Streetwise Professor

Igor Shuvalov garnered a lot of press for his role in getting Russia the 2018 World Cup. A commentor on SWP (Jennifer, if memory serves) asked if I had heard of him before, and opined that he looks like a very attractive candidate for the Russian presidency in 2018. Depending on your point of view, based on this piece by Kremlin gadfly John Helmer, you would conclude that (a) yes, he’s perfect for the job, or (b) that would be another step in Russia’s descent into force, fraud, and corruption:

The High Court ruling also implies that Frank shares culpability with Igor Shuvalov (2nd right image), currently a deputy prime minister of the Russian government. In the judgement, Justice Smith does not probe the financial or other motives for the collaboration between Frank and Shuvalov, but he concludes that they combined together to force Skarga and Izmaylov out of their shipping companies; Shuvalov became chairman of the Sovcomflot board just weeks after Frank took operational control from Skarga. He remained in charge during the period when, according to Justice Smith, the company used criminal methods – extortion, property break-ins, data theft, perjury, threats of violence – to pursue its campaign of intimidation.

According to Justice Smith, “at about the end of July or the beginning of August 2004, Mr. Frank recommended to the Ministry of Economy and Trade a merger between Sovcomflot and NSC [Novoship]. In about the middle of September, Mr. Igor Shuvalov, who was then Chief Economic Advisor to the Russian President and was designated to be the new Chairman of Sovcomflot, supported the merger proposal, and decided that Mr. Frank should replace Mr. Skarga as Director-General of Sovcomflot in order to pursue the policy.” [Emphasis added.]

Lovely.

Note that this is from a “421-page ruling of UK High Court Justice Andrew Smith” in litigation involving control of the Russian shipping company Sovcomflot.  (Lovely name, too.)  Per Helmer:

The consequences are dramatic for the Russian government. The judgement [sic] makes impossible the public listing of Sovcomflot shares in any international market because of the evidence disclosed that the company lies to its auditors, falsifies financial records, encourages perjury, and knowingly engages corrupt officials for the purpose of fabricating schemes of personal vengeance and wrongful enrichment.

The UK Bribery Act, which comes into force in April as well as the listing rules for both the London Stock Exchange and the Hong Kong Stock Exchange, will expose Sovcomflot’s chief executive, Sergei Frank (2nd left image) , to a level of scrutiny he is unlikely to withstand, following Justice Smith’s ruling that Frank had repeatedly lied in his testimony; had fabricated the case against Skarga and Izmaylov after squads of private detectives he despatched had failed to uncover incriminating evidence; procured false witnesses; filed his claims in London because Russian law precluded his company from pursuing them in the Russian courts; made a practice of concealing his decisions from other responsible Sovcomflot officials; and pursued Skarga and Izmaylov vindictively to prevent them from opposing his scheme for merging Sovcomflot with Novoship, and selling shares in a much bigger IPO than his predecessors, acting on the advice of JP Morgan, had recommended to the government.

Again, remember that political comer Shuvalov is tied at the hip to aforementioned Mr. Frank, thug and perjurer.  The mere fact of a close tie between a high level government official (deputy PM no less) and a business reveals a great deal about the patrimonial, natural, Russian state.  The fact that the business involved and its head are loathsome reveals even more.