Zingareviches are walking through the forest

According to several sources at once, the American company International Paper (IP) continues to prepare for the exit from the Ilim group, one of the largest Russian timber processing industries. Ilim accounts for up to 75% of all Russian market pulp and about 10% of paper production.

The Americans are going to sell 50% of the company, which they once received from the scandalous Russian oligarchs, the twin brothers Mikhail and Boris Zingarevich. They, the Zingarevichs, as well as their old partner, hardly less odious than they themselves, Zakhar Smushkin, own the other half of the Civil Code.

Considering the geopolitical realities, it will be extremely difficult to sell an asset at the market price of IP – and this is where the Zingarevichs come out. Apparently, it is they who are most interested in the speedy redemption of the asset – and, moreover, for sheer pennies.

Do they want to “shod” their partners, having received for nothing what billions of dollars were invested in, and whether the Zingarevichs have the opportunity to pay at least something at all – The Sankt-Peterburg Post figured it out.

Recall that it was the Zingarevichs who in the “dashing” 90s became the creators of Ilim. Only now they did not seem to be very eager to invest in production. IP entered Russia obviously not without their participation, paying $650 million for half of the asset. Now that more than $3 billion have been invested in the group by American investors, and a geopolitical storm is raging around, is it time to snatch back a swollen piece of the pie?

Brothers Zingarevichi. A photo: dp.en

At the end of 2021, IP received over $300 million in profit from Ilim, which, presumably, “floated” to American jurisdiction. And this is in conditions when the United States has already imposed a whole series of sanctions on our country. But it’s hard to say, and today the formal structure of the owners is not completely clear at all.

Indeed, until the summer of 2021, the structure belonged to the Swiss offshore “Ilim HOLDING SA”. Apparently, in their homeland, the Zingarevichs and Smushkin could pay less taxes. How much money settled in this offshore is unknown, as well as the reason for the exit. Rumor has it that the brothers could fall under the sanctions and decided to hide the assets more securely.

A photo: Rusprofile.en

Today, Ilim is one of the largest assets of the Russian timber industry, which, as it turns out, sent a significant part of the dividends to its American investors at the suggestion of the same Zingarevichs.

Are Zingarevichs fans of offshore companies? A photo: Rusprofile.en

The GC owns a whole series of productions – pulp and paper mills and other enterprises in the Arkhangelsk, Irkutsk, Moscow and Leningrad regions. You can also add a large Svetogorsk Pulp and Paper Mill under the control of a subsidiary of IP.

“Forest Kings”

In the past, Boris Zingarevich started as a simple mechanic at the pulp and paper mill, and now, at the end of 2021, he has a fortune of over a billion dollars. And three years ago, the brothers had about $550 million each.

Unlike their partner Zakhar Smushkin, the Zingarevichs do not like to shine. And there are explanations for this: they say that since the mid-90s they realized that silence is golden, and big money loves silence. They are credited with acquaintances with many criminal authorities of those years, and here’s why.

The point is how the odious oligarchs pieced together their “forest empire”. Already in 1991, when the whole country was bursting at the seams, they founded the Technoferm company, which traded paper and cardboard. There is no need to explain to the “veterans” of the market how trade was going on in those years against the backdrop of emerging capitalism and crime penetrating everywhere.

They quickly secured the necessary connections, and just a year later, the Ilim Pulp company appeared – the base for the current Ilim Group of Companies. And then the strange thing started. Very soon, a whole series of enterprises turned out to be in the hands of the Zingareviches – starting with one of the largest in the country, the Kotlas Pulp and Paper Mill.

After him – about 30 more enterprises. The struggle for them in those years was serious. According to the memoirs of participants in the “forest” market of those years, there was everything in this area – murders, kidnappings, and blackmail. It gave back even in the late 90s, when unknown people kidnapped the owner of a large woodworking enterprise, Yevgeny Drachev.

And then there was an attempt on the head of the Arkhangelsk pulp and paper mill – an explosive device went off near his house. After that, there was another series of assassination attempts – in 2002, as a result of an assassination attempt, Alexander Burdanov, a former member of the board of directors of the pulp and paper mill, was killed.

Even before that, in 2001, an attempt was made on the life of an investigator of the prosecutor’s office, Boris Strigalev, who was investigating a case against a group of APPM managers (the case was initiated under the article “Embezzlement or embezzlement of funds”). This was written by “Kommersant”.

A fierce struggle unfolded for the Arkhangelsk Pulp and Paper Mill in the 2000s, the winners of which were the Zingarevichs. Photo: lesprom.com

As a result, as a result of numerous property perturbations, the Arkhangelsk Pulp and Paper Mill ended up in the hands of Ilim, which gave rise to rumors that the beneficiaries of the structure could be behind some high-profile crimes. Recall that these crimes were never solved, so there is no evidence of the involvement of the Zingarevichs.

However, that was a little earlier. And the course of the struggle for the pulp and paper mill turned out to be somewhat different: in fact, the Zingareviches were able to wrest an asset from another odious oligarch, the “privatizer” from the 90s, Oleg Deripaska.

There was a serious corporate conflict over the asset, for which Oleg Deripaska fought. In 2002, Deripaska’s BazEl, with the support of businessman Vladimir Kogan, recovered 8 billion rubles from Ilim, the bailiffs arrested 83% of the shares of the Bratsk Forestry Complex and 61% of the Kotlas Pulp and Paper Mill.

