Russian oligarch warns London of complacency

IT is an unusual perspective, albeit one that Oleg Deripaska clearly passionately believes in. A major philanthropist himself, the Russian tycoon, speaking exclusively to City A.M., describes oligarchs as the drivers of progress in Russia through their hefty donations to education, culture and public health. To UK ears, this is a fresh and fascinating take: we are not used to being told about oligarchs’ good deeds.

At the plush headquarters of aluminium giant Rusal, next to James’s Palace, he explains how Russia is in a state of transition, with billionaire business people stepping in to provide services that were previously seen as the responsibility of the state.

The Rusal chief executive describes a country in which businesses have a duty to build and support communities and even build whole cities, complete with medical and education services, where they operate.

The oligarch believes that George Osborne’s controversial plan to scrap income tax relief on charity donations over £50,000 should be considered more carefully. Deripaska says he would love to see such reliefs introduced in Russia to help philanthropists. “They are a good idea, the UK government knows the whole picture, but I wish we had them in Russia, we have no tax breaks.”

The oligarch, whose fortune is estimated at around $16bn, speaks ardently about the educational opportunities he is seeking to create in a new Russia.

Sipping his tea in the office, tastefully decked out with Russian art, Deripaksa, 44, says he sees philanthropy as a duty.

In 1998, he founded Volnoe Delo, one of Russia’s largest private charity foundation, specialising in supporting projects in education, science and public health. It has a budget of hundred of millions of dollars and backs 400 projects across Russia.

“We have bought computers for schools and where we have factories we provide a lot of services we pay for – its is very important. There is everything in these places.”

Deripaska speaks of the remaining hurdles to creating a more meritocratic society in Russia. He is determined that “smart” people should have a chance to succeed, regardless of background. “This transition will take more than 50 years. We have a past in which people were brainwashed and the brightest people were not allowed to develop.”

He has achieved riches but it has not been easy: He has faced legal battles and threats from the mafia.

The tycoon, who lives in Moscow, made his mark in the metals markets in the so-called aluminium wars of the 1990s, and has admitted that he was forced to build up his own security unit, including KGB agents.

Like other oligarchs he has a strong affinity with London, a city which offered the tycoons the chance of a quieter life away from Moscow in those tempestuous times.

Crucially, however, Deripaska, who owns a home in Belgravia and regularly travels to the capital, urges London to avoid complacency if it is to remain a top financial services centre.

He says: “London used to be unreachable [in its position as the number one financial services centre] but there is competition from other jurisdictions now.”

One of the companies in which he has a majority shareholding, aluminium giant Rusal, listed in Hong Kong two years ago rather than in London and he said such emerging markets were working tirelessly to provide a business friendly environment.

“There used to be one flight a day [between Russia and Hong Kong] and now there are three or four. These places are becoming very strong.”

He also warned that the health services in the UK, both private and NHS, were one of the reasons that top business people were falling out of love with London.

“People come to London but travel home via Frankfurt to go the dentist or doctor. That is not good for London.” He also warned over excessive corporate governance rules and regulations which could stop companies making quick decisions.

On the upside, the oligarch – who is embroiled in a high court battle with billionaire Michael Cherney who claims he was not paid for a stake in Rusal – believes that “legal services are very good in London.” He also detects another improvement: “Tax charges were milking people ... but over the last two or three years things have got better.”

Deripaska’s company didn’t list here – but one gets the feeling this is an oligarch sill in love with London.

CV: OLEG DERIPASKA
AGE: 44

WORK HISTORY: He became a tycoon in Russia after working in the metals markets in the 1990s. He has admitted that his success attracted the attentions of the Russian underworld and that he needed an elite security squad to protect him. He has also been embroiled in a number of legal disputes connected with his businesses.

EDUCATION: He was educated at Moscow’s state university and studied economics. The tycoon has spoken of his humble background, working on building sites to pay for his education.

LIVES: Moscow

HOBBIES: He is a major philanthropist in Russia and his Volnoe Delo charity funds hundreds of projects.