uk taxpayers finance russian plutocrat

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http://www.dailymail.co.uk/news/article-1120772/Browns-fury-Royal-Bank-Scotlands-2-5bn-loan-Russian-oligarch.html#

Brown's fury at Royal Bank of Scotland's £2.5bn loan to Russian oligarch

By Simon Walters and Glen Olwen

10:58 PM on 18th January 2009

Former Royal Bank of Scotland boss Sir Fred Goodwin, branded ‘the world’s worst banker’, was blamed last night for forcing taxpayers to write off a £2.5billion loan to a Russian oligarch.
The money was lent by the bank, which is now controlled by the Government, to Leonid Blavatnik, 51, a London-based billionaire who owns chemical giant LyondellBasell, which is on the verge of collapse.
Treasury officials examining RBS’s books were horrified to learn that they included the sum to Mr Blavatnik, which has now been written off.
Last year Leonid Blavatnik was Britain's 11th richest person, with £3.9billion
A senior official said the loan was more evidence that the recklessness of banks was a major factor in the credit crunch.

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‘These bankers doled out ridiculously large sums to foreign investors to finance deals which had nothing to do with Britain,’ said the official.
‘It is only now that we are going through the banks’ accounts that we can see the true scale of their irresponsibility. Some of it is every bit as crazy as the American sub-prime loans scandal.’
The money was lent to Mr Blavatnik by Dutch bank ABN Amro, which was later taken over by RBS when Sir Fred was chief executive.
He was forced to quit in October after claims that his reckless expansion strategy was responsible for bringing RBS to its knees.
He was initially dubbed ‘Fred the Shred’ by City financiers because of his reputation for arrogance and ruthless savings.
But he was called ‘the world’s worst banker’ when the credit crunch started to bite.
RBS found it was hopelessly over-extended and forced to look to the Government for a bailout.
When Sir Fred resigned on October 13, RBS shares stood at 65p – down from 442p when he became chief executive officer.
He quadrupled the bank’s assets during his seven years in charge with purchases such as NatWest and ABN Amro – but was later accused of paying far too much for some of his deals.
He was awarded a knighthood in 2004 and rewarded with an £8million cash and shares bonus pot in 2006.
Mr Blavatnik is a Russian-born Jew who emigrated to America with his family in 1978.
He now splits his time between New York and his £41million home in Kensington, West London.
Earlier this month, it was announced that one of his companies, LyondellBasell, was teetering on the edge of bankruptcy, with £18billion debts.
The collapse in demand for chemicals over the past three months has left the company struggling to service loans from banks like Merrill Lynch, Goldman Sachs, ABN Amro and UBS.
The most recent rich list – compiled early last year, before the worst effects of the economic slump – rated Mr Blavatnik Britain’s 11th richest person, with a £3.9billion fortune.
Like his fellow oligarchs, he made his money in the free-for-all of post-communist Russia.
Access Industries, the US-based group he formed in 1986, holds large debt-fuelled investments in oil, coal, chemicals, telecommunications and real estate.
In 2003, he sold a 50 per cent stake in Russian oil company TNK to British Petroleum and is on the board of directors of the resulting company, TNK-BP.
Mr Blavatnik’s spokesman refused to comment on the £2.5billion RBS loan.
He said: ‘LyondellBasell is working with its lenders, including RBS, to improve the company’s liquidity and financial position. Access, as LyondellBasell’s owner, believes the restructuring will allow the company to reposition itself for long-term success.’