Roman Abramovich, the billionaire owner of Chelsea Football Club, was accused in a London trial of using political threats to force his former business partner Boris Berezovsky to sell shares in a Russian oil company.
Abramovich, one of Russia’s richest men, used his ties to the Kremlin to make Berezovsky sell a stake in OAO Sibneft at a fraction of its value in 2000 and to part with shares in an aluminum company four years later due to a breach of contract, Berezovsky’s lawyer said today at the start of a 16-day trial in London. Berezovsky claims he lost at least $5.56 billion.
The dispute stems from a business deal to acquire Sibneft that both men thought “would make them wealthy beyond their wildest dreams,” Berezovsky’s lawyer Laurence Rabinowitz said at today’s hearing. The partnership collapsed when Abramovich decided “wealth and influence were worth more than loyalty.”
Berezovsky, a billionaire living in exile in the U.K. since falling out with Russia’s then-President Vladimir Putin, claims his former close friend Abramovich took advantage of his political misfortune to wrest ownership of the companies from Berezovsky and a third business partner, the Georgian businessman Badri Patarkatsishvili, who died in London in 2008.
Abramovich, now 44, purchased the Sibneft stake from Berezovsky for $1.3 billion before selling the company in 2005 to state-run OAO Gazprom for $13.1 billion. Berezovsky claims Abramovich told him the Russian government would take the shares if he didn’t agree to sell them, resulting in a trading loss of about $5 billion.
‘Substantial Cash Payments’
Abramovich rejects the claim, saying Berezovsky never owned the Sibneft shares and that the deal between the men consisted of Abramovich making “substantial cash payments” to Berezovsky in exchange for his “political patronage,” which was common in Russia in the 1990s, according to court records.
Berezovsky also alleges Abramovich forced him to sell a 25 percent stake in the aluminum producer United Co. Rusal to another party in 2004 at a loss of $564 million as a result of various breaches of trust. He claims the stake was reduced in value after Abramovich sold another 25-percent holding in Rusal without permission for $1.58 billion.
Abramovich says the claims are “wholly unfounded,” according to his prepared argument in the case.
A judge last year rejected Abramovich’s bid to block the case from going to trial in a ruling upheld by the U.K. Court of Appeal in February. Abramovich was later ordered to pay 774,000 pounds ($1.2 million) of Berezovsky’s legal fees.
Judge Elizabeth Gloster, who is hearing the trial, said in a separate judgment in May that Patarkatsishvili, the other businessman in the dispute, was of “central importance” to the case and ordered Berezovsky to share transcripts of the Georgian’s previous discussions with Abramovich’s lawyers.
Abramovich claims Berezovsky’s evidence in the Rusal dispute is “inconsistent” and based mostly on oral evidence of discussions that allegedly took place between Abramovich and Patarkatsishvili.
Patarkatsishvili, who gave control of his Imedi media company to News Corp. in 2007 in order to enter politics, died at the age of 52 in his home near London in February 2008, a month after being charged in Georgia with plotting a coup against President Mikheil Saakashvili.