The prosecutor's office is ready to make Berezovsky accountable for the pillaging of Aeroflot. But let's look more closely.

 In 1995, Berezovsky took control of the state-owned company Aeroflot. He didn't buy shares or privitize it. He simply placed people loyal to him -Krasnecker and Glushkov - in key posts in the company.
 After this, all of the hard currency passed through two Swiss companies, Andava and Forus. Seventy-eight per cent of the shares belonged to Berezovsky and Glushkov. It is believed that $580 million passed through Andava and slightly less through Forus."We don't claim all this was stolen," the lead investigated,Nikolai Volkov, told me. "But certain financial operations have raised serious concerned."

 The concern is something like this: Aeroflot is a Russian company, but all of its money stayed abroad. A series of middlemen sprang up between Aeroflot and its own money. According to Volkov, one deal looked like this:
 Aeroflot engaged a Russian company called FOK to collect its foreign debts. FOK, in turn, hired an Irish offshore company to collect the money. Naturally, Andava and FOK are controlled by the same people. In this case, FOK and the Irish company collected $38 million for its service.

 Basically, it was a scheme by which Aeroflot borrowed its own money and paid a percentage for the privilege. Between 1995 and 1998, its annual passenger volume grew from 3.5 million to 4.5 million. Revenue grew from $1 billion per year to $1.3 billion. The company purchased 15 new Boeing aircraft. In 1995, a share in Aeroflot cost $7 and by 1998 it cost almost $185.

  Did Berezovsky's people do anything illegal? No.There is no law against paying a middleman to perform a service, no matter how ridiculous or how high the fee. After all,it would be silly to try and scale the barbed-wire fence of the law, when it is full of holes large enough to drive your black Mercedes through.  We should remember that this behaviour is routinely practised. If you examine Sibneft or Tyumen Oil, or Norlisk Nickel, you will find the exact same thing.

 The continued flowering of such companies is due to the high Russian taxes. The efforts of those hard working and skilled managers, goes offshore, and why not?
Unfortunately, for purely political reasons, this is what spurs on the prosecutor's office. This is perfectly understandable, for these schemes are inherently distasteful.

 However, we should look carefully at the Aeroflot case. Anyone who is ready to condemn the Russian Mephistopheles for destroying this company should look again. Aeroflot revenues are down since Berezovsk's team was dismissed. |