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Vladimir Yevtushenkov is to remain under house arrest until at least 16 November following a ruling by a Moscow court in a money laundering case widely seen as politically motivated.
Shares in the oligarch’s oil-to-banking conglomerate Sistema fell by 8.8%, and shares in Bashneft, the oil company at the heart of the case, fell by 4.5% on the Moscow stock exchange after Thursday’s decision. Yevtushenkov’s lawyers had asked for him to be released on bail for 300m rubles (£4.8m) and allowed to go to work. Instead, he will be confined to his mansion in Zhukovka outside Moscow without telephone, internet or the possibility of speaking to anyone besides investigators and his lawyers.
The latest ruling dashed hopes that he had been released late last week after he was unexpectedly reached by phone.
It also meant a rough birthday for Yevtushenkov – the 15th richest man in Russia, with a net worth of £5.5bn, according to Forbes – who turned 66 on Thursday.
In a turn of events that shocked the business world and sent Sistema’s stock into a nosedive, the oligarch was arrested last week on charges of money laundering. Sistema, one of the 10 largest companies in Russia, controls the country’s biggest phone operator, MTS, as well as Bashneft, a mid-sized oil company that has doubled its profits to $1.5bn (£920m) over the past four years. In July, Bashneft delayed a planned IPO on the London stock exchange.
Yevtushenkov is accused of helping to launder stolen state assets when Sistema purchased Bashneft and other energy companies from structures controlled by Ural Rakhimov, the son of the former president of Russia’s Bashkortostan republic. A Moscow court said on Thursday Rakhimov had illegally acquired the assets. The republic allegedly lost more than $5bn when its energy companies were bought by Rakhimov in a privatisation deal more than a decade ago.
Many have compared Yevtushenkov’s case to that of another oligarch, Mikhail Khodorkovsky, whose Yukos oil company was broken up and acquired by the state oil giant Rosneft after he was imprisoned on charges of privatisation fraud. Last week, the head of the major business group Russian Federation of Industrialists and Entrepreneurs called the Yevtushenkov case “Yukos 2.0”. According to economy minister Alexei Ulyukayev, the case has damaged Russia’s business climate and would increase capital flight.
The newspaper Vedomosti reported in June 2013 that Rosneft, which is controlled by Vladimir Putin’s ally Igor Sechin, was considering purchasing Sistema’s oil business. Rosneft has been barred from international capital markets by western sanctions over the Ukraine crisis and is reportedly struggling to service $39bn in debts.
Also on Thursday, Bashneft terminated an agreement to sell a 98% share in United Petrochemical Company (UCP) to Sistema, Bashneft’s majority shareholder. A source in Sistema quoted by news agency RBC said the holding was “playing it safe with its cash” in an uncertain situation.
