Breaking News

Tweet TWEET

Deripaska Didn’t Need Cherney to Build Rusal, Lawyer Says

Lawyers for United Co. Rusal (486) Chief Executive Officer Oleg Deripaska denied their client had been a “struggling student” who relied on Michael Cherney to build his metals business two decades ago, in a $1 billion lawsuit between the two men.

Deripaska was “a proper businessman” with employees, partners, a trading unit and lawyers in Russia and Cyprus, his attorney, Thomas Beazley, said in opening statements today. When they met in the early 90s, Cherney “had none of that.”

Cherney, who lives in Israel, says Deripaska was his partner and never honored a deal to give him a share of Rusal, the world’s biggest aluminum producer. In court filings, Deripaska calls Cherney a “life-long criminal” who extorted money from the company.

“The idea that he’s some sort of struggling student with a summer job is just wrong,” Beazley said of Deripaska. Cherney “wasn’t a proper but non-conventional businessman as he has presented himself.” The true nature of the relationship was that Cherney provided “krysha” or protection, Beazley said.

Cherney lawyer Mark Howard told the court on July 9 that Deripaska is “seeking to rewrite history.” The allegations about Cherney are to distract attention from the court case, he said.

The trial, which will last into next year and feature as many as 70 witnesses, will focus attention on Russia’s so-called “aluminum wars” of the 1990s, when the fight for market share involved criminal gangs and violence. Deripaska said in court papers he was forced to pay Cherney for protection after attempts on his life.

Proceedings will stop after this week and begin again in September when the first witnesses are scheduled to be called.

The case is Cherney v. Deripaska, High Court of Justice, Queen’s Bench Division, Commercial Court 06-1218.

To contact the reporter on this story: Kit Chellel in London at cchellel@bloomberg.net

To contact the editor responsible for this story: Anthony Aarons at aaarons@bloomberg.net

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.