It was rumored that the truth was on Deripaska’s side, but in the end, Ilim’s lawyers and colossal efforts did their job – as a result of more than 150 lawsuits and 4 years of confrontation, Ilim was able to resolve the situation in its favor and save assets. About that story writes “Business Petersburg”.

We must not forget that many structures ended up in the hands of the Zingarevichs as a result of bankruptcies – as many believed, in some cases, perhaps fictitious. Here we can recall the situation with the same Bratsk timber industry complex, which went bankrupt in 1997, but already in 1998 a very profitable enterprise “surfaced” already in the hands of the Zingarevichs and their partner Zakhar Smushkin.

And only in 2007, when the acute phases of conflicts and the collection of assets ended, the need arose to invest and develop the group. And Zingarevichi, without thinking twice, agreed to sell shares with IP. So the Americans began to make money on the Russian forest.

After that, the Zingarevich empire grew by leaps and bounds. At one time, Boris Zingarevich was even a member of the board of directors of Rosseti, one of the most scandalous and corrupt state corporations.

Developers from the forest

At the same time, the Zingarevichs also took up the development and hotel business. Another scandalous story is connected with this, when the authorities of the Northern capital, it is not clear on what grounds, transferred to companies close to the twin oligarchs, three monument buildings of federal significance at once for reconstruction into hotels.

So, LLC “Lotus Hotels” received the building of the former barracks of the Pavlovsky Life Guards Regiment on the Field of Mars. “Orange-Development” got the building of the former Court stable department, and the building of the Central Air Transport Agency on Nevsky Prospekt turned out to be under “IFG-Basis-Project” LLC.

And the essence of the situation (which caused questions) is that the transfer of these historical buildings was carried out without competitive procedures. It turns out that the budget did not receive any additional benefits from this story.

Another part of the Zingarevich empire, the Plaza Lotus Group company, received from Smolny the status of a strategic investor after the refusal to restore the Stable Department, the project of which caused an uproar from the townspeople.

But instead of forgetting about the oligarchs, Smolny allocated six plots to their structures at once without bidding, where they were going to build economy-class hotels.

However, instead of them, Mikhail Zingarevich suddenly presented the concept of investment hotels. And in 2017, apparently, against the background of possible financial problems, he began to sell these assets altogether. And obviously with considerable benefit for themselves. Such are the responsible investors who protect the image of the cultural capital.

By the way, the partner of the Zingarevichi Smushkin, the latter, as mentioned, is a figure no less odious than the brothers themselves. What is worth only a high-profile story from 1998, when his brother Fedor was convicted in the United States for the murder of a young girl, a pizzeria worker. This was written by “Version”.

In order to get along with such partners, Zakhar Smushkin himself has to be “not a blunder”. Photo: Sergey Ermokhin / Delovoy Petersburg

It would seem that Zakhar has nothing to do with it, but according to evil tongues, he allegedly could travel to the USA, trying to “shield” his brother. Even so, he did not succeed, but it was then that he could secure the necessary contacts in the States in order to then let IP into the Russian timber market.

Atlas Shrugged

The Zingarevichs have their own unpleasant history with their relatives. Specifically, with the son of Boris Zingarevich Anton, also a big businessman who owned Energostroyinvest-holding.

In 2016, the Investigative Department of the Ministry of Internal Affairs of the Russian Federation charged Anton Zingarevich and the CEO of Energostroyinvest-Holding in absentia with fraudulently embezzling 2.5 billion rubles from Globex Bank and MTS Bank. In absentia, because by that time Zingarevich Jr. had long been in the States so beloved by the oligarch brothers. This was written by “Kommersant”.

Investigators believed that the suspects could steal loans from these financial institutions, in fact, irrevocable. Moreover, according to investigators, the loan from MTS Bank was partially spent on the Atlant hockey club from Mytishchi owned by Zingarevich Jr. and repayment of its debts, and most of the funds under the guise of providing a loan to the little-known offshore company Blaine Overseas Venture, as well as the purchase bills of Enonoline Overseas Ltd was withdrawn abroad.

Even so, for the future, “Atlanta” this money would not have gone, if at all it had reached him. Indeed, in 2015, under the wise leadership of Anton Zingarevich, the club was actually left without funds and disappeared from the hockey map of Russia.

Anton Zingarevich. Photo: Tatyana Dorogutina / TASS

As a result, Anton Zingarevich was put on the international wanted list. However, the connections of an influential father and uncle seem to have been able to rectify the situation. Three years later, under extremely strange circumstances, the case against Anton Zingarevich was dismissed.

By the way, another Zingarevich, Mikhail and his son Denis, were also credited with possible fraud with bank money. In 2020, Mikhail Zingarevich even received a bankruptcy lawsuit regarding the debts of his development structure, Plaza Lotus Group. Fontanka wrote about the situation. However, in the end, Mikhail avoided bankruptcy.

Of course, the events of those years are not directly related to the current situation with Ilim. However, it is significant that such scandals thundered in their environment. Now it is not at all clear whether the Zingareviches have the means to buy out shares from their American partners.

In addition, there is a high probability that they may clash with another odious oligarch, Vladimir Yevtushenkov and his AFK Sistema, for an asset. Whatever the outcome, it is already clear that the above-mentioned scandals of the Zingarevichs will not be limited.