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By John Helmer, Moscow

The personal rapport between Oleg Deripaska (left) and Sergei Stepashin (right), chairman of the Accounting Chamber, has been famously uncordial. Some say Stepashin believes Deripaska plotted to cut his term as prime minister to just three months – May 12 to August 9, 1999 – and was one of those persuading the late President Boris Yeltsin to promote Vladimir Putin as prime minister instead. A lot of murky business has transpired since then. But when it comes to discharging his mandate as the state auditor, noone accuses Stepashin of letting his feelings get in the way of his duty. The converse isn’t believed of Deripaska.

For most practical purposes, though, Stepashin’s duty to bring Rusal into compliance with Russian tax law and transfer pricing regulations has fallen short of Kremlin backing at each attempt. These began in 2004, when Stepashin exposed the Anadyr scheme, a self-enrichment arrangement between Deripaska and then Governor of Chukotka, Roman Abramovich, who was collecting dividends from Rusal at the time. That story was first told in 2004. It resurfaced when Abramovich was on trial in the UK High Court late last year; the evidence in court revealed that Governor Abramovich took $1.37 billion in Rusal profit shares between 2001 and 2003, before selling out to Deripaska for another $2 billion. Since 2004 the biennial attempts Stepashin and his auditors have made to bring Rusal to book have been chronicled here.

As for tolling, the finagle through which Rusal avoids paying domestic tax on the movement of Russian aluminium for sale abroad, the Accounting Chamber has been joined over the years by the federal Ministry of Finance, several deputies and committees of the State Duma, and more than one regional government in seeking enforcement of Russian law. The history of aluminium tolling the Rusal way can be followed here.

Deripaska’s lobbying against enforcement and against tightening of the transfer pricing regulations has proved resilient. On March 6 Stepashin said in parliament he might try again. Rusal reacted, warning its Duma critics in a published announcement, not only that the company “operates in full compliance with the current tax legislation of the Russian Federation,” but also that if Duma deputies claim otherwise, “the Company is examining possible legal action regarding disseminating false information.”

Since March Deripaska’s internal control of Rusal has been threatened by the open revolt of Victor Vekselberg, the former board chairman, and the start of his litigation against Deripaska in London for violation of shareholding agreements. Less openly, Mikhail Prokhorov also appears to be supporting the case that Deripaska is in violation of these agreements. Next month, the UK High Court will commence hearing similar charges by Michael Cherney that Deripaska breaks shareholder agreements and financial commitments.

Outside the Rusal ranks, but inside Russia, Deripaska is facing rebellion against the electricity pricing schemes on which the profitability of the smelters depends; on his plans to cut production and jobs at Rusal smelters in western Russia; and against the new aluminium inventory and pricing schemes Deripaska has negotiated with Glencore.

Stepashin’s latest move, disclosed yesterday, should therefore be read, not only for what it says expressly, but also for what it portends for Deripaska’s struggle to survive at Rusal. This announcement has just come from the Accounting Chamber; it has yet to appear on the chamber’s website:

“The Board of the Accounting Chamber of the Russian Federation has decided to include in the Work Plan of the Accounting Chamber for inspection and analysis in terms of the economic interests of the Russian Federation, the effectiveness of participants in foreign economic activities of the customs procedure for processing on the customs territory of the Russian Federation (tolling) and for conducting export-import operations with the participation of persons registered in offshore zones, in 2011-2012. One object of this check will be OAO Rusal. Checking will begin in July. Results of the audit will be summed up at the end of this year.”

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