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. Last Updated: 07/27/2016

Investor Anger Flummoxes Berezovsky

The usually urbane Boris Berezovsky was caught off guard Tuesday when foreign businessmen at an investment conference grilled him with angry questions and accused him of running his businesses into the ground.

Speaking at an investment conference, the nation's most notorious businessman and Kremlin powerbroker began smoothly by praising what he called former President Boris Yeltsin's success in creating the foundations for a new political and economic system. But by the end of his presentation he was visibly disturbed, rattled by persistent questions about his rise to financial and political might under that regime.

"Could you explain how it is that every time you've been involved with a company, its capitalization has run down to zero?" asked a combative investor at the back of the hall at a conference organized by Moscow investment bank Renaissance Capital.

As the crowd gasped, Berezovsky was momentarily speechless f a rare situation for the tycoon.

Berezovsky erupted into an angry tirade.

"If you're going to ask that question you'd better give a concrete example," he snapped back at the questioner.

Berezovsky repeated his response several times, after which his interrogator rattled off some examples f oil major Sibneft, airline Aeroflot, and carmaker AvtoVAZ f companies that time after time have hit the headlines over allegations of financial crimes.

Berezovsky visibly bristled at the investor's taunts.

"All Russian companies are undervalued as the value of the company depends on political stability," shouted Berezovsky.

He said he'd bought Sibneft in the political instability of 1995 for just over $200 million and by early 1997 it was worth $7 billion. The post-crisis price, however, is down to $2 billion, he said.

But as one investor retired, another took up the fray, asking Berezovsky why the structures of the companies he'd been involved in were so murky.

"Sibneft and Aeroflot are some of the most transparent companies in Russia," Berezovsky replied. "Transparency allows Sibneft to trade on world markets and Aeroflot would be in just as good a condition if it continued to be under the same management as it was in 1997."

Sibneft was the first local oil major to publish accounts to GAAP standards f the U.S. standard. However, its ownership is far from transparent. Sibneft is widely reported to be run by Berezovsky and his prot?g?, Roman Abramovich, but probe any further and you reach a dead end.

In the controversial takeover earlier this year of majority stakes in key aluminum smelters that put over 70 percent of the industry in the hands of Sibneft shareholders, the chain of companies they used was so convoluted and opaque that Anti-Monopoly Minister Ilya Yuzhanov at first doubted whether it would be possible to investigate the deal and find out who owned the stakes.

Without any prompting, Berezovsky also defended the aluminum deal Tuesday.

"There was a lot of criticism about the creation of the aluminum conglomerate, which missed the most important point about the whole deal," he said. "It was about Russians investing in the Russian economy."

Berezovsky said that 95 percent of his capital was already kept within the nation and reiterated his claims that he had long given up his direct stakes in business holdings. He said he had never owned shares in Aeroflot and no longer held his stake in Sibneft.