The cast list of The Corfu Connection reads like something out of an Agatha Christie novel

By Richard Little John
Last updated at 12:50 AM on 24th October 2008

The cast list of The Corfu Connection reads like something out of an Agatha Christie novel. Grand panjandrums, Russian oligarchs, media moguls, upper-class twits and exotic same-sex lovers are the stuff of fiction. The only missing ingredient is Hercule Poirot - which is a pity, since it would take the great detective himself to unravel this unsavoury melange. You can just imagine the scene as he calls all the players together into the drawing room of that multi-million dollar Russian yacht...

The Mafia paradise that holds secret to tycoons' alliance

By Richard Pendlebury and Neil Barnett
Last updated at 1:00 AM on 24th October 2008

Springtime in Brussels and a familiar figure is wreathed in smiles as he announces his latest diplomatic masterstroke.
After three years of talks Peter Mandelson, the EU Trade Commissoner, has secured a bilateral agreement with the tiny Adriatic nation of Montenegro. 'Today's signature is an important milestone,' he cooed. Montenegro's progress towards becoming a reliable world trading partner had been 'remarkable'
'Future Monaco': The port of Tivat in Montenegro is going to be transformed into the 'Monaco of the Adriatic' and has a tight circle of wealthy backers
Even so, one imagines that Montenegrin trade prospects rarely dominate small talk at the world's most glamorous restaurants. But they might well have done so at the Moscow dinner table we know Mandelson to have shared with his good friend, Oleg Deripaska, only a few weeks before the Brussels' announcement in April.
Or, indeed, on any of the other occasions when the commissioner has broken bread with the Russian and their mutual friend - and Deripaska's business partner and adviser - the British financier, Nat Rothschild.
Why? Because Deripaska, Russia's wealthiest man, is also the single largest private employer of Montenegro's 680,000 population, responsible for half of the nation's legitimate economic output.
Rothschild - who this week caused a political firestorm by accusing Geroge Osborne, the Tory Shadow Chancellor, of soliciting a £50,000 donation from Deripaska - also has a stake in one of the Russian's projects in Montenegro, as well as other heavy business links with him.
Tycoon alliance? Nat Rothschild (left) has a stake in one of Oleg Deripaska's projects in Montenegro
Indeed, this unholy alliance may very well be the key to understanding Rothschild's astonishing betrayal of his old university chum, Mr Osborne.
BUT why has a tiny state like Montenegro assumed such importance to Deripaska and his business partners? It is no secret that the country has a significant and well-established black economy. As one Balkan business analyst said: 'It is the one country in the region that isn't just bedevilled by corruption, it's a kleptocracy.'
Montenegro, which broke from a federal union with Serbia two years ago, has been governed by prime minister Milo Djukanovic since 1991.

