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Loans for shares scheme

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222: 738:"he reforms of the 1990s were mainly the work of the advisers brought in under then president Boris Yeltsin. Fearing that the population might soon have a change of heart and turn its back on reform, Yegor Gaidar and Anatoly Chubais, the chief Russian architects of the process, decided to accelerate it, selling off state resources and enterprises at little or no charge. Not long into the process, ownership of some of Russia's most valuable resources was auctioned off by oligarch-owned banks under a scheme called "Loans for Shares." Although they were supposedly acting on behalf of the state, the bank auctioneers rigged the process-and in almost every case ended up as the successful bidders. This was how Khodorkovsky got a 78 percent share of ownership in Yukos, worth about $ 5 billion, for a mere $ 310 million, and how Boris Berezovsky got Sibneft, another oil giant, worth $ 3 billion, for about $ 100 million. he government was generally unable to exercise much control. Since the state was very weak, these "new Russians" paid little or no taxes on their purchases." 490: 497: 36: 98: 629:. However, that required them to push out entrenched managers with communist allegiances. This had already become an immensely more cumbersome task once the communists took control of Russia's legislature in the 1995 elections and would be made excruciatingly challenging if the communists were to take control of Russia's executive government. Consequentially, in order for the companies to turn a profit, investors felt that the Communists would need to lose the election. The auctions were 482: 772:
revert towards a Communist resurgence if progress was not maintained, and that in light of these concerns, the long term political goals of democratization and asset distribution from state hands to private ownership might have been deemed more important than possible short term gains from the asset sales: "f that meant undervaluing State assets then so be it".
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and lacked competition, being largely controlled by favored insiders with political connections or used for the benefit of the commercial banks themselves. As neither the loans nor the leased enterprises were returned in time, this effectively became a form of selling, or privatizing, state assets at
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The scheme was structured in a manner that made Yeltsin's victory a strong interest of the investors involved. The two-stage program was structured so that the loans would be allocated before the election, but the auction of the shares could only take place after the election, making it of financial
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A "less cynical" interpretation was proposed by Professor of political science and international studies, Russell Bova, who offered as an alternative, that Chubais may have been motivated by concerns that privatization would fail, that in the face of mid-1990s economic difficulty, the country might
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On August 31, 1995, Yeltsin held an initial meeting attended by ten Russian business moguls about banking issues. In his remarks, Yeltsin made comments about his belief that the banks should have a political role. "Russian bankers take part in the country’s political life. … The banks, like all of
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in Russia and contributing to political instability. In the medium term, this scheme impeded Russian growth; the oligarchs, realizing that their purchases could be seen as fraudulent by future governments, attempted to strip assets from the government enterprises rather than build them up.
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The loans-for-shares auctions in November–December 1995 allowed the more conspicuous of "the oligarchs", as they were now known, to reposition as captains of industry. Initially dreamt up by Vladimir Potanin of Oneximbank, this privatization scheme was backed by Chubais but also by Kremlin
758:"Much of the second wave of privatization that did take place—in particular, the "loans-for-shares" scheme, in which major Russian banks obtained shares in firms with strong potential as collateral for loans to the state—turned into a fraudulent shambles, which drew criticism from many" 569: 110: 293: 288: 142:, is a useful starting point for translations, but translators must revise errors as necessary and confirm that the translation is accurate, rather than simply copy-pasting machine-translated text into the English Knowledge. 625:
To make companies whose shares were sold by the government profitable, the new investors sought to restructure them and install a western-style management approach by eliminating communist
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and lacked competition, being largely controlled by favored insiders with political connections or used for the benefit of the commercial banks themselves.
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Do not translate text that appears unreliable or low-quality. If possible, verify the text with references provided in the foreign-language article.
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and endorsed by Chubais, then a deputy prime minister, whereby some of the largest state industrial assets (including state-owned shares in
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The scheme has been perceived by many as unfair and fraudulent, and it is the loans-for-shares scheme that gave rise to the class of
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and restructuring freshly-sold companies at the same time (in order to outweigh communist sympathizers as one source speculated).
