The Chelsea FC owner said he paid him $80m in 1996, $50m in 1997 and 1998, and $80m in 1999. Sums of up to $5m were delivered in cash to Berezovsky’s Moscow office and club.
“Yes, he [Berezovsky] did call me and quite often. Of course, when he needed money he did call me,” Abramovich said. He insists the payments were for Berezovsky’s political services and his influence over then president Boris Yeltsin.
Berezovsky says the money represented his share of profits from his Russian oil giant Sibneft. Berezovsky, the Kremlin critic and London-based exile, is suing Abramovich for more than $5bn in what is the world’s biggest private litigation battle.
He says that Abramovich exploited his situation after he fell out catastrophically with Vladimir Putin in 2000. Abramovich forced him to sell his interests in Sibneft at a knockdown price, he asserts.
Giving evidence for a third day, Abramovich admitted Berezovsky had played an “extremely important role” in Sibneft’s creation in 1995.
The company was a beneficiary of Russia‘s infamous privatisation programme in which state assets were virtually given away to a small group of businessmen – the oligarchs — in return for political support.
At one point, Berezovsky’s barrister Laurence Rabinowitz QC quoted from Yeltsin’s autobiographical Midnight Diaries. The book describes Yeltin’s ultimately successful battle against a resurgent communist party ahead of the 1996 presidential elections. “I don’t think this book was written by Mr Yeltsin,” Abramovich observed wryly, speaking via a translator in Russian.
The court also heard that Abramovich used a series of opaque intermediary companies to reduce Sibneft’s tax bill by hundreds of millions of dollars. After Sibneft won control of an oil company and refinery he “inserted” third party legal entities between the two.
These entities bought oil from Sibneft, then sold it back to Sibneft for “two or three times” the price, siphoning off the difference.
The court heard these intermediary companies qualified for tax exemptions because they employed disabled people – a common, and legal, tax avoidance ruse in Russia at the time. “I don’t recall why it was done,” Abramovich admitted. He insisted, however: “These were real people. We paid them salaries.”
The case continues.