The Long, Long Shadow Cast by the Yukos Legacy

mechel_logo.jpgThe legacy of the Kremlin’s systematic dismemberment of the Yukos oil company via selective legalism, regulatory harassment, and farcical judicial proceedings just doesn’t seem to be fading away into that dark void of Russian memory. Instead, we are seeing the Y-word pop up again and again, from Royal Dutch Shell to Russneft to TNK-BP. The latest victim of a $5 billion tongue lashing from Vladimir Putin is the coal and steel giant Mechel, and as Vidya Ram of Forbes points out, there are serious fears that this company could suffer a similar fate as Mikhail Khodorkovsky’s once illustrious business group.

Still, there was something about Putin’s remarks that suggested Mechel’s troubles amounted to far more than an antitrust investigation. “The really striking thing was Putin’s language, and the use of crude sarcasm, from which one can glean that there is more to the story,” said Philip Hanson, an associate fellow at the foreign affairs think tank Chatham House. Zyuzin had been invited to a meeting of metal producers in Nizhny Novgorod on Thursday, but had not turned up, claiming to be sick. At the meeting, Putin urged Zyuzin to, “get better soon… otherwise, we will have to send him a doctor to get rid of these problems.” “The heavy language is reminiscent of the kind of crude treatment of a business, that launched the Yukos case,” said Hanson.