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called him an arrogant posh boy. And now it is time for HARDtalk. In | :00:07. | :00:09. | |
post Soviet Russia, a small band of businessmen became unimaginably | :00:10. | :00:17. | |
rich. These so-called oligarchs command assets worth billions of | :00:17. | :00:20. | |
dollars, but their position isn't without its perils in the era of | :00:20. | :00:30. | |
:00:30. | :00:30. | ||
Putin. Disloyalty to the Kremlin can have grave consequences. Today | :00:30. | :00:33. | |
we speak to Oleg Deripaska, a billionaire many times over, the | :00:33. | :00:36. | |
architect of a vast business empire that currently faces significant | :00:36. | :00:42. | |
economic and legal challenges. Is the politics of Russia proving to | :00:43. | :00:52. | |
:00:53. | :01:13. | ||
be bad for business? Welcome to HARDtalk. Thank you. You have had | :01:13. | :01:22. | |
to live with the label of oligarch for many years. Do you resent it? | :01:22. | :01:30. | |
do not think it is about me. In the 1990s are was in Siberia or when | :01:30. | :01:40. | |
:01:40. | :01:47. | ||
the privatisation was happening. I consider myself an industrialist. | :01:47. | :01:51. | |
Interesting that she did not consider yourself to be an oligarch. | :01:51. | :01:58. | |
Do you think that is true of the Russian people? Mr Putin was still | :01:58. | :02:04. | |
talking about the era of the 1990s, the privatisation of same many post | :02:04. | :02:09. | |
Soviet assets. He said he would ensure that that oligarchy never | :02:09. | :02:16. | |
again happens in Russia. Politicians never revealed the | :02:16. | :02:26. | |
:02:26. | :02:31. | ||
truth. It is not on the Russian again it any more. The 90s are of | :02:31. | :02:41. | |
:02:41. | :02:41. | ||
be. To quote some of the words of the campaign. When eight campaign | :02:41. | :02:46. | |
do rueful pit in said during the campaign, in the 90s, it was the | :02:46. | :02:54. | |
being, ponder, whole sectors of the economy were destroyed, stolen. | :02:54. | :03:00. | |
They ground Russia into the dust. - - one of Vladimir Putin's campaign | :03:01. | :03:10. | |
:03:11. | :03:11. | ||
managers said that. He is the official campaign manager for | :03:11. | :03:20. | |
Vladimir Putin. Whatever was said in Russia during the campaign is | :03:20. | :03:29. | |
not about business, it is about politics. It was a tough time. | :03:29. | :03:33. | |
People went into the streets because they were unhappy about the | :03:33. | :03:41. | |
elections. A one to talk to you about the future. Your business | :03:41. | :03:45. | |
empire employs hundreds of thousands of people inside and it's | :03:45. | :03:52. | |
good Russia. Our audience would love to here how you build the | :03:52. | :03:59. | |
business up. You were a nuclear scientist at University. Within any | :03:59. | :04:05. | |
very few years you were running the biggest aluminium smelting plant in | :04:05. | :04:15. | |
:04:15. | :04:16. | ||
Siberia, I believe it. How did that happen? You have to leave in a | :04:16. | :04:20. | |
small village in the northern Caucasus. You have to work very | :04:20. | :04:30. | |
:04:30. | :04:35. | ||
hard. It was a small, but it demanded extensive work because we | :04:35. | :04:41. | |
did everything by hand. We worked after school, went to sleep, went | :04:41. | :04:47. | |
to school, went back to work. That is how you can be trained to | :04:48. | :04:51. | |
understand that you can grow everything by yourself and rely on | :04:51. | :05:01. | |
:05:01. | :05:02. | ||
yourself. Been University, two years training in Siberia. Then | :05:02. | :05:12. | |
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after university, like thunder there was no university, no-one | :05:13. | :05:20. | |
would support mustardy if I wanted to go for a PhD. -- support my | :05:20. | :05:30. | |
:05:30. | :05:30. | ||
study. Hard work and tough times, because, no-one puts it politely, | :05:30. | :05:37. | |
it was something of the Wild West in the post-Soviet Russian economy. | :05:37. | :05:45. | |
T get as far as you beat in any top industry - minerals, aluminium your | :05:45. | :05:49. | |
speciality - you had to fight some tough battles. You had to be | :05:49. | :05:59. | |
:05:59. | :06:00. | ||
prepared. Is strong, to a lot of sport, be focused, work hard, | :06:00. | :06:09. | |
respect people for what they can do, not for what they promise to do. UK | :06:09. | :06:19. | |
:06:19. | :06:20. | ||
and differentiate yourself from the country. Th country. Thntry of Russia | :06:20. | :06:29. | |
was in transition. No-one knew how to do it. -- the end her country of | :06:29. | :06:39. | |
