Posts Tagged ‘russia’

The Man from Y.E.A.R. — Yukos, Eutelsat, Arianespace and Roscosmos

Monday, April 11th, 2016

Путін Хуйло.

Remember that $50 billion arbitration award to Yukos? Well, as with any judgement award, the tougher next step is actually getting paid. If you expect Russia to simply write a checks to a former Yukos shareholders, then go fly a kite.

They threatened to start seizing assets outside of Russia, so Putin’s commanding everything they own get a diplomatic property plate slapped on it. Afterwards, many buildings in Paris became part of the Russian consulate.

So now we find a couple of asset seizures from two Paris-based entities: Eutelsat and Arianespace. The Eutelsat assets seized were related to 15-year lease on the Express AT2 spacecraft, which launched in 2014, at $400 million. The Arianespace assets are related to rocket launch service, likely related to Soyuz launchers out of Kourou, and worth $300 million.

Would you be surprised if Luxembourg was next on the list?

Not at all, given Gazprom’s involvement with SES S.A.

Here’s the story by Michael D. Goldhaber, in American Lawyer (subscription)…

The Russian social contract rests on a tacit agreement between the businessmen and politicians not to talk about their mutual corruption. In Russia’s desperation to roll back history’s biggest arbitration award, this bargain is breaking down.

In July 2014, arbitrators ordered Russia to pay 
$50 billion to the oligarchs from whom it seized Yukos Oil Co. At a Feb. 8 hearing to set aside this award, Russian counsel Albert Jan van den Berg told the Hague District Court: “If we want to talk about the reality of this case, we have to go back to … the disintegration of the Soviet Union.… A handful of oligarchs were robbing state-owned companies blind.” On April 20, a Dutch court will decide whether “you stole it first” is a valid defense.

In the “loans for shares” program of 1995-1996, Russia allowed a larger group of oligarchs to transfer control of a dozen major companies to themselves in exchange for loans to help Boris Yeltsin balance his budget and thwart the Communists’ return to power. Russia chose Mikhail Khodorkovsky’s Bank Menatep to hold the initial Yukos auction and share tender. Two Menatep affiliates submitted the only bids. The winner bought 33 percent of Yukos in exchange for $159.5 million, committed to invest $200 million in the company and won the right to lend the state $159 million secured by another 45 percent of Yukos.

When Russia defaulted on that loan, Menatep organized a new auction, with two Menatep affiliates again emerging as the only bidders. One bought the secured shares for $160.1 million. Menatep’s total commitment was $518.6 million. By the next year, Yukos was publicly valued at $6 billion. Other crown jewels of the Russian economy that were privatized in this creative manner include Lukoil, Mechel, Norilsk Nickel and Sibneft.

Putin tolerated Khodorkovsky until he publicly questioned the integrity of another state oil deal in 2003, as we described in our ongoing coverage.Then prosecutors tested a long list of pretexts for hounding Yukos into liquidation. They never even considered going after Yukos for rigging a state auction, because that remained business as usual. Indeed, the state would recover Yukos’ main asset in 2004 by means of—you guessed it—a rigged auction.

As the 10th anniversary of Yeltsin’s “loans for shares” approached in 2005, the Duma passed a law at Putin’s urging that cut the statute of limitations for challenging a privatization. At that moment, a legal accounting seemed unlikely either for the oligarchs stealing Yukos, or for the government stealing it back.

But before Russia dismantled Yukos, the Menatep oligarchs had passed their shares to corporate shells based in jurisdictions that signed an investment treaty with Russia known as the Energy Charter Treaty. “It looks like someone mapping the Ebola virus,” a Russian counsel says of their tangled legal structure. In 2005, three offshore affiliates of Group Menatep (now GML Ltd.) filed claims for expropriation.

With Cleary Gottlieb Steen & Hamilton defending the arbitration, Russia argued only in passing that “loans for shares” sullied the oligarchs’ hands. The arbitrators, in their 1,888-point ruling of 2014, dismissed the argument in one formalistic point. Russia had failed to adequately connect Bank Menatep’s allegedly illegal “loans for shares” scheme with the claimants’ “investment” in Russia, they concluded, because the claimant entities were separate from Bank Menatep and its oligarchs. The reasoning of paragraph 1370 struck us as the award’s weak link immediately. The arbitrators didn’t back up their assertion of corporate separateness. And they never tested the alleged illegality.

