Oleg Deripaska 'may quit Britain'

By Tim Whewell
BBC Newsnight reporter

Oleg Deripaska talks about the 'yachtgate' scandal

Russian billionaire Oleg Deripaska has told the BBC he is considering breaking his connection with Britain.

"I'm not sure I will have any links with Britain in the future," he said in an exclusive interview with Newsnight.

The possible move follows the collapse of a Birmingham-based van firm Mr Deripaska once owned.

Last summer then EU trade commissioner Lord Mandelson and shadow chancellor George Osborne were involved in controversy after a party on his yacht.

Mr Deripaska was speaking as he took me on a personally-guided tour of his Russian industrial empire - the most extensive the publicity-shy tycoon has ever given a journalist.

One of Russia's richest men, Mr Deripaska still owns a house bought for an estimated £25m ($40m) on one of London's most exclusive squares.

I wasn't considering in those days whether they were British politicians. It was my summer holiday

Oleg Deripaska on the "yachtgate" scandal

He said firmly that he still regards Lord Mandelson, now the business secretary, as his friend.

And he described their relationship as "good", asking: "Why should it have changed?"

But he also told me: "I don't understand your country.

"You have a lot of achievements, but at the moment you are in a kind of fire.

"You need to change so many things you inherited from the post-industrial economy - I just can't see any benefit in what the media are doing with your politicians right now."

'A good dinner'

He is particularly annoyed at the reporting of the party last summer including Lord Mandelson and the shadow chancellor, Mr Osborne, when his 72-metre yacht, the Queen K, was moored off Corfu.

Mr Deripaska said: "I wasn't considering in those days whether they were British politicians. It was my summer holiday."

The Queen K was the unlikely setting for a meeting that rocked politics

"We had a good dinner, there were many people and I'm surprised they picked on these poor guys and screwed them in the press," he added.

The scandal erupted because Mr Deripaska controls most of Russia's aluminium - and Lord Mandelson then oversaw EU metal tariffs.

I asked Mr Deripaska if he ever benefited from their relationship.

"Benefited from friendship?" he asked indignantly. "It's not my business. Whatever I did in my life, I did myself."

Lord Mandelson has already denied he did "any favours" for Mr Deripaska - and the EU commission has said a 2005 decision to remove punitive import tariffs on aluminium foil, that appeared to benefit Mr Deripaska's company Rusal, was taken without Lord Mandelson's personal intervention.

After the meeting in Corfu, George Osborne was accused by Mr Deripaska's friend - the banker Nathaniel Rothschild, who was at also at the party, of having used the occasion to solicit a donation to the Conservative Party - a claim he has strongly denied.

Disappointment with Britain

Speaking about the allegations for the first time, Mr Deripaska said: "I tried to stay away from Russian politicians - why should I move towards British politicians?

"I can't see that anyone from Britain would ask me - it's unbelievable."

George Osborne and Peter Mandelson were left at daggers drawn

He says he has not been in Britain for more than a year and does not currently hold a British visa.

His disappointment with the country is fuelled partly by the failure to save LDV, the British van-maker he owned, from bankruptcy.

As the recession bit, his car company, GAZ, stopped funding the loss-making LDV and backed a management buy-out bid.

But hopes that the government might support the project with a substantial cash injection came to nothing.

After "yachtgate", did Mr Mandelson keep the Russian tycoon's interests all the more firmly at arm's length?

It was Ian Pearson, the junior business minister, who spoke for the government on LDV, while his boss remained silent.

Perhaps, I suggested to Mr Deripaska, one reason LDV was not rescued was that politicians now feel they have to be over-careful in dealing with him.

"In this sense, it would be so wrong for the country," he answered.

"You have a good company, good people and complex manufacturing.

"There are only a few left in Britain — engineering companies that can support production — and based on a wrong press, someone could push them out of business. Why?"

When pressed on whether the government should have bailed LDV out, he said simply: "It's their decision - I can't judge."

For now, Mr Deripaska has wider problems than Britain.

According to Forbes magazine, his fortune has shrunk over the last year from £28bn to just £3.5bn.

Mr Deripaska disputes those figures, saying he was never as rich as has been claimed.

The billioniare says he was raised in a village "at the minimum level of life"

He said: "Whoever counted, it was based on assets only, in the most positive scenario."

He says he doesn't know how much money he has, but he admits he took risks as his company, Basic Element, has diversified into more and more sectors including metals, cars, construction, aviation, financial services, and energy.

It has depended partly on huge foreign bank loans which he is now attempting to restructure.

"If you want to grow at 2-3% a year it's not a problem," he said. "But if you want to grow 15-20% a year it's a risk, it's a ride on a wild horse."

He says he likes horses - and then laughs. He is disarmingly charming - at 41, boyish not only in his looks, but also in energy and enthusiasms.

As we toured the assembly line at the GAZ plant at Nizhny Novgorod - the most automated, he says, in the country - he told me he is convinced his new Russian car, the Volga Syber, will be a best-seller when the economy picks up.

Later, as we took a helicopter trip over the Sayan Mountains of southern Siberia, near his aluminium smelter, he talked of expanding into other metals - and even of building nuclear power stations.

And where does his determination come from?