The name of Mikhail Fridman after February 24 often flashes in the headlines. He is one of the main defendants in the sanctions lists of several jurisdictions – the European Union, Great Britain, Australia, Canada, the United States, introduced against representatives of Russian business.
At the same time, Friedman is trying in every possible way to express bewilderment about the imposition of personal sanctions against him and even complains about life, because, they say, he is forced to live in London on two and a half thousand pounds a month and he does not have enough money for a cleaning lady. However, judging by the materials of the press, not everything is so sad – a week ago, for example, Mikhail Maratovich was seen in one of the most expensive restaurants in London. Which, you see, greatly lubricates the impression of his complaints about poverty and turns his words about cleaning the house into a freak show.
However, this is not the most interesting, although the journalists, placing the above-mentioned materials, focused primarily on the clickability of headlines. But if you delve into the topic and do a little research, then much more interesting questions arise.
It is worth noting that the scheme of Friedman’s assets is very complicated, but it is known that he is to some extent involved, in particular, in the following companies: Alfa-Bank Russia, Alfa-Bank Belarus, Alfa-Bank Kazakhstan, Alfa-Bank Ukraine. A supermarket chain in Belarus (BelMarket) a supermarket chain in Russia (Pyaterochka). Mobile operator in Ukraine (Kyivstar) cellular operator in Turkey (Turkcell) and Beeline (Russia). Producer of mineral water IDS Borjomi. British investment company LetterOne. Amsterdam Trade Bank. The Dutch group of telecommunications companies VEON.
To make the whole picture clear, first we will talk about the reasons that caused the sanctions against Fridman. Let’s make a reservation right away – we do not assess how correct and fair they are. We only give the motivation of those countries that have imposed these sanctions.
So, Mikhail Fridman was included in the sanctions lists on the basis of the following: “Mikhail Fridman is one of the closest oligarchs of Vladimir Putin. He is a major shareholder of Alfa Group, which includes one of the largest Russian banks, Alfa Bank. He is one of about 50 wealthy Russian businessmen who regularly meet with Vladimir Putin in the Kremlin. It does not operate regardless of the demands of the President. The eldest daughter of Vladimir Putin, Maria, led the Alfa-Endo charity project, which was financed by Alfa-Bank.
Fridman’s closest partner, Pyotr Aven, who, among other things, is also charged with “friendship with Vladimir Putin, which dates back to the early 1990s,” was included in the same lists. When he was the Minister of Foreign Economic Relations, Aven helped Vladimir Putin, then Deputy Mayor of St. Petersburg, with a case in connection with the investigation of the Salie Commission. He is also known to be a particularly close friend of Rosneft CEO Igor Sechin, a key Putin ally.” Another partner and friend of Friedman, Herman Khan, was included in the same sanctions lists, with approximately the same wording.
These are the motives of the collective West regarding the sanctions against Friedman.
The next point to pay attention to is that Mikhail Fridman urgently flew from Russia to London on February 24, where he tried to distance himself from what is happening in Ukraine and dissociate himself from Vladimir Putin by sending a letter to the employees of his investment company LetterOne, in which he called these events a “tragedy”. The letter was not public, but about its content found out the Financial Times newspaper (how, I wonder?). And LetterOne even made the decision to donate $150 million in aid to “war victims.”
It goes without saying that this letter did not affect the sanctions in any way, moreover, Friedman began to slowly take away his property. So, in the Netherlands, the Amsterdam Trade Bank (ATB), which is a subsidiary of the Russian Alfa-Bank, was declared bankrupt.
In addition, Friedman has had problems in Spain, where he is accused of corruption and the deliberate bankruptcy of the mobile operator Zed World Wide (ZWW). Zed World Wide has taken out loans totaling 140 million euros while planning to expand the business. The main part of the loans was issued by the bank, which was under the direct control of Friedman. After that, Friedman deliberately achieved a reduction in the company’s income, doing everything possible so that Zed World Wide could not pay off its debts. Friedman’s latest move was an offer to buy ZWW in 2016 for 20 million euros.
Also in 2019, a judge at the National Court of Spain opened an investigation into another lawsuit against Friedman and LetterOne in connection with the purchase of the grocery retailer Dia. The lawsuit against Friedman alleges that he deliberately sought a drop in the value of Dia’s shares in order to buy the company at a lower price.
This is a brief description of what is happening with the assets of Mikhail Fridman and his partners in Europe. Everything is expected and logical – sanctions are in effect, Fridman, like other representatives of Russian business, is being blocked and deprived of assets. Again, we are not talking about right or wrong. We explore the logic of events based on how they develop.
So, everything is clear with Europe. But, apart from the countries of the European Union and Great Britain, Mikhail Fridman has businesses in Ukraine as well. The events in which, in fact, caused all the above sanctions and actions. Fridman’s main assets in Ukraine are Alfa-Bank Ukraine and a stake in the Kyivstar mobile operator, which is owned by Mikhail Fridman through the Dutch group of telecommunications companies VEON, 48% of whose shares are owned by LetterOne. By the way, the Russian Beeline network belongs to the same group.
