Mikhail Tchernoi

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Soviet-born Israeli businessman, partner of David and Simon Reuben in Trans-World's Russian aluminium business in the 1990s

Mikhail Tchernoi

Image Mikhail Tchernoi (NEWSru.co.il).jpg
Mikhail Tchernoi (photo: T. Cohen / Getty Images, via NEWSru.co.il)
Born January 1952 Uman, Ukrainian SSR, Soviet Union (according to Haaretz); other sources say Uzbekistan
Nationality Israeli
Residence Israel
Occupation Businessman
Known for Trans-World, Siberian Aluminium, Cherney v Deripaska
Sibling(s) Lev Tchernoi

Mikhail Tchernoi (Mikhail Semenovich Chernoy; also spelled Chernoi, Cherney and Tchernoy, and known in Israel and Britain as Michael Cherney; born January 1952) is a Soviet-born businessman who has lived in Israel since 1994. With his younger brother Lev Tchernoi, he was one of the four principals of Trans-World, the metals group of David Reuben and Simon Reuben, which built up large holdings in the Russian aluminium industry in the 1990s.[1] He later sued Oleg Deripaska in London for a 20% share of Rusal. The case was settled in September 2012, shortly before he was due to give evidence.[2] He has been investigated in several countries over alleged links to organised crime, which he has always denied. He has never been convicted of a crime.[3]

Early life

Sources disagree about where he was born.

  • A 2009 profile in Haaretz said he was the son of ordinary workers, born 57 years earlier in the Ukrainian town of Uman.[4]
  • In a 2008 High Court judgment, Christopher Clarke J said that he was born in the Ukraine and grew up in Uzbekistan.[5]
  • The Guardian has described him as "Uzbekistan-born".[3]

A 2009 request by the Spanish anti-corruption prosecutor gives his date of birth as 16 January 1952.[6] Fortune gave his age as 48 in 2000. It said he spelled his name "Cherney" and spoke no English.[1]

Trans-World and the Reuben brothers

According to the 2008 judgment, he was involved with a company called Trans Commodities from 1989 to 1992 and then went into partnership with Iskander Makhmudov. In 1992 he and his brother Lev became 50/50 partners with the Trans World Group (TWG).[5] Fortune gave David Reuben's account that Lev came to his Moscow office in 1992 and later introduced him to his elder brother. It said the partnership was never put in writing, and it called the Reubens and the Chernoys together Trans World's "four principals".[1] Forbes wrote in 2001 that the Trans-World group "was led by two Russian brothers, Mikhail and Lev Chernoi, and two traders based in Western Europe, David and Simon Reuben".[7] The Guardian reported that both brothers had been employees of Trans Commodities, a French company, and left shortly after 1993 to become involved in Trans-World.[8] Fortune also reported that he was a 50% partner with the New York trader Semyon Kislin in a company called Trans Commodities.[1]

Fortune reported that in 1997 the Reubens paid him about $400 million to sever their ties with him. It said he then worked with plant managers against his former partners, and that by the end of that year Trans-World had lost about half of its holdings.[1] In the 2008 judgment, the court recorded that he sold his 25% interest in TWG for $410 million, and that a document referred to a price of $300 million for 25% of Trans-World Metals SA.[5] In his 2009 interview with Haaretz, he gave the price of his shares as $400 million.[4]

Siberian Aluminium and Oleg Deripaska

According to the 2008 judgment, he met Oleg Deripaska in 1993 or 1994. The two became partners in the Sayansk aluminium smelter (SaAZ) in Siberia through a joint venture, and Deripaska became general director of the plant in late 1994.[5] In a 2012 judgment, Andrew Smith J summarised Deripaska's pleaded case. It was that he met Tchernoi in May 1994, when Tchernoi introduced himself as a partner in TWG, and that from 1995 he made protection ("krysha") payments to organised crime groups that Tchernoi represented, along with Anton Malevsky and Sergei Popov. Tchernoi denies these allegations. He says that he and Deripaska were business partners.[9] In 2009 he told Haaretz that Deripaska "was like a son to me".[4]

By 2001 the two jointly owned Sibirsky Aluminy (Siberian Aluminium, or Sibal).[4] Fortune reported that after the 2000 sale of Trans-World's main Russian smelters, the Sibneft group allied itself with him.[1] In March 2001 Tchernoi and Deripaska met at the Lanesborough Hotel in London. Deripaska accepts that he later paid Tchernoi $250 million, but he says that this was the final instalment of protection payments.[3]

