Oleg Deripaska

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Oleg Deripaska
Born	January 2, 1968 (1968-01-02) (age 41) Dzerzhinsk, Gorky Oblast, Russian SSR
Residence	Moscow, Russia
Alma mater	Moscow State University, Plekhanov Russian Academy of Economics
Occupation	CEO of Basic Element Company
Net worth	▼US$3.5 billion (2009)[1]
Spouse(s)	Polina Deripaska (née Yumasheva)
Website Basic Element

Oleg Vladimirovich Deripaska (Russian: Олег Владимирович Дерипаска) (born January 2, 1968 in Dzerzhinsk, Gorky Oblast) is a Russian billionaire, CEO of Basic Element Company and a member of the Board of Directors and CEO of UC Rusal, a Russian aluminium industry company.^[2]

Contents 1 Business Interests 2 Biography 2.1 Education and early career 2.2 Later career 2.3 Recent quotations 2.4 Lawsuits 3 Personal life 4 References

[edit] Business Interests

Deripaska is the sole owner and CEO of Basic Element, a diversified investment company established in 1997 with assets in Russia and abroad. Basic Element's main assets are concentrated in six sectors - energy, resources, manufacturing, financial services, construction and aviation. The major assets include UC Rusal^[3], the world’s largest aluminium and alumina producer ^[4], GAZ Group automotive company, Soyuz Bank, Ingosstrakh insurance company, Aviacor aircraft manufacturer, SMR mining company, Continental Management Timber Industrial Company, Glavstroy and Transstroy] construction companies. In 2007, Basic Element's consolidated revenues exceeded USD26 billion. The market value of the Company's assets is estimated at USD45 billion ^[5]. Basic Element employs 300,000 people and owns companies in Russia, the CIS countries, Africa, Australia, Asia, Europe and Latin America.

Deripaska is one of 16 global business leaders who drafted CEO Climate Policy Recommendations to G8 Leaders, a document outlining international business community's proposals to effectively tackle global warming. The proposals were signed by more than 100 of the world's leading corporations and handed to Japanese Prime Minister Yasuo Fukuda on June 20, 2008. G8 leaders discussed the recommendations during the summit in Japan on July 7-9, 2008. The process was coordinated by the World Economic Forum in collaboration with the World Business Council for Sustainable Development. ^{[6] [7]}

In 2004, Deripaska was appointed by the President of Russia to represent the country in the Asia-Pacific Economic Cooperation Business Advisory Council (ABAC). He has held the position of Chairman of ABAC Russia since 2007.

Deripaska is Vice President of the [Russian Union of Industrialists and Entrepreneurs, Chairman of the Executive Board of the Russian National Committee of the International Chamber of Commerce] and a member of the Competitiveness and Entrepreneurship Council, an agency of the Russian Government].

He sits on the board of trustees of the Bolshoi Theatre, the School of Business Administration, the School of Public Administration, and the School of Economics at Moscow State University and the School of Business Administration at St. Petersburg State University. Deripaska is a co-founder of the National Science Support Foundation and the National Medicine Fund.

In 1999, Mr. Deripaska received the Order of Friendship, a state award of the Russian Federation. He was named businessman of the year in 1999, 2006, 2007 by Vedomosti, a leading business daily published in partnership with The Wall Street Journal and The Financial Times.

[edit] Biography

[edit] Education and early career

Deripaska was born in Dzerzhinsk, Gorky Oblast, but he grew up in Krasnodar Krai. He graduated with honors in physics from the Moscow State University in 1993, and in 1996, he earned an economics degree from the Plekhanov Russian Academy of Economics. He was general manager of Sayanogorsk Smelter (1994-1997) and held the post of president of Sibirsky Aluminium Investment Industrial Group (1997-2001), which later became a core of Basic Element Investment Company.

The Guardian mentions^[8]:

“

(…) as a student at Moscow State University, he was skint. The Soviet Union had just collapsed, the country was in turmoil and "decay"; Deripaska worked on building sites across Russia to prevent himself from starving. "We had no money. It was a very practical question every day. How do I get money to buy food and keep studying?" he recalls. There was little future in his university subject, theoretical physics. He abandoned his studies and started business as a small-time metals trader. Between 1993 and 1994 he accumulated a 20% stake in the Siberian aluminium factory - to the annoyance of the plant's communist-era bosses. "I was expecting they would treat me as a shareholder. But they said, 'No, you have the shares, but we run our business. And it's separate.'" Deripaska persuaded the workforce not to go on strike, boosted production, and - it's not entirely clear how - crushed the local mafia.

”

[edit] Later career

In 2005, he was included in the Sunday Times Rich List with an estimated wealth of £4,375m, but was not listed in 2006; however, according to an August 2006 article in the New York Times, the Russian business newspaper Vedomosti has estimated Deripaska's total wealth at $14 billion, which, if true, would either make him Russia's richest man or possibly tied for the spot with fellow multibillionaire oligarch Roman Abramovich.^[9]

He is said to be the richest person in Russia according to an April 18, 2008 Forbes report, with "a fortune of $28.6 billion -- $11.8 billion more than he was worth last year."^[10] Deripaska himself has consistently said that the estimate of his wealth was exaggerated, which did not completely account for the amount of debt he incurred, and that he should be ranked far below the top ten on the list of the Russian billionaires. ^[11]. In the 2009 Forbes report his net worth was calculated as $3.5 billion - a drop of $24.5 billion. ^[12]

Deripaska has a London home in Belgrave Square, which was originally the town residence of the Dukes of Bedford. In September 2006, Deripaska was rumored to be interested in buying Arsenal F.C. for £350m.^[13] Arsenal and Deripaska both denied the claim.^[14]

