Dmitry Mazepin can intercept the financial flows of Andrei Melnichenko and Vyacheslav Kantor
The Russian authorities are allegedly considering the creation of a single trading company for the export of fertilizers – this was reported by Bloomberg. American journalists name the founder of Uralchem, Dmitry Mazepin, as the author of the idea. And the ultimate goal of the proposed venture is to increase price influence on world markets.
Whether Russia will be able to influence world prices with its 12% market share is a separate question. Until now, domestic suppliers often dumped. But in this situation, something else is more interesting: will it be possible to force Russian fertilizer exporters to transfer financial flows to a single company? After all, the production of fertilizers is controlled by very influential people in Russia. Or could something change in their situation?
According to the agency, Dmitry Mazepin’s idea to create a single company for the export of fertilizers was announced in July. Then it was allegedly discussed at the government level with the participation of the head of the Ministry of Industry and Trade Denis Manturov and the Chairman of the Cabinet Mikhail Mishustin. But no final decision was made.
If this happened, Dmitry Mazepin could well lay claim to leadership of the mega-exporter. Last spring, he got rid of a controlling stake in the Uralchem and Uralkali companies and resigned from all posts in the Uralchem holding he created (one of the largest fertilizer producers in Russia). But Mazepin has not lost his influence in the industry. Last year, he participated in negotiations at the UN level on the export of ammonia through Odessa as part of the “grain deal”, and also reported on the situation with fertilizers personally to the president. In addition, Dmitry Mazepin holds the post of Chairman of the RSPP Commission on the Fertilizer Market. So he has the opportunity to promote his ideas not as an individual, but on behalf of this influential organization.
Whose interests may be affected by the redistribution of the fertilizer market? The first places in the ranking of the largest fertilizer producers in Russia are EuroChem, PhosAgro and Acron. The founder of EuroChem, Andrei Melnichenko, by his own admission, has not lived in Russia for a long time, preferring Switzerland. After European sanctions were introduced against him, he moved to the UAE and transferred the entire business to his wife. After the start of the SVO, Melnichenko gave several interviews to Western publications, in which he complained about the injustice of the sanctions imposed against his family. At the same time, the businessman, who was formally deprived of his former assets, continued to participate in events under the RSPP – where he oversees climate and sustainable development issues. Recently, Melnichenko has had problems with Russian law enforcement officers. The Prosecutor General’s Office filed a lawsuit against him regarding SIBECO – the Siberian Energy Company (we talked about this in more detail in No. 33). The bottom line is that Melnichenko’s structures bought this company in 2018 from the structures of Mikhail Abyzov, who is now in jail, and now prosecutors want to turn SIBECO shares into state income, since they consider the mentioned deal to be corrupt.
Mazepin’s idea to create a single company to export fertilizers was announced in July. Then it was allegedly discussed at the government level. But no final decision was made
The episode with SIBEKO should show how influential Melnichenko is today. While he is hiding behind his wife, to whom he transferred the assets. The businessman’s press service recently stated that SIBECO does not belong to Melnichenko: the final beneficiary is a discrete trust registered in Cyprus. It is clear that this is unlikely to affect the essence of the trial. And at the same time, attempts are visible on the part of the defendants to delay the process. At their request, the court in Krasnoyarsk extended the period of preparation for the consideration of the case from September 7 to September 14. Meanwhile, an information campaign has already been launched against the businessman. They write that he allegedly “runs around the government offices” to resolve the issue with SIBECO, and allegedly offers to give the company to the state, and even the 32.5 billion received from Abyzov, if only there would be no criminal case. The reliability of such “leaks” is questionable, but it is obvious that someone is trying to put pressure on the businessman. Isn’t the ultimate goal of these attacks the redistribution of EuroChem’s financial flows?
Among the beneficiaries of PhosAgro, once created by the structures of Mikhail Khodorkovsky*, in recent years were two Cypriot offshore companies – Adorabella Limited and Chlodwig Enterprises Limited. Former senator Andrei Guryev seemed to be behind both. His son Andrei Guryev Jr. also worked at PhosAgro and lobbied for business interests at the RSPP level. Both were sanctioned and have been distancing themselves from the company for the past year and a half.
Recently, the name of the Guryevs has appeared in the media in connection with their property. In July, Yulia Guryeva (daughter of an ex-senator) living in London tried through the court to return the yacht Alfa Nero, which the authorities of Antigua and Barbuda first confiscated and then auctioned off at half price, thus gaining $67.6 million. Also, as part of the sanctions, Britain banned the entry into the country of Andrei Guryev Sr., to whom local media attributed a number of expensive real estate properties, including Witanhurst Palace.
Another beneficiary of PhosAgro was Vladimir Litvinenko, rector of the St. Petersburg State Mining University. Last spring, he transferred more than 20% of the holding’s shares to his wife Tatyana. Vladimir Litvinenko continues to work at the university. It is difficult to say how strong his lobbying positions are on the issue of creating a single exporter of fertilizers, but it has been mentioned more than once that it was Litvinenko who acted as Vladimir Putin’s scientific advisor when he defended his Ph.D. thesis.
But the beneficiary of the Akron company, Vyacheslav Kantor, has been living in Israel for a long time. Having fallen under Western sanctions, he reduced his stake in Acron below a controlling stake, transferring 45% of the shares to trust management by managers. Kantor is connected with Mazepin by an old, old plot. In the late 90s, Vyacheslav Kantor was engaged in purchasing assets under the auspices of the Chairman of the Federation Council Yegor Stroev and the head of the State Property Agency Alfred Koch. Then Akron laid claim to the Kirovo-Chepetsk chemical plant, but head of government Viktor Chernomyrdin pushed through the decision in favor of Uralchem, which was backed by Mazepin. Now the former patrons of Vyacheslav Kantor are no longer visible in power, but Mazepin is still included in the highest offices. So Acron’s financial flows from the export of fertilizers may well end up being redistributed. Our Version talked about how the business empire of Vyacheslav Kantor became a tasty morsel for more influential oligarchs at the beginning of the year in issue No. 3.
There are rumors that large fertilizer producers have already spoken out against Mazepin’s idea – they have restored their sales to previous levels and do not want any disruption. However, the question remains in which jurisdictions the lion’s share of profits and taxes from the sale of Russian fertilizers ends up. It is no secret that offshore gaskets are often used in supply schemes. Moreover, in the current conditions there is a justification for this: payments to Russian banks from abroad are complicated by Western sanctions. Therefore, there are doubts: is export earnings returned to the country in full? It is more interesting for the exporters themselves not to return it. Not only can they freely dispose of dollars on the world market, but the non-return of currency contributes to the depreciation of the ruble.
Meanwhile, the ruble is preparing to fall below the psychologically important level of 1 cent. Experts are increasingly talking about the need to repatriate foreign exchange earnings if the government wants to maintain the exchange rate. The Ministry of Finance is inclined to do the same. So establishing state control over the export of fertilizers in this context may seem like a completely logical step. And on the quiet, you can promote the idea of creating a single exporting company. They say that it will be easier to deal with her than with dozens of small traders.
In the spring, Forbes released a ranking of the richest billionaires in a year. It was headed by Vyacheslav Kantor with an indicator of +5.3 billion dollars. In second place is Andrey Guryev and family (+4.2 billion dollars). Andrey Melnichenko took fourth place (+2.1 billion dollars). This is explained by the rise in world prices for fertilizers. But Dmitry Mazepin did not make it into the top 10 richest Russians, although he can also be considered the “king of fertilizers.”
