Streetwise Professor reports:
No doubt the recent decision of Permanent Court of Arbitration in The Hague intensified Putin’s Pavlovian response to a question about Khodorkovsky. The court ruled that Yukos shareholders could sue Russia for violating the Energy Charter by seizing Yukos assets.
The likelihood of collection in the event of a favorable verdict is probably small. Indeed, given the murky and political nature of the case, a favorable verdict is not a foregone conclusion. But Putin has reason for fear nonetheless, because regardless of the verdict, a trial would be huge problem. The kinds of information that would be revealed would be extremely damaging. The ongoing SOVCOMFLOT trial in London, and other London cases involving Russian litigants, demonstrates just how such proceedings can bring to light all sorts of shady practices. And those cases pale in comparison to the blockbuster potential that any litigation involving Yukos would have. No wonder Putin goes ballistic under these circumstances when somebody rings the Khodorkovsky bell.
A couple of other things about Putin’s virtual audience with the great unwashed amused me. First, his whining about the WTO, and supposed American opposition to Russia’s accession. All nations, the US included, are hypocrites on trade policy, but Russia is a leader in this area. The economic crisis has exacerbated Russian protectionist tendencies, and these are likely to get worse, not better, if the oil price remains relatively high and takes the ruble with it. Whereas world manufacturing is recovering, albeit unevenly, Russia’s is contracting further. This will only encourage Russian protectionist tendencies.
Second, Putin continued his on-the-one-hand-but-on-the-other-hand evaluation of Stalin. The amusing part, though, was Putin’s explicit mention of the cult of personality: indeed, in the critical portions of his remarks, he mentioned the personality cult before, you know, the millions of deaths: “At the time (of Stalin’s rule) we had to deal not only with a cult of personality, but with massive crimes against our own people.” Pretty bizarre coming from a man who is actively creating is own personality cult.
One last Russian, but not Putin-related note. The Hong Kong Stock Exchange has again delayed a decision on a Rusal (Deripaska) public listing. The bankers who are into Rusal for billions are desperate for an IPO so they can get some of their money back. HKSE gives the impression, though, of somebody who figures that if they just ignore an embarrassing person in their company, he’ll just go away. Given Rusal’s desperation–and that of its bankers–that’s not likely to happen. Meaning that HKSE will have to fish or cut bait.
It would be foolish to permit the listing. Rusal, and anything dealing with Deripaska, is a scandal waiting to happen. Or, more accurately, a scandal that’s already happened, and ongoing, just waiting to be revealed.