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Mandelson to face questions over links to Russian tycoon and plans for a £5bn super-rich haven in Montenegro
The cast list of The Corfu Connection reads like something out of an Agatha Christie novel
Djukanovic is an interesting character. He had long been ' tolerated' by the West for opposing the regime of late Serbian tryrant Slobodan Milosevic. But allegations of links to hugely profitable, mafia-run tobacco smuggling between his country and the EU have seen him repeatedly investigated by Italian prosecutors.
If Djukanovic is the political leviathan of this tiny state, then his friend Deripaska, similarly tainted by alleged mafia-links, is his economic equivalent.
It is said that Djukanovic personally handled the controversial sale of Montenegro's most important state-owned industrial asset - the KAP aluminium firm - to a subsdidiary of Rusal, Deripaska's aluminium concern.
Rusal is the world's largest producer of the metal and benefited greatly from two EU aluminium import tariff cuts which were made while friend Mandelson was trade commissioner.
Some say that KAP was considerably underpriced. There are whispers of kickbacks. Others resent the way in which Russia has taken such a huge stake in their country.
Since 2001 Russia has commanded first place in the countries investing in Montenegro.
Investor: Lord Rothschild, father of Nat, is also on board for the Porto Montenegro marina development near the town of Tivat
Tourism from Russia has rocketed, too. But the main source of investment in recent times has been in real estate, mostly along the gorgeous Adriatic coast.
There are those cynics who say that much of the Russian property investment is a money laundering operation by criminal elements from the Russian Federation.
Of course, there is no suggestion that this might explain Mr Deripaska's interests in the region.
But there is undoubtedly one project for which he has particularly-high hopes - or at least had before the credit crunch shrank his £14billion fortune. That is the extraordinary Porto Montenegro marina development near the town of Tivat.
It is often said of Monaco that it's 'a sunny place for shady people'. Given the identities of some of its recent investors, much the same could be said of the beautiful Montenegran coast.
But at Tivat they really are going to build what has been billed 'the Monaco of the Adriatic'. A Four Seasons hotel is part of the multi-billion-pound plan, as well as hundreds of luxury appartments and berthing for 800 boats - 150 of them superyachts.
Once again prime minister Djukanovic was personally involved in the negotiations, which saw an abandoned ex-Yugoslav naval base and dockyard sold to foreign investors in early 2006. Once again there were allegations of underpricing.
The yard was bought by a firm called TriGranit, Hungary's biggest property developer. It is co-owned by a Hungarian-born Canadian billionaire named Peter Munk and Nat Rothschild.
Munk, 80, is owner of Barrick Gold, the world's largest gold producing company. He was advised to invest in Montenegro by the Rothschild family, with whom he has long enjoyed business ties.
Then he made a call to Deripaska. 'Oleg made the first phone call to the prime minister (Djukanovic) and opened the door for me,' Mr Munk explained.
But Munk and Rothschild were not alone in the project. Also on board are Nat's father Lord Rothschild and two other business big names. One, Bernard Arnault, the chairman of luxury goods conglomerate LVMH, adds lustre.
The other - Deripaska himself - adds a blizzard of cash and a warship-sized yacht, the 283ft Queen K, which has been the subject of recent notoriety as a honeypot for Britain's political elite.
Work on the Montenegrin project is already well under way. Giant palm trees have been brought in from Spain, the pier fenders are lined with African teak and fountains made from Venezuelan stone tinkle prettily.
Porto Montenegro should open for business next year. PM Djukanovic hopes that he can persuade the EU to accept Montenegro as a member by 2012, which should help the Tivat development considerably.
Certainly, its tight circle of wealthy backers have much at stake. Munk sits on the international advisory board of Rusal, Deripska's metals giant. Nat Rothschild (whose JNR firm advises Deripaska) sits on the equivalent board at Barrick Gold.
In return, Munk has reportedly invested heavily in Nat Rothschild's New Yorkbased Atticus hedge fund.
How very cosy. But this nexus of tens of millions of pounds of wealth has been much reduced in recent weeks and is still precarious, thanks to the world financial downturn. Fear stalks the oligarch mansions.
Even Deripaska is reportedly struggling to meet debt repayments on a part of his metals empire and will have to liquidate assets.
In this fraught enviroment, George Osborne - the Shadow Chancellor - made a stupid misjudgment.
He chose to score a cheap political point by leaking embarrassing remarks about Peter Mandelson - the same Commisioner Mandelson who had so enthusiastically praised Montenegrin economic progress and had shown a liking for tariff cuts.
And by so doing, Osborne also unwittingly shone an unwelcome light on Mr Rothschild's most important business partner, Mr Deripaska.
So Rothschild went on the attack. When business is this stormy, you have to choose your place of shelter. And Rothschild's was the Porto Montenegro connection.

