Russian tycoon's arrest sparks fears of 'second Yukos'

17th September 2014, Comments 0 comments

The arrest of a top billionaire sent shockwaves through Russia's business and political circles on Wednesday and prompted fears of a state-orchestrated asset grab similar to the prosecution of ex-tycoon Mikhail Khodorkovsky.

The Investigative Committee, which reports directly to President Vladimir Putin, announced late Tuesday that Vladimir Yevtushenkov had been placed under house arrest and was being investigated for money laundering linked to an oil deal.

Yevtushenkov's sprawling conglomerate Sistema lost a third of its value on Wednesday.

The detention triggered comparisons to the prosecution of Khodorkovsky, once Russia's richest man and head of the now-defunct Yukos oil firm, who spent a decade in jail in what his supporters say was revenge for challenging the Kremlin.

Observers said Yevtushenkov's arrest marks a watershed for Russian business as it signals that even tycoons loyal to the Kremlin are no longer immune from prosecution.

The probe centres on how his holding acquired oil company Bashneft and comes after speculation that Russia's biggest oil producer Rosneft -- run by Putin's loyal lieutenant Igor Sechin -- was keen to get its hands on the company.

Sistema's chairman, Russia's 15th-wealthiest man with a fortune of $9 billion (7 billion euros) according to Forbes, must now wear an electronic bracelet, said a spokeswoman for the prison service.

The bespectacled 65-year-old tycoon has been placed under house arrest until mid-November in his country residence outside Moscow and is banned from using the Internet, added a spokeswoman for Moscow's Basmanny court which ordered his detention.

Sistema is a vast holding which has major interests in the country's biggest mobile telephone company MTS and a range of other assets.

The Investigative Committee said it had launched the probe because it had "sufficient grounds" to believe Yevtushenkov was involved in the legalisation of property acquired by criminal means.

Sistema said the accusation was "without foundation."

The high-profile detention stunned economists who said it was a fresh blow to an economy battered by Western sanctions, capital flight and a looming recession.

- 'Putin losing control' -

"The house arrest of a businessman of such level is absolutely unprecedented," said Sergei Guriyev, the former dean of Moscow's New Economic School who fled Russia last year after coming under pressure from investigators over a case linked to Yukos.

"The most dangerous thing for investors is that they no longer understand the rules of the game," Guriyev, now professor of economics at Paris-based Sciences Po, told AFP in written remarks.

"What seemed impossible, now happens every day."

Alexander Shokhin, head of the Union of Industrialists and Entrepreneurs, said his big business lobby group planned to petition Putin to release Yevtushenkov from house arrest.

Khodorkovsky pointed the finger at Sechin -- whom he has famously accused of driving his own downfall -- and said the arrest showed Putin was losing his grip on domestic politics.

"I see in this a total loss of control by the president, who simply does not see what is going on under his own nose," Khodorkovsky told the Vedomosti business daily.

"If he did see, I doubt that he would so misjudge the situation and give such an order," said Khodorkovsky, who was unexpectedly released from prison late last year and now lives in Switzerland in self-imposed exile.

"I still hope that our president will at some point tear himself away from his new conquests and see what is happening in the country," he added, apparently referring to Russia's annexation of Crimea in March and its confrontation with the West over Ukraine.

-'Bulldogs under a carpet'-

Rosneft, targeted by Western sanctions, denied any role in the Yevtushenkov probe.

Putin's spokesman Dmitry Peskov said all comparisons to the Yukos case were inappropriate.

Yevtushenkov's arrest nonetheless sparked fears that authorities, who are under pressure to keep Russia's struggling economy afloat, could move in on other private businesses, too.

"We have a really bad feeling about this," an aide to a senior Russian official was quoted as saying by Russian media. "This all makes us think of a second Yukos case."

"This is even not a racket, this is simply daylight robbery," former deputy finance minister and economist Sergei Aleksashenko wrote on his blog.

"An oil company in Russia is too attractive a business not to pique the interest of people close to the authorities."

But prominent commentator Yulia Latynina rubbished comparisons to the Yukos case, arguing that Yevtushenkov, who she said counts Ukraine's ousted pro-Moscow leader Viktor Yanukovych among his friends, was a true Kremlin insider.

"It is a fight among bulldogs under a carpet," she said on Echo of Moscow radio.


© 2014 AFP

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