Abramovich accuses rival tycoon of links to Chechen terrorists

Chelsea owner tells court he paid Boris Berezovsky for 'protection from criminal gangs'

Roman Abramovich was accused of 'unjustified smears' in court yesterday (AFP/Getty Images)

Roman Abramovich was yesterday accused of "trying to smear" his former business partner Boris Berezovsky during an extraordinary day of courtroom evidence in which the Chelsea Football Club owner claimed he had "never aspired to be a public figure".

Mr Abramovich, 45, is being sued for billions of pounds by Mr Berezovsky, 65, who alleges he "betrayed" and "intimidated" him into selling shares in a Russian oil company for a fraction of their true worth.

Yesterday at London's Commercial Court the Chelsea owner faced questions suggesting he had sought to falsely portray Mr Berezovsky as little more than a gangster who had provided him with protection from criminal gangs – far from the legitimate business partner Mr Berezovsky claims he was.

As Mr Berezovsky's lawyers drew attention to their client's role in securing the release from Chechen forces of two British hostages, it also emerged that Mr Abramovich had paid their ransom money. "You will seek to smear Mr Berezovsky, if that is what you think is necessary, in order to try and meet his claim in this action," Mr Berezovsky's barrister Laurence Rabinowitz, QC, said.

Mr Abramovich's witness statement says he required krysha, the Russian term for "roof", meaning protection, be it either from violent criminality or political interference. Mr Berezovsky, an influential politician, could provide both, he said. Mr Abramovich also alleged that Mr Berezovsky had links to Chechen gangs and terrorists.

Mr Rabinowitz described the claim as "an utterly unjustified smear," adding that Mr Berezovsky knew only five Chechens in 1995. "You will resort to smearing him by trying to associate him with criminal gangs and anything else you think will assist you by making him look bad in front of this court," he said.

Mr Rabinowitz spoke of Mr Berezovsky's role in the release of Britons Camilla Carr and Jon James from Chechen forces in 1997. Mr Rabinowitz said his client "had not sought undue publicity" for securing the release of the hostages, two of some 1,500 cases in which he had directly intervened, many of whom flew to safety aboard his private jet. Mr Abramovich disputed this, before revealing it was in fact he who had bankrolled the rescue.

"After the hostages were bought out, Mr Berezovsky arrived with the journalists, everything was filmed and shown on TV. If this is thought to be without publicity, I disagree with that part," he said, through a Russian translator. "Moreover, that story, I actually paid for that, paid for the story," he added. "I gave the money to Badri [Patarkatsishvilli, Mr Berezovsky's business partner]. He flew there and bought out the hostages."

Mr Abramovich's attention was also drawn to a comment in his witness statement in which he claims he "was quite surprised by [Mr Berezovsky's] extravagant lifestyle," and says he "was never interested in imitating this lifestyle".

"Just consider the truthfulness of this statement?" Mr Rabinowitz asked. "That you never had any interest in what you label an extravagant lifestyle." Mr Abramovich appeared expressionless as Mr Rabinowitz went through a highly abridged list of the Chelsea owner's property portfolio, including the 420-acre Fyning Hill estate, and a property in Lowndes Square, Knightsbridge, which Mr Abramovich said was "a flat", but admitted having bought several flats in the same building and is attempting to remodel them into one house, which when completed has been estimated will be worth more than £150m.

At one point he seemed unable to remember how many properties he owned in France, but admitted buying the Chateau de la Croe in 2000 from the Duke and Duchess of Windsor. Mr Abramovich described the purchase of Chelsea Football Club as a "turning point" that "did impact my way of life significantly".

Mr Abramovich also answered detailed questions about the controversial loans for shares auction of December 1995 that delivered the vastly profitable oil firm Sibneft into his hands.

He disputed the idea that he knew the bankrupt Russian government would ultimately default on the loan, delivering him the controlling interest he sought. He was also questioned on why the state companies that merged to form Sibneft, namely Omsk and Noyabrskneftegas, ultimately provided him with the capital he needed to win the auction and then privatise them. "If we didn't do so, someone else would have done so," he said.

The court heard how Mr Abramovich gave the son of Viktor Gorodilov, the head of Noyabrskneftegas, a job in his oil trading firm. Andrew Gorodilov, the son in question, is now a deputy speaker in the Duma of Chukotka, the Russian region where Mr Abramovich is Speaker and former governor.

The case continues.

Meet the oligarch: Six things we've learnt about Roman

* He paid for the release of two British hostages in Chechnya and for Boris Berezovsky to fly there and take the credit for it.

* He bought a French chateau from the Duke and Duchess of Windsor in 2000.

* He claims he met Berezovsky in Israel in 2001, after the pair had supposedly fallen out.

* He relied on physical protection from criminal gangs in the 1990s.

* He gave Andrey Gorodilov a job in his trading business. Mr Gorodilov is now deputy speaker in the Chukotka Duma, or parliament, while Mr Abramovich is Speaker.