Earlier this year, the Yukos chapter 11 case in Houston highlighted the fact that governmental persecution is a risk of doing business in the still emerging capitalist markets of Russia. An incident yesterday underscored another risk of doing business in Russia that is difficult to hedge effectively — i.e., that extra-judicial means are still the approach favored by many in resolving business disputes in Russia.
Anatoly Chubais, the CEO of Russia’s state electric company and one of Russia’s most prominent pro-Western politicians, survived a brazen assassination attempt in Moscow yesterday as the attackers detonated a roadside bomb and then sprayed Mr. Chubais’s armored car with machine-gun fire. A retired Russian army colonel and explosives specialist was arrested a few hours after the attack, which was at least the third on Mr. Chubais’ life over the years.
Inasmuch as he was the architect of the rigged privatizations during the 1990s that transferred the country’s business wealth from the state into the hands of a few Kremlin-connected cronies, Mr. Chubais certainly has his share of enemies. More recently, he has been pushing a plan to overhaul Russia’s deteriorating power grid and to restructure the state electric company. Mr. Chubais also has a somewhat testy relationship with Russian president Vladimir Putin after Chubais sided with a liberal party against Mr. Putin in the most recent parliamentary elections in Russia.
Although the number of business contract murders in Russia reportedly have declined in recent years from the “cowboy era” of the period after Communism failed, the killings still occur and the Russian government’s response tends to differ based on the state view of the moment toward the victim. That does not evoke warm and fuzzy feelings for foreign investors who are considering committing capital in any of Russia’s numerous undercapitalized industries or markets.