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Russia Hit With Massive Yukos Judgment, Georgia Charges Saakashvili With Abusing Office

Plus, a Macedonian archeologist is jailed in smuggling case and a Bosnian leader decries flood donors’ mistrust.

by Barbara Frye, Ioana Caloianu, and Mane Grigoryan 28 July 2014

1. Moscow told to pay $50 billion to former Yukos investors

 

An arbitration court in The Hague today ordered the Russian government to make a huge payout to former shareholders in Yukos, the oil company that was dismantled a decade ago when its director, Mikhail Khodorkovsky, was imprisoned.

 

The ruling obliges Moscow to begin paying out a combined $50 billion to five investors by January, Reuters reports, calling the decision “a big hit for a country teetering on the brink of recession.” Russian Foreign Minister Sergei Lavrov said his government would appeal.

 

The dismembering of Yukos followed Khodorkovsky’s conviction in 2005 on charges of fraud and tax evasion. Most of its assets were auctioned off to the state-owned Rosneft oil company.

 

Khodorkovsky is not among the beneficiaries of the payout, having ceded his stake in Yukos to Leonid Nevzlin, whom Reuters describes as “a business partner who had fled to Israel to avoid prosecution.” The news agency says Nevzlin, who owned a 70 percent share of Yukos, is due to receive the biggest windfall.

 

Another beneficiary will be Platon Lebedev, Yukos’ former chief executive, who was imprisoned along with Khodorkovsky. Both men were convicted of stealing Yukos’ oil in a subsequent trial. Khodorkovsky was released in December and Lebedev in January.

 

In live-blogging the case, the Guardian’s Graeme Wearden writes that Russian officials defended their takeover by arguing that Yukos “fraudulently evaded billions of dollars of tax” via a complex corporate structure that set up entities in Russia’s low-tax regions.

 

But citing a series of moves by officials – including attributing to Yukos revenues earned by its trading companies but not crediting Yukos with VAT payments made by those same companies – the court determined that “the primary objective of the Russian Federation was not to collect taxes but rather to bankrupt Yukos and appropriate its valuable assets.”

 

In a scathing passage, the tribunal wrote, “Rather the Russian court proceedings, and most egregiously, the second trial and second sentencing of Messrs. Khodorkovsky and Lebedev on the creative legal theory of their theft of Yukos’ oil production, indicate that Russian courts bent to the will of Russian executive authorities to bankrupt Yukos, assign its assets to a state-controlled company, and incarcerate a man who gave signs of becoming a political competitor.”

 

2. Saakashvili faces criminal charges in Georgia

 

Prosecutors in Georgia announced today that they have charged former President Mikheil Saakashvili with abusing his office, Civil.ge reports.

 

The case stems from the breakup of anti-government protests in Tbilisi in November 2007 and a raid on opposition-minded Imedi TV the same day, according to the news website.

 

Mikheil Saakashvili is the latest in a string of officials from the previous administration to face criminal charges in Georgia. Photo from Facebook.

 

Prosecutors said that on Saakashvili’s orders police used excessive force in dispersing the rally in order “to intimidate protesters and to deter them from further rallies,” according to Civil.ge.

 

They also allege the raid on Imedi was part of a plan to seize the channel and that authorities were prepared to give owner Badri Patarkatsishvili Georgian Railways in exchange for the station.

 

Patarkatsishvili was a Georgia-born tycoon who made his fortune in Russia before returning to his native country early in Russian President Vladimir Putin’s first term. He initially supported Saakashvili, but their relationship soured amid mutual accusations of corruption. He died in London in February 2008.

 

In addition to Saakashvili, prosecutors charged Vano Merabishvili, who was interior minister in 2007; then-chief prosecutor Zurab Adeishvili; then-Defense Minister Davit Kezerashvili; and Gigi Ugulava, a Saakashvili ally who at the time was mayor of Tbilisi. 

 

Saakashvili’s last term as president ended in November. He is now a “senior statesman” at Tufts University’s Fletcher School of Law and Diplomacy. He was summoned to Tbilisi for questioning by prosecutors but failed to show up today.

 

On his Facebook page, Saakashvili wrote that the ruling Georgian Dream coalition is seeking political “revenge” against prior leaders, according to Civil.ge. Saakashvili said his prosecution is aimed at “pleasing Russia” and will strain Georgia’s ties with its Western allies, adding, “I will obviously not take part in this farce.” 

 

3. Top archeologist gets jail time in Macedonia artifact-smuggling case

 

A leading archeologist in Macedonia has been convicted of aiding an artifact-smuggling ring and sentenced to three years in prison, Balkan Insight reports.

