NOVAYA GAZETA

INVESTIGATION

Photo: Evgeny Stetsko / TASS

Rybolovlev, without his scales

The way to making billions lies through jail

SOCIETY
01:50 5 October 2016

Yulia POLUKHINA,
Special correspondent

This year, the Novaya Gazetas headlines are fraught with the socalled New Russian Poverty. In fact, poverty always makes us see
wealth in a new light. Conspicuous consumption seems to be an
innate characteristic of the young Russian power elite, still not
satiated enough, but in the lean years, it looks worse that immoral, it
looks plain inadmissible. Our articles about the Russian nouveauriches embrace stories of the Princess Olga yacht, Roman
Abramovichs mansions in Manhattan, and the Principality of
Monaco, which Dmitry Rybolovlev, ex-owner of Uralkali, turned into
his estate.
All this is also about power, which turns into money, which is then
needed for new investment in power but this time, in a different
environment. For instance, Roman Abramovich did, albeit not right
away at all, succeed in persuading the New York City Landmarks
preservation Commission to get several of his mansions united into a
huge estate. As to Rybolovlev, all he had to do was to invest some of
the money into Albert IIs favorite hobby, the Monaco football club.
This pattern dates back to the early times when the Russian
capitalism was rising, together with its special relationships with
those in power, both official and informal rulers. So, to scrutinize
Dmitry Rybolovlev as a phenomenon, special correspondents of the
Novaya Gazeta have been to Geneva and Saint Tropez, but also to
Perm District.
In the Urals, they dont really like talking to strangers. I had lived in a Bashkir
single-industry town for several years, and was aware of what we could and
could not expect. However, the city of Perm surpassed my imagination. For
example, this city with a million residents has the embankment of the Kama
River cut off from the residential parts of the city by a railroad. Likewise, any of
my attempts to have an open talk about what was going on in this city and region
in the mid-90s would normally be cut off with silence, but there did transpire
a certain picture in the end.

To me, it seems that the two major time periods in Dmitry Rybolovlevs life and
career are best pictured using the records of two criminal cases. The first is a
contract murder case, when Rybolovlev spent several months in a temporary
detention center, only to be acquitted, even by the Russian Supreme Court
(nevertheless, it is rumored in Perm and elsewhere, that investigation might be
reopened in case new circumstances appear).
The proceedings on the second case were never initiated, but it had to do with a
major 2006 accident in Berezniki that left about 2,000 families without a proper
shelter, which they still dont have even today. The first event happened in the
capital accumulation period, while the second one occurred during capital
sublimation and cashing it.
One of the very few of Rybolovlevs interviews was for Forbes, April 2008,
unfolding his story as an ideal path of a young capitalist, whose views had been
influenced by classical literature (Dreiser) and movies from abroad that were in
fashion (Wall Street by Oliver Stone). Actually, 1987 was not the time one could
not even have imagined making career as a Wall Streeter in Perm. Rybolovlev
sought out the path of least resistance. A son of a prominent cardiologist, he
entered a medical university. The Urals is where people mostly work at the same
plants and factories generation after generation, and medicos are considered to
be high blood of a sort. If you are one, you have money and connections. The
connections can be expanded through a smart marriage, too. Being a third-year
student, Dmitry Rybolovlev married Yelena Chuprakova. Incidentally, Valeriy
Chuprakov became director of the Perm plant of mineral fertilizers, and exactly
in 1987.

The young broker's circle

Dmitry Rybolovlev didnt seem to be particularly interested in starting his own
business based on the research of his father, a pioneer in magnetotherapy;
rather, he appeared to go for striking it rich, quickly and adventurously. Well,
that became possible in the early 90s. Dmitry Rybolovlev got ahold of a
certificate from the Ministry of Finances and began offering financial services,
such as managing stockholder registries. Of course, this was a major competitive
advantage, shortly before voucher privatization in Russia and then mortgage
auctions.
True, neither vouchers nor stocks cost a lot at the time, and yet, one would really
need quite a bit of money to buy them in the amounts that Rybolovlev did. If you
had heard journalists from many an edition asking Rybolovlev the notorious
Where did you get the start-up capital, then Not from gangsters would
summarize all of his responses. In fact, who was a businessman and who was a
gangster, particularly in the Urals and in 90s, was not sharply defined.

