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Russian businessman Usmanov rejects opposition activist Navalny’s bribe charges

Usmanov said the transfer of the estate to a charity foundation had been a commercial deal to add another plot of land to the territory of his suburban house

MOSCOW, April 12. /TASS/. Russian billionaire Alisher Usmanov has rejected opposition activist Alexei Navalny’s accusations that he allegedly transferred an estate in a prestigious residential area west of Moscow to a charity foundation run by an associate of Prime Minister Dmitry Medvedev as a bribe. 

The Russian tycoon said in an interview with business newspaper Vedomosti that the transfer of the estate on the Rublyovskoye highway to the SotsGosProyekt charity foundation had been a commercial deal to add another plot of land to the territory of Usmanov’s suburban house.

According to Usmanov, the estate was intended as a residence for his sister but she decided against living there as she believed that the house was too big for her.

Usmanov learnt from his old acquaintance Ilya Yeliseyev with whom he had earlier worked in Gazprom’s investment vehicle Gazprom Investholding that the SotsGosProyekt foundation was planning to carry through a development project near the boundaries of the land site, on which Usmanov’s house is located.

"I had long been looking for a possibility to expand my land site where I have been living for over 20 years and so I proposed exchanging their plot of land covering 12 hectares for my sister’s land site located far away from me and accommodating a ready-made house," the businessman said.

The charity foundation ceded an empty plot of land on Rublyovskoye highway on an area of 12 hectares to Usmanov "at the par value" while the businessman transferred his sister’s land site and the estate to SotsGosProyekt.

The Russian billionaire estimated the land plot he received from the charity foundation at $50 million. At the same time, Usmanov said that the 4-hectare land plot transferred to SotsGosProyekt was estimated at $15-20 million and the house located on it at $30 million.

‘So, the balance is about 50/50," the businessman said.

A video posted by Navalny’s Anti-Corruption Fund in early March claimed that Ilya Yeliseyev, a former classmate of Medvedev, and the SotsGosProyekt Foundation related to the prime minister had received a land plot together with an estate worth 5 billion rubles ($85 million) in the village of Znamenskoye on the Rublyovskoye highway from Usmanov under a donation agreement. Navalny called the property transfer a bribe "in the system of charitable foundations belonging to Dmitry Medvedev."

Purchase of assets and relations with the state

Russian businessman Usmanov stressed he had never participated in any privatization deals and purchased all his assets on the secondary market.

"Before that, he [Navalny] used to say that I had allegedly participated in privatization. But which privatization? In 2004-2005, when ore was sold at $22 per tonne, I was buying the Mikhailovsky Ore Mining and Processing Plant and 30% of Tulachermet [metals enterprise] for $2 billion and was consolidating the share package of Gazmetal for $2 billion. I bought a blocking stake in MegaFon [cell phone operator] for $5.2 billion and I have been returning this debt up to this day," the businessman said.

When the economic crisis broke out in 2008, Metalloinvest, the country’s largest producer of iron ore products, owned by Usmanov and his partners received government guarantees as a strategic enterprise as its management sought to hedge credit risks.

According to Usmanov, this happened without his participation as he was undergoing post-hospital rehabilitation after a surgery at that time. In the same year when the businessman returned to the company’s management, Usmanov’s enterprises gave up government guarantees.

As Usmanov said, he never counted on state guarantees and consciously was not purchasing state assets, except for the license to develop the Udokan copper deposit, which cost his controlled structures $500 million. This was one of the largest deals by the mining company with the state unrelated to oil and gas deposits.