 

Pasko Kuzman
According to prosecutors, Pasko Kuzman, the former director of the country’s Cultural Heritage Protection Office, granted the smugglers permission to conduct digs in the eastern town of Delcevo and along a road from Skopje to Veles in central Macedonia.

 

A prosecution witness testified that the group illegally sold historical artifacts they excavated for personal profit, according to Balkan Insight.

 

Sixteen defendants received jail time and four were sentenced to probation. Others convicted include Ilco Bojcevski, another top official in the preservation agency who prosecutors said led the crime ring. He received a 7½-year prison term.

 

The defendants maintain their innocence and their lawyers said they will appeal the verdicts, Balkan Insight writes.

 

Kuzman was arrested in February along with seven others suspected of stealing 162 artifacts from the Museum of Macedonia in November and in a series of thefts from November 2011 to October 2013. During the arrests, police found some of the artifacts in the homes of the suspects, along with others that had not been declared stolen at the time.

 

4. Bosnia’s post-flood donors avoid dealing with its government

 

Bosnia’s prime minister is complaining that many organizations giving aid to the flood-ravaged country have opted to circumvent the government, making it difficult to ensure that the most pressing needs are addressed first, Balkan Insight reports.

 

“If the donations were all directed to one place, we could talk about the priorities,” Vjekoslav Bevanda told the news agency in an interview.

 

Bevanda acknowledged that donors do not trust the Bosnian government, widely perceived as corrupt, to channel the money where it needs to go. But he said those suspicions are based on “some long-time ago experiences, when there were misuses.”

 

Much of the aid the country received during the 1992-1995 war disappeared, Balkan Insight notes.

 

“It is still unknown how much of this donor money even got to Bosnia,” according to the news agency. “Parliamentary commissions have made attempts to track down wartime donations but no comprehensive report by the state on the donations ever emerged.”

 

Donors have pledged about 800 million euros’ ($1.07 billion) worth of grants or loans to help Bosnia recover from May floods that killed 25 people and displaced 40,000 in a country of 3.8 million.

 

Foreign governments and aid agencies are not the only ones who do not trust the Bosnian government to handle the money responsibly. Deutsche Welle reported in early July that residents left homeless by the disaster were protesting a slow official response, exacerbated by Bosnia’s bewildering layers of government.

 

“Many Bosnians believe the donations will disappear to corruption and cronyism,” the German news agency wrote.

 

Bosnia ranked in the middle of the pack among 177 countries surveyed in Transparency International’s most recent Corruption Perceptions Index. The organization cites a lack of corruption prosecutions, weak punishments, and political interference with the anti-corruption agency and judiciary, among other issues.

 

5. Crimea crisis sends Belarusians to Lithuania for summer holiday

 

Belarusians who have long made Crimea their summer destination of choice are flocking instead to Lithuania this vacation season, the Baltic News Network reports.

 

Belarusians make up “a significant part of the tourist flow this year,” a tourism official in the town of Birstonas, about 125 kilometers (78 miles) from the Belarusian border, told BNN. “Belarusians stand behind the 15 to 20 percent increase in the tourist traffic to our town this summer.”

 

The official said the Belarusians love Lithuania’s “lush greenery.”

 

Many bring their extended families, and locals praise Belarusian visitors as “low-maintenance, humble, and very curious,” according to Alma Slaboseviciene, a manager at the tourism information center in Palanga, a seaside resort town.

 

“They are good money spenders. Very curious, though, modest and sometimes a little shy,” a waitress in Palanga said.

 

Sensing their opportunity after Crimea’s annexation by Russia earlier this year, Palanga tourism officials sent a Russian-speaking employee to Minsk to work with a longtime travel agency partner there, according to BNN.

 

Slaboseviciene told the news agency the number of Belarusian tourists to Palanga in June was 698, a nearly sixfold increase from the same month last year.

 

Those numbers might be even higher if visas were easier for Belarusians to obtain, BNN reports. Applicants complain about long waits even to get permission to submit their requests, long lines on application day, and disrespect and confusion at the Lithuanian border when they try to enter.

 

Lithuania tourism could use the boost. For the past decade the country has ranked near the bottom of EU tourism statistics, attracting a fraction of the visitors who head to the Continent’s tourism powerhouses of the UK, France, Italy, Germany, and Spain.

 

Aside from the capital, Vilnius, Lithuania’s main tourist assets are forests, lakes, and sheltered and open-sea coastline. 

Barbara Frye is TOL's managing editor. Ioana Caloianu is a TOL editorial assistant. Mane Grigoryan is a TOL editorial intern. 
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