:06:39. | :06:41. | ||
Russia. After the Second World War, 30% will GDP was borrowed. The | :06:41. | :06:49. | |
economic transition was painful. I do not know when you have last been | :06:49. | :06:55. | |
in Russia. It is a different place. I have seen it and I do want to | :06:55. | :07:00. | |
talk about where Russia goes now. But just finishing these thoughts | :07:00. | :07:05. | |
about the foundations of your business. What about the law? It is | :07:05. | :07:11. | |
on the record that in the US you have had visa problems because of | :07:11. | :07:14. | |
associations that the US believes you have had with criminal | :07:14. | :07:19. | |
enterprise, the same in Canada. What have your response been to | :07:19. | :07:27. | |
there's allegations but my first, I offered them to come and check. | :07:27. | :07:37. | |
:07:37. | :07:39. | ||
one wants to do it. The stories were in newspapers. It is important | :07:39. | :07:46. | |
what some people think. In Siberia, Moscow, the south of Russia. Eight | :07:46. | :07:56. | |
:07:56. | :07:57. | ||
you my story and they knew what had it. If you went to what she | :07:57. | :08:03. | |
described as the Wild West now you would not recognise it. -- what you | :08:03. | :08:13. | |
:08:13. | :08:13. | ||
describe. It is a safe area. It is better an hour. We have no other | :08:13. | :08:23. | |
:08:23. | :08:28. | ||
option. -- is better now. DD you do things than that you are repeated | :08:28. | :08:36. | |
it to acknowledge you regret now? No. Part of your success was your | :08:36. | :08:41. | |
ambition to build the business. You were not happy with the original | :08:41. | :08:49. | |
smelting plant. He wanted more and you came to dominate through Rusal, | :08:49. | :08:59. | |
:08:59. | :09:00. | ||
be huge aluminium company that you started. Looking at what has | :09:00. | :09:06. | |
happened to your business in the last five years, do you believe | :09:06. | :09:13. | |
that in the end you went too far? That you were captured by hubris? | :09:13. | :09:23. | |
:09:23. | :09:27. | ||
It was a crisis. Our industry still suffered a lot because of the | :09:27. | :09:35. | |
European situation. Our customers were in the sectors of | :09:35. | :09:41. | |
transportation, construction and packaging. He was a tough | :09:41. | :09:48. | |
environment for them in 2008, 2000. Lots of subsidies for Hoppen | :09:48. | :09:58. | |
:09:58. | :09:59. | ||
manufacturing etcetera.... Hoppen manufacturing. Court of Arbitration | :09:59. | :10:09. | |
:10:09. | :10:13. | ||
for at. The same for new material for construction and packaging. I | :10:13. | :10:23. | |
:10:23. | :10:24. | ||
am confident that the aluminium industry is good for development. | :10:24. | :10:31. | |
At the end of 2008, the beginning of 2009, how could stick you | :10:31. | :10:41. | |
:10:41. | :10:44. | ||
can't...... how close the bit you can't to going bust? You were worth | :10:44. | :10:54. | |
:10:54. | :10:55. | ||
billions of dollars at that time. It is still a business. There are | :10:55. | :11:05. | |
:11:05. | :11:07. | ||
not auditors. From that position of enormous wealth and success, you | :11:07. | :11:13. | |
had major problems. There you can tell me how close you came to | :11:13. | :11:23. | |
insolvency, to going bust. Not very close. I know how banks think, how | :11:23. | :11:30. | |
they treat their clients. I was capable of demonstrating in an | :11:30. | :11:38. | |
efficient way that there was no problem for them. I assured | :11:38. | :11:42. | |
everyone that Clegg was no problem with the company and it was capable | :11:42. | :11:51. | |
of getting through the crisis. No- one got a hit it. You pay your | :11:51. | :12:01. | |
:12:01. | :12:04. | ||
debts in full. -- got a haircut. Not completely, but we had as its | :12:04. | :12:12. | |
value it much more than the debts. You still have a huge business, you | :12:12. | :12:18. | |
are still worth billions of dollars. People who used to be closed you | :12:18. | :12:24. | |
are convinced that you made some bad decisions. Victor was the | :12:24. | :12:30. | |
chairman of Rusal, working alongside you. He quit the company, | :12:30. | :12:37. | |
saying it was in deep crisis. He said it was overburdened with debt, | :12:37. | :12:41. | |
entangled in lawsuits and social conflict. He said the management | :12:41. | :12:46. | |
had adopted strategies without the approval of the board. | :12:46. | :12:56. | |
:12:56. | :13:00. | ||
everything is true. I have for it to show what week and... what we | :13:00. | :13:10. | |
:13:10. | :13:10. | ||
can achieve from different strategies. To talk and to walk. | :13:10. | :13:18. | |
