Full name:
Magomedov Ziyavudin
Magomedov Ziyavudin Date of Birth
25 September 1968
Magomedov Ziyavudin Citizenship
Russia
Magomedov Ziyavudin Professional field/official position
Owner of Summa Group, Member of the Russian Foreign Affairs Council
Magomedov Ziyavudin biography
MAGOMEDOV Ziyavudin Gadzhievich (b. 1968 in Makhachkala) graduated from Moscow State University with a degree in World Economics in 1994. During his studies, he became acquainted with Arkady Dvorkovich (future assistant to Dmitry Medvedev) and Ruben Vardanyan (future founder of Troika Dialog Corporation) and earned his first million. Back in 1989, together with his brother Magomed and cousin, Akhmed Bilalov, he founded a company to supply the first computer equipment to Moscow across the Polish border.
- In 1994, they created the company Interfinance, led by Ziyavudin. The corporation’s activity was aimed at the takeover of oil companies and banks. In 1995, the Magomedov brothers bought Diamant Bank, which became one of the largest ones due to transactions with state-owned companies and, presumably, was engaged in cashing and lost its license in 2001 after a scandal. In 1997, Magomedov began to trade in petroleum products, creating several oil trading companies, bought a 5% stake in Nizhnevartovskneftegaz, and became the main contractor of Transneft.
- In 2001-2002, Magomedov acquired land from the Mari Machine-Building Plant in Primorsk, where later he built Primorsky Commercial Port, the first major asset of the Summa Capital holding group (renamed Summa Group in August 2011). The holding merged Summa Telecom, Transport Group FESCO, OZK, Globalalektroservis, INTEX, Stroynovatsiya, SUIproekt, and other corporations. In 2006, the Mamedov company Slavia bought a 76% stake in Yakutgazprom for 628 million rubles. In the same year, Summa Telecom received frequencies without a tender for the provision of WiMax wireless technology services throughout Russia. Ziyavudin’s brother, Magomed, at that time, was a senator from the Smolensk region (2002-2009).
The rise of Summa came during the presidency of Dmitry Medvedev. In July 2009, Magomedov, through the development company Intex, gained control over the company SUIProject, the general contractor for the reconstruction of the Moscow Bolshoi Theater, which cost the budget more than 35 billion rubles. In 2010, Summa Capital acquired a 50.1% stake in Russia’s largest port operator, Novorossiysk Commercial Sea Port (NCSP), which allowed Magomedov to control a significant portion of Russian oil exports to Western Europe. At the end of 2011, the Summa group won the competition for the construction of an oil terminal in Rotterdam, pledging together with the Dutch Vitol to invest $1 billion in its development. In May 2012, Summa bought out 50% minus 1 share of United Grain Company. - In 2015, he founded the Caspian VC Partners venture fund, which then invested in Peek Travel, Uber, Uber China, Diamond Foundry, and Virgin Hyperloop One. Magomedov invested about $100 million in the implementation of the project of a high-speed vacuum train Hyperloop. In 2016, Ziyavudin joined the Board of Hyperloop One, and a year later became its co-chair.
- On March 31, 2018, by the decision of the Tverskoy Court of Moscow, Ziyavudin Magomedov and his brother Magomed were detained on suspicion of embezzlement of 2.5 billion rubles and the organization of a criminal community. The embezzlement, according to investigators, was associated with state contracts carried out by engineering companies of the Summa group, in particular, during the construction of the Kaliningrad stadium. Besides, the criminal case included episodes about the activities of the Novorossiysk Commercial Sea Port.
Magomedov Ziyavudin crimes
National and cross-border corruption, embezzlement of public funds.
Former one of the “kings of public procurement” Ziyavudin Magomedov fell victim to the undercover political games in the Kremlin and his own greed. He enriched himself sharply during the presidency of Medvedev, but he overlooked the fact that a cohort of oligarchs from Putin’s inner circle continues to be the most influential force. Enriching oneself at the expense of the budget and citizens is safe, though enriching oneself at the expense of Putin’s friends is fraught with consequences.