Litigation against Oleg Deripaska

Tchernoi issued a claim against Oleg Deripaska in the High Court in London in November 2006.[5] In July 2007, through a press release, he pledged that he would give the proceeds of any settlement of his claim against Rusal, which could total $600 million, to the Michael Cherney Foundation.[10]

Tchernoi's case was that at the Lanesborough meeting Deripaska agreed to hold 20% of Rusal on trust for him. Rusal merged into United Company Rusal in 2007, and he therefore claimed 13.2% of the merged company, worth about $4.35 billion.[11] Deripaska argued that the agreement was a sham designed to hide the true nature of protection payments.[3]

Jurisdiction rulings

On 3 July 2008 Christopher Clarke J ruled that the claim could be tried in England.[5] He found that Russia was the natural forum for the dispute. He nevertheless allowed the case to go ahead in London, for these reasons:

  • Tchernoi had a well-founded fear for his safety and would never take the case to trial in Russia.
  • There was a significant likelihood that he would be prosecuted if he returned there, possibly on "trumped up" charges.
  • There was "a significant risk of improper government interference" if the claims were brought in Russia.[11]

The judge wrote that "one side or other is plainly telling lies on a grand scale". He said that "a considerable body of evidence" had been put in about Tchernoi's alleged criminality, and noted that Deripaska himself was "the subject of serious allegations".[5][3] The Court of Appeal dismissed Deripaska's appeal in Deripaska v Cherney [2009] EWCA Civ 849 on 31 July 2009. It held that the judge had had "cogent evidence" for his findings.[11]

2012 trial and settlement

The trial opened in July 2012. The Guardian reported that Tchernoi was to give evidence from Israel by video link, because a Spanish arrest warrant meant that he could not travel to London.[3][2] On 12 July 2012 Andrew Smith J ruled on Deripaska's applications for witness protection orders for twelve witnesses living in Russia:

  • He granted orders for one witness.
  • He deferred his decision on another.
  • He refused the remaining applications.

He found that evidence of alleged threats against witnesses in other proceedings, said to have been made on Tchernoi's behalf, was "not of a quality that provides convincing support" for allegations of that seriousness. He added that his refusal implied no criticism of Deripaska or his advisers.[9]

On 27 September 2012, before either man gave evidence, the case was settled. A statement said that "Mr Deripaska announces that Mr Cherney's litigation in London against him has been terminated". Roman Abramovich had been due to give evidence for Deripaska.[2] The court therefore never ruled on the merits of the claim.

Move to Israel and citizenship

According to the 2008 judgment, Tchernoi left the Soviet Union in 1991, emigrated to Israel in 1994 and acquired Israeli citizenship.[5] Fortune reported that both brothers moved to Israel in spring 1994 and settled in villas outside Tel Aviv. It said that he had not returned to Russia since, and that "Israel is now preparing to boot Michael".[1] In March 1995 two private investigators in Israel were indicted for plotting to kill him and Anton Malevsky.[1] The 2008 judgment records that two former military intelligence officers were jailed over the plot.[5]

Haaretz reported in 2009 that Israel's Interior Minister, Avraham Poraz, had written to him in 2004. The letter said that, according to information received by the Israel Police, he was responsible for murders and attempted murders carried out on his orders during the struggle for the aluminium market. The paper said this "barely did not cost him his Israeli citizenship". It also reported that he had never been questioned about the 1995 murder in Moscow of the banker Vadim Yafyasov. In 2009, however, Russia's Prosecutor General, Yury Chaika, asked Israel to question him about it.[4] By 2009, Haaretz said, he lived in a villa in Savyon.[4]

Investigations and allegations

Switzerland

Fortune reported in 2000 that he had been briefly arrested in Switzerland and that an investigation there was continuing.[1] The 2009 Spanish prosecutor's request quotes a German police summary of the Swiss proceedings. It says that he was detained in Geneva in November 1996 on suspicion of belonging to a criminal organisation, and that the Geneva proceedings were eventually closed because none of the accusations could be proved.[6] According to the 2008 judgment, he has never been convicted, and Switzerland's Federal Supreme Court required that a non-suit be entered.[5] In May 2010 his foundation issued a press release. It said that a Swiss court had found in 2008 that he had no connection with organised crime, and that the Swiss courts had awarded him CHF 30,000 in compensation for an investigation that ran from 1996 to 2007.[12]