New twist as tycoon loses $6bn oil firm to Russian in Osborne donor row

Keith Dovkants 22.10.08
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A TYCOON who clashed with Lord Mandelson's billionaire friend Oleg Deripaska has sought sanctuary in Britain.
The Standard reveals that the Home Office, advised by the security services, decided that businessman Mikhail Gutseriev would be at risk if he was made to return home to Russia.
It is a surprise twist to the Corfu affair which has left shadow chancellor George Osborne fighting for his political life over his meetings with Mr Deripaska. Mr Gutseriev, who is staying at a secret location in London, says he was forced to sell his oil firm, valued at $6 billion, to Mr Deripaska after he was hounded by the Kremlin.
The revelation comes at a time when Mr Deripaska is being seen as toxic for both Labour and the Conservatives.
His friendship with Business Secretary Lord Mandelson has been overshadowed by a claim that during a gathering on his £80 million yacht anchored off Corfu this summer, Mr Osborne discussed a £50,000 donation to the Tories.
Mr Osborne's denials have been contradicted by his Corfu host and old friend Nat Rothschild, also a friend and business partner of Mr Deripaska. Today, another holiday guest supported Mr Rothschild's version.
The Standard's investigation reveals the depth of controversy which has embroiled Mr Deripaska.
The Gutseriev affair was known about in business circles in London and Moscow and although Mr Osborne may not have been aware of the case, Lord Mandelson, as a former EU trade almost certainly did. The Standard's inquiries show that Mr Gutseriev tried desperately to hang on to his company, Russneft, as the Russian authorities squeezed him.
In the end, he decided to flee Moscow after the public prosecutor brought serious charges against him. He says the charges were trumped up.
Weeks later his son Chingis, educated at Harrow, was killed in a mysterious car crash. Mr Gutseriev, 50, is believed to be moving between a number of addresses in Britain and is presently uncontactable.
Sources said that Mr Gutseriev has not sought asylum, but that he has been given leave to remain as an independent businessmen under immigration rules.
The Gutseriev affair could prove especially embarrassing for the Government. Gordon Brown may not enjoy having one Cabinet member, Lord Mandelson, defending his friendship with Mr Deripaska, while the department of another, Home Secretary Jacqui Smith, has moved to safeguard a man who claims he is a casualty of activities by the Kremlin from which Mr Deripaska is likely to benefit.
The Russneft case sent shockwaves through Moscow's business community and triggered alarm among British companies in Russia, including BP.
Their concern was that the Kremlin was apparently using its muscle against a prosperous company, a repeat of what happened when oil giant Yukos was seized by the Russian government and its owner, Mikhail Khodorkovsky, was sent to a Siberian jail on what his supporters maintain were phoney charges.
Mr Gutseriev's friends say the fraud and money laundering charges against him were also falsely manufactured by the Kremlin to put pressure on him to sell his business at a cut-price rate.
When he continued to resist selling, the Russian tax authorities demanded $800 million in what they claimed was unpaid tax.
Before he left Russia in July last year, Mr Gutseriev complained on his company website that he had been "bullied" into selling. He claimed Russian government officials wanted him to sell to a business rival.
"They made me an offer to leave the oil business," he wrote. "I refused. Then, to make me more amenable, they tightened the screws on the company with unprecedented persecution."
Mr Gutseriev, a Muslim born in the Caucasus, had been a Kremlin insider and he knew what to expect. But his friends say he was a man of honesty who, unlike other oil oligarchs, had built his company up through straightforward takeovers. He used to boast that he was untainted by controversy over how he acquired his wealth.
He was born in Kazakhstan into a family reduced to humble circumstances by Stalin's purges. Mr Gutseriev was educated in Grozny and took menial jobs to pay for his university studies. He rose through the ranks of officialdom during the Soviet era then, in the late 1980s, founded one of Russia's first co-operative banks.
He was elected to the Duma and, with the backing of shareholders, took over an oil company in 2000.
Two years later, he started Russneft. The company grew and Mr Gutseriev was unwilling to part with it.
A few weeks after he left the Moscow prosecutor issued a warrant for his arrest and alerted Interpol.
Mr Deripaska was cleared to complete his takeover of Russneft last week when a Russian court lifted a freezing order on its assets.
According to observers in Moscow, the acquisition of a company with solid resources like Russneft comes not a moment too soon for Mr Deripaska. Although even recently he was reckoned to be Russia's richest man with a fortune of around $28 billion, his interests have been vastly depleted in the financial turmoil of the past few months.
At the end of this month he has to find £1.14 billion to repay loans he arranged to buy a stake in a big Russian nickel concern, Norilsk. His company, Rusal, is already in breach of "collateral covenants" on the loan, it was reported this week. Russian stocks have plunged by more than 70 per cent since May.
Mr Deripaska's spokesman declined to comment.