:00:07. > :00:09.called him an arrogant posh boy. And now it is time for HARDtalk. In
:00:10. > :00:17.post Soviet Russia, a small band of businessmen became unimaginably
:00:17. > :00:20.rich. These so-called oligarchs command assets worth billions of
:00:20. > :00:30.dollars, but their position isn't without its perils in the era of
:00:30. > :00:30.
:00:30. > :00:33.Putin. Disloyalty to the Kremlin can have grave consequences. Today
:00:33. > :00:36.we speak to Oleg Deripaska, a billionaire many times over, the
:00:36. > :00:42.architect of a vast business empire that currently faces significant
:00:43. > :00:52.economic and legal challenges. Is the politics of Russia proving to
:00:53. > :01:13.
:01:13. > :01:22.be bad for business? Welcome to HARDtalk. Thank you. You have had
:01:22. > :01:30.to live with the label of oligarch for many years. Do you resent it?
:01:30. > :01:40.do not think it is about me. In the 1990s are was in Siberia or when
:01:40. > :01:47.
:01:47. > :01:51.the privatisation was happening. I consider myself an industrialist.
:01:51. > :01:58.Interesting that she did not consider yourself to be an oligarch.
:01:58. > :02:04.Do you think that is true of the Russian people? Mr Putin was still
:02:04. > :02:09.talking about the era of the 1990s, the privatisation of same many post
:02:09. > :02:16.Soviet assets. He said he would ensure that that oligarchy never
:02:16. > :02:26.again happens in Russia. Politicians never revealed the
:02:26. > :02:31.
:02:31. > :02:41.truth. It is not on the Russian again it any more. The 90s are of
:02:41. > :02:41.
:02:41. > :02:46.be. To quote some of the words of the campaign. When eight campaign
:02:46. > :02:54.do rueful pit in said during the campaign, in the 90s, it was the
:02:54. > :03:00.being, ponder, whole sectors of the economy were destroyed, stolen.
:03:01. > :03:10.They ground Russia into the dust. - - one of Vladimir Putin's campaign
:03:11. > :03:11.
:03:11. > :03:20.managers said that. He is the official campaign manager for
:03:20. > :03:29.Vladimir Putin. Whatever was said in Russia during the campaign is
:03:29. > :03:33.not about business, it is about politics. It was a tough time.
:03:33. > :03:41.People went into the streets because they were unhappy about the
:03:41. > :03:45.elections. A one to talk to you about the future. Your business
:03:45. > :03:52.empire employs hundreds of thousands of people inside and it's
:03:52. > :03:59.good Russia. Our audience would love to here how you build the
:03:59. > :04:05.business up. You were a nuclear scientist at University. Within any
:04:05. > :04:15.very few years you were running the biggest aluminium smelting plant in
:04:15. > :04:16.
:04:16. > :04:20.Siberia, I believe it. How did that happen? You have to leave in a
:04:20. > :04:30.small village in the northern Caucasus. You have to work very
:04:30. > :04:35.
:04:35. > :04:41.hard. It was a small, but it demanded extensive work because we
:04:41. > :04:47.did everything by hand. We worked after school, went to sleep, went
:04:48. > :04:51.to school, went back to work. That is how you can be trained to
:04:51. > :05:01.understand that you can grow everything by yourself and rely on
:05:01. > :05:02.
:05:02. > :05:12.yourself. Been University, two years training in Siberia. Then
:05:12. > :05:13.
:05:13. > :05:20.after university, like thunder there was no university, no-one
:05:20. > :05:30.would support mustardy if I wanted to go for a PhD. -- support my
:05:30. > :05:30.
:05:30. > :05:37.study. Hard work and tough times, because, no-one puts it politely,
:05:37. > :05:45.it was something of the Wild West in the post-Soviet Russian economy.
:05:45. > :05:49.T get as far as you beat in any top industry - minerals, aluminium your
:05:49. > :05:59.speciality - you had to fight some tough battles. You had to be
:05:59. > :06:00.
:06:00. > :06:09.prepared. Is strong, to a lot of sport, be focused, work hard,
:06:09. > :06:19.respect people for what they can do, not for what they promise to do. UK
:06:19. > :06:20.
