Filenews 1 February 2023
By Giacomo Tognini
Last Monday, the U.S. Department of Justice threw... bombshell by charging a former FBI agent and a Russian former diplomat and interpreter with money laundering and other illegal actions to help Russian oligarch Oleg Deripaska, who is under Western sanctions. The 21-page indictment reads like a gangster movie script: the defendants refer to their sanctioned client as "our friend from Vienna", "you know who" and "the big one".
The most striking incident, according to the indictment, is that Deripaska hired former agent Charles McGonigal and former diplomat Sergei Sestakov to make "leaf and feather" another Russian oligarch—who is not named—after Deripaska in the spring of 2021 "challenged the ownership of a large Russian company." The investigation allegedly included examining the assets of the rival oligarch outside Russia and the possibility that he had another passport besides the Russian one.
A person with knowledge of the case revealed to Forbes that "most likely this oligarch is Vladimir Potanin", one of the richest people in Russia, since his fortune is estimated at 27.5 billion dollars. The "Russian company" is probably Norilsk Nickel [Nornickel], one of the world giants in the production of nickel and palladium.
"Deripaska was gathering evidence to file a lawsuit in London [against Potanin] in order to reach a new deal with the shareholders of Norilsk Nickel on the same terms," the same source added. A spokesman for Deripaska did not immediately respond to a Forbes request for comment.
This isn't the first time Deripaska and McGonigal have garnered the spotlight: their names were implicated in the FBI's investigation into Russia's involvement in Donald Trump's 2016 presidential campaign. In 2020, a high-ranking FBI official said McGonigal's reference (in an e-mail from 2016) to the claims by George Papadopoulos, Trump's campaign adviser, that he had "a political stigma" about Hillary Clinton, sparked the Trump-Russia investigation, while the FBI allegedly tried to recruit Deripaska as an informant, since he had previously hired Paul Manafort, Trump's former campaign chief, as an adviser. In a post on the Truth Social platform Tuesday, Trump said of McGonigal: "I wish he would rot in hell!"
In 2018, according to the indictment, McGonigal began working with Sestakov and an "employee and agent of Deripaska" referred to as "Agent 1." The indictment describes the actions allegedly taken by McGonigal and Sestakov to unearth the rival oligarch's wrongdoings. In August 2021, the two defendants, in cooperation with "Agent-1", signed an agreement with a Cypriot company, which in turn would pay to a New Jersey-based company – owned by a friend of McGonigal's – $41,790 per month and $51,280 for the execution of the object of the deal, namely the provision of "information, analyses and investigations into the Russian company, its business activities and shareholders." From August to November 2021, the New Jersey-based company received a total of $218,440 through a Russian bank, according to the indictment.
As part of the investigation, McGonigal allegedly hired a subcontractor to conduct a thorough investigation into the rival oligarch and the Russian company. In October 2021, the subcontractor conveyed to McGonigal that a third party had located files on the dark web that revealed "hidden assets worth more than $500 million dollars" and "other information that McGonigal believed would be valuable to Deripaska." The indictment also states that McGonigal and Sestakov negotiated with "Agent 1" for Deripaska to give them money for the purchase of the files on the dark web, somewhere between late October and late November 2021. FBI agents seized their personal electronic devices on November 21, 2021.
The dispute between Deripaska and Potanin dates back to April 2008, when the former's Rusal acquired 25% of the listed Nornickel from Russian billionaire Mikhail Prokhorov in a deal that included cash and shares -- estimated at $14 billion. dollars–, with Prokhorov getting a 14% stake in Rusal in return. Prokhorov was Potanin's original partner in Nornickel, with the two businessmen co-founding the Oneximbank banking group in 1993 and later acquiring Nornickel through the infamous "loans for shares" program, under which Potanin and other businessmen financed Russian President Boris Yeltsin's re-election campaign in exchange for holdings in state-owned energy and commodity mining companies that they would repel if the Yeltsin won the election. (As it happened.)
After the 2008 deal, Deripaska clashed with Potanin over the latter's influence on Nornickel's board, a plan to buy back shares in the company and asset purchases from Potanin's Interros. In December of the same year they declared a truce, with Rusal withdrawing its legal claims against Nornickel for the repurchase of shares in the company. But the battle flared up again in August 2010, when Rusal filed an appeal against Potanin's Interros at the International Court of Arbitration in London, and the following month uploaded a website called "Save Norilsk Nickel" online.
After two years, another well-known Russian oligarch, Roman Abramovich, acted as a mediator to calm the tension. He and his partners and also billionaires, Alexander Abramov and Alexander Frolov, acquired in December 2012 a 6% stake in Nornickel for €1.5 billion. Dollars. Abramovich, Potanin and Deripaska agreed that the company's board would be composed of 4 members proposed by Potanin and Deripaska each, while one board member would be Abramovich's proposal. The agreement, valid for 10 years (expired on January 1, 2023), provided that Potanin would remain CEO of Nornickel and committed Nornickel to a new dividend policy.
The new crisis occurred in 2018, when Potanin attempted to buy a stake in Abramovich in Nornickel – a move that Rusal opposed and succeeded in stopping by a London court ruling in June 2018. Abramovich eventually sold shares in Potanin in early 2019. Until August 2020, Potanin called the deal a "relic of the past," as he had said in an interview with Reuters.
Things seemed to have calmed down until April 2021, when Rusal welcomed the decision of the Nornickel board to buy $2 billion worth of own shares. Dollars. Around the same time, according to the indictment drawn up in the US, Deripaska had begun to put into practice his plan to make the oligarch's rival "leaf and feather". For his part, Potanin began expanding his empire after the Russian invasion of Ukraine, repurchasing the Russian banking group Rosbank from the French Société Générale last April and "grabbing" the Russian bank Tinkoff Bank two weeks later – the price for these two transactions remains unknown.
Last July, several months before the deal expired, Potanin had publicly expressed his thoughts on merging Rusal and Nornickel – in a move worth $60 billion. Dollars. This was not possible after the US imposed sanctions on Potanin on 15 December 2022. Deripaska had already been subject to US sanctions since April 2018. (The UK has also imposed sanctions on both businessmen, while the EU only on Deripaska; it may not have "touched" Potanin due to Europe's dependence on the quantities of nickel and palladium supplied by Nornickel).
The last episode in the Deripaska - Potanin dispute was "played out" on October 21, 2022, when Rusal filed a lawsuit in the High Court of London against Potanin. "Rusal's claims are based on Mr. Potanin's failure to perform his duties as CEO of Norilsk Nickel," the company said. "Under the management of Mr. Potanin, Norilsk Nickel lost assets that played an essential role in the group's activities. As a result, Norilsk Nickel and its shareholders suffered significant losses." (Potanin owns 37% of Nornickel through his investment firm Interros, while Deripaska owns 45% of En+ Group, which in turn owns 26% of Nornickel plus 57% of Rusal).
Rusal also argued that she was "constantly trying to enter into a constructive dialogue with Mr. Potanin in order to reach an out-of-court settlement," but "these efforts proved ineffective."
Whether this "constructive dialogue" includes Deripaska's allegedly illegal investigation into Potanin's assets or not, the war between the two Russian oligarchs shows no signs of de-escalation.
Source: Forbes
