Sebastian Derungs
World News /03 Nov 2019
11.03.19

A Fresh Blow for Beleaguered Russian Oligarch Deripaska

Last week an arbitration tribunal unanimously rejected a claim brought by Central European Aluminum Company (CEAC) boss, Oleg Deripaska, against the state of Montenegro.

Deripaska was claiming €600 million in compensation over an investment CEAC made in the Balkan country back in 2005.

At the time, CEAC had acquired a controlling stake in Montenegro’s only aluminum plant, Kombinat Aluminijuma Podgorica, after a drive by the country to revitalize its struggling state-owned enterprises through foreign investment.

By the end of 2013, KAP had racked up debts in the region of €360 million and was forced into liquidation.

Three years later, Deripaska saw fit to initiate arbitration proceedings on the pretense that Montenegro had allegedly breached an obligation to safeguard foreign investments.

However, as the claim was based on a bilateral agreement between the Russian Federation and the Socialist Federal Republic of Yugoslavia, and not the state of Montenegro, the tribunal resoundingly rejected it.

This was the latest in a series of setbacks for the Russian oligarch often described as “Putin’s favourite industrialist.” It was also the latest in a long tale of entanglement and subterfuge tying Deripaska to Montenegro.

From the time of Deripaska’s 2005 KAP investment, Russian money has poured into Montenegro, dwarfing Western European investment in the country.

Development deals and beachside real estate have been a particular target for Russian investors, and Deripaska himself undertook several notable investments in the country, including in the Porto Montenegro yacht marina project.

But his interest in the country goes far beyond financial investments.

According to the U.S. government, Deripaska and his long-time advisor Victor Boyarkin were in fact intimately involved in the provision of support and funding to the Democratic Front (DF), the pro-Russian opposition party in Montenegro – acting as private sector proxies for the Kremlin.

Over several years, DF muddied the political waters in Montenegro, often through the orchestration of violent anti-government protests. But it wasn’t until election day in October 2016 that the party and its associates showed their true intentions, which were none other than a fully-fledged coup d’état.

The plot – perceived as a last-ditch attempt by Russia and the DF to prevent the country’s accession into NATO – involved a trans-border group of around 500 individuals from Russia, Serbia, and Montenegro, who planned to mobilize with the help of GRU agents and the DF, in pursuit of toppling the government.

The aim of the group was to assassinate the Montenegrin Prime Minister Milo Djukanovic and install the DF’s leader Nebojsa Medojevic in his stead, thereby reversing the country’s plans to join NATO and the EU and realigning under Russia’s sphere of influence.

The plot even allegedly involved a number of those who had organised and funded the separatist movement in eastern Ukraine. Several Donbass veterans were indeed recruited to be on the ground in Montenegro in the event of the coup succeeding.

But ultimately it didn’t come to this. Montenegrin police, with the help of tip-offs from foreign intelligence agencies, thwarted the plot and prosecuted several individuals for their involvement, with new arrest warrants announced in August.

Others, such as Deripaska and his acolyte Boyarkin, escaped prosecution but were hit with U.S. sanctions over their alleged role in the plot.

The attempted coup may have been the most brazen attempt at forceful election meddling by Russia in recent years, but it certainly hasn’t been the only one.

Other cases, such as the 2016 U.S. presidential elections, have been well documented. And within most of them, one constant: the man described by the U.S. Treasury as playing “a key role in advancing Russia’s malign activities,” Oleg Deripaska.

Whether it’s connections to a coup in the Balkans or links to election meddling in the West, Deripaska’s fingerprints always seem to crop up.

But there are repercussions to doing Putin’s dirty work.

His wealth has already waned from $6.7 billion to $3.6 billion due to sanctions. It may still be an astronomical sum but the rate of decline is equally noteworthy.

This is not a trajectory that will please the influential oligarch. The defeats are starting to pile up and there’s a sense that, slowly but surely, Deripaska – and Russia’s use of private proxies – is being found out.

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