:06:20. > :06:29.and differentiate yourself from the country. Th country. Thntry of Russia
:06:29. > :06:39.was in transition. No-one knew how to do it. -- the end her country of
:06:39. > :06:41.
:06:41. > :06:49.Russia. After the Second World War, 30% will GDP was borrowed. The
:06:49. > :06:55.economic transition was painful. I do not know when you have last been
:06:55. > :07:00.in Russia. It is a different place. I have seen it and I do want to
:07:00. > :07:05.talk about where Russia goes now. But just finishing these thoughts
:07:05. > :07:11.about the foundations of your business. What about the law? It is
:07:11. > :07:14.on the record that in the US you have had visa problems because of
:07:14. > :07:19.associations that the US believes you have had with criminal
:07:19. > :07:27.enterprise, the same in Canada. What have your response been to
:07:27. > :07:37.there's allegations but my first, I offered them to come and check.
:07:37. > :07:39.
:07:39. > :07:46.one wants to do it. The stories were in newspapers. It is important
:07:46. > :07:56.what some people think. In Siberia, Moscow, the south of Russia. Eight
:07:56. > :07:57.
:07:57. > :08:03.you my story and they knew what had it. If you went to what she
:08:03. > :08:13.described as the Wild West now you would not recognise it. -- what you
:08:13. > :08:13.
:08:13. > :08:23.describe. It is a safe area. It is better an hour. We have no other
:08:23. > :08:28.
:08:28. > :08:36.option. -- is better now. DD you do things than that you are repeated
:08:36. > :08:41.it to acknowledge you regret now? No. Part of your success was your
:08:41. > :08:49.ambition to build the business. You were not happy with the original
:08:49. > :08:59.smelting plant. He wanted more and you came to dominate through Rusal,
:08:59. > :09:00.
:09:00. > :09:06.be huge aluminium company that you started. Looking at what has
:09:06. > :09:13.happened to your business in the last five years, do you believe
:09:13. > :09:23.that in the end you went too far? That you were captured by hubris?
:09:23. > :09:27.
:09:27. > :09:35.It was a crisis. Our industry still suffered a lot because of the
:09:35. > :09:41.European situation. Our customers were in the sectors of
:09:41. > :09:48.transportation, construction and packaging. He was a tough
:09:48. > :09:58.environment for them in 2008, 2000. Lots of subsidies for Hoppen
:09:58. > :09:59.
:09:59. > :10:09.manufacturing etcetera.... Hoppen manufacturing. Court of Arbitration
:10:09. > :10:13.
:10:13. > :10:23.for at. The same for new material for construction and packaging. I
:10:23. > :10:24.
:10:24. > :10:31.am confident that the aluminium industry is good for development.
:10:31. > :10:41.At the end of 2008, the beginning of 2009, how could stick you
:10:41. > :10:44.
:10:44. > :10:54.can't...... how close the bit you can't to going bust? You were worth
:10:54. > :10:55.
:10:55. > :11:05.billions of dollars at that time. It is still a business. There are
:11:05. > :11:07.
:11:07. > :11:13.not auditors. From that position of enormous wealth and success, you
:11:13. > :11:23.had major problems. There you can tell me how close you came to
:11:23. > :11:30.insolvency, to going bust. Not very close. I know how banks think, how
:11:30. > :11:38.they treat their clients. I was capable of demonstrating in an
:11:38. > :11:42.efficient way that there was no problem for them. I assured
:11:42. > :11:51.everyone that Clegg was no problem with the company and it was capable
:11:51. > :12:01.of getting through the crisis. No- one got a hit it. You pay your
:12:01. > :12:04.
:12:04. > :12:12.debts in full. -- got a haircut. Not completely, but we had as its
:12:12. > :12:18.value it much more than the debts. You still have a huge business, you
:12:18. > :12:24.are still worth billions of dollars. People who used to be closed you
:12:24. > :12:30.are convinced that you made some bad decisions. Victor was the
:12:30. > :12:37.chairman of Rusal, working alongside you. He quit the company,
:12:37. > :12:41.saying it was in deep crisis. He said it was overburdened with debt,
:12:41. > :12:46.entangled in lawsuits and social conflict. He said the management
:12:46. > :12:56.had adopted strategies without the approval of the board.
:12:56. > :13:00.
:13:00. > :13:10.everything is true. I have for it to show what week and... what we
:13:10. > :13:10.
