Yesterday, at the Federal Arbitration Court of the Moscow District, I lost my cases against Rosneft and Transneft. The court rejected the cassation appeals. That was hardly a sensation, of course. The logic of the previous proceedings, the conduct of the judges, and the behavior of the “oil lawyers” all clearly showed that the decision had already been “made at a high level.” So, the mechanisms of justice in Russia for these cases have been virtually exhausted. There is still the Constitutional Court, but that is more of a general legal matter concerning not the companies themselves, but the law “On Joint-Stock Companies.” The position of the state and the judicial system has been defined: minority shareholders in Russia do not have the right to receive information about the current business operations of a company they have invested in. All rights begin at a 25% stake. As applied to my cases, this means: The managers of OAO AK Transneft (100% of the ordinary shares are owned by the state) have the right to spend billions on “charitable activities” and, without breaking down any details, report it only like this: **18 ****OPERATING EXPENSES AND NET OTHER OPERATING INCOME (continued) The following expenses and income were included in net other operating income: ** Three months ended September 30, 2008 Nine months ended September 30, 2008 Three months ended September 30, 2007 Nine months ended September 30, 2007 Oil surpluses 3,269 8,777 2,157 7,903 Loss on disposal of fixed assets (705) (679) (485) (922) Charitable expenses (822) (1,069) (5,099) (6,153) Fines received 5 955 Other net operating (expenses) / income (62) 370 - - 1,685 8,354 (3,427) 828 These figures are in millions of Russian rubles. This table contains all the information currently available about Transneft’s charitable spending. They consider that sufficient. Link to the data. If you think that after my lawsuits began Transneft got embarrassed and stopped spending on “charity,” you are mistaken. It spends. Hundreds of millions. It spends, while at the same time constantly demanding state assistance to repay loans and build pipelines. The question of whether it is, shall we say, odd to ask taxpayers for money while simultaneously throwing cash around with no one knowing where it goes is not being raised either within Transneft itself or in the Government of the Russian Federation. And by the way, I did finally find an organization that received Transneft charity money. It is the New Economic School (a well-known Russian economics university). The guys at NES love being very transparent, so they honestly told me that Transneft once gave them one million dollars. The fate of the other hundreds of millions remains unknown. Rosneft, Russia’s largest oil company (75% state-owned), can sell most of its oil and petroleum products through Gunvor, an offshore company based in Switzerland. And if some shareholder is interested in the details of those transactions, that shareholder can go to hell. Because Rosneft has the right not to disclose Gunvor supply volumes or prices to shareholders, the media, or the public. And if a shareholder thinks that the billions going to some guy in Switzerland could very well have stayed inside Rosneft itself, then that shareholder should just cross himself (a Russian expression meaning “forget it” or “stop imagining things”). Because there is no way to verify those suspicions. That is how it is. Of course, dropping the matter at this point would be far too lavish a gift to the “effective managers” of these state companies. The European Court of Human Rights will definitely be next up (quite obviously, at the very least my right to manage my property has been violated). We are also working through options for international arbitration. I met with colleagues from Transparency International and other similar organizations, and they suggested several interesting possibilities. Legally, it is not all that simple, but we will try to use every avenue available, from Interpol to some Royal Court in London. Enlightened Europe has plenty of crooks too, but there they sometimes put those crooks in jail (instead of promoting them, as they do here). The Russian Federation has signed a number of anti-corruption conventions, and that may open up some interesting possibilities. So this defeat has not reduced either my motivation or the motivation of my colleagues, friends, and comrades. In short, everyone will be punished. No matter how long the rope twists, it still comes to an end, and so on.