After Russia's invasion of Ukraine, one of our most important agenda topics was the Russian oligarchs. How did the rich of this former communist country, which had no capital accumulation, become rich? This question has been answered. Here are the stories of some of the oligarchs on the agenda:
Leonid Mikhelson
Mikhelson is the founder and chairman of the board of Novatek, Russia's second largest natural gas producer.
He started his career as a foreman for a construction company that was building a gas pipeline in Russia's Tyumen region. Mikhelson also has a stake in the petrochemical company Sibur, which was founded in 1995. In 2017, Mikhelson bought a 17 percent stake in the petrochemical company Sibur from Putin's ex-son-in-law Kirill Shamalov, increasing his own stake to 48 percent. Mikhelson's major partner at both Novatek and Sibur is Gennady Timchenko, another billionaire oligarch said to have close ties to Russian President Vladimir Putin. Timchenko and Putin have been close since the early 1990s. It was Vladimir Putin, who was then chairman of the city's foreign affairs committee, who granted Timchenko an oil export license in 1991. Mikhelson's company, Novatek, is one of the official sponsors of the Russian Football Federation.
Although Leonid Mikhelson's name is not on the sanctions list, his company Novatek was also affected by the sanctions, and his fortune fell by $6.2 billion in 2022.
Vagit Alekperov
How did he become an oligarch?
Vagit Alekperov, formerly an oil well worker in the Caspian Sea, rose rapidly in his political career to become the deputy minister overseeing the oil industry in the USSR. In this process, when the minister resigned, he temporarily took the seat of the ministry and used the power he gained to lobby for the merger of Russia's three oil producers into a single company. In 1991 he bought the three major oil fields under ministry control and founded Lukoil, now Russia's largest independent oil company. Even though Lukoil, in which Alekperov owns almost a quarter, was affected by US sanctions in September 2014, the Russian oligarch is still the fourth richest person in Russia according to Forbes' 2021 list. Lukoil is the third largest company in Russia after state companies Sberbank and Rosneft.
How was it affected by the sanctions?
Lukoil Chairman Vagit Alekperov is arguably the most affected oligarch, losing more than 60 percent of his personal wealth as of March 2. Lukoil, which is traded in London, lost more than 80 percent of its value.
Vladimir Lisin
How did he become an oligarch?
Vladimir Lisin is chairman of the board of directors of the leading steel products producer NLMK Group. Novolipetsk, the locomotive of NLMK Group, is Russia's fourth largest steel producer. Lisin, who owns 84 percent of NLMK's shares, manages its assets with Fletcher Group Holding, which he heads. On the other hand, Lisin has clearly expressed his opposition to Russia's attack on Ukraine. While Lisin described the attack as a tragedy, he stated that there was no reason to justify the deaths or the war.
How was it affected by the sanctions?
Even though Lisin has not been sanctioned yet, according to the BBC's report on March 4, 2022, the Scottish government stated that they would take urgent decisions to freeze the assets of Russian business people doing business in their country. Lisin owns Aberuchhill Castle, which is located on 1,200 acres in Scotland.
Vladimir Potanin
How did he become an oligarch?
Potanin, who started his career at the Ministry of Foreign Trade of the USSR, left the civil service during the "perestroika" (reformation) period of former SCCB President Mikhail Gorbachev. In 1991, he established the private Interros holding by utilizing the knowledge he gained in the Ministry of Foreign Trade and his previous professional network. During the privatizations in 1995, Vladimir Potanin bought a share of Norilsk Nickel and owns just over a third of the company, the world's largest producer of refined nickel. Potanin founded Onexim Bank in 1993, which, with the help of government contacts, controls the industrial giants. In addition to all these, Potanin also served as the vice president of former Russian President Boris Yeltsin from 1996-97. The oligarch also previously held shares and investments in the insurance, media, agriculture, engineering and oil sectors. Today, he owns shares in the pharmaceutical company Petrovax Pharm and the ski resort Rosa Khutor near Sochi. The Russian billionaire has close ties to President Vladimir Putin. Potanin was also included in the "Putin list" of prominent Russian political figures and oligarchs prepared by the US Treasury Department. Potanin owns at least three luxury yachts (lengths of 89 meters, 88.5 meters and 76 meters) and spent $10 million on his daughter's wedding on the French Riviera. On the other hand, while paying 7 billion dollars as compensation to his ex-wife, he was sentenced to pay 250 thousand dollars monthly alimony.
How was it affected by the sanctions?
Shares of Vladimir Potanin's company, Norilsk Nickel, traded in London, the capital of England, lost more than 50 percent of its value, and Potanin lost $4.5 billion of his fortune between February 23 and March 3.
Alexey Mordashov
How did he become an oligarch?
After graduating from the Leningrad Engineering-Economic Institute as an economist in 1988, Mordashov started his career at the Cherepovetskiy Metallurgical Plant. He became the financial director of the factory in 1992. On September 24, 1993, a decree of Russian President Boris Yeltsin transformed the state-owned Cherepovets Iron and Steel Complex into the Severstal open joint stock company. During this period, when the old manager of the factory instructed him to buy the shares so that it would not fall into the hands of an outsider, Mordashov established two mutual funds and bought the workers' shares to acquire a large stake in the factory. He was appointed CEO of the company in 1996. Mordashov turned Severstal into a conglomerate with businesses in steel, coal and mining. Another investment of Mordashov was in the tourism sector. Although he took part in the management of the billionaire company that bought 30 percent of the TUI company, one of the largest tourism agencies in the world, he left his job after the war started.
One of the billionaire's notable luxury assets is his new yacht NORD. NORD was handed over to its owner, Mordashov, just a year ago. The yacht has six decks, two helipads and can accommodate 36 guests in 20 cabins. NORD has a cinema, a swimming pool and a beach club for barbecue parties.
How was it affected by the sanctions?
Alexey Mordashov lost 5.6 billion of his fortune and was forced to leave the management of the tourism company TUI.