Joint venture

The role of experienced ship financier John Sawyer in trying to promote a joint venture between Novorossisyk Shipping (Novoship) and Russian businessman Yuri Nikitin has been under scrutiny in the Sovcomflot corruption trial this afternoon.

Sawyer with a 30 year banking background that included doing good work for Norwegian tanker king, John Fredriksen, was recruited as a financial advisor by Novoship president Tagir Izmaylov in 2002.

The two were brought together by Nikitin and had an initial meeting at London’s Ritz hotel to discuss how Sawyer could advise on financing a Novoship fleet renewal programme and refinancing of debt.

Tagir Izmaylov catches up with the news.

But documents produced in court showed communications between Andrew Wettern, a Watson, Farley & Williams lawyer, Sawyer, Yuri Privalov, the self confessed corrupt head of Sovcomflot’s London based subsidiary Fiona Maritime, and Yuri at a kship e-mail address. It is admitted that Yuri with the kship address is Nikitin.

These messages related to the creation of a joint venture into which Novoship would put South Korean aframax newbuildings with oil trader Nikitin contributing expertise on the Russian crude market as well as investment.

Wettern suggested that “colour and flavour” about the opportunities provided by oil trading following the collapse of the Soviet Union and the business success of Nikitin and his businesses should be put together and according to Sovcomflot’s barrister Andrew Popplewell discussed with Sawyer how to build up a story of arms length negotiations with Nikitin that Izmaylov could present to the Novoship board.

“John is well informed about the absolute need for confidentiality in relation to Nikitin’s involvement,” Wettern wrote in one of these messages.

(Click here to read earlier exclusive reports from the Sovcomflot corruption trial as well as the interlocutory judgments in full.)

Wettern said in a June 2006 letter than he had explained to Yuri the “idea of the ball going backwards and forwards across the net a few times before the joint venture is finally agreed.”

And it was recommended that Nikitin’s first offer should not be completely unrealistic, but a first serve that justified Izmaylov continuing discussions.

But Izmaylov was adamant that he had never discussed a joint venture, sale of the aframaxes or bareboat charters with Nikitin in other than the most general and vague of ways.

Izmaylov admitted going with his partner to Crete and on a cross country skiing vacation in St Moritz organised by Nikitin although he insisted in both cases they were not free holidays and he had paid about $5,000 to the businessman.

But Popplewell repeatedly challenged Izmaylov that they were really a reward for Novoship favouring Nikitin’s companies, to encourage future assistance and to buy silence about past transactions.

“Your suggestion is wrong. There were no improper dealings with Nikitin,” insisted Izmaylov.

The trial continues.

Printable version Newsletter sign up