STOCK MARKET BSE NSE

Battle of billionaires: Final verdict

Russian billionaire Boris Berezovsky lost the multibillion-dollar legal battle against Chelsea football club owner Roman Abramovich. Here is a look at what lead to this feud that intrigued lawyers and the media alike.

Published: 05th September 2012 01:06 PM  |   Last Updated: 05th September 2012 01:07 PM   |  A+A-

russia
By AP

Two Russian businessmen rose to riches together in the chaotic years of post-Soviet Russia and then became arch enemies and a British judge gave a verdict on Friday putting an end to a multibillion-dollar court battle.

After a seven-month delay Judge Elizabeth Gloster delivered a summary ruling Friday to settle the legal feud between Roman Abramovich, the billionaire Chelsea Football Club owner and self-exiled tycoon Boris Berezovsky. Berezovsky lost his multibillion-dollar legal battle against Roman Abramovich after Gloster ruled that he didn’t tell the truth in the clash over vast oil wealth.

The feud, the most high-profile commercial case at London’s High Court in recent years, has fascinated the British and Russian media with tales about the tycoons’ jet-setting lives and the lawless Wild West years that followed the 1991 breakup of the Soviet Union.

Berezovsky (66) is a former Kremlin power broker who fled to Britain after falling out with President Vladimir Putin. He sued Abramovich (45), who he calls his former friend, protégé and business partner, alleging that Abramovich threatened him into selling his stakes in the Russian oil giant Sibneft vastly beneath their value.

Berezovsky alleged blackmail and breach of contract and was seeking more than $4.8 billion in damages. Abramovich denied the allegations and his lawyer  accused Berezovsky of lying and making up stories.

Both tycoons were cross-examined and sat across from each other on most days during the four-month trial, which attracted large crowds of journalists, lawyers and spectators.

The case has sparked so much interest partly because of its focus on the two oligarchs’ personal as well as business relationship. They were said to have become friends on a private cruise in the Caribbean, built a business empire together, but parted bitterly when their fortunes were reversed.

Berezovsky, a mathematician-turned-Mercedes dealer, amassed his wealth during Russia’s privatisation of state assets in the early 1990s. In return for backing former Russian President Boris Yeltsin, he gained powerful political connections and access to valuable assets at very low prices.

Berezovsky says he mentored the younger Abramovich, treated him like a son, and founded Sibneft with him and a third partner. Berezovsky claimed that the friendship faltered when he fell out with Putin, at which point Abramovich “intimidated” him into selling his Sibneft shares — causing him losses of almost $6 billion.

In separate claims, Berezovsky also alleged breach of trust and breach of contract when Abramovich sold Berezovsky’s alleged stake in aluminum conglomerate Rusal without his consent. Abramovich contradicted that account, saying Berezovsky never had “a cent” of investment in Sibneft. He said he had paid more than $2.5 billion to Berezovsky for his services as his “political godfather” and reluctantly funded Berezovsky’s extravagant lifestyle of yachts and vacation homes because he feared retaliation from Berezovsky, who he alleged had connections to gangsters in Chechnya.

“Our business relationship was over and yet he still treated me as his ‘cash cow’ and expected me to fund all of his expenses,” Abramovich claimed in a statement. He described Berezovsky as ambitious, sometimes megalomaniacal and a man who “would often start believing his own PR”.

Charged in Russia with fraud and embezzlement, Berezovsky has been living in London since 2001.

Abramovich lives in Russia and is known to some as the “stealth oligarch” because of his low profile, but is widely known in Britain since he bought the Chelsea soccer club in 2003. His wealth is estimated to be about $15 billion by The Sunday Times.

On Friday Judge Elizabeth Gloster scathingly dismissed Berezovsky’s case, calling him “an unimpressive and inherently unreliable, witness who regarded truth as a transitory flexible concept, which could be molded to suit his current purposes.”

“I regret to say that the bottom line of my analysis of Mr Berezovsky’s credibility is that he would have said almost anything to support his case,” Gloster said in the summary of her judgment.

In contrast she found Abramovich to be “a truthful and a reliable witness”

Outside the court, Berezovsky accused Gloster of rewriting Russian history. “I am absolutely amazed by what happened today,” he told reporters. “Sometimes I have the impression that Putin himself wrote this judgment.”

A statement issued by Abramovich’s representatives said he was “pleased and grateful” that his position had been “comprehensively vindicated by the court”. In Moscow Putin’s spokesman Dmitry Peskov expressed satisfaction with the decision.

“It’s always pleasant when slander is called by its own name,” he was quoted as saying by the state news agency RIA Novosti. The judge concluded that the deal between the two men was that in return for substantial cash payments, Abramovich and Sibneft would enjoy Berezovsky’s political patronage and influence, “which was indispensable to the construction of any major business in the conditions of the 1990s”.

The judge rejected Berezovksy’s claims that he was threatened by Putin and Alexander Voloshin, a Putin ally, to coerce him to sell his Sibneft stake.

She also rejected Berezovsky’s claim that he had an agreement which gave him an interest in any aluminum holdings that Abramovich might acquire after 1999.

There was never any agreement that entitled Berezovsky to shares in the aluminum company Rusal, she added. The case hinged on four alleged oral agreements and almost every aspect of those alleged deals was in dispute, the judge said.

“Significantly there were no contemporaneous notes, memoranda or other documents recording the making of these alleged agreements or referring to their terms,” the judge said.

The case may have fascinated the British media, but many in Russia appeared cynical.

“The super-rich are not popular in Russia. An overwhelming majority of Russians see their wealth as ill-gotten gains, see them as people who enriched themselves at people’s expense,” said Masha Lipman, an analyst at the Carnegie Moscow Center.

Berezovsky said he hadn’t decided whether to appeal. He declined to comment on the financial implications of losing the case. “Life is life,” he said. “Now I know what means English court better than before.”



Comments

Disclaimer : We respect your thoughts and views! But we need to be judicious while moderating your comments. All the comments will be moderated by the newindianexpress.com editorial. Abstain from posting comments that are obscene, defamatory or inflammatory, and do not indulge in personal attacks. Try to avoid outside hyperlinks inside the comment. Help us delete comments that do not follow these guidelines.

The views expressed in comments published on newindianexpress.com are those of the comment writers alone. They do not represent the views or opinions of newindianexpress.com or its staff, nor do they represent the views or opinions of The New Indian Express Group, or any entity of, or affiliated with, The New Indian Express Group. newindianexpress.com reserves the right to take any or all comments down at any time.

flipboard facebook twitter whatsapp