decision-making in the case.

News

Register here to continue reading this article and 2 more for free or 12 months full access inc. Magazine and Weekly Newspaper for just $119/year.

If you have already registered, enter the information below with the same email you used previously and you will be granted immediate access.

IntelliNews Pro subscribers click here

Thank you. Please complete your registration by confirming your email address. A confirmation email has been sent to the email address you provided.

Thank you for purchasing a bne IntelliNews subscription. We look forward to serving you as one of our paid subscribers. An email confirmation will be sent to the email address you have provided.

To continue viewing our content you need to complete the registration process.

Please look for an email that was sent to with the subject line "Confirmation bne IntelliNews access". This email will have instructions on how to complete registration process. Please check in your "Junk" folder in case this communication was misdirected in your email system.

If you have any questions please contact us at sales@intellinews.com

Subscribe to bne IntelliNews website and magazine

Subscribe to bne IntelliNews website and monthly magazine, the leading source of business, economic and financial news and commentary in emerging markets.

Your subscription includes:
  • Full access to the bne content daily news and features on the website
  • Newsletters direct to your mailbox
  • Print and digital subscription to the monthly bne magazine
  • Digital subscription to the weekly bne newspaper

IntelliNews Pro subscribers click here

bne IntelliNews
$119 per year

All prices are in US dollars net of applicable taxes.

If you have any questions please contact us at sales@intellinews.com

Register for free to read bne IntelliNews Magazine. You'll receive a free digital subscription.

If you have already registered, enter the information below with the same email you used previously and you will be granted immediate access.

Thank you. Please complete your registration by confirming your email address. The confirmation email has been sent to the email address you provided.

IntelliNews Pro offers daily news updates delivered to your inbox and in-depth data reports.
Get the emerging markets newswire that financial professionals trust.

"No day starts for my team without IntelliNews Pro" — UBS

Thank-you for requesting an IntelliNews Pro trial. Our team will be in contact with you shortly.

Dismiss