UBS Banker With Mueller Links Cleared of Russian Bid Rigging

(Bloomberg) -- A senior UBS Group AG executive was cleared by a London judge of bid rigging in a state-linked Russian auction following the break up of the Yukos oil company.

Robert Foresman, a vice chairman at the Swiss lender, was fighting a civil claim that he conspired with the Kremlin to fix the price for a key part of the auction. But a judge Tuesday dismissed the lawsuit, saying that there was no “smoking gun” to point to an unlawful agreement.

Foresman, who was named in Robert Mueller’s investigation into Russian interference in the 2016 U.S. presidential election, was one of five people facing claims for damages and losses over their roles in the 2007 auction of Yukos’s foreign assets. The lawsuit arose out of “the ruthless elimination” of Yukos, once the crown jewel of the nation’s energy industry, and a follow-up auction designed to divide up the assets, Judge Michael Burton said.

Participating in the auction could be “the trade of our lives,” Foresman wrote in a February 2007 email. “We could pull off something that makes us a huge profit“ that also “allows Kremlin to show that the auction of [Yukos] assets is not rigged but rather competitive.”

Most of Yukos’s assets were sold to Rosneft PJSC, then a smaller state-owned company, but Lot 19, which came up for auction in August, was a target for Foresman and his colleagues at Renaissance Capital, a Moscow-based investment firm. The group called the deal “Project Surplus” and “Project Big Easy.”

The consortium eventually bought the Yukos Finance unit for $310 million in a deal that was later unwound by a Dutch court. At the time, the Yukos Finance unit had substantial cash as well as a 49% stake in a company that owned part of an oil pipeline that connected Russia to Slovakia, which the Russian government considered a strategic asset. The surplus assets could have been worth $550 million once claims against the company had been settled, according to a court filing.

In the auction, the buyer group wasn’t prepared to go beyond its own limit of $310 million, something the judge said he believed to be “inconsistent” with an allegation of price fixing.

“I have always regarded this claim as frivolous and thought that it was a huge waste of money and time for all the defendants,” Foresman said Wednesday in an email. Lawyers for the claimants didn’t return calls and emails seeking comment.

Foresman’s high-level Kremlin contacts came to the fore in Mueller’s 400-page report, which described the banker’s unsuccessful efforts to meet with Donald Trump during the U.S. presidential campaign. Foresman was looking to pass along an invitation from Kremlin officials for Trump to speak at President Vladimir Putin’s flagship International Economic Forum.

In addition to Foresman, and a U.S. businessman named Stephen Lynch, Yukos investors were suing Stephen Jennings, then chairman of Renaissance Capital; Robert Reid, a Renaissance Capital lawyer; and Richard Dietz, the founder of VR Capital Group Ltd., a fund manager. The claims against them were all dismissed.

“This very powerful judgment is a complete vindication for Mr. Foresman who has been living with these very serious charges hanging over him for many years,” Mark Dawkins, an attorney for Foresman said in a statement.

To contact the reporter on this story: Jonathan Browning in London at jbrowning9@bloomberg.net

To contact the editors responsible for this story: Anthony Aarons at aaarons@bloomberg.net, Christopher Elser, Torrey Clark

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