Chapter 377 It's time to stop: You've already gotten enough.
By October 1995, Russia's political landscape had taken shape, exhibiting a state of fragmentation with multiple factions vying for power.
The five most influential factions are the liberal reformists, the left-wing forces led by the Communist Party of the Russian Federation, local warlords, red factory directors, and the security forces.
The liberal reformists, as the name suggests, are supporters of Western democracy and liberalism. Russia's First Deputy Prime Minister Chubais and the tycoons surrounding him are typical representatives; they support the president in the Kremlin.
However, this does not mean that the liberal reformists are a monolithic group; contradictions still exist among them.
For example, this time, the one preventing Ivanov from going to the auction was Koch, the acting director of the State Property Management Committee.
He was a staunch subordinate of Chubais and one of the most important implementers of Russia's privatization process.
His reason for refusing was very simple: Russia's auctioning of oil fields and mines does not allow foreigners to participate.
Because these are vital assets, essential to the nation's economic lifeline. Russia's newly formed capital is currently unable to compete with powerful foreign capital.
In order to protect Russia's economic lifeline, the government must step in to prevent adults from entering children's venues.
Ivanov frowned: "There's no problem with the margin we deposited in the bank."
Money, no matter its original source, can become whatever you want it to be once it has passed through several hands.
The financial team that Wang Xiao assembled at the beginning of the year is the one that actually carries out these tasks.
Their work was enough to keep the money clean in Russia's chaotic financial system.
The assistant said with a pained expression, "We explained, but Mr. Koch is stubborn and insists that it does not comply with the auction rules and is foreign capital."
This acting director of the National Management Committee, though only 34 years old, is as stubborn as an 84-year-old, completely impervious to reason.
In Moscow in October, the nights still fall quickly. It was already late, but neither Wang Xiao nor Ivanov could go back to rest at this hour.
Without even discussing it, the two of them directly instructed the driver to go to the State Property Management Committee.
Even with its poor security, Moscow's nights are still brightly lit.
The area in front of Menatep Bank, in particular, was filled with luxury cars. Brokers in fur coats held encrypted satellite phones, talking urgently to people on the other end.
Across the street, Alfa Bank was equally brightly lit, its electronic screens displaying ruble exchange rates and oil futures prices. Private banking services were indeed much better than before; even late at night, the windows remained open, and crowds lined up in the cold wind, busy buying short-term government bonds.
This is Moscow's most profitable investment right now.
The Pushkin Café on Petrovka Street presents a completely different scene.
Through the floor-to-ceiling windows, Ivanov recognized the two bankers sitting inside.
Because there was a traffic light ahead, during the brief pause in the car, Nikolai, whose eyes were like those of a night owl, recognized that the table between the two men was covered with a shareholding structure diagram.
The banker also had bodyguards, who were also from the KGB and were very perceptive. They had already noticed the gazes from outside the window and were staring at them warily.
Ivanov simply waved to them from inside the car window.
He dared not open the window, lest a bullet suddenly burst in and kill him.
The light turned green, and the driver continued driving forward.
Upon reaching the workers' quarters, the bustling atmosphere faded, and the windows of the dilapidated Khrushchev building glowed with a dim candlelight.
I don't know if there's a problem with the electrical system or if the area is experiencing another power outage.
Under the streetlights, next to the graffiti on the wall that read "Chubasi = Thief!", there was a flyer posted—Stop auctioning off the nation's bloodline!
This is likely the work of the Communist Party of the Russian Federation. They are campaigning for the State Duma elections scheduled for December.
A window in the Khrushchev building was open, and a drunken old man poked half his head out, spitting loudly outside.
He let out a strange, snickering laugh as his spit landed on a luxury car that sped past.
The driver had to quickly change lanes, fearing that his car would be the next to be hit.
Fortunately, the National Property Management Committee wasn't far away. The car turned another corner and arrived at Lubyanka Square, stopping in front of the gray building.
This building, which originally belonged to the Soviet State Planning Commission, now displays double-headed eagle emblems on its neoclassical columns, indicating that it has long since changed hands.
Unfortunately, what it can distribute is still the legacy of the Soviet Union.
It's already 8 p.m., and standing downstairs, they can still see the lights on in four offices.
This gives a glimpse into how busy the State Property Management Committee is.
The entrance to the building was equally bustling, with workers dressed in cotton overalls and leather jackets standing densely packed together, holding signs that read "Don't sell our bread," silently confronting the Ministry of Internal Affairs soldiers at the entrance.
Just like every demonstration in Moscow, there was no violent clashes between them.
The armed patrolling soldiers didn't pay them much attention, only sweeping their searchlights over their heads, illuminating their faces in a flickering light.