- There are many dubious episodes in Magomedov’s business career. Back in 1998, State Duma member Sergei Shashurin accused Transneft’s leadership of financial abuse with the participation of Magomedov’s Diamant bank. Shortly after the bank lost its license “for repeated violation of the law On Banks and Banking Activities,” Deputy Chairman of the Bank of Russia Andrei Kozlov was assassinated. The former chairman of the board of Diamant, Alexei Frenkel, was accused of this murder.
- The acquisition by Slavia of Yakutgazprom in 2006 attracted the attention of the Department of Economic Security of the Russian Ministry of Internal Affairs. The companies were accused of conspiracy and illegal additional issues. The department authorized operational-search measures due to the revealed fact of fraud, but the case was closed shortly.
- In 2008, The Moscow Post published an article “The Senator from the Smolensk Region Magomed Magomedov does not want to leave the Federation Council. He has important reasons for this.” The article, in particular, indicated that in the late 1990s and mid-2000s, the Magomedov brothers had links with the Dagestan mafia and could be involved in a scandal about the theft of Lukoil’s funds allocated for the reconstruction of the Old Smolensk road.
- The reconstruction of the Bolshoi Theater by Magomedov’s company SUIProekt, according to the Accounts Chamber of Russia, cost the Russian budget 35.4 billion rubles. Although the businessman said that he could not make a profit on this project, according to media reports, his company managed to get over 12 billion rubles in construction. The company’s contractors said that the reconstruction of the theater was financed through gray schemes using one-day firms.
- Magomedov tried to please the Russian leadership. In 2015, Alexei Navalny reported that Ziyavudin Magomedov paid for the vacation of Presidential Press Secretary Dmitry Peskov and his family on a Matlese Falcon yacht, which costs 385 thousand euros per week to rent.
- The arrest of the Magomedovs excited political circles in Russia because of their ties with Prime Minister Dmitry Medvedev. For several years, Magomedov was monitored by the special services, who forgave him numerous facts of fraud and overpricing of the cost of state contracts. However, the criminal prosecution of Ziyavudin Magomedov intensified after he tried to sell half of his shares in Omirico Limited, a subsidiary of Transneft state corporation, at a price 2.5 times higher than the market. The head of Transneft, a longtime friend of Vladimir Putin, Nikolai Tokarev decided to discuss a deal with Putin.
- Suleiman Kerimov was also called the opponent of the Magomedovs, with whom Summa fought for control of Caucasian assets. Having lost the fight for the Makhachkala port, the brothers initiated a case against Senator Kerimov in France, handing incriminating evidence to the French authorities. There, he was charged with tax evasion when buying a villa on the Cote d’Azur. Assumingly, Putin did not like their decision to hand over Kerimov, a more reliable partner for the Kremlin, to foreign law enforcement.
- Big business in Russia, by default, is firmly connected with the Kremlin and shares corrupt business models. The Russian special services have a file with compromising material on every major businessman, which can be used as soon as they try to play independently or refuse to demonstrate loyalty. The West needs to take this into account when conducting joint projects with Russian businesses or imposing sanctions.
Magomedov Ziyavudin, links and materials
Source: Parity media, 21 May 2008
The Magomedov brothers, Magomed and Ziyavudin, first became known in 1993-1994, when they began to collaborate in Kogalym with Semyon Weinstock, former head of Olympstroy and Transneft. In 1993, Semyon Weinstock was the CEO of Lukoil-Kogalymneftegas. From 1995 to 1999 he was Vice-President of LUKOIL JSC and CEO of LUKOIL-Western Siberia Ltd.
