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nairiporterPutin's son-in-law boosted by $1.75 billion Russian state loan
http://www.reuters.com/article/us-russia-capitalism-sibur-idUSKBN0UD0XC20151230
So, a company controlled by Putin's son-in-law Kirill Shamalov has recently been granted cheap financing worth 1.75 billion dollars from the state. He is 33 year old, is married to Putin's youngest daughter Katerina Tikhonova, and owns 20% of Sibur, the largest oil chemical company in Russia. The loan was granted by the national social aid fund, and will be used for building a gigantic industrial project in the northern region of Tyumen. The little documentation on the deal that has been made available to the public shows that the interest on the loan is 2%, which is about 4 times lower than the usual market rates.
Shamalov's wedding to Katerina was done with grandiosity at a skiing resort north of Saint-Petersburg in 2013. A huge amount of money was spent on that event, and all guests had given vows of discretion about it. The resort itself, called Igor, is owned by Yuri Kovalchuk, Putin's old friend and "personal banker", and also by an offshore company registered in Cyprus, of whose shareholders very little is known.
Kirill, 31 at the time, was already a rising star on the Russian business scene. But his wealth started surging only after the wedding to the president's daughter. Katerina is heading a project of the Moscow state university, worth 2.7 billion dollars. In just a year and a half, Kirill acquired a significant share of the biggest Russian chemical company Sibur. The value of these shares is now being assessed at about 2.85 billion.
How exactly such a young businessman was able to launch himself so high and so fast? You guessed right: after the wedding in 2013, he was given control of Sibur by its former owner, one of Putin's closest friends. A year later he was granted a 1.3 billion dollar loan, which was transferred via a bank that is owned by yet another friend of Putin's, and Shamalov was himself given one of the leading posts in that bank.
The former deputy minister of energy Vladimir Milov has revealed that Putin's friends have acquired vast assets via small-interest loans granted by the state, transferred through state banks (often offshore accounts) - like Gazprombank for example. All is done extremely opaquely, so it is very difficult to assess the full picture about the scope of these loan agreements. Gazprombank has been practically turned into a "pocket bank" of the Putin regime.
Of course, the president's speaker Dmitry Peskov was eager to convince the public that Putin's daughters were not involved in politics, and Putin was trying to keep them away from the public focus for a good reason. He said Shamalov is just a prominent businessman whose activity, according to Kremlin's official narrative, is within the Russian law. He has long been member of the Sibur board of directors, and is just one among its shareholders, just like the remaining top managers at the company. Peskov also said that Shamalov's business career are not related to Kremlin's interests in any way. Of course we already know better than that - not without the help of the little information that has leaked on the case in the media.
So how did Kirill Shamalov come into Putin's circle at such an early age? Well, his father Nikolai Shamalov was co-owner (along with Putin and some others) of Ozero, a company that sells equipment for luxurious villas (or as they are called in Russia, "dacha"). Various members of the company have later occupied various high-ranking posts in Putin's administration. As for Nikolai Shamalov, he became a shareholder at the Bank Rossiya, which for the last decade and a half has become one of the most influential financial institutions in the country. Igor Kovalchuk, the owner of that luxurious skiing resort Igor, happens to be the largest shareholder in that very same bank.
Nikolay Shamalov has two sons: Yuri and Kirill. And both have done pretty well during Putin's tenure. In 2003 the elder brother Yuri became president of Gazfond, a humongous investment fund that controls the assets of the pensioners who have previously worked at Gazprom, the state oil and gas company. Under Yuri's guidance, Gazfond took control of Gazprombank, which was Gazprom's financial branch at the time, but has been privatised since then. Yuri is one of the deputy chairpersons at the board of directors of Gazprombank. All in all, Gazfond has basically acquired a major state asset and transormed it into a private bank, which is now controlled by people, all of whom have been in close friendly relations with Putin since the time he was still ascending to power.