Now, Russia’s only recourse is in the Netherlands. (The day before the 2014 award, a Russian missile killed 193 Dutch citizens over the Ukraine.) At first, in January 2015, Russia told the Dutch court that “legal infirmities surrounding Yukos’ founding” were not a basis for a set-aside. Then White & Case took over Russia’s case from Cleary. With White & Case’s guidance, Russia is making “loans for shares” central to its enforcement defense in Washington, D.C., France, England, Germany, Belgium and the Netherlands.

Russia only raised “loans for shares” in Dutch court early this year. Even though it had confiscated Yukos’ share registry in 2003, Russia presented the evidence as newly discovered because “the code was not cracked until October 2015.”

Yukos’ counsel, Shearman & Sterling’s Emmanuel Gaillard, teases Russian intelligence: “It took the FSB 12 years to crack a code? This is very disappointing.”

Russia argues in its Dutch challenge that the arbitrators lacked jurisdiction because the Energy Charter Treaty does not extend a nation’s consent to arbitrate toward investors who make an illegal investment. (Russia also renews its arguments that it never ratified the treaty and that the claimants are Russian nationals, among other things.) For all the same reasons, Russia contends that the usual exception to sovereign immunity for confirming an arbitral award doesn’t apply.

As a legal matter, the Yukos camp counters that Energy Charter jurisdiction is predicated on claimants’ status as “investors,” rather than their investment’s legality. Anyhow, they say, Russia clearly waived its “loans for shares” objection.

As a factual matter, the oligarchs say that Russia knew full well that Menatep lay behind the bid for Yukos—just as the arbitrators knew full well that Menatep lay behind the arbitration. Given the dire state of Yukos and Russia in 1995, and a ban on foreign bids, they say a half-billion-dollar commitment was nothing to sneeze at.At the end of the day, the oligarchs argue that “loans for shares” were legal because they were organized, overseen, monitored and later ratified by Russia.

The Global Lawyer accepts that the Russian “sale of the century” was an open secret, and a disgrace. We’ll let the Dutch courts assess its legality. Meanwhile the cat and mouse game begins. On Dec. 17, a Paris court declined to suspend enforcement of the Yukos award pending appeal.

Gaillard complains that “Russia is busy slapping diplomatic plaques after the fact on every piece of property it owns in Western Europe.” Russia persuaded Belgium to enact a “Yukos Law,” requiring that a judge preauthorize asset attachment. It pressured Belgian diplomats and French police to block local functionaries from taking inventory at buildings the oligarchs seized. Most ominously, Russia warned in a July 15 diplomatic note that it will consider any American enforcement as grounds for retaliation against U.S. citizens and businesses.

Even so, the oligarchs have provisionally seized close to $1 billion in assets in France—including $400 million owed by Eutelsat to the Russian Satellite Communications Co. for satellite capacity and $300 million owed by Arianespace to Roscosmos for rocket launchers. One billion down, says Shearman. Forty-nine billion to go, says White & Case.

Russian Lie of the Week: That Wasn’t Our Spy Satellite

Tuesday, September 23rd, 2014

“One can only guess about the condition representatives of the so-called American Meteor Society were in when they identified a luminescent phenomenon high up in the sky as a Russian military satellite,” said the spokesman, Igor Konashenkov.

NBC News reported a fireball over Colorado was actually a Russian spy satellite (Kosmos 2495, a Kobalt-M spacecraft) used for reconnaissance.

Russian propaganda is speculating it was actually a threatening “flying Nazi wing” or something and the Kosmos 2495 did some counter-measures and shot the bitch down with a laser beam.

The technology is astounding: it weighs 6,700 kg, uses film to record images, then sends canisters back by dropping them somewhere over Russian territory. This particular one was launch in May, so it coincides with its end-of-life. However, instead of burning up upon re-entry over Orenburg, Russia, parts or all of it burned up over Colorado. Just another case of “Russian precision?” Yeah, right.

Anatoly Zak presented a balanced account of what may have happened:

According to a space flight historian Jonathan McDowell, Kosmos-2495 was deorbited on Sept. 2, 2014, and its descent module landed around 18:18 GMT after a 119-day mission. The reentry was confirmed by a likely sighting of the spacecraft over Kazakhstan, not far from the border with the Russian region of Orenburg, where Russian military satellites would normally land. However a yet another reentry was observed by multiple witnesses the following evening over the western United States. According to McDowell, the ground track of the mysterious object over the US closely matched that of Kosmos-2495, if only the satellite or its fragment was able to make additional six revolutions around the Earth after its projected landing in Russia and then reenter over the US state of Colorado around 04:33 GMT on September 3.

The sightings over the US could be explained by an aborted firing of the braking engine onboard the spacecraft that caused one of its parts, such as the descent module, to reenter over Russia, while another part, such as the service module to stay in orbit for several hours and then make an uncontrolled plunge into the atmosphere over the US due to air friction, McDowell said.

