The Russian Tank Commander, the Capitalist, and the Cover Girl

After the end of the Soviet Union, the Russian government planned to privatize Gazneft by issuing vouchers to the public that could be redeemed for stock at “voucher auctions.” The vouchers were negotiable and tradable, and you could show up at an auction with as many as you could collect. The total vouchers brought to the auction would then be totaled and the stock doled out proportionally.

It was a good plan, but Gazneft’s directors wanted to own the company themselves, so they came up with a clever system of holding the auctions in absurdly remote locations—places whose inaccessibility was compounded by imaginative ruses like shutting down local transportation or threatening to murder prospective attendees. The idea was that the only people who would succeed in showing up at the auctions would be Gazneft representatives. Inadvertently, this created a huge opportunity for anyone prepared to defy Gazneft and to try to attend the auctions anyway.

The value of Gazneft’s energy reserves at the time, 1994, was about 20 billion, American.

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