The Russian oligarch Boris Berezovsky faced repeated accusations in the high court that he had given untrue and contradictory evidence in his multi-billion damages claim against Roman Abramovich.
Berezovsky is suing the owner of Chelsea football club for more than $5bn (£3.2bn). He claims that Abramovich “betrayed” him after Berezovsky fell out with the Kremlin and fled to Britain in 2000, forcing him to sell his share in the Russian oil company Sibneft for a knockdown price.
Berezovsky told the court how he, Abramovich and the Georgian businessman Badri Patarkatsishvili created Sibneft in 1995, against the backdrop of Russia‘s infamous “loans for shares” privatisation programme. He insisted that there had been an agreement under which Abramovich would own half the company and in effect manage it, while he and Patarkatsishvili owned the other half.
Giving evidence for the first time, Berezovsky conceded that from early 1994 he became one of Russia’s most politically influential oligarchs. He had a “good relationship” with President Boris Yeltsin’s powerful daughter Tatyana, as well as with other members of Yeltsin’s inner circle, and was the first businessman to join the president’s exclusive Moscow tennis club.
But Berezovsky said the main reason for his influence with the Kremlin was his superior “intellectual capacity”. He described Abramovich scathingly as “not a person of the first level” and said he was not talented enough to succeed in business on his own. “To get leverage you need to be smart …He [Abramovich] wasn’t,” Berezovsky said bluntly, conceding in written evidence that Abramovich was instead “very charming”.
However, Abramovich’s star lawyer, Jonathan Sumption QC, accused Berezovsky of inconsistencies. Berezovsky had publicly denied he was a Sibneft shareholder only to claim in 2001, once he had left Russia, that he and Patarkatsishvili actually owned half, the court heard.
The barrister said the oligarch had lied when he sued Forbes magazine for libel in 2001. In that case he had denied influencing Yeltsin through his daughter – something, Sumption said, Berezovsky now admitted. “Why did you deny it and then sign a statement of truth in support of your denial?” he asked. Speaking in English, and visibly flustered, Berezovsky answered: “It’s a good question.”
The packed court erupted in laughter. The judge, Mrs Justice Gloster, appeared unimpressed, chipping in: “Well, could you answer it please.” Berezovsky said his lawyers had prepared the document, and he had not paid too much attention to it. Abramovich, who was in court, listened to the proceedings via a Russian translation, intently, occasionally rubbing his face.
Berezovsky asserts that Abramovich held his interest in Sibneft for him in trust, even though officially he was never a shareholder. Abramovich – who is still close to Russia’s prime minister, Vladimir Putin – eventually gave him a $1.3bn pay-off. Berezovsky maintains this was a gross undervaluation for what his interest in the oil company was actually worth. Abramovich sold Sibneft to Gazprom in 2005.
Berezovsky said he agreed with Sumption’s description of Russia in the 1990s as the “wild east”. The oligarch admitted that corruption was widespread, but said that he personally “wasn’t corrupt”. But he said that under Yeltsin Russia was significantly less corrupt than today under Putin’s authoritarian leadership, which scored 10 out of 10 for corruption compared with Yeltsin’s “3 or 4” out of 10.
Berezovsky that his main priority had been to secure Yeltsin’s re-election as president in 1996 against the spectre of a communist comeback during closely fought elections. He said he had used his lobbying skills to ensure Sibneft won an auction for two Siberian oil companies as a way of raising money. His real goal, though, he said, was to support his loss-making ORT TV station, a crucial tool in Yeltsin’s faltering re-election campaign.
The case is scheduled to last two months.