Kremlin Inc. Just Keeps on Killing

Forbes reports:

Alexander Antonov, a little-known Russian businessman survived an assassination attempt after he was shot in the head by a gunman in Moscow on Wednesday morning. Though the news hardly caused a stir in Moscow- relegated to the third page of most newspapers – it’s a powerful reminder that despite attempts to stamp out corruption, the country is still struggling to throw off a shadowy past.

Contract killings are far more prolific than the number reported in the media suggest, says Carlo Gallo, of Control Risk Group in London, who advises companies considering investing in Russia. “Contract killings may have decreased in frequency since the 1990s and the day of wild capitalism, but they are still occurring regularly in Russia, though they rarely make the headlines,” he told Forbes. “Victims tend to be journalists operating at a local level or local administrators involved in handing out permits, or land allocation.”

Russia’s problem with corruption is widely acknowledged. President Dmitry Medvedev himself has pledged to stamp out the problem. (See “Russia’s $120 Billion Elephant: Corruption.”)

However, the problem remains, and the troubles in the court system mean that the normal legal routes for solving business disputes or battles over planning permission are rarely effective.

“The low level of reliability of the court system means that business players look for other methods of resolving dispute, and this can include violent methods,” said Gallo.

“The killings will continue as long as the shadowy side of the economy prevails,” says Elena Panfilova, director of Transparency International in Moscow. “It’s not at all good for the business climate and business community.”

A loss of business confidence is something Russia simply can’t afford at this stage. The Russian economy has already been severely dented, with the war with Georgia and a high profile dispute with BP hurting the enthusiasm of foreign investors, while its financial market was battered when hedge funds and western institutional investors withdrew billions of dollars. On top of that falling demand for oil and metals and dented the profits of some of the countries biggest energy firms and miners, forcing them to cut production and sending unemployment soaring.

Contract killings rarely directly involve foreign investors, says Gallo. “Victims are overwhelmingly Russia,” he said. “However it does underscore the need for serious due diligence by foreign investors thinking of entering deals with local partners, if nothing else but to preserve the brand name.”

Assassination survivor Antonov sits on the board of Konvers, a mid-sized banking concern involved in the Baltic states and controlled by his son, Vladmir Antonov. “We already have an understanding of who did this,” the son told the Interfax news agency on Thursday.

One response to “Kremlin Inc. Just Keeps on Killing

  1. Jack Mehoff & Ben Dover

    so basicly Elena Panfilova is saying if Alexander Antonov or many more don’t die there will be more murders???

    im just a 14 year old doing his geography project report..

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s