Oleg Deripaska: the man even Putin avoids

Oleg Deripaska is by far the most feared of all Russia's wheeler-dealer plutocrats. But now, the ruthless metals czar faces his own financial meltdown.

It was Peter Mandelson's birthday on Tuesday. The new Business Secretary celebrated in style with a political coup of serpentine brilliance. Having become mired in the controversy around his friendship with Oleg Deripaska, events turned suddenly in his favour when it emerged the Tories were up to their necks in it, too. Yet Deripaska may have other things on his mind, says the Daily Mail: namely his own financial survival.

Deripaska, whose fortune was put at £17bn before the current financial crisis, is "fighting a desperate battle to keep his vast metals, banking and car empire intact". It is a measure of the clobbering he has taken from crashing metal and stock markets that Russia's "aluminium tsar" is now desperately casting around for a mere $2bn. The "clock is ticking" for Deripaska, says the FT. He needs the cash to repay part of a $4.5bn loan from Western banks to fund expansion of his empire. If he can't raise it by the end of the month, he will have to hand creditors a 25% stake in Norilsk, the world's biggest nickel miner. "We're in a bit of a last-chance saloon," says a source close to him. Deripaska is far from alone in his speedy fall from financial grace: the collective wealth of the 25 richest Russian businessmen has plunged by $230bn since May. But many Russians view it as significant that he of all people is now vulnerable. Deripaska is by far the most feared of all Russia's wheeler-dealer plutocrats, says The Sunday Telegraph, and not just because of his close links with the Kremlin. The outwardly folksy charm of this "baby-faced billionaire" belies an often-violent past. As Marshall Goldman, a Russian expert at Harvard University, points out: "Even Putin gives him a wide berth."

Deripaska's ruthlessness was nurtured in childhood. He was born in Nizhny Novgorod in Siberia, an archetypically grim Soviet-era industrial city, and helped his widowed mother scratch a living before studying physics at Moscow State University. "It was a very practical question every day," he recalls. "How do I get to buy food and keep from starving?" He found the answer in a smelter in Siberia, and made his name and fortune in the bloody "aluminium wars" of the 1990s. "When the smoke had cleared," says Forbes, "dozens of executives, bankers, traders and mob bosses were dead." Two clear winners were left standing: Deripaska and Roman Abramovich. In 2000, they combined their aluminium interests to form Rusal; four years on, Abramovich sold out to his old friend completely.

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In recent years Deripaska has been living the life of an international financier. He is married to Polina, daughter of Boris Yeltsin's chief-of-staff. They spend a good deal of time at their Belgravia mansion in London, where their children go to school; she is publisher of Russia's Hello! magazine. But questions about Deripaska's past won't go away, says The Daily Telegraph. Three months ago a London High Court judge listed contract killing, money laundering, bribery, illegal telephone tapping and "involvement with the mob" among allegations levelled at the oligarch. Deripaska, who had his US entry visa cancelled last year, vehemently denies it, blaming "political enemies and business rivals" for smearing his name. But it's easy to see why he has become political dynamite.

How Oleg Deripaska sparked the juiciest British political scandal in years

At the centre of the Deripaska/Mandelson/Osborne imbroglio is Nat Rothschild, the son of Jacob (Lord) Rothschild, who entertained all three men at the Rothschild family villa on Corfu this summer, says The Daily Mail. His links with all three go back some way: he has been a friend of George Osborne since their Bullingdon days at Oxford; is a longstanding chum of Peter Mandelson; and has been advising Deripaska on his business interests for years. "The Rothschilds have given Deripaska a vanilla coating in this country," a City source told the paper. "Without them, bankers would normally hold their noses, but they have vouchsafed for Oleg around town."

The allegations made against Mandelson, which he dismisses as smears, centre on claims he used his position as EU Trade Commissioner to advance the interests of Deripaska's company Rusal after a couple of 'matey dinners' with the oligarch orchestrated by Rothschild, says the Mail. For a fortnight, "the new Peter Mandelson hunting season" resumed in the press, says The Independent on Sunday. Then came Nat Rothschild's revelation that George Osborne "found the opportunity of meeting Mr Deripaska so good that he invited the Conservative fundraiser, Andrew Feldman... to accompany him to Mr Deripaska's boat to solicit a donation". It is illegal for political parties to solicit donations from overseas residents, says The Times, as it is to use a British company as a proxy which is what Rothschild alleges the Conservatives suggested. What began as a "gathering of the rich and powerful in the sunshine" has the makings of the juiciest political scandal in years.