Russia and the United States

  • Fortune reported that the former FBI agent Joel Bartow spent four years trying to have him indicted for money laundering, and that the FBI regarded him as an organised crime figure.[1]
  • The Center for Public Integrity reported that a 1996 Interpol report, citing the Russian police, said the brothers were "suspected of money laundering, embezzlement of funds, contract killing". It added that they had never been convicted and had denied any wrongdoing.[13]
  • Fortune reported that he was cleared in Russia's investigation into thefts from the central bank in the early 1990s. In a fax to the magazine, Tchernoi wrote: "I do not possess any exclusive information on the so-called Russian mafia... Sorry to disappoint you."[1]

In 2006 UPI reported that a State Department official had confirmed that he was refused a US visa in August 2003. The refusal was made under Section 212 of the Immigration and Nationality Act, which bars people believed to be seeking entry to engage in "unlawful activity".

  • Tchernoi was a sponsor of the Intelligence Summit, a private conference in Virginia. US officials were warned about attending it.
  • The organiser, John Loftus, said that Tchernoi had been framed and that a "smear campaign" was being run against him.
  • Two former CIA directors, R. James Woolsey and John Deutch, withdrew from the event's advisory board. Woolsey said he had received "new information" about the funder.[14]

Bulgaria

In August 2000 Bulgaria expelled five businessmen as a threat to national security, Tchernoi first among them, and barred him for ten years. Lenta.ru, citing Reuters and BTA, reported that he held shares in the mobile operator Mobiltel.[15] In September 2003 Mediapool reported that the Sofia City Court had rejected his appeal against the order taking away his right to reside in Bulgaria. Earlier that year the same court had declared void a separate measure refusing him entry, and that ruling was itself under appeal.

  • His lawyer, Todor Batkov, said that in 1999 a deputy prime minister in the Kostov government had demanded 34% of Mobiltel free of charge as the price of not expelling him.
  • Batkov also said that his client did not intend to return to Bulgaria.
  • General Atanas Atanasov, the former head of the National Security Service who signed the order, said that it was lawful.[16]

Spain

A Spanish investigation into the alleged laundering of money from the "Izmailovskaya" organised crime group was opened at the Audiencia Nacional in 2007, as case 101/2007-D. In a request dated 13 March 2009, the anti-corruption prosecutor José Grinda named Tchernoi, Oleg Deripaska and Iskander Makhmudov as suspects. The request alleged that properties around Moraira and Teulada on Spain's Costa Blanca had been bought for him with the proceeds of crime.[6] A Spanish judge signed a warrant for his arrest in May 2009.[4] In January 2010 Ynet reported that Interpol had issued an international warrant. Tchernoi said the case was probably a product of attempts by Deripaska to destroy his reputation. Deripaska's spokesman denied this.[17]

His foundation's 2010 press release said that Israel had refused a Spanish request for his extradition.[12] According to a 2015 summary by Russian prosecutors, quoted by TBCA, the Spanish case was transferred to Russia's Interior Ministry on 7 December 2012 for further investigation.[6] No sources found say what happened to the Spanish case against Tchernoi after that.

Israel: the Bezeq case

Tchernoi was arrested in Israel in 2001. He and the businessman Gad Zeevi were charged in 2002 with aggravated fraud and money laundering. The prosecution alleged that Zeevi had hidden Tchernoi's part in financing the 1999 purchase of 20% of the telecoms company Bezeq.[4][18] Haaretz described it in 2009 as the only indictment brought against him to date. It also reported that an earlier indictment for allegedly bribing an Eilat councillor had been withdrawn.[4] On 21 October 2015 Judge Oded Mudrik of the Tel Aviv District Court acquitted Tchernoi, Zeevi and the other defendants of all charges.[18][19] In June 2016 the court awarded each man about 308,000 shekels towards his defence costs, which Ynet reported they would donate.[20]

Political links in Israel

Tchernoi told Haaretz in 2009 that he had been friends with Avigdor Lieberman since the 1996 election campaign. He said that he had voted for Lieberman's party, Yisrael Beiteinu, and that he had never funded any political party.[4]

