What Is Khodorkovsky Doing His Time For? (II)

By Gregory Tinsky (Russia)

Part 1

Five grannies make a ruble

Big money lacked a brand-new signboard and the diversification of business. That’s what new „Intersectorial Scientific-Technical Programs Center” — or just „MENATEP[1]” in short — was found for. Competition at the market of financial services, which Khodorkovsky majored in, increased drastically and the commission charges for transactions of that kind reduced to 3–5%. New era of business — import of goods — was on the rise.
Money raised in the financial laundry were used for purchase of computers abroad — merchandise, previously unknown in Russia. Margin in that area made up hundreds of percents. However, without a twinge of conscience, Khodorkovsky’s team put such hi-tech goods as genuinely French cognac „Napoleon” right from its manufaturer in Poland into the same list of imported goods. In December of 1988 Khodorkovsky found „Menatep” bank and came to a thought that his compatriots (still Soviet at the time) were hiding quite considerable savings under their mattreses. Thus, seemingly the first financial pyramide ni the USSR was created. Its advertising motto stated: „Making our way to the market economics at speed of 15 million rubles an hour”. Unfortunately, several million people were unable to keep up with suche tremendous speed and fell off during the way. At that Menatep wasn’t really upset with the fact that they’ve failed to keep their savings — mind that bank’s capital doubled thanks to this affair. Menatep’s codename for this operation was „Five grannies make a ruble”.

Business-project “Power”

By the beginning of the 90s ex-Komsomol members had more money than they were able to spend. Time of investments had come. Khodorkovsky became an aide to Ivan Silayev — then Prime Minister of Russia — and in 1992 he became a President of the Investment Center for Fuel and Energy Complex being a Russian Minister of Fuel and Energy Deputy. During the Kremlin meeting of business representatives with President Yeltsin he told the latter that business should be engaged with industry and that he’s ashamed to tell his parents that he makes money with commerce. As early as privatization strated, Menatep started to buy off everything on end: fertilizing manufacturers, copper and pipe-making factories, agricultural refinery complexes etc. The best move that Menatep made was its participation in the so-called shares-for-loans auctions. Russian government desperately needed money, budget was empty as the socialistic grocery store. As people from Yeltsin’s surrounding rumour, it was situation like that when genius schemer Vladimir Potanin (one of contemporary Russian oligarchs) invented a rather weird way of replenishing the budget. Government announced an auction where private companies were offering state the loans with an utmost low interest rates. In exchange, government offered them shares of the most profitable state enterprise as a deposit.

Yukos — second largest oil-producing company in Russia — happened to be the tastiest titbit of that national pie. Competitors (INCOM bank consortium, Alfabank, and Russian Credit bank) offered „tremendous” $350 million for the gem of the Russian oil industry. But…let us not forget the post that Khodorkovsky occupied at the moment. He was was a President of the Investment Center for Fuel and Energy Complex and a Russian Minister of Fuel and Energy Deputy. This very state organization was ordered to hold an auction. As a result of illegal activities of the Center, offer of competitors was refused due to formal reasons and Menatep got Yukos almost for free — for ridiculous $159 million. Still that was merely 45% of its shares. During the next 3 years, however, thanks to some doubtful extra emission of shares, Menatep became a majoritatarian Yukos share-holder, having 90% of its shares. That’s how great world career of Mikhail Khodorkovsky started.

To be continued…

Source: Russian Interests

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