Prigozhin’s heirs are looking for appearances and passwords
The sudden death of the founder of the Wagner PMC has complicated access to his assets.
For the last year and a half, Yevgeny Prigozhin has appeared in the public eye mainly as the founder and de facto leader of the Wagner PMC. However, in addition to this, he was a major entrepreneur in a number of other business sectors, and the companies associated with him had a turnover of hundreds of billions of rubles per year. The head of the Khaminsky and Partners legal group, Alexander Khaminsky, spoke about what difficulties Yevgeny Prigozhin’s relatives might expect when entering into an inheritance.
In Russia, businessmen like Yevgeny Prigozhin are usually called authoritative. Unlike the dashing nineties, this now rather indicates the weight and presence of connections in power structures – they have begun to play a much greater role in the formation of modern financial, trade and industrial empires. Since the early 2000s, when property regulations began to be established in the country, the owners themselves began to be subject to completely different requirements than had been the case before.
But along with new times came new heroes. The same Evgeny Prigozhin, having shown considerable ingenuity, was able to build a huge international holding company based on both horizontal and vertical integration from a modest “culinary” company. And if the tip of the iceberg, more or less visible to Russian ordinary people, including from the words of Russian President Vladimir Putin, was estimated at hundreds of billions of rubles, then the volume of African business was already measured in tens of billions of dollars. This, on the one hand, gave almost unlimited power, on the other hand, it distorted the understanding of reality and one’s role in history. This ultimately played a cruel joke on Prigozhin. After all, it may turn out that not only the businessman himself, but also most of his huge fortune was buried under the wreckage of the crashed plane.
What does Yevgeny Prigozhin’s legacy consist of?
If we talk about Russia, then this is Concord Management and Consulting, its subsidiaries and other legal entities in which the entrepreneur had shares. But these companies have not shown dizzying turnover recently. Thus, the parent company itself last year had revenue of 49 million rubles with a loss of 77 million. The situation is similar for other Russian companies, the owner or manager of which is Prigozhin himself. Of course, there is still a whole galaxy of companies included in the perimeter of his interests, but, just like in the 90s, control over them exists as long as their actual owner is alive. Take, for example, the Megaline company, which formally separated from the Concord group several years ago. Today, its leaders and founders are completely different people, and they are unlikely to want to give a business with an average annual turnover of 4 billion rubles to Prigozhin’s heirs. The same situation applies to other business assets.
Of course, part of the business was promptly transferred to his son, Pavel Prigozhin. We are talking about the companies “Beta”, “Turstatus”, “Lakhta Park Premium”, “Lakhta Park” and “Lakhta Plaza”. But if you look at the financial statements, you can see that over the last year their revenue has decreased significantly: 655 million rubles compared to 2.4 billion a year earlier. At the same time, it raises serious doubts that a 25-year-old young man, without entrepreneurial skills, will be able to keep his existing assets afloat without outside help.
But the most significant part of Yevgeny Prigozhin’s fortune is not in Russia. And here the geography is quite wide: Syria, Central African Republic, Congo, Nigeria, Ethiopia, Sudan, Mozambique, Madagascar and Angola. And everywhere the interests of the Concorde owner focused on natural resources – oil, gold and diamonds. Euro Police, M Invest, Mercury llc, Lobaye Invest and a number of other oil and gold mining companies controlled by Prigozhin received fantastically favorable conditions from local governments for the development of subsoil, and then the appropriation and further sale of the extracted resources.
He also did not forget about the services of a private military company, which local presidents and prime ministers needed more than anyone else. It was they who made it possible to conduct mutually beneficial bargaining with the authorities of these African states. And here the following point cannot be discounted. While under sanctions, Prigozhin was forced to mask the traces of his commercial activities in the international arena. An excessively high turnover of dollars and euros could attract the attention of US and EU regulatory authorities and lead to the blocking of accounts. Therefore, barter relationship schemes were in use: Wagner protected deposits and other important objects, suppressed anti-government protests, trained local military personnel, and in return received permission to develop subsoil. Further sales and capitalization of proceeds were based on the classic gray schemes of the late 90s – early 2000s and ended with hiding funds in offshore territories.
Another thing is that with this nature of doing business, the structure of foreign ownership is often such that in the event of the sudden death of the main beneficiary, it will be extremely difficult for his heirs to prove their rights to the unattended billions. It would be good if part of the funds were invested in a family foundation, albeit located somewhere in the Cayman Islands. At least then his assets were divided equally among living family members. But in cases where funds are needed for business development, they are most often found in the accounts of anonymous funds or in crypto wallets. In such cases, they are owned by the one who has access and passwords.
As in the 90s, those who have weapons in their hands take over what is bad. Whatever organizational and entrepreneurial talents Yevgeny Prigozhin possessed, he was still an ordinary person. And man, as we know, cannot comprehend the immensity. Therefore, at different stages of his life, he enters into various alliances or invites partners with whom he has to share not only powers, but also profits. In our case, these are precisely the same people with weapons with whom Prigozhin’s heirs will definitely not argue or sue.
