Cherney Happy to Invest Millions on a Handshake, Deripaska Says

Michael Cherney surrounded himself with criminals, owned forged passports and sealed deals on a handshake, lawyers for United Co. Rusal Chief Executive Officer Oleg Deripaska told a London court.

Cherney “surrounded himself with criminal characters,” Tom Beazley, a lawyer for Deripaska, said at a trial in London today. “They were his network, he used them to pressurize and put pressure on Mr. Deripaska in particular.”

Cherney says Deripaska was his partner and never honored a deal to pay him for his share of the business, which may amount to as much as 13 percent of Rusal, the world’s biggest aluminum producer. The trial will focus on Russia’s so-called aluminum wars of the 1990s, when the fight for market share involved gangs and violence.

Cherney “is happy to invest hundreds of millions of dollars without oversight or paperwork or anything to show for it,” Beazley said. The commercial “reality of this partnership, just does not make sense.”

Deripaska said in court papers that Cherney fled Russia in the early 1990s after obtaining forged Polish passports and driving licenses. Cherney was caught trying to enter the U.K. and deported to Switzerland where he and his wife were arrested for having forged documents, Deripaska said in court filings.

German Border

Beazley pointed to incidents when other people were apprehended. He said Swiss authorities in 1994 intercepted a car at the German border carrying false documents in Cherney’s name, a loaded Walther PPK handgun and two silencers.

“It is a clear example of Mr. Cherney engaging in the sorts of activities that is symptomatic of being involved in organized crime,” Beazley said.

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

Deripaska claims in court papers he was forced to pay Cherney for ’krysha’ or 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.

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