Oleg Deripaska: …UK, you know definitely lagging behind in most of their competitors as a financial performer with a legal structure, you know 90% of revenue of a legal firm in London out of ex-Soviet Union countries. But the UK at the moment is not, in terms of the capital in the market, as attractive as the United States, not as attractive as Asia.

Jeff Randall: Why do you think that is because you chose to float your company in Hong Kong on the Hong Kong stock exchange not on London, why was that?

OD: It’s just reality; you know regulate to become too conservative.

JR: So our disclosure requirements are too tough?

OD: It’s one thing, it’s not about disclosure, there would be no one arguing about transparency I think it’s also reality of financial markets, there is not… it used to be the platform where a company could borrow money, could find a partner, could find venture capital and now it’s not so developed and I think this is a fundamental.

JR: So what advice would you give the British government?

OD: I think your government should listen better to city bankers or…

JR: To city bankers?

OD: I know it’s not, you know they…

JR: Some would say we listened to the city bankers and that’s why we’re in the trouble we’re in.

OD: You’re not so in trouble as the rest of Europe first of all.

JR: Well that’s true, that’s true.

OD: I mean there is a great platform which the government should support because it will create more opportunity to attract more business, it will attract more people who can develop better relations for Britain with the rest of the world. And of course you should stay competitive.

JR: Because of course after the credit crunch bankers in Britain are unpopular but they’re not really trusted.

OD: Choose new ones.

JR: Where do we find them?

OD: You still have a great business school, great economy school, still we are sending our kids to study in England and we trust your system.

JR: I read that as a young man you read the novels of Conan Doyle, Arthur Conan Doyle, what did they teach you about the British character?

OD: Very suspicious.

JR: We are suspicious?

OD: Yes.

JR: We are suspicious, I thought we were curious.

OD: Okay I will say it like that.

JR: Is that simply because Sherlock Holmes was suspicious or the British are suspicious?

OD: It was Doctor Watson who was suspicious, Sherlock Holmes was curious.

JR: Well I’m sure you know we’ve moved on a bit from Conan Doyle but not much. Now what about the British media, you are best known in Britain for the events that became known as “Yacht Gate” when you invited George Osborne and Peter Mandelson on your boat in I think it was the summer of 2008. Why did you invite them?

OD: First of all I think I don’t want to disappoint the media, maybe my boat is the smallest out of the Russian fleet and…

JR: I’m sure your tiny little modest yacht but why were they on it?

OD: And anchored next to my friends in the House it was just part of the holiday season and there were actually… I was really surprised reading all this in the media which came out of a glass of water which was empty.

JR: Really, well you’re a powerful international businessman, you need the agreement sometimes of politicians, they were two influential politicians, it seemed too many people that you were trying to engage with them perhaps to earn a favour, perhaps to earn an obligation.

OD: I’m very rash in business, I know it’s hard to believe but I’m so down to mother Russia that I just couldn’t even find what sort of favour I could find outside of Russia which could help me or somehow support my business. I just… I would really doubt this you know cliché that Russian Oleg tried to get something in exchange.

JR: Like Holmes I’m curious, I’m curious because George Osborne, Peter Mandelson they’re not particularly agreeable people, you are very wealthy you could have invited Maria Sharapova and Anna Kournikova, why those two politicians?

OD: I don’t like tennis.

JR: And as I understand it Peter Mandelson’s no good at tennis. Okay, one of your key businesses is Rusal; you floated the shares in Hong Kong nearly two years ago. Since then the share price has gone from $13 to about $5, what’s that telling us?

OD: From $10 to $5, it’s telling us we’re still a surplus in aluminium capacity.

JR: So you think it’s the markets’ judgement on the sector not on your company?

OD: Of course, look at the rest of the peers in the same, look at you know Rio Tintum Aluminium business and the rest…

JR: Some years ago I think it was 2006 you had your Visa to the States revoked, as I understand it you can now travel to the United States, and you do. What’s your view of doing business in the United States today?

OD: Great opportunities.

JR: You like it there?

OD: Uh-hm.

JR: Why is that?

OD: Because they solved the energy problem, not just electricity but energy problems, the cheapest cost of capital, very qualified people, very entrepreneurial, very open.

JR: So how does that compare with doing business in the Euro Zone?

OD: The Euro Zone has a great problem; you know Euro is so heavy…

JR: So you’re saying the Euro is over-valued?

