GO
Loading...

Abramovich Admits 'Not Very Ethical' Standards

Michael Steen HKSCKPVIamp; Jane Croft, Financial Times
Tuesday, 1 Nov 2011 | 3:22 AM ET

Roman Abramovich, the billionaire owner of Chelsea football club, conceded he used business practices that were common but “not very ethical” during the early 1990s in Russia as his business progressed from the manufacture of plastic toy ducks into what would become an oil and metals empire.

Steve Allen | Brand X Pictures | Getty Images

The 45-year-old Russian magnate, who is appearing in court in a case brought by his erstwhile partner-turned-rival, Boris Berezovsky, broke a long silence on Monday to speak under oath about his rapid ascent during the turmoil that followed the collapse of the Soviet Union.

Mr Berezovsky has brought the $6.5 billion case, accusing Mr Abramovich of pressing him into selling shares in Sibneft, a Russian oil company, in 2001 for $1.3 billion, well below their market value, under the threat Vladimir Putin, Russia’s president at the time, would otherwise expropriate them. Mr Abramovich denies the claims.

In questioning that appeared to attempt to highlight inconsistencies and grey areas in Mr Abramovich’s early biography, Laurence Rabinowitz, Mr Berezovsky’s lawyer, asked the magnate whether he or his business associates had ever forged a document.

“If backdating documents is something that is not very ethical, then perhaps we can be accused of that,” Mr Abramovich told the court, after initially saying that none of the people close to him had ever faked a document. “This practice existed in Russia and, for sure, we have done it...In the course of this case we say that certain documents have been signed two days early or not.”

It was not immediately clear how direct a bearing this will have on a case that rests largely on oral agreements struck on luxury yachts, at ski resorts or in airports up to 16 years ago for which no written records exist.

Mr Rabinowitz produced a 1992 order by Moscow prosecutors to detain Mr Abramovich, who was an oil products trader at the time, after 55 train wagons of diesel fuel went missing from the Ukhta oil refinery in northern Russia. Investigators accused Mr Abramovich of forging documents with officials at the refinery.

The missing diesel was recovered and Mr Abramovich said no further action was taken.

“I was released and there were no problems,” he said.

Mr Abramovich claims that Mr Berezovsky never owned the Sibneft shares that the latter says he was forced to sell. Instead, he said, he paid Mr Berezovsky, who has lived in exile in the UK since 2000 after falling out with Mr Putin, for access to former president Boris Yeltsin’s circle.

The case continues.

Featured

Contact U.S. News

  • CNBC NEWSLETTERS

    Get the best of CNBC in your inbox

    › Learn More

Don't Miss

U.S. Video

  • Mad Money's Jim Cramer discusses Micron Technology and how the company gained control over inventory issues. The bears expect the company's history to repeat itself, but Cramer says this time, it feels different.

  • In this excerpt from a live CNBC interview, Warren Buffett explains why it's extremely unusual for a company's directors to vote against executive compensation plans.

  • Mad Money host Jim Cramer says shareholder activism works for every shareholder, and offers his take on the Valeant/Bill Ackman bid to acquire Allergan. The market is better off for these efforts, he says.