250,000 employees. 10,000 very experienced people in top | :13:18. | :13:24. | |
management. It to being a few thousand years of experience in | :13:24. | :13:31. | |
different industries. It is not just my decision. A planets pit and | :13:31. | :13:41. | |
:13:41. | :13:42. | ||
we exercise that plan.... a plan is Prix p it and we exercise but plan. | :13:42. | :13:50. | |
We know how to operate the business and we know our Productions Court | :13:50. | :13:58. | |
of Arbitration for Sport production facilities. Eight final thought | :13:58. | :14:07. | |
about the state of the business now. Why do Mark think here you face so | :14:07. | :14:15. | |
many legal, arbitration, settlement actions in Rusal? Y wound so many | :14:15. | :14:21. | |
people convinced you have taken some terrible decisions, | :14:21. | :14:25. | |
particularly the decision to buy into pinnacle company and refuse to | :14:25. | :14:35. | |
:14:35. | :14:40. | ||
sell when you were offered a decent Just one example - we could have | :14:40. | :14:47. | |
sold it for $5 billion. Then we got offered four 9 billion them for 12 | :14:47. | :14:54. | |
billion. Later 16 billion. Can you do such money in the operation - I | :14:54. | :15:00. | |
can tell you not. But the company was so good, I could see. I could | :15:00. | :15:07. | |
see it on a global sense. If one company could solve problems, | :15:07. | :15:13. | |
either China or India for the next hundred years, this is so unique | :15:13. | :15:19. | |
and so well placed in the current market, that to sell them is to | :15:19. | :15:24. | |
make a crime. So here and now, you are prepared to say you are not | :15:24. | :15:34. | |
:15:34. | :15:39. | ||
prepared to sell out? We have to sell for a fair price. It is a a | :15:39. | :15:47. | |
little market. If we decided it and it was decided by the board, by the | :15:47. | :15:53. | |
synergy and the investment in our company. You mention that the | :15:53. | :15:58. | |
success of the cover is nothing to do with the political connection. - | :15:58. | :16:04. | |
- of the company. In Russia today, a very big business like yours | :16:04. | :16:10. | |
cannot succeed if you fall out with the Kremlin, Mr Vladimir Putin in | :16:10. | :16:13. | |
particular. That is not possible if you have made an enemy of the | :16:13. | :16:23. | |
Kremlin? UK and not cross a street on a red light, that is common | :16:23. | :16:33. | |
:16:33. | :16:33. | ||
knowledge. -- you cannot. I think it is a little difficult. We have | :16:33. | :16:39. | |
to look at the message sent by Mikhail Khodorkovsky to know that | :16:39. | :16:43. | |
in Russia, if you upset Mr Vladimir Putin and the Kremlin, the | :16:43. | :16:47. | |
likelihood is that you will spend a substantial chunk of your time in | :16:47. | :16:57. | |
:16:57. | :16:59. | ||
prison. That was a very difficult case. He was a Spanish too much. | :16:59. | :17:04. | |
But at the same time... That is interesting. You think it was wrong, | :17:04. | :17:10. | |
unfair, unjust that he now faces a second six-year jail term? I have | :17:10. | :17:15. | |
known him for quite a long time. It is difficult for me to make a | :17:15. | :17:22. | |
judgement on the court case. There is a lot of legal reports. I think | :17:22. | :17:32. | |
:17:32. | :17:32. | ||
he was out of... He came from an organisation. For example, I was | :17:32. | :17:42. | |
:17:42. | :17:43. | ||
slightly after he was expelled. He did business to read them. -- | :17:43. | :17:49. | |
through them. He had a social and political agenda. That is the point. | :17:49. | :17:53. | |
Isn't message clear from the clamour that if you are to continue | :17:53. | :18:00. | |
as a very big powerful business leader in Russia, you must not step | :18:00. | :18:06. | |
into politics and challenge the Kremlin? How do I say it... I do | :18:06. | :18:13. | |
not want to go too much into the subject. If you have a big business, | :18:13. | :18:18. | |
it will buy you are few seasons of Parliament them you wanted to make | :18:19. | :18:28. | |
:18:29. | :18:30. | ||
a fresh Parliament to promote business, they have enough money. | :18:30. | :18:34. | |
They just need to have leaders who take the risk. I think the | :18:34. | :18:39. | |
parallels you draw with the US and Britain do not work too far. | :18:39. | :18:47. | |
agree. It is not my area. I am not a politician. I am not a journalist. | :18:47. | :18:50. | |
You are a very big business man with a huge stake in the Russian | :18:50. | :18:54. | |
economy, but across the economy, you employ hundreds and thousands | :18:54. | :19:00. | |