OD: Over-valued, that’s why Britain is very lucky to be out of it and…

JR: Lucky?

OD: Yes very lucky, I would say not lucky, clever. Great, let’s talk about [s.l. bailing 07:37]. Interest rate was about 8%, it cost if you talk about Rusal, it cost Rusal around $750m interest/commission what we pay to the State bank which give us credit when the international financial market was in [inaudible 08:07] and we repaid in less than three and a half years. And actually I can’t see you know the same time Russian Centre bank get slightly above 1% and we pay 7% premium to the money which was important for us.

JR: But at that moment of crisis it is fair to say is it not that President Putin used his influence to save your company?

OD: There was a problem which was design and parliament adopted the law where there was a fund of around $16bn and we borrowed part of the fund the same as five or six companies. And actually not just Rusal got this opportunity in our group there was another company which was also offered this opportunity but when we calculated we decided to go on and restructure it without credit. That’s why I can’t see how it could put us in someone’s pocket; you know 8% interest rate.

JR: Well it was an expensive pocket.

OD: It was just open dealing and believe me now here in Russia, you know in the media, even in parliament there was a lot of scrutiny to this deal that’s why the interest was so high and we’ve been forced to repay at the first possible moment that’s why we went and made an IPO in Hong Kong and borrowed quite expensive money at the first opportunity. I don’t think it would be fair to believe that over 20 years you can change such a great country and I don’t think it’s fair to say this is a completely wrong way and is this guy developing nothing at all. Look in the past and about…

JR: I agree with you Russia is a place of huge opportunity, I’m simply saying this; if President Putin were less adversarial perhaps things would progress at a better rate.

OD: Yes but it’s not about him it’s about us, you know he has… you’re trying to demonise him but we also made a lot of mistakes and it’s about changing ourselves and we’ve done a lot. It’s not about Moscow or Russia, don’t forget in Moscow it’s one country the rest of Russia it’s a completely different story.

JR: Once again I repeat, clearly it’s obvious there are opportunities here in Russia but what about the perception, maybe the reality, that this is a country riddled with corruption and crime, that is true isn't it?

OD: I never see crime and corruption in England; it’s true but maybe because I never go in the place where I could you know…

JR: Well in England there’s plenty of crime and corruption you can be sure.

OD: Yes but I never go to this place and maybe if you’re really about business in Russia try to choose this part or this area or this sector where you feel more comfortable and it’s a social issue, we have failed in almost all institutions in the middle of the 90s, you know you try in Iraq, how long did you believe it would take you to improve the situations there to the level of Russia? How long does it take in the US? 200 years.

JR: I read an interview you gave just over a year ago with a British newspaper and you said quite openly that in your early days in business in the 90s you had to pay crime gangs, you had to; it was a necessity to keep the security of your business. Is that still true?

OD: My people. No it’s over.

JR: So those days are over?

OD: Completely.

JR: You don’t have to pay off the mafia in this country to do business?

OD: No.

JR: No threats from criminal gangs?

OD: You know you can’t say… it’s not for us, you know big corporate, mid-size, upper small size definitely no, you have police, you are quite developed for this type of crime institution who could handle the problem and this is a Russian reality, you have more than 800,000 employed in security companies it’s not wild west like in the middle of the 90s this is for sure. And not just in Moscow, that’s important, not just in Moscow.

JR: Your good friend Roman Abramovich has spent a fortune buying a football club in London, Chelsea, he’s been very successful. Have you never been tempted to buy an English football club, tempted?

OD: I tried to understand the reality of his success in this part of the business.

JR: I don’t think it’s a business success.

OD: Yes but you know he likes football. I love playing football, when we were kids we were playing football until the sun came down but you need to have a lot of free time, you need to really be engaged in it and it’s not on my agenda. I really prefer to spend another seven maybe twelve years trying to develop business in Russia.

JR: He spends a lot of time in London; it seems to me that you don’t find London so attractive anymore?

OD: Me? I’m just very busy here, you know the crisis is still here it’s not just history, maybe in the 15 years we’ve had like great depression, how to be beneficial and stuff but it’s still… and we have a new canvas, we have Asian companies, we have the United States which is suddenly going back on the top of the house and demanding his share of the export and all this opportunity, you know this is just reality you need to be very competitive.

ENDS

Full press release can be found here http://skynews.skypressoffice.co.uk/press-releases/items/2013-01/2963/exclusive-jeff-randall-interview-russian-oligarch-oleg-deripaska