Friday 2 December 2016

Kremlin power struggle fears as minister arrested

Roland Oliphant in Moscow

Published 16/11/2016 | 02:30

Russian Economy Minister Alexei Ulyukayev is escorted to court in Moscow. Photo: Reuters/Maxim Zmeyev
Russian Economy Minister Alexei Ulyukayev is escorted to court in Moscow. Photo: Reuters/Maxim Zmeyev

A Russian minister has been charged with corruption, with his arrest sending shockwaves through the country’s elite, sparking speculation of a power struggle inside the Kremlin.

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Alexei Ulyukayev, the Minister of Economic Development, denies taking a $2m (€1.9m) bribe to facilitate the controversial sale of an oil company involving a key ally of Vladimir Putin.

Mr Ulyukayev called his arrest a “provocation” when he appeared in Moscow’s Basmanny district court yesterday.

“I am determined to cooperate with the investigation as much

as possible.

“I request more lenient measures of restraint,” the minister said at a hearing to determine whether or not he should be remanded in custody.

The judge ordered

Mr Ulyukayev be placed under house arrest and that he must wear an electronic tag after officials argued he was a flight risk.

Mr Putin, who spoke by telephone with US president-elect Donald Trump earlier yesterday,  fired Mr Ulyukayev as a minister in a decree published late last night.

Officers from the Investigative Committee, the country’s top detective agency, and the Federal Security Service (FSB), successor to the KGB, swooped on him “in the act” of receiving the bribe money at 2.30am yesterday.

Investigators claim he attempted to extort the bribe from Rosneft, a

state-owned oil company.

It was alleged to be in exchange for backing the company’s bid for the government’s stake in Bashneft, which is a regional oil producer.

Rosneft is controlled by Igor Sechin, a close ally of Vladimir Putin who is widely considered to

be one of the most powerful individuals in

the country.

Mr Ulyukayev is the first serving minister to be arrested since Lavrenty Beria, Stalin’s feared secret police chief, was detained and shot in a power struggle following the dictator’s death in 1953.

His arrest has sparked alarm that a similar power struggle may be unfolding in Mr Putin’s Kremlin.

Mr Ulyukayev, who has served in the government since 2000 and held his current post since 2013, is considered a liberal figure.

He has opposed an increasing state presence in the economy.

He and a number of other figures associated with Dmitry Medvedev, the prime minister and a bitter rival of Mr Sechin, initially opposed Rosneft’s involvement in the Bashneft tender.

They said it was wrong for a state-owned company to take part in a privatisation drive.

The resulting political struggle saw the government suspend the privatisation in August.

Rosneft won the auction for 50.01pc of the company with a $5bn (€4.7bn) bid when the tender was finally held last month.

A spokesman for

Mr Putin said the Russian president had been aware of the case “from the start of the investigative operations”. A spokesman for Mr Medvedev said the prime minister had also been kept abreast of events.

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