of people in many businesses. Would you say it has been damaging to | :19:00. | :19:04. | |
Russia's economy and to the degree which Russia can attract inward | :19:04. | :19:13. | |
investment from overseas to see the Khodorkovsky case, to see what has | :19:13. | :19:17. | |
happened to heritage investment in Russia? Would you say this creates | :19:17. | :19:20. | |
a very difficult problem for Russians who want to sell | :19:20. | :19:26. | |
themselves as a place of foreign business? The Khodorkovsky case | :19:26. | :19:33. | |
created a sudden demand for change. You have seen it. Are you behind | :19:33. | :19:40. | |
that the mind? Would you support that demand for change? No. Because | :19:40. | :19:46. | |
I can see the people who lead us. They are even worse than the people | :19:47. | :19:55. | |
in these areas today. This is a Russian reality. We have to leave | :19:55. | :19:59. | |
the understanding that we need may be another two generations to | :19:59. | :20:04. | |
complete the transition. They will call you oligarchs, they will make | :20:04. | :20:09. | |
you are new label. You need to come this of down and see what you can | :20:09. | :20:14. | |
do. 20 years ago, we had the Soviet empire which collapsed, created a | :20:14. | :20:20. | |
lot of problems. We still have people who believe it was a better | :20:20. | :20:25. | |
way to live. We just need to be patient and off and go through and | :20:25. | :20:29. | |
create as much opportunity as possible for a country to become | :20:30. | :20:38. | |
normal. You talk about patients. The World Bank looked at the | :20:38. | :20:43. | |
Russian economy. It is not sustainable in the long run. You | :20:43. | :20:50. | |
get figures - the OECD said Russian workers are only 43% as productive | :20:50. | :20:55. | |
as the developed Western economies. Russia needs immediate reform. It | :20:55. | :20:59. | |
needs a better infrastructure, in needs a rule of law and the courts | :20:59. | :21:08. | |
and property rights to be respected and it needs to happen now. Russia | :21:08. | :21:18. | |
needs better discipline. We have everything in place. You want a | :21:18. | :21:25. | |
honest government in place. Many countries suffer the same problem. | :21:25. | :21:30. | |
But we have for the best. I can tell you that if you look at the | :21:30. | :21:37. | |
numbers, last year, the Russian automotive market grew. The | :21:37. | :21:43. | |
production came not from outside Russia but inside Russia. How many | :21:43. | :21:52. | |
factories were developed - you can look at that. Maybe we were not so | :21:52. | :21:58. | |
quick to spend like Greece or Spain or Italy. We tried to balance it. | :21:58. | :22:06. | |
We have a surplus. You can consider the surplus. As long as the All | :22:06. | :22:13. | |
prices are OK, you are OK. Even if the All prices go down, the Russian | :22:13. | :22:23. | |
:22:23. | :22:26. | ||
economy will not suffer too much. - - or your -- oil prices. Where do | :22:26. | :22:31. | |
you think is a better place to do business - Russia or China? Well | :22:31. | :22:38. | |
according to the report, it is certainly not Russia. You are on a | :22:38. | :22:43. | |
pile with Nigeria in terms of corruption. I understand. But if | :22:43. | :22:53. | |
:22:53. | :22:55. | ||
you ask Syria's businessmen and the big companies. You can ask hundreds | :22:55. | :23:00. | |
of people and you will receive 95% answered that Russia is a better | :23:00. | :23:06. | |
place to do business now than China. This is a reality. I do not want to | :23:06. | :23:14. | |
challenge the World Bank report but just say in my view it as a | :23:14. | :23:18. | |
businessman who is doing business in Russia. Indeed elsewhere as well. | :23:18. | :23:23. | |
I want to end with this thought. We have a lot of Russian billionaires | :23:23. | :23:27. | |
in London. You spend a lot of time in London and rather well know that | :23:27. | :23:31. | |
you have social contacts just a few years ago with Peter Mandelson, | :23:31. | :23:35. | |
with George Osborne who is now the Chancellor of the Exchequer of this | :23:35. | :23:39. | |
country. I wonder if it is important for you to build those | :23:39. | :23:43. | |
sorts of political links in the UK and whether you might think of | :23:43. | :23:48. | |
establishing yourself here. I would like to spend more time here. Last | :23:48. | :23:53. | |
time, I spend less than 15 days. For the future quest mac for the | :23:54. | :24:00. | |
future, it may be. It is a struggle for Brasher to go through the | :24:00. | :24:07. | |
crisis and Bill dealt country. -- Russia. Are you one of the leading | :24:07. | :24:15. |