  • The MCG Holding payment. In April 2007 Haaretz reported that in May 2001, three months after Lieberman became infrastructure minister, a company owned by Tchernoi transferred about $500,000 to a bank in Cyprus. Hundreds of thousands of shekels were then transferred to associates of Lieberman. Tchernoi's lawyer, Yaakov Weinrot, said the money had been for a "wine deal".[21]
  • Questioning in 2007. Haaretz later reported that Tchernoi was questioned in April 2007 on suspicion of bribing Lieberman through his company MCG Holding. He said that he had not known about the transaction and denied giving any bribe.[4]
  • Outcome. Israel Hayom reported that in April 2006 the Attorney-General, Menachem Mazuz, had ordered an investigation into suspicions that Lieberman received millions of dollars from businesspeople abroad, Tchernoi among them. Police recommended charges in 2009. On 13 December 2012 Attorney-General Yehuda Weinstein decided not to indict Lieberman in that case.[22]

Haaretz also reported on a 2007 case in which the far-right activist Avigdor Eskin and the private investigators Rafi Pridan and Aviv Mor were arrested over a surveillance operation that mainly targeted Tchernoi. Eskin told investigators that the operation was paid for by Alexey Drobishenko, the director of a company belonging to Deripaska.[4]

Philanthropy

The Michael Cherney Foundation says on its website that it was created after the suicide bombing outside the Dolphinarium disco in Tel Aviv on 1 June 2001. It says its main aim is "helping democratic nations in their war on terrorism" and helping post-Soviet immigrants integrate into Israeli society. It also says that before 2001 he gave to charity in Russia, Ukraine, Central Asia, Bulgaria and the US. The foundation published the book Dolphinarium: Terror Targets the Young and paid for the documentary Empty Rooms, made by the Dutch filmmaker Willy Lindwer.[23] A 2007 press release listed other projects it had funded:

  • Moscow's Maimonides Classical Jewish Academy
  • stipends for young Israeli artists
  • a rehabilitation wing for gravely injured soldiers at Beit Levenshteyn Hospital
  • aid for victims of terrorism

The same release said that the peers Lord Pearson and Baroness Cox had joined him in promoting humanitarian causes and in "the battle against radicalism".[10]

In May 2011 the foundation said that it had funded a pamphlet by the group Keep Jerusalem, which it described as "dedicated to educating people about the importance of a united Jerusalem under Israeli sovereignty". It also said that it supported "Meeting Place", whose activities included bar mitzvah ascents to the Temple Mount (Haram al-Sharif), which is in the Old City of occupied East Jerusalem.[24] The Jerusalem Summit described him as chairman of its board of trustees, in a photograph caption showing Baroness Cox receiving its "Scoop" Jackson Award from him.[25] He also sponsored the 2006 Intelligence Summit in the United States.[14]

Business interests

Besides aluminium, his reported business interests have included:

  • Bulgaria: shares in the mobile operator Mobiltel.[15]
  • Russia: shareholdings in Yukos, Roseximbank and Neftinvestbank, as reported in 2000.[15]
  • Cyprus: companies including MCG Holding, which Haaretz described as owned by him and which he ran with his partner Todor Batkov.[4]
  • Israel: he tried to buy a large stake in Bezeq in 1999 through financing given to Gad Zeevi.[18]

