The world's 142nd-richest person is wounded by a blog.Thanks to a web host's fear of the UK's plaintiff-friendly libel laws, Uzbek/Russian oligarch Alisher Usmanov was able to temporarily suppress some interesting material posted about him at
Craig Murray's website. Notably,
Usmanov has not taken Murray to court, presumably because his lawyers don't think he would win, even with the
UK libel laws which put the burden of proof on the defendant. Based on material available elsewhere on the internet (for example, see
Anticompromat's extensive bio and
other information on Usmanov), it looks like at least some of what Murray claims may be true. More on Usmanov, including his interests in Transnistria (a topic
not discussed by Murray), below the cut.
Murray, of course, was the UK's Ambassador to Uzbekistan who was sacked, according to him for being an opponent of the West's policy of tolerating Uzbek President Islam Karimov's human rights abuses. Murray has now reposted the article that drew the letter from Usmanov's lawyers, which is titled "Alisher Usmanov, potential Arsenal chairman, is a Vicious Thug, Criminal, Racketeer, Heroin Trafficker and Accused Rapist," at a newly created Blogger blog - alisherusmanov.blogspot.com. The bit about Arsenal relates to Usmanov's ownership of a stake in the British football (soccer) club.
Usmanov may be learning a difficult lesson about using heavy-handed tactics to go after speech you don't like - often (at least in an open society), such tactics just get more people talking about the material you find offensive. Perhaps if Murray's blog was hosted in Russia, Usmanov would have had success getting his friends in the Kremlin (Usmanov, you'll recall, was the tycoon who recently pre-empted the auction of Rostropovich's art collection and declared his plans to donate the collection to the Russian state - he's identified by one study as belonging to the "liberal-technocratic" camp of Russian elites, as opposed to the siloviki - page 33 of this pdf) to deploy the new "anti-extremism" law against him. Another advantage he would have on his home-field media space is that he's the owner of the Kommersant publishing house.
But instead of anything resembling such a result, the case - well, actually, there's no legal case - the story has become a cause celebre for bloggers the world over, it appears. Nathan has an interesting post about the brouhaha at Registan, with interesting comments. The Moscow Times also had an article about the story yesterday, noting that part of the reason it's become such a big story is that the website of at least one other politician aside from Murray, hosted on the same server, was also shut down for "technical reasons." We'll see if Usmanov gets to be Arsenal Chairman, regardless of the size of his ownership stake. For the moment, it looks like he fought the blogs, and the blogs won.
Interestingly enough, I had been reading just a few days ago about Mr. Usmanov's ownership of a controlling stake in the crown jewel of Transdniester's industrial sector - Moldova Steel Works, better known as MMZ, which is the abbreviation its Russian name, Молдавский металлургический завод, at Rîbniţa (also spelled Râbniţa or Rybnitsa, or Рыбница in Russian):
The metallurgic production unit in Rabnita is by far one of the most important objectives in Transnistria. 4,000 people are employed in this factory and the whole Northern part of the separatist republic depends on this factory. At maximum capacity, the factory can produce up to one million tons of steel and one million tons of laminated products a year.
Several groups benefited of this production unit. First it was the Russian group Itera, which at the end of '98 bought 75% of the shares. Once the group fell into the disgrace of president Putin, Itera had to sell in 2004. The shares were bought by the companies from Liechtenstein , which at this moment control 90% of MMZ. The two companies are called Rumney Trust Reg and EIM Energy Investment & Management Corporation. Both companies used to belong to the Itera Group. The buyers hurried up to certify with documents the new property, while the only ones who admitted being part of the Itera group, were Youssouf Hares and Alisher Usmanov, a Syrian businessman also active in the Ukraine, and of Uzbek origin. [...] Hares declared to us that the factory cost 100 million dollars and that the exclusive manager of MMZ is Alisher Usmanov. [source]
Organizational chart compiled by the Romanian Center for Investigative Journalism,
showing the ownership structure of the MMZ steel plant in Rybnitsa .
[image source]
According to a report published last year by the Association of the Bar of the City of New York on various legal aspects of the situation in Transdniester (which the report refers to as "the TMR"), economic influence is one of the levers Russia uses to maintain its outsized role as a third party to the secessionist conflict between Moldova and the PMR authorities:
Besides direct economic assistance by Russia, the fortunes of Russian economic elites have become intertwined with a successful secession of the TMR. The TMR’s economy is highly reliant on Russia. “Just over 50% of [the TMR’s] officially registered exports are direct towards two key markets—Russia and Russian companies registered in North Cyprus.” To pick just one example, the ECHR found credible evidence that “from 1993 onwards Transdniestrian arms firms began to specialize in the production of high-tech weapons, using funds and orders from various Russian companies.”
