Russian Economy Minister Ulyukayev detained over bribe allegation

November 15, 2016 1:34 AM EST

Russian Economy Minister Alexei Ulyukayev speaks during an interview with Reuters in Moscow, Russia, November 1, 2016. Picture taken November 1, 2016. REUTERS/Sergei Karpukhin


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By Svetlana Reiter and Vladimir Soldatkin

MOSCOW (Reuters) - Russian law enforcement officials detained Economy Minister Alexei Ulyukayev on corruption charges linked to a $5 billion acquisition by state oil giant Rosneft, in a case that could lay bare the faultlines in President Vladimir Putin's inner circle.

Ulyukayev, a 60-year-old technocrat whose ministry has been overseeing a sell-off of state assets, is the highest-ranking Russian official to be arrested while in office since the collapse of the Soviet Union in 1991.

The Investigative Committee, the state agency that investigates major crimes, said Ulyukayev received a $2 billion bribe in exchange for signing off on Rosneft's purchase of a stake in mid-sized oil producer Bashneft.

"The minister is detained," the Committee said in a statement. "In the near future investigators plan to bring charges against Alexei Ulyukayev."

Kremlin spokesman Dmitry Peskov told reporters that Putin had been informed about the case when the investigation was launched. "These are serious allegations," Peskov said. "Only a court can deliver a verdict."

He said he did not know whether the detention meant that Rosneft's purchase of Bashneft could be reviewed.

Rosneft's acquisition of Bashneft was the focus of a major turf war between rival Kremlin camps, sources close to the deal and in the government have told Reuters.

Rosneft's chief Igor Sechin, who is also one of Russia's most powerful men and a close Putin lieutenant, lobbied hard for the green light to buy Bashneft.

But the deal was fiercely opposed by economic liberals in the government, some with ties to Prime Minister Dmitry Medvedev, who believed Bashneft should go to private investors.

Ulyukayev initially opposed Rosneft buying Bashneft, one of the most lucrative state assets to be privatized in years, but eventually signed off on the deal.

Medvedev and Putin spoke about the detention, according to Medvedev's office. "The prime minister believes that the most painstaking investigation of this case is required," his office said in a statement.

A Rosneft spokesman, Mikhail Leontyev, was quoted as saying by TASS news agency that the company saw no risk to the Bashneft deal stemming from Ulyukayev's arrest. "The deal is absolutely above board," he said.

The minister has been in his job since June 2013. He is not part of Putin's inner circle, which is dominated by people who favor a commanding role for the state in the economy, but neither is he a part of the rival camp of economic liberals.

Ulyukayev is close to Andrei Kostin, the influential head of Russia's second-biggest lender VTB. The minister is the head of state-owned VTB's supervisory board.

(Additional reporting by Katya Golubkova and Maria Tsvetkova; Writing by Christian Lowe; Editing by Alexander Winning)



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