Excuse me, could you please move aside?
The assistant politely cleared the way, and the protesters mechanically took a step back, as if they had repeated this action countless times.
There was no conflict, no anger; only despair and numbness on everyone's faces.
The soldiers from the Internal Affairs Department, who had just changed shifts, walked out smoking. As they passed the crowd holding up signs, they said, "Nobody bid for the power company."
Then he left without stopping.
The people holding up signs looked at each other, seemingly unsure how to react, and finally their gazes fell on Ivanov's face.
The latter immediately emphasized, "We have no interest in the power company; we are here to take care of other business."
Even after saying that, the crowd holding up signs still did not disperse.
It was as if only by continuing to stand here could they preserve the tiny flame of hope in their hearts.
Wang Xiao sighed softly. From her perspective, the workers' actions were completely unnecessary.
Because among the 16 auction companies approved by the president, Rostec was not favored.
It is too large and burdened with heavy debt. Most critically, its system is too complex, with intricate bureaucratic relationships that make it difficult for outsiders to intervene.
Rather than taking huge risks investing in something with no idea when you'll reap the rewards, it's better to choose minerals and oil, which offer quick returns.
Just like them.
The soldiers of the Ministry of Internal Affairs were only responsible for maintaining order and did not set up any barriers.
They glanced at the visitors and, sensing they weren't troublemakers, sent them upstairs.
As soon as you go upstairs, before you even reach the office door, the sounds of fax machines and typewriters clatter incessantly. Young female civil servants also jog along, carrying documents to the photocopier at the end of the corridor.
Anyone who says that the Moscow government is undisciplined, overstaffed, and inefficient from top to bottom should come and see how people here work day and night.
They are never lacking in diligence, they just often don't know which direction they should move in.
The assistant was about to step forward and ask which office Director Koch had.
The office door next door opened first, and a familiar face walked out.
Ivanov was quite surprised to see Yura: "What are you doing here?"
Before his friends could respond, he frowned and asked, "What exactly are you trying to do? Why are you suddenly saying I'm not qualified to participate in the auction?"
Yura saw him and also looked shocked: "You're back?"
"Nonsense!" Ivanov said impatiently. "If I hadn't come back, I wouldn't have known what you were up to. Qualifications? Why don't I have the qualifications? Did I not deposit enough money in the Central Bank? Good heavens! I didn't lose a single penny."
Yukos will acquire 33% of its shares through an investment tender, with a starting price of $150 million for the loan-for-shares deal. The winning bidder will also need to commit to an additional $200 million in investment for the company.
In other words, participants in this auction must deposit $350 million with the central bank.
This can be considered the largest government-led loan-for-equity swap deal to date.
Yura was a little confused and subconsciously looked back at Koch, the director of the National Management Committee, who had followed her out.
The latter's face was etched with exhaustion, making him look at least 10 years older than his actual age. He was clearly impatient and nodded curtly, "Our gentleman has already received enough."
Yura then realized what was happening and pulled Ivanov aside to persuade him: "Alright, my friend, you've already snatched the Siberian Oil Company from Penezovsky and acquired the Surgut Oil Company. There are only 12 companies confirmed for auction so far, and you've already got two of them."
"So what?" Ivanov asked, utterly astonished. "Did I cheat, steal, or cheat? I followed the auction process strictly according to regulations; the highest bidder wins. What's the problem?"
Yura on the other side was speechless, and a voice came from behind Ivanov: "Of course there's a problem, a big problem."
Koch's face fell. "Sir, I must remind you, I am a PhD in Economics from the St. Petersburg Institute of Mathematics and Economics of the Russian Academy of Sciences. I know all too well your money laundering tricks of passing money around and layer by layer."
His gaze swept over Wang Xiao, quite impolitely, "I warned you long ago that this is Russian state property, and only Russians can participate in the auction. No foreign capital is allowed."
Wang Xiao looked at him calmly: "Sir, are you talking about me? What's wrong with me lending money to Ivan? Since you're an associate doctorate in economics, you should be very clear that raising so much money in such a short time is incredibly difficult for any law-abiding businessman. Using my own character as collateral to seek outside help to overcome this difficulty, what's wrong with that? Oh, I understand—"
She made a sudden realization, "My biggest mistake was that when everyone else didn't believe in the future of the Russian government and thought any investment here would be a waste, I chose to trust the Russian Federation government, the Kremlin, our President's vision for the future, and the fairness and impartiality of the auction led by Mr. Chubais and personally overseen by you. How awful!"