It shouldn’t come as a surprise the Russian military is using space technology first used in the early 1980’s, with alleged 0.3m resolution, however.

Putin’s Russia is run by criminals, drunks and KGB-bred barbarians who have no regard for human life or for telling the truth.

Here’s a more-recent follow-up from the Daily Camera in Boulder:

Witnesses across the Front Range and in several neighboring states reported the object streaking across the sky and breaking into several pieces around 10:30 p.m. on Sept. 2.

While some initially speculated it was a meteor, a meteor would have burned too quickly to be seen over such a vast area, said Mike Hankey, the American Meteor Society’s operations manager.

He added that fragments from the object were even big enough to show up as a weather event on radar just east of Cheyenne, Wyo.

The object probably was a piece of Russia’s Cosmos 2495 reconnaissance satellite, launched in May, said Charles Vick, an aerospace analyst with military information website Globalsecurity.org.

Cosmos 2495 was designed to shoot reconnaissance photos and send the film back to Earth in capsules.

It delivered film to Russia as intended, but some pieces of the craft remained in orbit until falling over the Rockies, Vick said.

The U.S. Strategic Command, responsible for American nuclear warfighting forces, confirmed that Cosmos 2495 re-entered the atmosphere and was removed from the U.S. satellite catalog Sept. 3.

Jonathan McDowell, an astronomer with the Harvard-Smithsonian Center for Astrophysics, estimates that there are 98 operating spy satellites in orbit, launched by at least six nations.

Of those, 37 are from the United States, 30 from China and just three from Russia, he said. Many of those satellites are old, and probably half are in full operation, McDowell said.

A Russian Defense Ministry spokesman told the ITAR-TASS news agency Sept. 9 their military satellites were operating normally,


Putin’s Proton

Tuesday, August 12th, 2014

ILS is laying off 25% of it’s workers. For those of you keeping score at home, chalk up another Russian-controlled business fail.


Lost in Space: Fruit Flies, Mushrooms and Geckos

Friday, July 25th, 2014

Too bad Geico doesn’t offer spacecraft insurance. The Russians could use some help, as they hold a large share of both launch and in-orbit failures.

I feel bad for the researchers suffering the latest Russian space program setback, the in-orbit loss-of-control for the Foton M-4 spacecraft, carrying a payload of geckos, fruit flies and mushrooms.

Russia’s Progress space firm confirmed Thursday that the Foton-M4 satellite was not responding to commands from the ground to start its onboard engine and lift it to a higher orbit.

However the company said in a statement that all other systems on the satellite, which was launched on July 19, were operating normally and information from the scientific experiments was being transmitted to the ground.

“The equipment which is working in automatic mode, and in particular the experiment with the geckos is working according to the programme,” said Oleg Voloshin, a spokesman of Russia’s Institute of Medico-Biological Problems, which is running the experiment.

The two-month mission is monitoring by video how well the geckos sexually reproduce in space, according to the Institute’s website.

Progress said the design of the Foton-M4 “allows for the functioning of the satellite in automatic mode for a long time.”

A space expert cited by Interfax said that in its current orbit the satellite could stay up in space as long as three or four months.

OK, so maybe they can’t control the thrusters, but all else is working.

Perhaps the resulting “Russian lizard sex in space” video will compete with the popularity of Russian dash cam videos.


No Free Speech or Paids Ads in Russia

Wednesday, July 16th, 2014

The remnants of totalitarian communism in Russia refuses to go away. Putin’s mafia-style government first tried to take down the satellite TV signal of Dozhd, one of the few remaining independent channels. The channel is available via Yamal 300K, Eutelsat 36B, Astra 4A, and Dish Network in the U.S. (via Anik F3).

Now the government wants to ban advertising on any channel beside FTA television, most of which is state-owned or controlled. Removing one of the main sources of revenue is their way of putting them out of business.

Dozens of small and independent Russian television stations could face closure after lawmakers approved a controversial bill banning advertising on cable and satellite channels.

The proposal would also consolidate state-controlled channels’ dominance of the advertisement market.

The surprise bill raced through Russia’s State Duma, the lower house of parliament, last week, sailing through its three compulsory readings in just two sessions.

Excluded from the ban are “national, compulsory, universally accessible” channels and those conveyed by terrestrial broadcasting — meaning all the state-controlled channels that currently dominate Russian television.

Advocates say the new law aims to end unfair competition on the television market, where pay channels supposedly benefit from mixed funding schemes — subscription fees and advertising — while free broadcast channels are limited to commercials.

