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In Russia Economy minister detained over alleged $2M bribe

Ulyukayev's detention has sparked a wave of speculation about whether the case could be linked to an internal power struggle

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Russia's Economy Minister Alexey Ulyukayev, seen during the St. Petersburg International Economic Forum, in 2014 play

Russia's Economy Minister Alexey Ulyukayev, seen during the St. Petersburg International Economic Forum, in 2014

(AFP/File)

Russia's security service has detained Economy Minister Alexei Ulyukayev on suspicion of taking a two-million-dollar bribe over a massive deal involving state-controlled oil giant Rosneft, investigators said Tuesday.

Ulyukayev is the highest ranking official to be detained over suspected corruption since President Vladimir Putin took power in 2000 and vowed to clamp down on endemic graft.

The 60-year-old minister's detention has sparked a wave of speculation about whether the case could be linked to an internal power struggle.

Russia's Investigative Committee, the country's main federal investigative body, said the FSB security service, the successor to the KGB, detained Ulyukayev following an operation.

It alleged in a statement that Ulyukayev received the money on Monday for giving the go-ahead for Rosneft to acquire a majority stake from the state in Russian oil company Bashneft in a $5.2 billion (4.84 billion euro) deal last month.

Russian oil company's Rosneft CEO, Igor Sechin, pictured during a visit to Venezuela, in July 2016 play

Russian oil company's Rosneft CEO, Igor Sechin, pictured during a visit to Venezuela, in July 2016

(AFP/File)

The statement does not say who gave the alleged bribe to Ulyukayev.

The sale of the 50.07 percent stake in Russia's sixth-largest producer came after months of wrangling that has seen Rosneft -- headed by Igor Sechin, a powerful ally of President Vladimir Putin -- face down opposition from some in the government.

Ulyukayev had originally opposed the sale but later endorsed it after Putin said it could help fill state coffers.

"The entire sum -- 329.69 billion rubles -- will go to the Russian budget," Ulyukayev said in a statement after the deal on October 12, adding that the government had received only two bids and the other one had been less than the company's independently assessed value.

The Investigative Committee said Ulyukayev had been detained as part of a probe into large-scale bribe taking, for which he could face a jail term of between eight and 15 years.

It said that it will charge him shortly.

Spokeswoman Svetlana Petrenko told RIA Novosti news agency: "This is about extortion of a bribe from Rosneft representatives accompanied by threats."

"Ulyukayev was caught red-handed as he received a bribe," she said.

She said that "the acquisition of the Bashneft shares was carried out on a legal basis and is not the subject of the criminal investigation."

'Very serious accusation'

Ulyukayev, who has served as head of the ministry of economic development since 2013, was tasked with pulling Russia out of the longest economic crisis since Putin took power 16 years ago, sparked in late 2014 by falling oil prices and Western sanctions over Moscow's actions in Ukraine.

Alexey Ulyukayev has served as head of Russia's ministry of economic development since 2013 play

Alexey Ulyukayev has served as head of Russia's ministry of economic development since 2013

(Belga/AFP/File)

RIA Novosti cited a law enforcement source as saying that Ulyukayev was detained as part of a "sting operation" after investigators received "serious evidence" from "tapping his conversations and the conversations of his associates."

A spokesman for Rosneft told TASS state news agency the company would not comment on the Investigative Committee's actions but that it acquired the Bashneft stake "in accordance with Russian law on the basis of the best commercial offer made to the operating bank."

Kremlin spokesman Dmitry Peskov told Interfax news agency: "This is a very serious accusation that requires very serious proof. In any case only a court can decide."

Peskov later told Russian media that Putin had been informed of the start of the operation that led to Ulyukayev's detention.

Putin's critics insist he has turned a blind eye to widespread corruption as his close allies have amassed vast fortunes during his time in power.

In another recent high-profile corruption case, the acting head of an anti-graft agency at the interior ministry was arrested in September for taking bribes after police found more than $120 million in cash during a raid of his Moscow flat.

In July Investigative Committee officials were detained on suspicion of taking large bribes from a mob boss in return for dropping his case.

Ex-defence minister Anatoly Serdyukov was dismissed in 2012 over a major corruption scandal.

'State capitalism'

Bashneft, an oil producer based in the central city of Ufa, was originally privatised in the early 2000s.

In 2014, a Moscow court ordered the nationalisation of a stake held by billionaire Vladimir Yevtushenkov after he was detained on money laundering charges.

Two months after Bashneft's nationalisation, Yevtushenkov was released.

The decision to let state-controlled Rosneft bid for the stake in Bashneft had been widely criticised, including by many in government who have demanded the country's creaking economy be liberalised.

Leading business daily Vedomosti said ahead of the confirmation of the Bashneft sale that it "confirms that Russia is knowingly building state capitalism and monopolising the economy".

"It's impossible to call the sale of one state company to another state company privatisation," Vedomosti said.

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