Russian system 'starting to eat itself': oligarch

9th October 2014, Comments 0 comments

A Russian oligarch, who used to be known for his close ties to the Kremlin, has said businessmen have become Vladimir Putin's "serfs" as Western sanctions see the system turn on itself.

A former Kremlin insider who fled Russia after running afoul of the authorities, Sergei Pugachev said the arrest of fellow billionaire Vladimir Yevtushenkov last month was part of a state-orchestrated asset grab.

"This is just the system starting to eat itself," Pugachev told the Financial Times in an interview.

"Now there is Putin and there are his lieutenants who carry out his orders - and all cash generated is put on the balance of Putin," he said. "The country is in a state of war, and therefore big business cannot live as before. It has to live under military rules."

"Today in Russia there is no private property. There are only serfs who belong to Putin."

Pugachev presided over a multi-billion-dollar shipping empire before he fled Russia in 2011. A Russian court last year ordered Pugachev's arrest as part of a fraud probe into a bank he controlled.

Pugachev studied in Saint Petersburg formerly known as Leningrad where he met Putin in the 1990s when he was a senior official at the city's town hall.

In 1992, Pugachev set up his own lender, the International Industrial Bank known as Mezhprombank in Russian.

The bank quickly found favour with the Kremlin, running accounts for Boris Yeltsin's family shortly before his 1999 resignation.

Pugachev then cultivated ties with Putin's Kremlin and was known for his tight relationship with the powerful Orthodox Church.

Fellow tycoon Yevtushenkov, ranked by Forbes as Russia's 15th richest man, was last month put under house arrest as part of a probe linked to his company's acquisition of shares in oil firm Bashneft.

His arrest stunned business and political circles in Russia, sparking fears of a state-orchestrated asset grab as the economy is reeling from Western sanctions.

Putin has ruled out any major revision of privatisation deals but also said he would not interfere in the Yevtushenkov probe.

© 2014 AFP

0 Comments To This Article