But the heads of 15 pay channels, including Natalya Sindeyeva of opposition-leaning Dozhd TV, have written a letter to the government warning that the ban will sound the death knell for more than half of Russia’s cable and satellite channels.

“Excluding the advertising model could place about 150 thematic pay channels on the brink of survival,” the letter says. “Raising payments for television services may lead to understandable customer dissatisfaction.”

The signatories also warn that the new law will hurt small and medium-sized businesses currently advertising on pay channels since “only big-business representatives can afford advertising on federal channels.”

Read the letter in Russian here. Behold the quick translation into English…

From an article in the newspaper “Kommersant” from 26/06/14, we were surprised to learn that in the State Duma in an expedited manner planned to adopt a package of amendments to the “Law on Advertising.” Our keen interest aroused amendment prohibiting advertising on pay channels. We believe that consideration of this amendment, the State Duma of the Russian Federation should take into account the following circumstances:

1. Absolutely no obvious reason why television channels necessary in law to impose a particular model in the market. We believe that any TV channel can select or advertising model, or paid, or mixed. The choice of a model should be determined solely by market mechanisms rather than the provisions of the legislation. According to our information the absence of such legislative restrictions characteristic of the vast majority of countries around the world.

2. Most pay-TV channels now uses both models of monetization of their business – and advertising and paid. Exception advertising model will deliver about 150 paid thematic channels on the brink of survival. It is possible, the financial burden will be shifted to the subscribers. Services of the largest Russian operators used by tens of millions of Russian citizens. Increased pay for TV service can lead to understandable frustration consumers.

3. Please note that the central channels of essential federal campaigns can afford only representatives of big business. For medium and small business advertising on such channels is not available due to its high cost. But representatives of small and medium businesses can promote on the Russian market their products and services by means of pay-TV channels. They can appeal to the audience of thematic channels, which are most likely to consume their product or service at feasible prices for their business. Ban such advertising can lead to a significant delay in the development of small and medium-sized businesses in our country. We believe that this provision of the legislation is contrary to public policy to support small and medium-sized businesses.

Appeal with the proposal to postpone consideration of this amendment in the spring session of the State Duma. Propose to discuss the amendment with the business community, and nominate it for discussion by the State Duma in view of his opinions.

This is ridiculous, yet typical of Putin’s stupidity. Gutting the Russian economy is obviously not a consideration.

People will find want they want from other sources: the truth.


Angara!

Thursday, July 10th, 2014

Interesting to read of the Angara project’s history, via Russian Space Web

The collapse of the Soviet Union at the end of 1991 had profound effects on the Russian space program. The nation’s main space launch site in Baikonur ended up in the newly independent Kazakhstan, while several major suppliers of rocket components along with key tracking facilities were now in Ukraine. The Russian Defense Ministry had the most reasons to worry about losing its capability to launch strategically important military satellites, in case of a conflict between former Soviet republics.

On Aug. 3, 1992, less than a year after the failed coup to overthrow Mikhail Gorbachev had instead triggered the final convulsion of the Soviet state, Russia’s Military Space Forces approved a new assessment on the state and prospects of the nation’s launch systems. (355) The document set the course toward the development of a new launch vehicle, whose design and launch facilities would not rely on contractors outside Russia. A month and a half later, on September 15, the Russian government issued an official decree giving the rocket industry the task to conceptualize the best architecture for a heavy space launch vehicle, which would be dubbed Angara after a great Siberian river.

The future rocket was required to carry up to 24 tons to low Earth orbit and up to 3.5 tons to geostationary orbit. The new launch vehicle was expected to replace Proton after 2005. Similar studies aimed to eventually built the Neva light-weight launch vehicle capable of delivering four tons of payload to the low Earth orbit and thus replacing the Ukrainian-built Tsyklon and for the medium-class Yenisey launcher designed to replace Zenit. (264)

The new heavy rocket would be first based at Russia’s northern space port in Plesetsk, however, in 1994, plans were also made to deploy it at a future new launch site in Svobodny with a much better geographical location in the Russian Far East.

The launch complex, or cosmodrome, is less than 100 miles from the Chinese border and the Russian Federation is comprised of many ethnic groups.

What if the R.F. breaks apart even further? Putin will surely go down in history as the biggest Russian asshole ever.


Energomash: High Security Factory

Friday, January 6th, 2012

There’s a new “hero of the motherland” in Russia this week. Her name is Lana Sator. She used an old tunnel entrance to gain access to one of the world’s most important rocket factories.

She took lots of cool pictures over five nightly trips through the tunnels. The Russian government? Not happy about it. She published their letters, too.