She stared at Koch, whose face was growing increasingly grim. "Sir, you should have warned me sooner that you would go back on your word and that you are not trustworthy!"
“Madam!” Koch’s face was more somber than a Moscow winter, as if a blizzard was about to strike. “This is an auction of Russian state property. Please do not cause trouble.”
This really stirred up a hornet's nest, and Wang Xiao immediately flew into a rage: "Sir, where have I been being unreasonable? What I said was not reasonable? Unless you announce right now that no one participating in the auction is allowed to raise funds, borrow money, or take out a loan!"
Ivanov chimed in sarcastically, "Mr. Koch must be very eager to announce this regulation. After all, Mr. Khodorkovsky's Menatep Bank, which organizes the auction, is backed by the Ministry of Finance and doesn't need to borrow or raise funds."
Koch flew into a rage: "Sir, this is a baseless accusation, it's slander! The auction was fair and impartial to everyone."
"Is it that I'm the only one being treated unfairly?" Ivanov retorted without backing down. "I need a reasonable explanation, otherwise I will never accept this unfair treatment."
Koch glanced back at Yura, who had no choice but to come over and persuade her friend.
God, he didn't want to do this either.
However, there was no other way; Russia's current situation was extremely dire, and the privatization auction had to proceed smoothly.
As for who the real winner is for each company? That was decided from the very beginning.
In Wang Xiao's words, it's like dividing up pork.
Ivan was able to snatch Siberian Oil Company from Berezovsky because the latter made a foolish mistake, angered the Kremlin president, and was tacitly punished.
Ivan was able to acquire the Surgut Oil Company because the latter's original tacitly approved buyer was an alliance between local warlords and the Red Factory Director, and Punonin, as a representative of the powerful department, forcefully protected Ivan.
This is equivalent to the powerful government suppressing the local warlords and the "red factory directors," which is welcomed by the liberal reformists who led this loan-for-equity auction.
However, Ivan's attack on Yusco was not feasible, because he had threatened Khodorkovsky's interests.
Just as Ivan pointed out, Khodorkovsky had a very close relationship with the government. From the Soviet era, as one of the earliest group cadres to engage in business, he was a darling of the system and never encountered any difficulties from government agencies in his business dealings.
Even after the collapse of the Soviet Union and the replacement of the hammer and sickle flag with the tricolor flag in the Kremlin, Khordovsky remained one of the closest friends of officials and the leader of the federal and Moscow governments’ highly profitable chartered banks.
Meanwhile, in 1992, he became an advisor to Vladimir Lopkhin, the Minister of Fuel and Energy in Gaidar's cabinet, and obtained an informal position similar to that of a deputy minister.
The reason for this is that he was unwilling to give up running Menatep Bank at the time, which meant that he could not officially take up a position at the Department of Energy.
But his power is by no means small; he is in charge of the Department of Energy's investment funds.
With such a background, taking over Yukos would be a piece of cake for him.
The liberal reformist officials who led the auction would help him.
Yura continued to plead, "Ivan, you already have three oil companies. You don't need any more. Well done, my dear friend, you've got more than enough."
“Not enough!” Ivanov looked at him coldly. “I want to build a large oil industry, and Yukos is an essential part of it. I need enough oil fields to ensure that the upstream and downstream industrial chains can operate.”
His face was filled with disappointment, as if he didn't recognize his friend anymore. "Yura, is this what you call free competition? You keep talking about bringing Russia into a market economy and developing Russia's economy through free competition. But what are you doing now? You are trampling on free competition. What you are doing is worse than the worst planned economy!"
Yura's face swelled up, looking like a spilled paint palette.
He had to admit that the entire concept for the auction was quite poor and violated the fundamental principles of his beliefs.
Who wins and who loses? It's the result of politicians' choices, not market competition.
But we've already come this far.
The Communist Party of the Russian Federation is coming on strong, and both domestically and internationally, people are optimistic about their comeback.
The Kremlin is in grave danger, and these defenders of the new regime must unite and rally all forces that can be united.
Khordovsky and the forces behind him were among those they had to win over. If he didn't gain enough from the government's reforms, he might very well defect to the Communist Party of the Russian Federation in a fit of anger.
He is not like Berezovsky, who had no real power base and relied entirely on currying favor with the president and the Kremlin. There would be no place for him if the Communist Party came to power.
Khordovsky was a prominent figure who thrived in the Soviet era.
Even after the August 19th coup in 1991, when two high-ranking Soviet officials, Nikolai Kruzena and Georgyil Pavlov, committed suicide by jumping off buildings, the whereabouts of hundreds of millions of US dollars in state funds under their custody remained unknown.