For all those years, Kirill Shamalov has risen up the career ladder at a speed that is comparable to that of Putin's other close friends. In 2002 he became a law consultant on foreign policy at Gazprom. He was just 20 years old then, and was still studying at the Saint-Petersburg state university. Three years later, he got his degree there, and he was placed at the top management of Gazprombank, which was still a branch of Gazprom at the time. Then in 2008 he was appointed vice-president of Sibur.
In 2010, Gazprombank and Gazfond already owned 95% of the Sibur shares. The same year the sale of Sibur to a company controlled by Kirill Timchenko and his business partner Leonid Mikhelson was arranged. It was a complicated deal, but Gazprombank helped a great deal with its completion by granting Mikhelson and Timchenko a loan worth at least half the pruchase price.
Then Mikhelson got 57.2% of Sibur, and Timchenko 37.4%. Five of all the present and former managers at the company were given the remaining 5.5%, Kirill Shamalov among them. In 2014 his personal share was raised to 4.3%. Later that year, he left his managerial post at Sibur, but kept his shares, and remained in the board of directors. Then he registered a new company, which was entirely his own property, Yauza-12. By the end of 2014, Shamalov had already bought 17% out of the 37.4% Timchenko portion at Sibur, which allowed him to increase his shares to 21.3%, and become the second-largest shareholder there. Once he had married Putin's daughter, his road towards the topmost positions in Sibur was paved smoothly, and now he is one of the richest and most influential people in Russia.
Why am I saying all this. Well, Kirill Shamalov's wealth is a fine example of the way people from Putin's closest circle are being given top positions at key companies, and how these exclusive prerogatives are being used to foster a new generation of oligarchs who are meant to be absolutely loyal to Putin. But the really striking thing is how skillfully all of this is being concealed from the public eye. And how little the ordinary Russian people are feeling the effects of this wealth on their everyday life, their living standard, and their economy. In the meantime, the Kremlin propaganda machine keeps feeding them information that only reinforces their belief that Putin is the most honest and benevolent leader they have had since Peter the Great.
http://www.reuters.com/article/us-russia-capitalism-sibur-idUSKBN0UD0XC20151230
So, a company controlled by Putin's son-in-law Kirill Shamalov has recently been granted cheap financing worth 1.75 billion dollars from the state. He is 33 year old, is married to Putin's youngest daughter Katerina Tikhonova, and owns 20% of Sibur, the largest oil chemical company in Russia. The loan was granted by the national social aid fund, and will be used for building a gigantic industrial project in the northern region of Tyumen. The little documentation on the deal that has been made available to the public shows that the interest on the loan is 2%, which is about 4 times lower than the usual market rates.
Shamalov's wedding to Katerina was done with grandiosity at a skiing resort north of Saint-Petersburg in 2013. A huge amount of money was spent on that event, and all guests had given vows of discretion about it. The resort itself, called Igor, is owned by Yuri Kovalchuk, Putin's old friend and "personal banker", and also by an offshore company registered in Cyprus, of whose shareholders very little is known.
Kirill, 31 at the time, was already a rising star on the Russian business scene. But his wealth started surging only after the wedding to the president's daughter. Katerina is heading a project of the Moscow state university, worth 2.7 billion dollars. In just a year and a half, Kirill acquired a significant share of the biggest Russian chemical company Sibur. The value of these shares is now being assessed at about 2.85 billion.
How exactly such a young businessman was able to launch himself so high and so fast? You guessed right: after the wedding in 2013, he was given control of Sibur by its former owner, one of Putin's closest friends. A year later he was granted a 1.3 billion dollar loan, which was transferred via a bank that is owned by yet another friend of Putin's, and Shamalov was himself given one of the leading posts in that bank.
The former deputy minister of energy Vladimir Milov has revealed that Putin's friends have acquired vast assets via small-interest loans granted by the state, transferred through state banks (often offshore accounts) - like Gazprombank for example. All is done extremely opaquely, so it is very difficult to assess the full picture about the scope of these loan agreements. Gazprombank has been practically turned into a "pocket bank" of the Putin regime.