Affiliations

Notes

  1. ↑ 1.00 1.01 1.02 1.03 1.04 1.05 1.06 1.07 1.08 1.09 1.10 Richard Behar, Capitalism in a cold climate Fortune, 12 June 2000 (online 12 April 2000), accessed 31 October 2026.
  2. ↑ 2.0 2.1 2.2 Luke Harding, Deripaska and Cherney make surprise deal out of court The Guardian, 27 September 2012, accessed 31 October 2026.
  3. ↑ 3.0 3.1 3.2 3.3 3.4 3.5 Simon Goodley, Gun battles and 'extortion' in latest Russian oligarch legal battle The Guardian, 9 July 2012, accessed 31 October 2026.
  4. ↑ 4.00 4.01 4.02 4.03 4.04 4.05 4.06 4.07 4.08 4.09 4.10 4.11 4.12 Gidi Weitz, interview with Michael Cherney, Haaretz, 20 November 2009, republished in English as Michael Cherney: On Deripaska, the Russian mafia and the Israeli police Novinite, 12 December 2009, accessed 31 October 2026.
  5. ↑ 5.0 5.1 5.2 5.3 5.4 5.5 5.6 5.7 5.8 5.9 Christopher Clarke J, Cherney v Deripaska [2008 EWHC 1530 (Comm)], High Court (Commercial Court), 3 July 2008, accessed 31 October 2026.
  6. ↑ 6.0 6.1 6.2 6.3 José Grinda González, Fiscalía Especial contra la Corrupción y la Criminalidad Organizada, request for investigative measures, D.P. 101/07, Juzgado Central de Instrucción nº 4, Madrid, 13 March 2009, reproduced as Investigation of Izmaylovskaya gang (Chernoi, Deripaska, Makhmudov) in Spain, 2009 TBCA, accessed 31 October 2026.
  7. ↑ Gangster-free capitalism Forbes, 26 November 2001, accessed 31 October 2026.
  8. ↑ Nick Kochan, The deal that made a Russian oligarch The Guardian, 6 July 2003, accessed 31 October 2026.
  9. ↑ 9.0 9.1 Andrew Smith J, Cherney v Deripaska [2012 EWHC 1781 (Comm)], High Court (Commercial Court), 12 July 2012, paragraphs 5–6, Find Case Law (The National Archives), accessed 31 October 2026.
  10. ↑ 10.0 10.1 Michael Cherney, the Israel-based businessman... (press release) Lawfuel, 31 July 2007, accessed 31 October 2026.
  11. ↑ 11.0 11.1 11.2 Court of Appeal upholds High Court finding that litigant unlikely to get fair trial in Russia Herbert Smith Freehills, 22 September 2009, accessed 31 October 2026.
  12. ↑ 12.0 12.1 Michael Cherney Foundation, Suiza paga al empresario Michael Cherney una indemnización tras concluir que su investigación no tenía fundamento (Marketwire press release), 31 May 2010, republished by Sociedad Uruguaya, accessed 31 October 2026.
  13. ↑ Knut Royce, FBI tracked alleged Russian mob ties of Giuliani campaign supporter Center for Public Integrity, 14 December 1999, accessed 31 October 2026.
  14. ↑ 14.0 14.1 Shaun Waterman, Intel summit overshadowed by fund concern United Press International, 18 February 2006, accessed 31 October 2026.
  15. ↑ 15.0 15.1 15.2 Болгария выслала из страны пять бизнесменов (Bulgaria expels five businessmen) Lenta.ru, 19 August 2000, accessed 31 October 2026.
  16. ↑ Martin Nikolaev, Съдът остави в сила забраната Чорни да живее в България (The court upheld the ban on Cherney living in Bulgaria) Mediapool, 25 September 2003, accessed 31 October 2026.
  17. ↑ Olga Viniar, Michael Cherney wanted by Interpol Ynet (from Calcalist), 18 January 2010, accessed 31 October 2026.
  18. ↑ 18.0 18.1 18.2 Михаил Черной полностью оправдан по "делу Безека" (Mikhail Chernoy fully acquitted in the "Bezeq case") NEWSru.co.il, 21 October 2015, accessed 31 October 2026.
  19. ↑ Yonah Jeremy Bob, Cherney, Zeevi, acquitted in Bezeq Affair after 16 years Jerusalem Post, 23 October 2015, accessed 31 October 2026.
  20. ↑ Lital Dobrovitsky, לאחר הזיכוי: המדינה תפצה את מיכאל צ'רנוי וגד זאבי (After the acquittal: the state will compensate Michael Cherney and Gad Zeevi) Ynet, 26 June 2016, accessed 31 October 2026.
  21. ↑ Uri Blau and Gidi Weitz, $500,000 funneled to Lieberman associates Haaretz, 25 April 2007, accessed 31 October 2026.
  22. ↑ A glance at how the criminal cases against Lieberman have developed over the course of the last 12 years Israel Hayom, 14 December 2012, accessed 31 October 2026.
  23. ↑ Welcome to Michael Cherney Foundation site! cherfund.org (Wayback Machine copy, 2008), accessed 31 October 2026.
  24. ↑ Michael Cherney Foundation, Michael Cherney's Fund Helps to Keep Jerusalem United (press release) PR Newswire, 18 May 2011, accessed 31 October 2026.
  25. ↑ Jerusalem Summit jerusalemsummit.org, accessed 31 October 2026.
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