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conservatives like Soskovets, who was the one to get Yeltsin's signature on it. At bargain-basement prices, Potanin picked up
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The scheme implementation ultimately resulted in the emergence of an influential class of enterprise owners, known as
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Content in this edit is translated from the existing Russian Knowledge article at ]; see its history for attribution.
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Russian bankers constituted the majority of those who have provided the funds (see
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State-Building in Russia: The Yeltsin Legacy and the Challenge of the Future
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to the source of your translation. A model attribution edit summary is
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Loans-for-shares auctions held in Russia in November-December 1995
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Privatization in Transition Economies: The Ongoing Story
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to this template: there are already 932 articles in the
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adopted a "loans-for-shares" scheme proposed by banker
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who was linked to USAID program managed by head of the
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Time to Rethink Privatization in Transition Economies?
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concern for them that Yeltsin would win the election.
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NPF «Surgutneftegas» (guarantor — ONEXIM Bank)
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a machine-translated version of the Russian article.
1151:, U.S. aid coordinator for the former Soviet Union. 1834:The Oligarchs: Wealth and Power in the New Russia 1171: 595:company) and even some targeted investments from 1932: 1172:Hockstader, Lee; Hoffman, David (July 7, 1996). 1329:p.35, ed. Gordon B. Smith, quote by Russel Bova 923:MFK Bank (effectively a consortium of MFK and « 608:Harvard Institute for International Development 591:(who made a loan for a small percentage of the 177:accompanying your translation by providing an 122:Click for important translation instructions. 109:expand this article with text translated from 1351: 1271:- ed. Ira W. Lieberman, Daniel J. Kopf, p.112 1174:"Yeltsin Campaign Rose from Tears to Triumph" 526: 189:{{Translated|ru|Залоговые аукционы в России}} 1365: 412:"Circling over Shannon" diplomatic incident 1398:Economic history of the Russian Federation 1358: 1344: 553:state-owned shares in companies through a 533: 519: 1019:Novorossiysk Shipping Company (Novoship) 80:Learn how and when to remove this message 1946:Boris Yeltsin 1996 presidential campaign 1244: 1009:Novorossiysk Shipping Company (Novoship) 998:ZAO «Laguna» (effectively MENATEP Bank) 43:This article includes a list of general 688:and in desperate need of funds for the 27:Russian fraudulent privatization scheme 14: 1933: 1274: 1339: 1304: 1204: 1165: 602:The scheme was primarily overseen by 1240: 1238: 1236: 1234: 1200: 1198: 1196: 835:North-Western River Shipping Company 636: 620: 91: 29: 673: 24: 1910:Jewish Museum and Tolerance Center 1469:1996 Russian presidential election 680:1996 Russian presidential election 49:it lacks sufficient corresponding 25: 1982: 1317:, June 1999, Volume 36, Number 2. 1231: 1193: 662:acquired the oil giants Sidanco, 646:Russia, are learning democracy." 1403:History of Russia (1991–present) 495: 488: 480: 220: 96: 34: 1895:Russia–United Kingdom relations 1393:Dissolution of the Soviet Union 1205:Wedel, Janine R. (1998-05-14). 