Financial Times Clears Michael Cherney (Mikahil Chernoy). Private Eye Suspects Deripaska

Classified Polnews

by David Waldman

The European edition of the prestigious Financial Times, has issued a clarification regarding a FT article published in 2006 concerning Michael Cherney (Mikhail Chernoy), the Israeli tycoon who made his fortune in the Russian metals industry in the early 1990s.

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In an article entitled, "Bid to Buy Romanian Refinery Raises Concerns" which appeared on December 20, 2006, the Financial Times reported on a takeover by PMG, an Austrian Foundation, of the Rafo refinery in Romania. In discussing the takeover, the FT article made reference to "past investigations carried out by law enforcement agencies relating to Michael Cherney." While it is true that Mr. Cherney did have a financial interest in the refinery in 2005, he categorically denied any interest in the takeover.

The Financial Times on June 4th issued a clarifying article in which it explained that the December article did not intend to offer or support any allegation that Mr. Cherney was in any way involved in any of the crimes referred to in the investigations, nor any crimes that were alleged to have been carried out in the Russian aluminum wars of the early 1990's. ( The clarification is at ( http://www.ft.com/cms/s/b70412be-0e4b-11dc-8219-000b5df10621.html Michael Cherney ) The article notes that, "none of those investigations resulted in Mr. Cherney's being charged with any criminal offence." At the same time another UK publication "Private Eye" reports that Oleg Deripaska, former partner of Michael Cherney, has raised suspicions as he plans the $30bn floating of his company RUSAL, the world's largest aluminium group, in London later this year. Deriapska's past will likely raise some serious questions from City regulators and advisers J.P.Morgan Cazenove and Credit Suisse.

The Private Eye questions why Deripaska is once again banned from visiting the US after his visa was withdrawn several months ago. Deripaska has been less than candid about his past business associates. Similarly, he is also suspected of concealing from EBRD and other international financial institutions the fact that in 2001 he signed a contract in London with his former business partner and mentor, Michael Cherney, which states that Cherney owns 20% of RUSAL and that Deripaska is holding them in a trust with an obligation to sell these stakes and reimburse Cherney their full value. Cherney is currently suing Deriapska for billions of dollars, claiming that the latter did not pay him in full. Cherney has lost the first round of litigation in London's High Court on procedural grounds, but intends to appeal and is also considering further litigation.