As Oligarchs Lose Billions, Kremlin Steps In

Russia bails out first businessman, but more trouble looms
By Jason Farago,  Newser Staff
Posted Oct 29, 2008 7:11 AM CDT
Alfa Group head Mikhail Fridman, right, leaves a press conference in Moscow, Monday, June 16, 2008. Fridman is partaking in a $50 billion bailout set up by a Russian state bank.   (AP Photo/Alexander Zemlianichenko)
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(Newser) – The Kremlin is allowing an individual businessman to tap into a $50 billion rescue fund, reports the Wall Street Journal, signaling a shake-up of the relationship between the Russian government and the country's oligarchs. Mikhail Fridman, whose creditors declared him in default on a $2 billion loan from Deutsche Bank, got the bailout from a state bank controlled by Vladimir Putin—but other capitalists might not be so lucky.

Moscow insiders say the government is seeking to keep important assets under Russian control, rather than let them pass to foreign creditors. But the billions in debt that the oligarchs racked up makes that a tall order. A critical test comes this week when Oleg Deripaska, often called Russia's richest man, faces a deadline on a loan secured by a 25% stake in a Russian metals giants; if he defaults, it would go to American and British banks.