Collateral damage

23 September 2010 By Jason Bush

The Kremlin’s battle to oust Moscow’s influential mayor Yuri Luzhkov has caught an oligarch, potashandgold king Suleiman Kerimov, in the crossfire. Kerimov can probably weather the storm. But the freezing of his assets in Cyprus is a timely reminder of Russia’s political risk.

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A Cyprus court has frozen $6 billionworth of assets belonging to Suleiman Kerimov, including a 25 percent stake in potash producer Uralkali and a 37 percent stake in gold miner Polyus Gold, held via Cyprusregistered subsidiaries.

This coincides with a $2 billion lawsuit filed in the London International Arbitration court by Ashot Yegiazaryan, a Russian businessman and parliamentary deputy, who is disputing ownership of a 25 percent stake in the Hotel Moskva near Red Square, acquired by Kerimov last year. Moscow mayor Yuri Luzhkov and his wife Elena Baturina are also named in the lawsuit, Russia's Vedomosti newspaper reported.

In recent days Russia has been gripped by intense speculation over the political future of Luzhkov, who has left the country for a holiday in Austria. Stateowned television channels have broadcast critical documentaries about Luzhkov, and Kremlin officials have hinted that he is expected to resign shortly. This follows public disagreements between Luzhkov and President Dmitry Medvedev over a controversial road construction project near Moscow.

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