Of course, the president's speaker Dmitry Peskov was eager to convince the public that Putin's daughters were not involved in politics, and Putin was trying to keep them away from the public focus for a good reason. He said Shamalov is just a prominent businessman whose activity, according to Kremlin's official narrative, is within the Russian law. He has long been member of the Sibur board of directors, and is just one among its shareholders, just like the remaining top managers at the company. Peskov also said that Shamalov's business career are not related to Kremlin's interests in any way. Of course we already know better than that - not without the help of the little information that has leaked on the case in the media.
So how did Kirill Shamalov come into Putin's circle at such an early age? Well, his father Nikolai Shamalov was co-owner (along with Putin and some others) of Ozero, a company that sells equipment for luxurious villas (or as they are called in Russia, "dacha"). Various members of the company have later occupied various high-ranking posts in Putin's administration. As for Nikolai Shamalov, he became a shareholder at the Bank Rossiya, which for the last decade and a half has become one of the most influential financial institutions in the country. Igor Kovalchuk, the owner of that luxurious skiing resort Igor, happens to be the largest shareholder in that very same bank.
Nikolay Shamalov has two sons: Yuri and Kirill. And both have done pretty well during Putin's tenure. In 2003 the elder brother Yuri became president of Gazfond, a humongous investment fund that controls the assets of the pensioners who have previously worked at Gazprom, the state oil and gas company. Under Yuri's guidance, Gazfond took control of Gazprombank, which was Gazprom's financial branch at the time, but has been privatised since then. Yuri is one of the deputy chairpersons at the board of directors of Gazprombank. All in all, Gazfond has basically acquired a major state asset and transormed it into a private bank, which is now controlled by people, all of whom have been in close friendly relations with Putin since the time he was still ascending to power.
For all those years, Kirill Shamalov has risen up the career ladder at a speed that is comparable to that of Putin's other close friends. In 2002 he became a law consultant on foreign policy at Gazprom. He was just 20 years old then, and was still studying at the Saint-Petersburg state university. Three years later, he got his degree there, and he was placed at the top management of Gazprombank, which was still a branch of Gazprom at the time. Then in 2008 he was appointed vice-president of Sibur.
In 2010, Gazprombank and Gazfond already owned 95% of the Sibur shares. The same year the sale of Sibur to a company controlled by Kirill Timchenko and his business partner Leonid Mikhelson was arranged. It was a complicated deal, but Gazprombank helped a great deal with its completion by granting Mikhelson and Timchenko a loan worth at least half the pruchase price.
Then Mikhelson got 57.2% of Sibur, and Timchenko 37.4%. Five of all the present and former managers at the company were given the remaining 5.5%, Kirill Shamalov among them. In 2014 his personal share was raised to 4.3%. Later that year, he left his managerial post at Sibur, but kept his shares, and remained in the board of directors. Then he registered a new company, which was entirely his own property, Yauza-12. By the end of 2014, Shamalov had already bought 17% out of the 37.4% Timchenko portion at Sibur, which allowed him to increase his shares to 21.3%, and become the second-largest shareholder there. Once he had married Putin's daughter, his road towards the topmost positions in Sibur was paved smoothly, and now he is one of the richest and most influential people in Russia.
Why am I saying all this. Well, Kirill Shamalov's wealth is a fine example of the way people from Putin's closest circle are being given top positions at key companies, and how these exclusive prerogatives are being used to foster a new generation of oligarchs who are meant to be absolutely loyal to Putin. But the really striking thing is how skillfully all of this is being concealed from the public eye. And how little the ordinary Russian people are feeling the effects of this wealth on their everyday life, their living standard, and their economy. In the meantime, the Kremlin propaganda machine keeps feeding them information that only reinforces their belief that Putin is the most honest and benevolent leader they have had since Peter the Great.