1105: 1951:Boris Berezovsky (businessman) 1890:Russia–United States relations 1320: 1141: 187:You may also add the template 13: 1: 1474:1998 Russian financial crisis 1158: 765:Center for Global Development 1915:Killing of Vladimir Petukhov 1840:List of Russian billionaires 1464:Petroleum industry in Russia 1286:Council on Foreign Relations 1250:"Loans for Shares Revisited" 1207:"The Harvard Boys Do Russia" 7: 1870:Azerbaijan–Russia relations 1479:Russia under Vladimir Putin 1408:Presidency of Boris Yeltsin 1388:Economy of the Soviet Union 1315:International Monetary Fund 1122: 1091: 1088: 1065: 1062: 1036: 1033: 1015: 1012: 994: 991: 973:ZAO «Strateg» (effectively 969: 966: 944: 941: 919: 916: 890: 887: 869: 866: 841: 838: 818: 815: 690:1996 presidential elections 353:Soskovets campaign strategy 159:will aid in categorization. 10: 1987: 1905:Genesis Philanthropy Group 1112:Russian business oligarchs 1094: 1078: 1068: 1057: 1039: 1028: 1018: 1007: 997: 986: 972: 961: 947: 936: 922: 906: 893: 882: 872: 856: 844: 833: 821: 810: 800: 791: 788: 785: 677: 599:in assistance to Chubais. 557:. The scheme helped with " 134:Machine translation, like 1825: 1692: 1494: 1487: 1373: 1282:"Putin and the Oligarchs" 963:Murmansk Shipping Company 610:(H.I.I.D). at the time. 584: 393:Constitutional conference 111:the corresponding article 1885:Russia–Ukraine relations 1569:Viatcheslav Moshe Kantor 1134: 563:1996 reelection campaign 388:1st Chernomyrdin Cabinet 229:This article is part of 1941:Privatization in Russia 1880:Israel–Russia relations 1875:Cyprus–Russia relations 1413:Loans for shares scheme 1367:Privatization in Russia 1129:Privatization in Russia 948:MFK Bank (effectively « 684:In 1995, facing severe 555:loans for shares scheme 474:Death and state funeral 198:For more guidance, see 64:more precise citations. 760: 740: 294:27th Central Committee 1564:Konstantin Kagalovsky 1042:Oil Financial Company 756: 736: 656:Mikhail Khodorkovskii 200:Knowledge:Translation 171:copyright attribution 1971:Corruption in Russia 1956:Mikhail Khodorkovsky 1855:Liberalism in Russia 1619:Mikhael Mirilashvili 1584:Mikhail Khodorkovsky 1046:Capital Savings Bank 1044:» (guarantor — 692:, the government of 549:'s government began 464:Presidential Library 1850:Ukrainian oligarchs 1684:Vladimir Vinogradov 1659:Alexander Smolensky 1179:The Washington Post 1149:Richard Morningstar 950:Renaissance Capital 545:Beginning in 1995, 459:Presidential Center 446:International trips 408:International trips 1599:Iskander Makhmudov 1554:Mikhail Gutseriyev 1436:Goskomimushchestvo 1248:(September 2010). 570:Letter of thirteen 179:interlanguage link 1966:Mikhail Prokhorov 1928: 1927: 1821: 1820: 1813:Access Industries 1778:Novolipetsk Steel 1679:Viktor Vekselberg 1669:Gennady Timchenko 1649:Mikhail Prokhorov 1589:Alexander Knaster 1549:Vladimir Gusinsky 1504:Alexander Abramov 1442:Banking in Russia 1103: 1102: 1075:December 28, 1995 1054:December 28, 1995 1025:December 28, 1995 1004:December 11, 1995 938:Novolipetsk Steel 853:November 17, 1995 830:November 17, 1995 807:November 17, 1995 733:very low prices. 722:Novolipetsk Steel 660:Boris Berezovskii 637:Investors lock in 621:Enterprises lease 615:Russian oligarchs 543: 542: 246: 245: 211: 210: 123: 119: 90: 89: 82: 16:(Redirected from 1978: 1961:Vladimir Potanin 1793:Rossiysky Kredit 1654:Arkady Rotenberg 1644:Vladimir Potanin 1624:Vadim Moshkovich 1614:Leonid Mikhelson 1594:Alexey Kuzmichev 1574:Suleyman Kerimov 1524:Boris Berezovsky 1509:Roman Abramovich 1492: 1491: 1459:Energy in Russia 1447:Semibankirschina 1429:Finance Minister 1360: 1353: 1346: 1337: 1336: 1330: 1324: 1318: 1308: 1302: 1301: 1299: 1297: 1288:. 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Boris Yeltsin
Early life
Presidency
Yeltsinism
CPSU membership
26th
27th Politburo
26th
27th Central Committee
28th Congress
Elections
1991

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