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Deripaska’s Basic Element Gets Slapped with Back Taxes

Tonight the Moscow Times is reporting that Oleg Deripaska’s company Basic Element is being slapped with a $4 million claim in back taxes for allegedly using “a complex promissory-note scheme with the aid of fly-by-night companies to understate its profit.” As Yevgeny Volk tells the paper, “No [Russian] tax case is purely a tax case — there is always a political background,” and others are speculating that Deripaska has been politically damaged by his confrontation with Igor Sechin, as the latter was pushing for Rosneft to assume control of Mikheil Gutseriyev’s oil company Russneft – the most recent private property to suffer the Yukos experience. After the news broke recently that Deripaska has met with U.S. presidential hopeful Sen. John McCain, a fierce Russia critic, it is also possible that there are other elements in the Kremlin that are not so pleased with him. Canadian investors in Magna should be watching these events very closely.