Rumors circulated that Khordovsky helped the Communist Party handle the money. Some said he kept it safe, while others said he helped transfer it overseas.
He has a vast and intricate network of connections within the government. If he was able to navigate the Komsomol societal with ease back then, he will likely be equally capable of thriving within the Communist Party of the Russian Federation in the future.
Therefore, someone like him would not, in essence, view the Communist Party as a monstrous threat.
Therefore, they must ensure that Khordowski will stand on the president's side in the future, no matter what.
While Yura was racking his brains trying to persuade Ivanov, Koch was also putting pressure on Wang Xiao, both openly and subtly.
"Madam, you may not yet fully understand the detailed requirements of the Strategic Asset Protection Regulations. The ultimate beneficiaries cannot include non-Russian capital."
He emphasized, "The auction cannot wait until you change your nationality. Once the auction actually takes place and it goes to court, you are very likely to lose the money you lent to Mr. Ivanov. He will not be able to repay you."
Wang Xiao rolled her eyes inwardly. What was the point of changing her nationality? She wasn't going to change her nationality.
She looked at Koch, gave him a sweet smile, and said something shocking: "It's alright, he can just compensate me with his men."
As she spoke, her eyes, brimming with tears and tender affection, swept towards Ivanov's direction.
Yura's eyes met hers, and in that instant, her heart clenched.
Perhaps due to the power shortage, the lights in Koch's office flickered, creating a loud rumbling sound in his ears, much like his heartbeat.
Strangely, even under these circumstances, Yura clearly heard Wang Xiao's words: "He is priceless in my eyes. Having him is enough; nothing else matters."
At that moment, Yura had to admit that he did envy Ivan.
To be loved so domineeringly, passionately, unrestrainedly, and relentlessly by a powerful and terrifying woman is an experience so intensely blissful that it feels like your body is about to explode.
Many people go through life without ever experiencing this kind of intense love.
Ivanov reached out and hugged Wang Xiao, obediently resting his head on her shoulder, and said in a sweet, affectionate tone, "I knew you loved me the most."
Koch hadn't rested for a long time, and his head felt like it was being pricked by countless needles.
At this moment, seeing this scene of deep affection, he only felt disgusted.
He didn't even have the patience to continue making up excuses, and simply said curtly, "Alright, ladies and gentlemen, you can leave now. The qualification review won't pass here."
Just as Wang Xiao was about to raise her eyebrows in anger, there was a knock on the office door, and another female civil servant with her hair neatly combed entered.
The latter adjusted his black-rimmed glasses and spoke in a measured tone: "Sir, if you want to prove that your funds are legitimate, please provide complete documentation of the entire funding chain, including the original source of the funds, intermediary bank records, guarantee agreements..."
She rattled off a long list of required documents, which even Ivanov's seasoned assistant struggled to memorize.
Wang Xiao pressed further, "When will it be provided to you?"
The female civil servant replied expressionlessly: "48 hours."
Ha, this is deliberately making things difficult for people.
This is 1995, a time before electronic office work and extremely underdeveloped communication. In 1995, getting a single document stamped could take a whole week.
Preparing and delivering so many documents to the Russian State Property Management Committee within 48 hours is undoubtedly a pipe dream.
Neither Wang Xiao nor Ivanov intended to challenge this human limit, because they were well aware of the other party's tactics—tactics that anyone who had dealt with such government agencies would understand.
After you've painstakingly prepared all the documents, the person receiving you will casually remark: "Hey, why did you scan that document? Go and get it right away. It's absolutely essential."
When you criticize them for not saying it sooner, they'll look at you like you're an idiot: "This is basic common sense. Don't you even know basic common sense?"
Ivanov turned to look at Koch, his eyes blazing with fury: "Sir, you are the director of the State Property Management Committee, you should not resort to such thuggish tactics."
The latter remained firm: "Sir, it is my duty to protect the security of Russian state property."
He gestured for him to leave, saying, "Please hurry up and prepare your materials; I have work to do."
Just as Ivanov was about to engage in a fierce battle with his opponent, there was another knock on the office door.
This time, three people came: three bankers—Vladimir Vinogradov of the Reform Commercial Bank, Mikhail Friedman of Alfa Bank, and Valery Malkin of the Russian Credit Bank.
The latter two had seen each other when they passed a coffee shop on their way to the State Property Management Committee.
The two men gave Ivanov a quick nod as a greeting, then turned their attention directly to Koch: "Sir, we need to have a serious talk."
Yura seized the opportunity to pull Ivanov away from the office.
Oh no, that's terrible. That's how businessmen are; they only care about profits and forget that politics requires balance.
