• More by Author
• Comments
• Send to a Friend
• Print

  Yet his bites turned painful for several Russian leading oil and gas companies whom he accused of corruption, lack of transparency and misusing millions of dollars.

   “I just want them to stop stealing,” Navalny, 35, told Oil and Gas Eurasia angrily when asked what had motivated him.

   In mid-February, Navalny, a former Yabloko party member and now an independent political activist, managed to achieve a victory in the Moscow city Arbitration court against his avowed enemy Transneft.

   The court stated that Navalny, like any minor shareholder with non-voting shares has the right to access data regarding meetings of the the board of directors held in 2009 and 2010.

   Transneft threatened to appeal the court verdict and the company’s president, Nikolai Tokarev, called Navalny the “village idiot”: “He runs around saying what he was told to say,” he was quoted by the Rossiya 24 channel as saying.
Prior to the court decision, Navalni, who also runs his a popular blog, was also able to obtain the unpublished Accounting Chamber report on Transneft which concluded that the company has misspent funds in building the East Siberia – Pacific Ocean (VSTO) pipeline to China.

   According to the chamber’s own estimates, Transneft signed 83 contracts worth around $3 billion without tenders. Navalny put the figure as $4 billion, citing his own investigation.

   While the mismanagement of the funds happened during the tenure of a former Transneft CEO Semyon Vainshtock who left in 2007, the company’s new chairman Nikolai Tokarev told Interfax that he was against publishing the report, claiming it contains sensitive information.

   However, some experts who spoke with the magazine about the situation in Transneft suggested that Navalny’s revelations may be in line with Tokarev’s efforts to distance himself from the previous management. “It is the right move,” a senior Federation Council official with ties to oil industry said.
Vainshtok who served as a head of the state corporation Olympstroi after leaving Transneft, is now the head of the board of directors at Israel Financial Service Ltd. That company owns the Med Ashdod oil field which it plans to develop with Gazprom.

   Tokarev himself has had negative comments about the former bosses of Transneft. Though e did not name names, in an interview with Vedomosti newspaper in 2008, Tokarev said: “All of VSTO’s problems emerged for just one banal reason: the personal interests of those who started to build this pipeline and good business interests did not coincide,” he told Vedomosti in 2008.
Тransneft said in the earlier statement that the Accounting Chamber probes in Transneft were initiated by the company itself.

   Navalny for his part fought a similar battle against the politically-connected Rosneft as a company minority shareholder for several years. Navalny accused Rosneft of selling the majority of its oil through Gunvor a Swiss trader, controlled by Kremlin-connected businessman Gennady Timchenko.

   “If we are claiming to be a strong and proud nation, why is one-third of our oil traded through a Swiss offshore company?” Navalny asked.

   On February 25th Rosneft appealed the verdict from the Court of Arbitration which  in August 2010 ordered the oil company to disclose the copies of the minutes of the board of directors meeting to minority shareholders.
The Rosneft board of directors is presided by deputy prime-minister Igor Sechin, a member of Russian Prime Minister Vladimir Putin’s inner circle which oversees Russia’s energy sector.

   In 2009, Navalny, who is also a minor shareholder in Gazprom, managed to get the Interior Ministry Investigative department to open a case against Mezhregiongaz, on the grounds that it bought gas through a Transinvestgaz middleman producer and not from Novatek, the independent producer.
Navalny said at that time that the scheme violated the interests of Gazprom minority shareholders. In a radio interview, Gazprom spokesman Sergei Kupryanov said that the gas in question was purchased “on a commercial basis” and was intended for the commercial buyers. The case was closed soon thereafter.

   According to Konstantin Sonin, a professor at the Russian School of Economics in Moscow, what seems to be strange about Navalny’s activities is that he does not seem to does not seem to defend anybody’s pecuniary interests. As professor Sonin put it, “It would be more natural if he acted in the interests of minority shareholders in general or in the interests of particular shareholders of a certain company.”

   But several oil analysts told Oil Gas Eurasia that while Navalny’s efforts will help to achieve some transparency within the companies, his actions would hardly change any of rules of the game. Some of them have even suggested that he is the pursuing interests of third parties who are interested in acquiring company shares.

   It is interesting to note that while Navalny was trying to pursue Transneft in court, he himself came under attack by prosecutors. The Kirov regional branch of the Investigative Committee said in January 2010 that Navalny had forced the local timber company to sign an unprofitable contract.

   The state-owned company lost 1.3 million rubles ($45,000) in damages. Navalny who worked as an advisor for the local governor Nikita Belykh denied the accusations.

   Transneft capitalization did not fall after Navalny has published his reports accusing Transneft of corruption. In November 2010, the day after the reports on Transneft appeared on Navalny’s blog, the price of the company’s privileged shares even rose by 2 percent – the first upswing since 2008.

   Alexei Devyatov, a senior economic analyst at Uralsib investment bank told Oil and Gas Eurasia that the situation with the Transneft shares shows that the “market doesn’t believe that the situation [regarding the accusations] will have any serious effect on the company”: “Things will only change if there are resignations or criminal cases,” Devyatov said while adding that Navalny is the “first robin”.

• More by Author
• Comments
• Send to a Friend
• Print