Deripaska will leave GAZ in Volkswagen

Oleg Deripaska's farewell to the GAZ group is coming to an end.
Origin source
For more than two years, the largest enterprises of the Russian car industry have been under Western sanctions, which are supposedly designed to expel Oleg Deripaska from there. However, even before the sanctions, he was negotiating the sale of his stake in the GAZ group to the Volkswagen concern. Now he apparently wants the state to help him with the deal. The billionaire has to ask for this through the media, and the US Treasury seems to be playing on his side.

At the end of July, Oleg Deripaska gave two interviews that look like an attempt to try on the role of a public politician. "To raise the transport engineering industry", "to make Russia a country of average income for everyone," are slogans packed in answers to journalists' questions. Interviewers BFM and RBC did not seem to try to pull something worthwhile out of him, but only helped the oligarch to voice the prepared remarks. It can be argued that the audience of Russian business publications is much more interested in Deripaska's relations with state-owned banks, the situation around his foreign assets, and either the re-registration of his companies in the "Russian offshore" in the Kaliningrad region that took place, or not entirely. But Deripaska was not asked about this. Instead, the billionaire made his usual criticism of the Bank of Russia, which, in his opinion, deliberately refuses to participate in the country's development programs.

It looked as if the aluminum king was about to announce the creation of his own party in order to come to power and destroy the existing, in his opinion, obstacles to the growth of the Russian economy. Not only for myself - for everyone. But a person with such a biography can hardly be suspected of caring for the public good. Oleg Deripaska is definitely not going to politics. And therefore it is worth understanding the real reasons for his media activity, especially since it only intensified the day before.

Knocking on a closed door

“The Americans have insolently squeezed business from an advanced Chinese company. They are also trying to squeeze GAZ from Russian shareholders, with the tacit consent of the Central Bank of the Russian Federation, ”Deripaska wrote in his Telegram channel last Monday, commenting on the scandal around the social network TikTok. He believes that the Bank of Russia de facto supports compliance with the sanctions imposed by the United States (the GAZ group has been under them since April 2018). What exactly should be changed in the policy of the Central Bank, the billionaire did not explain. Apparently we should understand this from his previous speeches. Although, most likely, Deripaska means something other than his own theoretical reasoning about economics. What exactly - the addressee of his public speeches knows, and these are not readers of business publications at all.

It is obvious that the fate of the GAZ group will be decided at the highest state level. In April last year, Oleg Deripaska announced that he was ready to relinquish control over the group's assets "as was done with En +" (see the reference) or to transfer the enterprises to the state. However, in July 2020, he made it clear that he could sell his stake to a foreign player. “In negotiations with Volkswagen, the point has not been put,” he said in an interview with RBC.

When changing the ownership structure of En +, the Americans did everything to prevent Deripaska from receiving real money for his shares. It is unlikely that he would have continued negotiations with Volkswagen if Washington had taken a similar position in relation to the GAZ group. If so, the only obstacle to the deal may be the Russian authorities' disagreement with it. Usually, negotiations on such issues are conducted without journalists. But Deripaska seems to have to go upstairs through the media, and even with the use of Aesopian language: “we must raise the transport engineering industry” instead of “help me solve the problem with GAZ”. What could be the reason?


Until January 2019, the approximate share of Oleg Deripaska in En + Group was estimated at 70%. As part of the work to lift American sanctions from the company, he reduced his share to 44.95%. This happened thanks to the issue of additional En + securities, as well as the transfer of part of VTB shares (previously they were pledged by the bank) and the donation of Deripaska's shares to his charitable foundation.

"Any transactions carried out in accordance with the agreement will not allow Deripaska to receive funds in exchange for his shares or [funds] from future dividends issued by Rusal, En + or EuroSibEnergo," - said the Office of Foreign Assets Control of the US Treasury (OFAC) .