Koch, however, didn't want to receive the three bankers either, his tone full of helplessness: "I've already allowed you to deposit all your money in the central bank, what more do you want?"
How absurd! Menatep Bank was both the organizer and a participant in the Yukos auction, and it demanded that all auction proceeds be deposited in Menatep Bank.
Undoubtedly, the other bankers would protest.
Koch agreed to their request and allowed them to deposit the funds in the central bank.
He's so busy, he really doesn't have the patience to listen to any more of their requests.
But it's obvious that the bankers came over so late at night to make even more demands.
"We hope to offer government short-term bonds to participate in the auction."
Koch flew into a rage and sternly rebuked, "No way! Please read the auction rules carefully. Cash, cash only. Bonds and stocks are not acceptable as funds for participating in the auction. Good heavens!"
His face showed utter disbelief. "This is basic financial common sense. Don't you bankers understand it?"
The office instantly became as noisy as a vegetable market.
Men always like to attack women, saying that one woman is equal to 500 ducks.
In reality, in such situations, one man can be equivalent to 1,000 ducks.
Anyway, when the 4,000 ducks in the office were making such a racket that even Wang Xiao and Ivanov couldn't stand it and quickly opened the door and ran away.
As they ran out, they heard a banker roar: "Scam, trap, government short-term bonds—it's all a trap you've set!"
What do you mean by that?
It is well known that for a long time in Russia, almost all bankers relied on ruble-dollar transactions to make money.
However, this summer, in an effort to control inflation, the Central Bank of Russia imposed a new exchange rate "corridor," narrowing the range of currencies that the ruble could exchange for the dollar.
This move effectively controlled the ruble's exchange rate and contributed to economic stability.
At the same time, the bankers' shortcut to making money was also shut down.
Fortunately, shortly afterward, short-term government bonds appeared. Their profits were astonishingly high, with annual interest rates reaching as high as 200%.
Who would pass up such a lucrative opportunity? Especially since the bonds are government-guaranteed.
So bankers couldn't wait to get into this new arena.
However, this resulted in their original cash being tied up in bonds.
Given the timing of the auction's commencement, and the fact that this time was announced so abruptly, bankers holding large amounts of short-term government bonds that they couldn't immediately convert into cash had ample reason to believe that this was a government conspiracy.
The government is trying to ensure that no one other than the new owners of the state assets they have chosen has enough cash to participate in the auction.
The argument in the office grew louder and louder, and the thin door panel was no match for the bankers' anger.
They threatened Koch that if they were not allowed to use short-term government bonds as funds for the auction, they would immediately dump all their bonds on the market. They would not take responsibility for the resulting bond market crash.
"Go ahead!" Koch stormed into his office, showing no sign of compromise. "You have your freedom to conduct financial transactions, and I have my rules!"
The three bankers looked at each other, and finally Friedman of Alfa Bank made the decision: "We'll go to Chubais. He has to give us an explanation."
Koch's face hardened like a poker card, and he still uttered two unyielding words: "Go ahead!"
The auction must be government-guided; he won't be easily swayed by these businessmen.
As he spoke, he turned around and slammed the office door shut.
Yu stretched out his hands to cover his face, rubbed them vigorously twice, and once again acted like a fire extinguisher, earnestly persuading the two great figures in front of him: "Alright, my dear friends, go back! You've already gained enough, and offended enough people. Why invite more trouble?"
However, if Wang Xiao and Ivanov were so easily satisfied, they wouldn't have accumulated such a large fortune in just a few years.
They will never be satisfied.
“Let’s go visit Mr. Chubais,” Ivanov decided. “Our Deputy Prime Minister needs to give us a reasonable explanation.”
As for whether the Deputy Prime Minister should rest at this late hour?
Are you kidding me?! Russia's national assets are now at stake; how can he possibly sleep?
Wang Xiao walked out without hesitation.
Yura was on the verge of collapse and had to plead, "Your Majesty, you are a rational woman, please stop Ivan. You are walking step by step into a dangerous abyss, there is absolutely no need for you to take this risk."
Wang Xiao turned her head and smiled, her white teeth gleaming coldly under the light.
Her bright red lips parted and uttered, each word distinct: "My dear Yura, one fundamental truth I've learned since childhood is that if you want something, you have to fight for it yourself. Otherwise, no one will actually hand it to you."
If you don't fight or compete, you might as well just wait to die on this land!
Why did the liberal reformers go to such lengths to protect Khodorkovsky's interests? To put it bluntly, it was because he was an uncontrollable factor; if not properly won over, he could turn against them at any time.
If he can betray us, why can't I? The squeaky wheel gets the grease.
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Good morning! [Eating popcorn emoji]
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