Kasyanov prepares for fall?

The Constitutional Court ruled last week on a suit filed by 12 depositors in notorious banks SBS-Agro and Rossiisky Kredit, which could undo the entire restructuring scheme set up for the banking system.

Contrary to expectations, the Constitutional Court ruled that declaring a moratorium on any payments to creditors of problem banks before a solution was found to settle all creditors' claims violates the rights of creditors that have already won their cases in court.

But sources at the Agency for the Restructuring of Credit Organizations (ARCO), set up in 1998 to clean up the banks hit worst by the financial crisis, say that without the moratorium most depositors at banks like SBS-Agro would get nothing at all.

Sources at ARCO link the suit filed in the Constitutional Court to a conciliatory agreement concluded several months ago with SBS-Agro's depositors. The bank's notorious owner, Alexander Smolensky, vigorously opposed the agreement. Smolensky's methods for putting pressure on opponents sound like gangster recipes, right down to threatening phone calls to state officials dealing with SBS-Agro.

Smolensky didn't like the fact that by imposing the moratorium and making sure an equal approach was applied to all creditors, ARCO was able to stop him from stripping the bank of its remaining assets. Left to his own devices, Smolensky would have had the bank declared bankrupt, sorted out the creditors that mattered to him and left the vast majority of private depositors without a kopek.

The real spice in this affair, however, isn't the already thoroughly blackened Smolensky, but the fact that some people link the latest developments to a behind-the-scenes tussle going on in the government. The man in the government responsible for the banking sector is Deputy Prime Minister Alexei Kudrin, who is also chairman of the ARCO board of directors. This means that the Constitutional Court decision is an obvious stone in his garden.

Both Prime Minister Mikhail Kasyanov and Minister of Economic Development and Trade German Gref could want to see Kudrin compromised. Though no serious changes are on the horizon for the government at the moment, they will come sooner or later. Fall is being named as the next crucial date, when inflation will rise, as will energy and utilities prices. That would be a logical time for changes, and given that Kudrin is still one of President Vladimir Putin's favorites, his rivals will be on the lookout for chances to ruin his reputation.

One final curious moment in this affair – lawyer Mikhail Barshchevsky, who defended the state's interests so poorly in court (ARCO is a state corporation) has just become Kasyanov's official lawyer and been given an office in the government White House.

This, quite literally, is the approach taken in the Urals city of Yekaterinburg: German citizen Peter Jerisch, the general director of the Sverdlovsk Electromechanic Plant, who was appointed chief shareholder of the plant by German company Alstom, was locked in his apartment after his door was welded to the doorframe.

It's not known who actually carried out the welding, but what is known is that former General Director Anatoly Kuznitsyn chose the moment to seize the plant with the help of armed men.

The Germans removed Kuznitsyn from his post because they suspected him of being involved in dirty financial deals. But while the Germans followed such principles as clean accounting and shareholders rights, Kuznitsyn followed the unwritten rules of the Russian criminal world.

His trump card was getting Gov. Eduard Rossel's support. He then got several local judges to rule in his favor, but the high point of his judicial blitzkrieg came when the Sverdlovsk Oblast arbitration court ruled on beginning renationalization of the company. Newspapers say that since it was Kuznitsyn who originally privatized the company in the first place, it was easy for him to find violations in the documents and file a suit.

It all sounds like a bad joke, but it's in danger of becoming an international scandal. The German Foreign Ministry has already sent a letter of protest to their Russian counterparts.

(Ekaterina Larina is assistant editor of The Russia Journal.
E-mail Katya at katya@russiajournal.com.)