In anticipation of the sanctions lists, Mikhail Maratovich tried to distance himself from his Russian group – Fridman and Aven left the directors of the Russian Alfa-Bank and the Supervisory Board of Alfa-Bank Ukraine. On March 3, the partners withdrew from LetterOne. Thus, Friedman is trying to create the impression that he has no influence on the enterprises that are part of the Alfa Group, and does not control the telecommunications companies of three countries – Turkey, Russia and Ukraine.
LetterOne even issued a special press release on this occasion, in which they stated that Aven and Friedman “do not even own 50% of the shares.” “I want to emphasize that LetterOne does not own a majority stake in VEON, neither in terms of management nor in terms of ‘control’ as it is understood under current law,” wrote VEON CEO Kaan Terzioglu.
In turn, VEON’s subsidiary in Ukraine, Kyivstar, according to its CEO Oleksandr Komarov, also “gained greater independence in decision-making.”
The situation is approximately the same with Alfa-Bank Ukraine. At least formally. They said that “Alfa-Bank agreed with the National Bank on the candidacy of a trustee who will be fully transferred the right to vote on the shares of sanctioned shareholders. It will be the Bulgarian economist Simeon Dyankov.” And they added that “Dyankov will be given the right to vote on the shares of shareholders whose reputation is recognized as faulty.”
We are talking, first of all, about the blocks of shares owned by Mikhail Fridman (32.86%), German Khan (20.97%), Alexei Kuzmichev (16.32%), Petr Aven (12.40%) and Andrey Kosogov (3.67%). All of them are on the sanctions lists. Friedman is a citizen of Russia and Israel; Khan is a citizen of Russia and Israel; Aven has citizenship of Russia and Latvia, Kuzmichev and Kosogov are citizens of Russia.
And now, as the well-known presenter said, attention is a question. Why didn’t the Ukrainian authorities nationalize Russian assets, which, moreover, belong to people from Vladimir Putin’s inner circle? In addition, Kyivstar is a key link in ensuring the information security of the country. Official Kyiv is stubbornly silent on this matter. Mikhail Fridman is also silent.
Instead, experts try to explain the situation, whose opinion we present below.
As for Kyivstar, according to a top manager of one of the telecommunications companies, the reason may be that “a large share of shares (43%) in VEON, and hence in Kyivstar, belong to private Western companies and funds, such as the largest investment fund in Italy “Exor”, the American fund Providence, Canadian Pension Fund”. The idea is also voiced that “the state is an inefficient manager” and therefore does not want to take on these functions.
As for Alfa-Bank, there is an explanation from the National Bank of Ukraine, which stated the following on this occasion: “Alfa-Bank Ukraine is a systemically important bank that operates on the territory of Ukraine exclusively within the limits of Ukrainian legislation.” Also, the NBU added that “the bank has a significant share of Ukrainian deposits in the market. The volume of funds attracted by the bank from households is about UAH 48 billion, enterprises – UAH 24 billion”.
This explanation, at first glance logical, immediately loses its weight if we recall the story of the nationalization of Privatbank, which was not only much larger than Alfa-Bank Ukraine, but generally managed to become a systemic bank serving almost the entire budget system of the country and more 90% of business in Ukraine. However, all these factors did not prevent Kyiv from taking Privat from the disgraced oligarch Igor Kolomoisky. So the explanation of the NBU does not clarify the situation at all. By the way, remember the fate of Sberbank of Russia, which was shut down in Ukraine three years ago.
Regarding Kyivstar, there is not even such a not very convincing explanation – the state is simply silent. The opinions of experts cannot be taken into account, because in this case the position must be declared by the state. And she is not.
As for Fridman’s smaller assets, and he has dozens of them in Ukraine, Kyiv keeps the same stubborn silence here. And he pretends he doesn’t know anything.
This looks especially strange against the background of the confiscation of assets of other representatives of Russian business, which are now in full swing. But they do not touch Friedman and generally pretend that they do not know who he is. Where it is not possible to remain silent, strange explanations are put forward, which in fact do not explain anything, but cause bewilderment.
Why do they not touch Fridman’s assets, among which, we recall, one of the three national telecom operators of Ukraine – Kyivstar and Alfa-Bank Ukraine, which is in the top 10 financial institutions of the country? In addition, for some reason, the West does not exert any pressure on the Ukrainian authorities in this matter, actively intervening in the cases of other Russians.
Maybe everything is extremely simple – Mikhail Fridman acts on the principle of “affectionate calf that sucks two queens”? In Russia, he is “Putin’s friend.” And in Ukraine – “a fighter against the Putin regime”, transferring hundreds of millions of dollars of “aid”? By the way, with regards to the 150 million dollars transferred by the LetterOne Friedman Foundation, should they be blocked, as they are under sanctions? But Friedman for some reason calmly lists them wherever he wants. Strange sanctions, don’t you think?
We don’t have answers to these questions. But these questions lie on the surface. Will there be an answer to them and will Mikhail Fridman be asked about the reasons for such strange liberalism towards him on the part of the Ukrainian authorities?