According to witnesses, Weinstock turned Kogalym almost into a prison camp at that moment. The situation in town was monitored by Dagestan gang of the Magomedov brothers. In Kogalym the men from Dagestan began to work closely with the Russian criminal world in the face of crime boss Gennady Bogomolov nicknamed Bogomol (Russian for “mantis”). Following Weinstock, Bogomolov, who had served 12 years in prison, moved to Moscow in the mid-90s, where he headed LUKOIL-Market, one of the subsidiaries of LUKOIL.
Source: The Moscow Post, 17 November 2008
In the late 1990s, the Russian government conceived to introduce a toll for using the federal highway Moscow-Minsk. But first an alternate toll-free road had to be constructed. It was then that the old Smolensk road came to the officials minds. The road runs parallel to M-1, connecting Belarus to Smolensk, Vyazma and Moscow region. The road required a major renovation, the cost of which was estimated at 500 million rubles. The budget had not got this much money. At best, it could provide a quarter of the necessary funds. The remaining money totaling to about 300 million rubles was allocated by Lukoil oil company, as reciprocal payments.
Once the money was transferred to GDRSU in Vyazemsk, and the Federal Highway Fund had no debt claims against the oil company, the funds were transferred to accounts of companies associated with Lukoil, namely to Alkort and Venora, which belonged to the Magomedov brothers. These structures were to supply fuel and road machinery, but no supplies took place. Law enforcement agencies failed to find out where went the 300 million rubles from Alkort and Venora.
Source: Ruspress, 24 July 2009
Ziyavudin Magomedov enjoyed direct support of General Viktor Cherkesov, former head of the Federal Drug Control Service and current Head of Federal Agency for the supply of arms, who is also a personal friend of Vladimir Putin. It was probably due to this that Summa Telecom managed to get a band for establishing a WiMax network across Russia, and persons associated with Magomedov received the country’s first MVNO virtual network operator’s license. It should also be mentioned that the construction of a new oil port terminal on the Baltic Sea was conducted on the means of Summa’s owner.
Ziyavudin Magomedov is a sponsor and co-owner (with the wife of his senior colleague, Natalia Cherkesova-Chaplina) of the agency Rosbalt. In connection with this so-to-say family factor and the widest lobbying opportunities of Cherkesov, the contracts for the reconstruction of the Bolshoi can hardly be considered accidental.
Source: Company, 22 January 2007
According to the media, the Magomedov brothers were on the boards of banks, headed by Aleksei Frenkel (Diamond and VIP-Bank) or those in the establishment of which he was involved (Evroprominvest and Sodbiznesbank). All these banks ended the same. They were deprived of the license on the grounds including money laundering for criminals. Sodbiznesbank was involved in the episode with the murder KAMAZ-Metallurgy CEO, Victor Faber, and his economist Natalia Starodubtseva. The bandits forced Faber to transfer 30 million rubles to the accounts of shell companies that had been opened in Sodbiznesbank. Law enforcers found that Sodbiznesbank was controlled by criminal gangs. In 2005 one of the owners of the bank, Aleksander Slesarev, and his family were shot in Moscow suburbs. In September 2006 there was another murder. The cistim was Central Bank deputy chairman Andrei Kozlov, under whose orders Frenkel’s banks lost their licenses, which allegedly prompted the banker to contract Kozlov’s murder. However, none of the people who knew Frankel could picture him as a client of murder. Furthermore, Frankel did not try to hide, although he was arrested only on January11, 2007, three months after the arrest of the killers.
Source: Finance, 14-2 February 2011
In 2010 Ziyavudin Magomedov entered the business advisory board of the APEC forum in 2010-2012 as Russia’s representative. In January 2011 Magomedov and Transneft company acquired Kadina Ltd, which owned a controlling stake (50.1%) in Novorossiysk sea trading port. The sellers in the transaction (the contract amounting to 2.5 billion dollars, according to media reports almost 80% higher than the market price for that moment), were the families of Aleksander Ponomarenko, NCSP board chairman, and Aleksander Skorobogatko, State Duma deputy (who received together a total of about 2 billion dollars.)
