Loans-for-Shares — State Assets Handed to a New Oligarch Class

In 1995, facing a budget crisis and a 1996 re-election he was expected to lose, Yeltsin's government auctioned controlling stakes in some of Russia's most valuable state enterprises — including the Yukos and Sibneft oil companies and Norilsk Nickel — to a small group of politically connected bankers in exchange for loans to the state, with the loans deliberately structured never to be repaid. The auctions were widely rigged in favour of the same bankers who ran them, creating the oligarch class within months and permanently entrenching a level of wealth concentration and state capture that shaped Russian politics for the following three decades.