Russian Ex-Minister Accuses Rosneft Chief of Entrapment
August 16 2017 - 8:14AM
Dow Jones News
By Thomas Grove
MOSCOW--A former Russian economy minister on trial for allegedly
taking a $2 million bribe accused the head of the state oil company
of entrapment on Wednesday, in the first hearing of a case that has
raised speculation about power plays at the highest levels of the
government.
Prosecutors allege that Alexey Ulyukayev demanded a bribe in
return for giving the greenlight to PAO Rosneft's purchase of
shares in mid-sized oil producer PAO Bashneft.
Speaking in a Moscow courthouse, Mr. Ulyukayev denied the
accusation. He said he was seized in an October sting operation by
the Federal Security Service, the successor of the KGB, when
Rosneft head Igor Sechin personally called him and asked him to
accept a suitcase with $2 million inside it, according to Russian
news agencies.
"The prosecution has completely ignored the circumstances of
Sechin handing over to me this suitcase, which in total does not
leave any doubt about the provocation carried out against me,"
Interfax quoted Mr. Ulyukayev as saying.
Russian agencies did not report Mr. Ulyukayev as saying in what
capacity he had been given the money. Rosneft spokesman Mikhail
Leontiev said there was "exhaustive evidence" regarding Mr.
Ulyukayev's guilt and said the former minister had demanded a bribe
and tried to get away with it, Interfax reported.
Mr. Ulyukayev, who had served as Russian economy minister since
2013, was dismissed in November by Russian president Vladimir
Putin. Mr. Putin accused the former minister of "a breach of trust"
after a Moscow court placed him under house arrest on the bribery
charges.
Mr. Ulyukayev's arrest was the highest-profile detention of a
sitting government official since Mr. Putin came to power in
2000.
While Russia's security services have opened criminal
investigations and occasionally arrested high-profile businessmen
and senior officials under Mr. Putin's tenure, detaining a sitting
minister--and the president's personal involvement in the case--is
unprecedented.
Mssrs. Ulyukayev and Sechin, reputed to have close links with
Russian intelligence agencies and a personal relationship with Mr.
Putin, had previously butted heads over the sale of Bashneft to the
state oil producer Rosneft.
Critics of Rosneft and Mr. Sechin said the sale of Bashneft was
meant to plug holes in Rosneft's own operations and lower profits
from a falling oil price.
Mr. Ulyukayev spoke out against the deal in August, saying
privatization of one state company by another was inappropriate. In
early September, however, he said Rosneft would be allowed to
participate.
Rosneft eventually bought the shares for 330 billion rubles ($5
billion), higher than the government's initial valuation of the
company at 306 billion rubles.
Political analyst and professor at the Moscow State Institute
for International Relations Valery Solovei said at the time that
Mr. Ulyukayev's arrest looked like fighting between factions of the
government.
Analysts say the arrest was retaliation against opponents of Mr.
Sechin who were trying to limit his growing oil empire. Among them,
Mr. Ulyukayev was the easiest target, they say.
Mr. Sechin's Rosneft is currently involved in an arbitration
battle with the former owners of Bashneft, conglomerate AFK
Sistema, for 170.6 billion rubles. Rosneft has said Sistema
destroyed value in the company during necessary preparations for an
initial public offering. Sistema denies the accusations.
The Moscow regional court where Mr. Ulyukayev's case is being
heard announced Mr. Sechin would be called as a witness, Russian
agencies reported last week following a preliminary hearing that
determined the start of the trial.
The next hearing was set for Sept. 1.
(END) Dow Jones Newswires
August 16, 2017 07:59 ET (11:59 GMT)
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