:13:10. > :13:18.can achieve from different strategies. To talk and to walk.
:13:18. > :13:24.250,000 employees. 10,000 very experienced people in top
:13:24. > :13:31.management. It to being a few thousand years of experience in
:13:31. > :13:41.different industries. It is not just my decision. A planets pit and
:13:41. > :13:42.
:13:42. > :13:50.we exercise that plan.... a plan is Prix p it and we exercise but plan.
:13:50. > :13:58.We know how to operate the business and we know our Productions Court
:13:58. > :14:07.of Arbitration for Sport production facilities. Eight final thought
:14:07. > :14:15.about the state of the business now. Why do Mark think here you face so
:14:15. > :14:21.many legal, arbitration, settlement actions in Rusal? Y wound so many
:14:21. > :14:25.people convinced you have taken some terrible decisions,
:14:25. > :14:35.particularly the decision to buy into pinnacle company and refuse to
:14:35. > :14:40.
:14:40. > :14:47.sell when you were offered a decent Just one example - we could have
:14:47. > :14:54.sold it for $5 billion. Then we got offered four 9 billion them for 12
:14:54. > :15:00.billion. Later 16 billion. Can you do such money in the operation - I
:15:00. > :15:07.can tell you not. But the company was so good, I could see. I could
:15:07. > :15:13.see it on a global sense. If one company could solve problems,
:15:13. > :15:19.either China or India for the next hundred years, this is so unique
:15:19. > :15:24.and so well placed in the current market, that to sell them is to
:15:24. > :15:34.make a crime. So here and now, you are prepared to say you are not
:15:34. > :15:39.
:15:39. > :15:47.prepared to sell out? We have to sell for a fair price. It is a a
:15:47. > :15:53.little market. If we decided it and it was decided by the board, by the
:15:53. > :15:58.synergy and the investment in our company. You mention that the
:15:58. > :16:04.success of the cover is nothing to do with the political connection. -
:16:04. > :16:10.- of the company. In Russia today, a very big business like yours
:16:10. > :16:13.cannot succeed if you fall out with the Kremlin, Mr Vladimir Putin in
:16:13. > :16:23.particular. That is not possible if you have made an enemy of the
:16:23. > :16:33.Kremlin? UK and not cross a street on a red light, that is common
:16:33. > :16:33.
:16:33. > :16:39.knowledge. -- you cannot. I think it is a little difficult. We have
:16:39. > :16:43.to look at the message sent by Mikhail Khodorkovsky to know that
:16:43. > :16:47.in Russia, if you upset Mr Vladimir Putin and the Kremlin, the
:16:47. > :16:57.likelihood is that you will spend a substantial chunk of your time in
:16:57. > :16:59.
:16:59. > :17:04.prison. That was a very difficult case. He was a Spanish too much.
:17:04. > :17:10.But at the same time... That is interesting. You think it was wrong,
:17:10. > :17:15.unfair, unjust that he now faces a second six-year jail term? I have
:17:15. > :17:22.known him for quite a long time. It is difficult for me to make a
:17:22. > :17:32.judgement on the court case. There is a lot of legal reports. I think
:17:32. > :17:32.
:17:32. > :17:42.he was out of... He came from an organisation. For example, I was
:17:42. > :17:43.
:17:43. > :17:49.slightly after he was expelled. He did business to read them. --
:17:49. > :17:53.through them. He had a social and political agenda. That is the point.
:17:53. > :18:00.Isn't message clear from the clamour that if you are to continue
:18:00. > :18:06.as a very big powerful business leader in Russia, you must not step
:18:06. > :18:13.into politics and challenge the Kremlin? How do I say it... I do
:18:13. > :18:18.not want to go too much into the subject. If you have a big business,
:18:19. > :18:28.it will buy you are few seasons of Parliament them you wanted to make
:18:29. > :18:30.
:18:30. > :18:34.a fresh Parliament to promote business, they have enough money.
:18:34. > :18:39.They just need to have leaders who take the risk. I think the
:18:39. > :18:47.parallels you draw with the US and Britain do not work too far.
:18:47. > :18:50.agree. It is not my area. I am not a politician. I am not a journalist.