More generally, though, the risk of the TMR’s privatizations—which were largely bought by Russian and Ukrainian companies—being unwound or otherwise jeopardized leads to a substantial interest on the part of some of Russia’s business elite. This is redoubled with the substantial interest that Gazprom now has in the proper transfer of shares in Moldova-Gas from the TMR to Gazprom as a valid means of paying off debt.
Or consider as another example the story of the Moldovan Metallurgical Plant (MMZ) in Ribnita. The Ribnita plant was built in 1984 using German technology and is widely considered to still be the most advanced steel works in the former Soviet Union. The Ribnita plant also generates between 40 percent and 66 percent of the TMR’s tax revenues. The TMR sold the Ribnita plant, despite the protests of the government of Moldova, to the Russian company Itera.
Then, in April 2004, Itera sold 75 percent of the plant to the Hares Group, an Austrian company, which purchased another 15 percent from other co-owners. Some have argued that the Hares Group is a “political buffer” which purchases assets in former Soviet republics and then re-sells them to the actual intended owners. In the summer of 2004, Hares allegedly sold 30 percent of the MMZ shares to Alisher Usmanov, one of the “metal tycoons” of Russia, who then announced a plan to consolidate MMZ with five other enterprises from Russia, Ukraine and Kazakhstan making the new enterprise the fourth largest ore mining and processing company in the world. Such high economic stakes may well play a part in driving Russia’s political agenda, regardless of the requirements of international law.
[source: pp. 292-293 in this pdf (footnotes omitted)]
"Conditional recognition of privatizations" in Transdniester has been proposed as part of one potential settlement plan, but this doesn't seem to have made a critical difference in resolving the conflict just yet.
A few years ago, Usmanov seemed confident that there would be no unwinding of MMZ's privatization, or at least that he'd be able to "take steps" to avoid losing control of the enterprise:
Moscow 19 October 2004 14:56 Alisher Usmanov’s holdings in Moldovan Steel Works (MMZ) should not be jeopardised by the recent decision of the Moldovan parliament that cancelled all privatisation deals in the breakaway region of Transdniestr, the Russian businessman said last week. “I believe that the privatisation of MMZ was done under the legislation effective at that moment and that my subsequent participation in the acquisition of a share package in a company that owns MMZ stock was in good faith and should not be cancelled,” said Usmanov, who controls Urals Steel in Russia and holds a substantial minority stake in Corus Group. Usmanov said that he is planning no immediate action. “However, if [the recent developments] infringe the interests of the mill’s owners in any way, we will take steps aimed at the preservation of the mill’s uninterrupted operation, jobs and corporate ownership structure,” he added.
More recently, earlier this year there was speculation that Gazprom would give its right to receive Transdniester's extensive natural gas debts to Usmanov's holding company, Metalloinvest, which would then take payment of the debts from Transdniester in the form of the portion of MMZ shares that remained in control of the de facto state. However, all of the parties supposedly involved denied that a deal had taken place. Quite a tangled web, and I'm not sure of the situation as it stands today.
[Image source for all images of MMZ]
[Update - according to this
multipart investigative report on the sale of Moldovan assets to Gazprom, what happened this March was the following:
“Gazprom” assigned Transnistria’s gas debts, in the amount of USD 1.3 billion, to the “Metalloinvest” Holding, which is also co-owner of Râbniţa Metallurgical Plant and Cement Factory. When informing the local media about the transaction, Anatolii Belitcenco, President of the Board of Administration of Râbniţa Metallurgical Plant specified that he did know the debt assignment conditions but that, thanks to them, Transnistria obtained a deferral for a few decades. Igor Smirnov, the leader of the self-proclaimed Transnistrian republic, responded to Belitcenco’s statement with as surprising as cynical a declaration: “Transnistria does not have legal gas debts because it did not sign any contracts with ‘Gazprom’. And so, Transnistria will not pay anything to “Metalloinvest”. Moldova must come to an agreement with Usmanov (Holding’s leader, who holds 30 percent of the shares of Râbniţa Metallurgical Plant), it is the one that has debts.”]
[Update Oct 10: IHT has an article about the brouhaha surrounding Murray's blogging about Usmanov, which is titled "
Bloggers beware when you criticize the rich and powerful" and describes the initial shutting down of Murray's site as "the Internet equivalent of a smackdown." Via
Registan.]
Democracy without local autonomy is like a ladder without rungs
