Russia’s economic development minister has appeared before a Moscow court accused of soliciting a $2m (£1.6m) bribe. Alexei Ulyukayev is the highest-ranking government official to be arrested since a failed coup in 1991.

His detention has shocked Moscow’s political class and is seen by many observers as part of a largely hidden battle between Kremlin factions, which could now spill out into the open.

Ulyukayev, who was arrested in the early hours of Tuesday as part of a sting operation, has held his ministerial post since 2013, having worked in government since 2000. He is part of the government’s liberal wing and has spoken out against increasing state involvement in the economy.



If convicted, he could face between eight and 15 years in jail. He denied the charges in court on Tuesday and saw his arrest as “an act of provocation against a state official” in Rosneft’s offices, his lawyer said.

Ulyukayev is alleged to have received a $2m bribe for approving the takeover of oil company Bashneft by the state oil giant Rosneft, which is headed by Igor Sechin, a hardliner and one of the most powerful men in Russia.

After being questioned on Tuesday morning, Ulyukayev appeared in court in the afternoon. He wore a suit and tie and was not in handcuffs. Prosecutors asked for Ulyukayev to be placed under house arrest while the investigation continued, declaring him a flight risk.

Details of the sting operation remain unclear. The state investigative committee spokeswoman Svetlana Petrenko told RIA Novosti news agency: “This is about extortion of a bribe from Rosneft representatives accompanied by threats … Ulyukayev was caught red-handed as he received a bribe.”

Some reports alleged Ulyukayev had received the bribe, in cash, on Monday, while others said he had merely registered an interest in receiving the money.

The Russian president, Vladimir Putin, had been aware of the investigation into Ulyukayev for some time, his spokesman, Dmitry Peskov, said. “This is a very serious accusation that requires very serious proof. In any case only a court can decide,” he said.



Peskov described Russia’s fight against corruption as “systematic and not selective”, but Kremlin critics said the opposite was true. Alexei Navalny, an opposition politician and anti-corruption campaigner, said that “of course this case has nothing to do with any real fight against corruption”.

The saga involving the privatisation of Bashneft has been long-running. Vladimir Yevtushenkov, a telecoms oligarch whose Sistema corporation bought Bashneft in 2009, was put under house arrest in 2014 on charges relating to the acquisition of the company. He was released a few months later, but in the meantime the state nationalised the oil company, ruling it had been acquired illegally.



Ever since the arrest of Yevtushenkov, speculation has been rife in the Moscow business community that Sechin wanted Rosneft to take control of Bashneft. Earlier this year, the government put 50.1% of the oil company on the market. Rosneft’s bid was criticised by businesspeople and the more liberal wing of the government, including Ulyukayev, who said the state should not take part in the privatisation of state assets. When the bidding was finally held last month, Rosneft won the tender with a $5bn bid.

The investigative committee said the inquiry did not cast doubt on the legality of Rosneft’s bid for Bashneft. A Rosneft spokesman said the case would not affect the work of the company.



Putin has long spoken about the fight against graft as a top priority of his rule, but critics say corruption is widespread at the highest levels of government, and most observers believe high-profile investigations and arrests are motivated by infighting and a battle for control among different clans, rather than a simple fight against graft.



Navalny said: “It’s clear that only Putin can make the decision on something like Rosneft taking over Bashneft. The idea that Ulyukayev was in a position to somehow blackmail Rosneft and demand money for approving the deal is utterly comical. I think it’s a kind of Russian roulette. Everyone has a file on everyone else, and Putin decides who gets hit.”



In recent months there has been a spate of high-profile arrests, including that of Nikita Belykh, a liberal politician who was governor of the Kirov region. Belykh was caught on camera at a Moscow restaurant allegedly taking a suitcase of hundreds of thousands of euros in cash. He denied the charges, claiming the arrest was a set-up. He is currently in jail awaiting trial.