* Oligarchs trade accusations in High Court case
* Cherney claims stake in aluminium producer RUSAL
* Deripaska denies murder allegations raised in case
* Cherney denies involvement in organised crime
By Clara Ferreira-Marques and Kirstin Ridley
LONDON, July 11 (Reuters) - Billionaire Oleg Deripaska was successful and “established” by the time he met rival oligarch Michael Cherney in 1994 at 26, his lawyers told a London court, arguing the magnate would not have needed his rival’s support to build his aluminium empire.
Lawyers delved into the early career of one of Russia’s richest men on Thursday, in a case that has shone a spotlight on the often lawless 1990s after the collapse of the Soviet Union, as well-connected Russians jostled for privatised state assets and organised crime and “protection” groups became influential.
Deripaska is fighting a claim from Cherney, an Israeli-based billionaire who says the two were partners and alleges he is owed a 13.2 percent stake in the now-listed RUSAL, the world’s largest aluminium producer, of which Deripaska controls the largest stake.
Deripaska accuses his opponent of links to criminal gangs but, with this week’s opening statements drawing to a close before the case is adjourned until September, he is facing allegations made to prosecutors abroad that he himself was involved in bribery and murder.
Deripaska, who is expected to call compatriot and Chelsea football club owner Roman Abramovich as one of his witnesses in the latest High Court battle between billionaires from Russia and the former Soviet Union, denies he and Cherney were allies.
He says he was forced into a protection racket - or “krysha” in Russian, from the word for “roof” - orchestrated by Cherney and supported by some of the country’s most powerful criminal gangs in the mid-1990s after receiving threats.
In opening statements to the court from the defence on Wednesday, his legal team argued Deripaska had no need for the contacts and financing that Cherney says he provided to build an aluminium empire. Cherney had, Deripaska’s side alleges, in fact fled Russia in late 1993 or early 1994 to escape a fraud probe.
Deripaska’s legal team said the entrepreneur used profits from his trading business, established as far back as 1991 when he was a still a physics student, to invest in assets including Sayansk Aluminium Plant (SaAZ), one of Russia’s largest.
“The idea that he was some sort of struggling student, with summer jobs, is just wrong,” lawyer Thomas Beazley, acting for Deripaska, told the court. “(Deripaska) was in fact an established and successful businessman at the time of their first meeting, albeit young.”
Cherney says he and Deripaska met at a London Metals Exchange reception in October 1993. Like most details in this case, even that is disputed. Deripaska says they met months later, at a dinner in May 1994.
Deripaska explains his attendance at social events related to Cherney as one of the rituals of krysha, where victims are expected to socialise and attend meetings, celebrate events and give presents in a public display of loyalty to give the krysha “a veneer of commercial and social respectability”.
Deripaska also denies Cherney provided financing or support. The aluminium tycoon’s lawyer argued that on Cherney’s accounts he entered into the partnership in October 1993 but says no payment was made until well into the following year.
“Mr Deripaska has gone on buying shares from October 1993, increasing his stake, but Mr Cherney is not putting in any money. Yet the point of the partnership, on Mr Cherney’s case, is he is the big financier,” Beazley said.
BRIBERY, DEATH THREATS AND MURDER
The London case, which follows the legal claim first made by Cherney in 2006, has brought to life the often violent years of privatisation in post-Soviet Russia, when protection rackets - criminal or otherwise - were rife and those venturing into business were often threatened, and on evidence provided to the court, beaten in public and even assassinated.
One criminal gang at the centre of the court case is Ismailovskaya, alleged to be run by Anton Malevsky, a man Deripaska says was used by Cherney to extort money before the Afghan war veteran died in a parachuting accident in 2001.
Ismailovskaya is named after a district in northeastern Moscow, where it was renowned as a gang of thugs and thieves before it honed its skills in the post-Soviet era to become one of the most feared criminal gangs that offered “protection”.
But Deripaska himself, who accuses Cherney of links with Ismailovskaya and other gangs, is facing allegations he was involved in bribery, threats and even murder as he built his fortune.
He denies the allegation, made by one of his own witnesses in separate proceedings to prosecutors in Israel, the United States and Russia.
Djalol Khaidarov has alleged that Deripaska ordered the murder of businessman Vadim Yafyasov in 1995 and bribed a local governor in the Kemerovo region to secure the takeover of a factory, according to Cherney’s court documents.
A spokesperson for Deripaska denied the allegation: “Criminal gangs were operating very widely in post-Soviet Russia. Mr Deripaska was subjected to a krysha by Mr Cherney and Mr Malevsky and the organised crime gangs they represented, which included Izmailovskaya.”
Cherney denies links to organised crime and his legal team say its client has never been convicted.
He will be giving evidence by video-link from his home in Israel because of an outstanding arrest warrant after a Spanish investigation into money laundering. Deripaska has been questioned in connection with the same probe.