Russian Oil Giant Rosneft Wins US$2.3B Damages Over Bashneft Deal

MOSCOW, — A Russian court yesterday ordered private company Sistema to pay huge damages to state-controlled oil giant Rosneft over its controversial deal to acquire oil company Bashneft.

The regional court of Bashkortostan in southern Russia ruled in favour of Rosneft which was suing Bashneft’s previous owner, private firm Sistema — owned by tycoon Vladimir Yevtushenkov.

It ordered Sistema to pay Rosneft 136 billion rubles (US$2.3 billion or RM9.8 billion)).

Rosneft — headed by Igor Sechin, a powerful ally of President Vladimir Putin — had asked for a higher sum of 171 billion rubles but if the amount is upheld, it will be one of the largest ever awarded by a Russian court.

Bashneft, an oil producer based in the central city of Ufa, was privatised in the early 2000s. In 2014, a Moscow court ordered the nationalisation of a stake held by Sistema.

The billionaire Yevtushenkov spent several months under house arrest from December 2013 on money laundering charges. His case was likened to that of former Yukos chief Mikhail Khodorkovsky — whose company was also snapped up by Rosneft.

Observers said Yevtushenkov’s arrest marked a watershed for Russian business as it signalled that even tycoons loyal to the Kremlin were no longer immune from prosecution.

Yevtushenkov was released two months after Bashneft’s nationalisation.

Rosneft then acquired Sistema’s majority stake in Bashneft in 2016 for 329.69 billion rubles, then worth some US$5.2 billion.

But Rosneft’s lawsuit accused Sistema of carrying out a reorganisation of Bashneft before it came under Rosneft’s control, causing it to suffer losses now.

The Bashneft deal is also at the heart of the case against former economy minister Alexei Ulyukayev, who is currently on trial for allegedly soliciting a massive bribe from Sechin in return for approving the deal.

Ulyukayev has denied soliciting the bribe, saying that he was caught up in a sting organised by the security services on the basis of testimony from Sechin.

According to the prosecution, Sechin personally handed Ulyukayev briefcases containing US$2 million in cash at the Rosneft offices in a operation carried out with the FSB security service.

The prosecution has asked for Sechin to appear as a witness in the trial, which resumes September 1 after a dramatic first hearing this month in which Ulyukayev directly accused Sechin of setting him up.

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