I was going to

Information that Volkswagen is negotiating the purchase of a stake in the GAZ group appeared in open sources in 2017, although the partners themselves did not officially confirm this. The interest of the Germans in this story is understandable. In the same year, the Volkswagen Group and the GAZ group signed an agreement to extend the contract production of passenger cars (Skoda Octavia and Kodiaq) at the plant in Nizhny Novgorod, as well as to supply German engines for GAZ light commercial vehicles. The US sanctions that were imposed on Oleg Deripaska and his companies in the spring of 2018 seem to be the main reason behind the deal. But in the light of recent events, the situation around GAZ looks completely different.

In a July interview with RBC, Oleg Deripaska said that "GAZ has never paid dividends, it is rather difficult to call this a source of income." But, according to him, a lot of efforts have been invested in the enterprises of the group. It is hard to believe that it was with these arguments that he could have convinced the OFAC hawks to allow him to sell GAZ shares for real money. By the way, on July 23, the US Treasury Department demanded that Deripaska be removed from decision-making in the GAZ group, while Washington nevertheless extended the "license" for Russian enterprises to work with suppliers and contractors (the document relieves the latter from secondary sanctions). In fact, the introduction of real tough sanctions has once again been postponed.

Nasha Versiya sent an official request to GAZ Group Management Company LLC regarding the resumption of negotiations with Volkswagen and a possible change in OFAC's position in relation to Oleg Deripaska's assets.

Who owns GAZ?

GAZ Group has not published data on affiliates since December 31, 2018. The last such publication indicated that 65.6% of the group's shares belong to the Russian Machines holding by Oleg Deripaska. The owners of the remaining 34.4% were not disclosed. As noted by RBC, the shareholding structure of Russian Machines and GAZ is looped back. According to SPARK, Russian Machines are now owned by the Cyprus-based Consultrend Enterprises. One of the shareholders of Consultrend Enterprise - "daughter" of "Russian Machines" - Nizhny Novgorod "Aritera", follows from the data of the Cypriot register.

Deripaska and the FBI

In general, the sanctions against Oleg Deripaska look strange against the background of his long-standing contacts with representatives of different levels of the American administration. In the summer of last year, in an interview with The Hill, he admitted that in September 2016 he talked to the FBI officers who allegedly tried to recruit him to spy on the highest ruling circles of Russia. Also, according to the oligarch, the agents were interested in information about Paul Manafort, who at that time headed the campaign headquarters of Donald Trump. Oleg Deripaska admits that he had common affairs with Manafort, but, according to him, it was exclusively about business.

This was far from the only episode of the Russian aluminum king's communication with the Federal Bureau of Investigation. By his own admission, in 2009-2011, he helped the American security forces with the release of former FBI agent Robert Levinson from Iranian captivity. The latter was detained in Iran in 2007 during an intelligence mission. Deripaska admitted that he paid more than $ 20 million for the release of Levinson, but the deal with the Iranians fell through due to the alleged opposition of the then US Secretary of State Hillary Clinton. “I heard that a Russia expert at the State Department said: We just don't want to be in debt to this guy,” Deripaska told The Hill. He added that he never expected the US to be grateful for its efforts to rescue Levinson.

However, it is hard to believe that a businessman who made a fortune by privatizing former Soviet enterprises can do anything disinterestedly. Moreover, to spend 20 million dollars in the interests of the government of a foreign country. The only thing that could explain such generosity is the concern for Oleg Deripaska's foreign assets, which he purchased with the money he earned in Russia.

Someone may suggest a link between Oleg Deripaska's expenses on saving the American agent and the unexpected loyalty that OFAC could have shown in the matter of selling his stake in the GAZ group. But in reality, everything can be much simpler. At the time of the operation to free Robert Levinson, the head of the FBI was Robert Mueller, who then, as a special prosecutor, was investigating "Russian interference" in the 2016 US presidential election. In fact, Mueller's report to Congress became the reason for the introduction of new sanctions against Russian officials and businessmen, including Oleg Deripaska.

The situation around the GAZ group is too similar to a fictitious divorce to hide assets. Allegedly, due to the threat of sanctions, many deputies and officials officially parted ways with their wives, having previously registered their property on them, the presence of which in the declaration of a civil servant can raise unpleasant questions not so much abroad as in Russia.