In 2006, GAZ Group, purchased all the shares of LDV Holdings (producer of light commercial vehicles, the city of Birmingham, Great Britain) from an American fund Sun Capital. The main product of LDV is the light commercial vehicle Maxus. In May 2009 GAZ Group signed an agreement to sell its UK LDV van business to Malaysian automobile manufacturer and distributor Weststar.^[15]

In April 2007, Deripaska acquired 25 percent (€1.05 billion) of the Austrian construction company STRABAG SE, which is owned by Hans-Peter Haselsteiner. STRABAG SE is the sixth largest construction company in Europe. ^[16]

In May 2007, Magna International chairman Frank Stronach announced that Deripaska was becoming a strategic partner in Magna. ^[17]

On 25 July, 2008 GAZ Group launched the serial production of ^[18] sedan, which is based on a platform acquired from the American corporation Chrysler and was designed by British studio UltraMotive. Engineers and specialists from Magna International played an active role in the installation and fine tuning of the cars assembly line, as well as in the training of the Group's employees. GAZ Group plans to add other models to the production at the assembly line. ^[19]

On October 3, 2008 Magna International announced that Russian Machines terminated its participation as a shareholder of the Canadian auto parts maker. However the companies said that development of autocomponents business in Russia, as well as other joint projects, would continue.

On April 30, 2009 Basic Element announced that it has transferred its 25% stake in STRABAG to other shareholders of the company. Basic Element will also hold a call option to buy back the stake until December 20, 2009 with an opportunity of its extension to October 2010. Basic Element also retaines one registered share of STRABAG and keeps two places on STRABAG nine-seat supervisory board. ^[20]

It was reported in May 2008 that Deripaska had shown an interest in purchasing an English Premier League football club, and was strongly linked to West Bromwich Albion. Albion announced in June 2008 that they were looking for serious investors, as Daily Mirror said that take over by Oleg Deripaska is a possibility. Deripaska himself had never indicated such intent, and in an earlier interview with The Guardian, he denied any interest in the English football industry. ^[21]

[edit] Recent quotations

APEC Summit, Lima (Peru), 22 November, 2008

Oleg Deripaska made the comments following the meeting of APEC Leaders in Lima, Peru, where he accompanied Russian President Dmitry Medvedev and led the Russian delegation to the APEC Business Advisory Council.

An Overproductive Meeting, Kommersant daily newspaper ^[22]

“

Today we have a huge stock of exchange goods, which are still being produced, because you can't shut the production capacity at once ... And until the world uses up the stock, there won't be a phase of growth in the real economy. Now it's important to come through the period before the supply meets the demand. In March-April we'll touch the bottom and we'll have a clear understanding of the demand and supply proportions.

”

Deripaska Urges Russia to Buy Metals, Revive Demand, Bloomberg ^[23]

“

We have to live modestly for the next two years, helping the state to use resources in a more efficient way. Our task is waste reduction. The crisis won't last long. There is a crisis of overcapacity in production that each country will have to deal with. We can expect a decrease in production capacity by between 20 and 50 percent globally and I am afraid Russia will see some of it too.

”

Russia needs "New Deal" - oligarch Deripaska, Reuters ^[24]

“

A new partnership between the state and the business community is needed. We can bet on investment in housing and infrastructure. Investment in housing, roads, schools and utility services will help to keep afloat a chain of other sectors such as construction materials, machine-building, metallurgy. Such projects will also help to employ people who will lose jobs in other sectors. There will be losses from the crisis indeed; the task is to make them minimal. Businesspeople should trim their businesses, leaving only structures that will be needed in the next 15 years, while the government should attract new resources. The state should help those who suffered most. We (businessmen) will survive one way or another, while the crisis may ruin many ordinary people. Some of them (other entrepreneurs) are trying to save production capacities and keep prices high, waiting for a (recovery). This makes it difficult for others to restructure. For instance, high domestic prices for metals do not allow the production of cheaper cars. The hand of the state should become visible and solid. It is the government's responsibility to find the right balance between supply and demand, to find a price balance. This requires manual control. We are a lucky country in a way. As opposed to the West, where most basic consumer demands are already met, Russians tend to spend rather than to save once they get money in their hands. For instance, in more than 12 million families more than one generation live under the same roof. There is a huge objective demand for housing, and people will buy apartments if they are offered them at reasonable prices. The same goes for cars and many other things.

”

[edit] Lawsuits

On November 24, 2006, Michael Cherney brought a legal action against Derispaska in the Commercial Court of the High Court in London.^[25]. Cherney sought a declaration that he was the beneficial owner of 20 percent of Rusal's stock which, he claimed, Deripaska held in trust for him. The claim was denied. On May 3, 2007, ^[26] Mr. Justice Langley ruled that Deripaska had not been properly served and that the court had no jurisdiction to try the claim under European law, because Mr Deripaska was not domiciled in England and Wales. He also refused to dispense with service of the claim form.

On July 3, 2008, British High Court Judge Christopher Clarke ruled that the case can be tried in England, although "the natural forum for this litigation is Russia". A spokesman for Deripaska stressed that the ruling was "not on the substance of the case...[R]ather, it is a procedural judgment about where that case should be heard", adding they "disagree with the pejorative claims made about Russian courts in the judgment"^[27]. "On the substance of the case, we vehemently reject the vexatious claims made by Mr Cherney, and look forward to setting out our case on these claims", he said in the statement.

On July 22, 2008, Judge Christopher Clarke granted leave to appeal to Deripaska^[28].

[edit] Personal life

Deripaska is married (to Polina Yumashev, daughter of Valentin Yumashev and step-daughter of Tatyana Yeltsin) with two children^[29].

[edit] References