Evgeny Mulyukov discovered possible massive fraud in the Russian oil giant Bashneft before it was bought by Rosneft, and found himself in exile, with bogus criminal cases against him.
On October 14, 2016, Moscow employees of Bashneft, a Russian oil giant with sales topping $9 billion annually, were told to leave their desks at once. The investigators brought by the new company owner, Rosneft, searched for evidence of massive fraud that has been possibly committed by the oil giant’s previous owners.
Igor Sechin, powerful CEO of Rosneft and a member of Vladimir Putin’s inner-circle, acquired Bashneft after a series of corruption scandals involving the oil giant’s previous owners — AFK Sistema and the son of a former head of Bashkortostan, an autonomous republic in the northern Russian. The State seized the company from its previous owners siting illegal privatization and opening criminal cases against the owners.
Following Bashneft’s de-privatization and its take over by Rosneft, the authorities dug into the company’s books and seem to have discovered massive irregularities. Sechin, who is known in Russia as Dark Vader for his harsh business practices, is likely to press for full investigation and criminal prosecution, if necessary.
However, over three years ago, another businessman already tried that, alas with worse results. After discovering massive fraud and attempting to alert authorities, he found himself facing criminal charges and being put on the Most Wanted list.
Evgeny Mulyukov, a minority shareholder of Trade Nafta, one of Bashneft’s trading partners, never expected to live in London — a city where Russian businessmen typically stay when they have to avoid a corrupt criminal investigation. For Mulyukov, the troubles started when he discovered, and tried to bring attention to the fact that Bashneft effectively sold most of its current and future oil reserves to a shell company linked to the company’s management, days after Bashneft was taken over by the government but hours before the decision went into effect.
3 years later, when Sechin requested a search and full investigation of Bashneft, he was probably searching for evidence of this deal, shady by even the Russian standards: the deal worth $5.6 billion (350 billion rubles) was not authorized by the company’s board, nor prices were checked. According to the export report, requested by Mulyukov, in some cases Bashneft sold oil with 40% discount to a no-name company that immediately sold it again, with a 40% mark-up.
After discovering these wrong-doings and realizing the scale of the fraud, Mulyukov notified the company’s management and the authorities: Anti-Monopoly Service and police did not respond. No actions were taken by the CEO of Bashneft Alexander Korsik and other top managers of Bashneft.
Mulyukov contacted the Director of the Federal Security Service of Russia as well as to the Prosecutor General. In his letters (Mulyukov since then made them public) he requests an investigation of the companies and officials involved.
Mulyukov believes that the $5.6 billion sale of most of the future oil reserves of Bashneft could have been part of the massive criminal conspiracy, in which management of Bashneft, Lukoil, Eksim Group, Arctic Bunker, Trubond Limited, Trade Nafta and law-enforcement authorities of Russia might have been implicated. Mr. Mulyukov also believes that the scheme was covered up by the officials and powerful oil lobby, the former director general of Bashneft Alexander Korsik and Vagit Alekperov, the owner of Lukoil, yet another oil conglomerate that bought the Bashneft oil.
Mulyukov warned the authorities that the deal is not legitimate, has not been approved by Bashneft general shareholders meeting (in Russia, deals involving 50 or more per cent of assets have to be ratified by shareholders), could involve price fixing and tax evasion (because the sale took place at below-the-market price).
As soon as Mulyukov filed the reports on Bashneft, he faced several lawsuits and criminal investigations that he believes were initiated by Alexander Korsik, who was still running Bashneft and lobbied the government, the new principal owner of the company, to keep him as CEO.
Mulyukov filed a petition to Yuri Chaika, the Prosecutor General of Russian Federation, requesting review of the criminal cases against him. The letter filed on his behalf by “Sokolov, Trusov and Partners” states:
“… On May 12, 2015, IU MU of Interior Ministry of Russia in Odintsovo district brought a criminal case №86005 against an unknown person for an offence under article 163 part 3, point “b” of the Criminal Code of Russia.
The said criminal case was initiated at the request of Golub M.V., submitted to the General Prosecutor’s Office of the Russian Federation.
This request by Golub M.V. contains deliberately misleading statements about my client, such as statements of unreasonable claims by Mulyukov Y.R. of money from their joint business with the applicant in the Nafta Trade LLC, as well as speculations about actions supposedly taken by Mulyukov Y.R. to threaten Golub M.V. with the spread of defamatory information against Golub M.V. and members of his family. Without any pre-investigation check, without getting an explanation of Mulyukov Y.R. about the facts of the statement, investigator Matyukhina A. A. of IU in Odintsovo district, criminal case was initiated.
I believe that Golub M.V. is misleading the investigation with his request, upon which a criminal case was brought on, and which he confirmed in testimony, both regarding to the circumstances of the October meeting of the Golub M.V. with Mulyukov Y.R., the event my client categorically and repeatedly denies in his statements and petitions sent to the investigator in the criminal case, and regarding the illegality of the claims made to Golub M.V. by Mulyukov Y.R. to transfer the money…”
Evgeny Mulyukov is now living in London, involved in several arbitration cases against Mikhail Golub and also working on clearing his name and fighting off criminal prosecution in Russia. Despite the fact that Bashneft board fired its former CEO who, according to Mulyukov’s information, initiated criminal prosecution, chances are slim: In Russia, less than 0.1 per cent of verdits are of acquittal.