:18:50. > :18:54.You are a very big business man with a huge stake in the Russian
:18:54. > :19:00.economy, but across the economy, you employ hundreds and thousands
:19:00. > :19:04.of people in many businesses. Would you say it has been damaging to
:19:04. > :19:13.Russia's economy and to the degree which Russia can attract inward
:19:13. > :19:17.investment from overseas to see the Khodorkovsky case, to see what has
:19:17. > :19:20.happened to heritage investment in Russia? Would you say this creates
:19:20. > :19:26.a very difficult problem for Russians who want to sell
:19:26. > :19:33.themselves as a place of foreign business? The Khodorkovsky case
:19:33. > :19:40.created a sudden demand for change. You have seen it. Are you behind
:19:40. > :19:46.that the mind? Would you support that demand for change? No. Because
:19:47. > :19:55.I can see the people who lead us. They are even worse than the people
:19:55. > :19:59.in these areas today. This is a Russian reality. We have to leave
:19:59. > :20:04.the understanding that we need may be another two generations to
:20:04. > :20:09.complete the transition. They will call you oligarchs, they will make
:20:09. > :20:14.you are new label. You need to come this of down and see what you can
:20:14. > :20:20.do. 20 years ago, we had the Soviet empire which collapsed, created a
:20:20. > :20:25.lot of problems. We still have people who believe it was a better
:20:25. > :20:29.way to live. We just need to be patient and off and go through and
:20:30. > :20:38.create as much opportunity as possible for a country to become
:20:38. > :20:43.normal. You talk about patients. The World Bank looked at the
:20:43. > :20:50.Russian economy. It is not sustainable in the long run. You
:20:50. > :20:55.get figures - the OECD said Russian workers are only 43% as productive
:20:55. > :20:59.as the developed Western economies. Russia needs immediate reform. It
:20:59. > :21:08.needs a better infrastructure, in needs a rule of law and the courts
:21:08. > :21:18.and property rights to be respected and it needs to happen now. Russia
:21:18. > :21:25.needs better discipline. We have everything in place. You want a
:21:25. > :21:30.honest government in place. Many countries suffer the same problem.
:21:30. > :21:37.But we have for the best. I can tell you that if you look at the
:21:37. > :21:43.numbers, last year, the Russian automotive market grew. The
:21:43. > :21:52.production came not from outside Russia but inside Russia. How many
:21:52. > :21:58.factories were developed - you can look at that. Maybe we were not so
:21:58. > :22:06.quick to spend like Greece or Spain or Italy. We tried to balance it.
:22:06. > :22:13.We have a surplus. You can consider the surplus. As long as the All
:22:13. > :22:23.prices are OK, you are OK. Even if the All prices go down, the Russian
:22:23. > :22:26.
:22:26. > :22:31.economy will not suffer too much. - - or your -- oil prices. Where do
:22:31. > :22:38.you think is a better place to do business - Russia or China? Well
:22:38. > :22:43.according to the report, it is certainly not Russia. You are on a
:22:43. > :22:53.pile with Nigeria in terms of corruption. I understand. But if
:22:53. > :22:55.
:22:55. > :23:00.you ask Syria's businessmen and the big companies. You can ask hundreds
:23:00. > :23:06.of people and you will receive 95% answered that Russia is a better
:23:06. > :23:14.place to do business now than China. This is a reality. I do not want to
:23:14. > :23:18.challenge the World Bank report but just say in my view it as a
:23:18. > :23:23.businessman who is doing business in Russia. Indeed elsewhere as well.
:23:23. > :23:27.I want to end with this thought. We have a lot of Russian billionaires
:23:27. > :23:31.in London. You spend a lot of time in London and rather well know that
:23:31. > :23:35.you have social contacts just a few years ago with Peter Mandelson,
:23:35. > :23:39.with George Osborne who is now the Chancellor of the Exchequer of this
:23:39. > :23:43.country. I wonder if it is important for you to build those
:23:43. > :23:48.sorts of political links in the UK and whether you might think of
:23:48. > :23:53.establishing yourself here. I would like to spend more time here. Last
:23:54. > :24:00.time, I spend less than 15 days. For the future quest mac for the
:24:00. > :24:07.future, it may be. It is a struggle for Brasher to go through the
:24:07. > :24:15.crisis and Bill dealt country. -- Russia. Are you one of the leading