New twist as tycoon loses $6bn oil firm to Russian in Osborne donor row

The Standard reveals that the Home Office, advised by the security services, decided that businessman Mikhail Gutseriev would be at risk if he was made to return home to Russia.

It is a surprise twist to the Corfu affair which has left shadow chancellor George Osborne fighting for his political life over his meetings with Mr Deripaska. Mr Gutseriev, who is staying at a secret location in London, says he was forced to sell his oil firm, valued at $6 billion, to Mr Deripaska after he was hounded by the Kremlin.

The revelation comes at a time when Mr Deripaska is being seen as toxic for both Labour and the Conservatives.

His friendship with Business Secretary Lord Mandelson has been overshadowed by a claim that during a gathering on his £80 million yacht anchored off Corfu this summer, Mr Osborne discussed a £50,000 donation to the Tories.

Mr Osborne's denials have been contradicted by his Corfu host and old friend Nat Rothschild, also a friend and business partner of Mr Deripaska. Today, another holiday guest supported Mr Rothschild's version.

The Standard's investigation reveals the depth of controversy which has embroiled Mr Deripaska.

The Gutseriev affair was known about in business circles in London and Moscow and although Mr Osborne may not have been aware of the case, Lord Mandelson, as a former EU trade almost certainly did. The Standard's inquiries show that Mr Gutseriev tried desperately to hang on to his company, Russneft, as the Russian authorities squeezed him.

In the end, he decided to flee Moscow after the public prosecutor brought serious charges against him. He says the charges were trumped up.

Weeks later his son Chingis, educated at Harrow, was killed in a mysterious car crash. Mr Gutseriev, 50, is believed to be moving between a number of addresses in Britain and is presently uncontactable.

Sources said that Mr Gutseriev has not sought asylum, but that he has been given leave to remain as an independent businessmen under immigration rules.

The Gutseriev affair could prove especially embarrassing for the Government. Gordon Brown may not enjoy having one Cabinet member, Lord Mandelson, defending his friendship with Mr Deripaska, while the department of another, Home Secretary Jacqui Smith, has moved to safeguard a man who claims he is a casualty of activities by the Kremlin from which Mr Deripaska is likely to benefit.

The Russneft case sent shockwaves through Moscow's business community and triggered alarm among British companies in Russia, including BP.

Their concern was that the Kremlin was apparently using its muscle against a prosperous company, a repeat of what happened when oil giant Yukos was seized by the Russian government and its owner, Mikhail Khodorkovsky, was sent to a Siberian jail on what his supporters maintain were phoney charges.

Mr Gutseriev's friends say the fraud and money laundering charges against him were also falsely manufactured by the Kremlin to put pressure on him to sell his business at a cut-price rate.

When he continued to resist selling, the Russian tax authorities demanded $800 million in what they claimed was unpaid tax.

Before he left Russia in July last year, Mr Gutseriev complained on his company website that he had been "bullied" into selling. He claimed Russian government officials wanted him to sell to a business rival.

"They made me an offer to leave the oil business," he wrote. "I refused. Then, to make me more amenable, they tightened the screws on the company with unprecedented persecution."

Mr Gutseriev, a Muslim born in the Caucasus, had been a Kremlin insider and he knew what to expect. But his friends say he was a man of honesty who, unlike other oil oligarchs, had built his company up through straightforward takeovers. He used to boast that he was untainted by controversy over how he acquired his wealth.

He was born in Kazakhstan into a family reduced to humble circumstances by Stalin's purges. Mr Gutseriev was educated in Grozny and took menial jobs to pay for his university studies. He rose through the ranks of officialdom during the Soviet era then, in the late 1980s, founded one of Russia's first co-operative banks.

He was elected to the Duma and, with the backing of shareholders, took over an oil company in 2000.

Two years later, he started Russneft. The company grew and Mr Gutseriev was unwilling to part with it.

A few weeks after he left the Moscow prosecutor issued a warrant for his arrest and alerted Interpol.

Mr Deripaska was cleared to complete his takeover of Russneft last week when a Russian court lifted a freezing order on its assets.

According to observers in Moscow, the acquisition of a company with solid resources like Russneft comes not a moment too soon for Mr Deripaska. Although even recently he was reckoned to be Russia's richest man with a fortune of around $28 billion, his interests have been vastly depleted in the financial turmoil of the past few months.

At the end of this month he has to find £1.14 billion to repay loans he arranged to buy a stake in a big Russian nickel concern, Norilsk. His company, Rusal, is already in breach of "collateral covenants" on the loan, it was reported this week. Russian stocks have plunged by more than 70 per cent since May.

Mr Deripaska's spokesman declined to comment.