Indictment
The story of Dmitry Rybolovlev and his business partners is laid down in detail
in the records of the criminal case. By the way, Dmitry was the only one fully
acquitted in the case; the others charged were convicted to serve long terms for
various crimes. As follows from the materials presented by the prosecution, the
gang was at first united by purely economic goals.
In 1994, when privatizing and incorporating enterprises of the Permsky
region, D. E. Rybolovlev, being President of Kamenniy Poyas, a check
investment fund, and Credit FD, a newly created joint-stock commercial bank,
entered into conspiracy with O. G. Lomakin, V. A. Nelyubin, V. B. Chernyavsky,
S. Z. Rustamov, and S. E. Makarov in order to participate in auctions and
investment tenders to purchase stocks of enterprises of the Permsky region,
belonging primarily to chemical and petrochemical industry, such as jointstock companies Uralkali, Silvinit, Azot, Neftekhimik, Metafrax and others, at
prices only negligibly higher than start prices, and also to purchase stocks in
the securities secondary market, while preventing competitors from purchasing
stocks by using the authority that the above persons possessed with various
criminal gangs. Since early 1994, the above persons would regularly meet in D.
E. Rybolovlevs office, located at 64, Lenina Street, City of Perm, where they
would hold coordinated meetings to discuss the progress of enterprise
incorporation and of purchasing stocks of the above enterprises.
No doubt that the key word here is "authority". The originators of the indictment
take it to have a purely criminal meaning, which is justifiable for law
enforcement authorities. But what if the participants of the case just wanted to
do business legally and become major industrialists and businessmen? However,
that would take more than mere authority. They would have to understand how
the newborn stock market was operating, and what the due diligence was for
enterprises, beyond the plain cash flow, which was the object of kickback for
gangsters anyway.
As agreed by all the participators, D. E. Rybolovlev was endowed with
general management of the groups activities of purchasing stocks at auctions
and investment tenders, as well as registering the purchased stocks as
property of the enterprises that were under Rybolovlevs control and part of
the FD group, with a verbal agreement to later re-register 50 % of the stocks of
the enterprises as property of Lomakin, Makarov, Nelyubin, Chernyavsky, and
Rustamov. <...> There was a verbal agreement reached between Rybolovlev
and the other participants that the part of the stocks of the enterprises that was
intended to belong to Lomakin, Nelyubin, Chernyavsky, and Rustamov should
later be registered as property of LIPS, a closed joint-stock company, founded
by the above persons. <...> In February 1996, in order to fulfill the agreement,
D. E. Rybolovlev introduced Makarov and Shnitkovsky of LIPS, a limited
liability company, into the board of directors of Credit FD, a joint-stock
commercial bank.
So, there were at least business relationships established between Rybolovlev
and a group of associates. Of them, most authority was possessed by Oleg
Lomakin (also known as Prokop). This is easy to track, not only by the criminal
case records but also by the accounting papers of the companies embraced into
the sphere of interests of the group, as well as by materials of legal cases.

Who sent the killer?

Not all the partners, however, were inclined to think strategically; some wanted
to strike it rich quick and easy, which sometimes led to clashes. For instance, the
distribution network of the joint-stock company Neftekhimik was effectively
under control of the gangsters. Here is what the indictment says about this:
In late 1994, the joint-stock company Neftekhimik had O. G. Lomakin as its
representative of the FD group, which were under control of Rybolovlev and in
possession of 40 % of Neftekhimik stocks. O. G. Lomakin, being in control of
raw material supply and process lines as well as selling the products of
Neftekhimik, had a real possibility to receive unregistered money resulting
from his activities, according to the agreement reached with Rybolovlev on
distribution of the stocks.

Which means that according to the prosecution, Prokop (Lomakin) was not
simply observing things but was actually running Neftekhimik on a day-to-day
basis, while gaining most of the profits from its sales. As to Rybolovlev, he had
his own viewpoint of the companys future development. After gaining control
over Uralkali, he intended to expand his potassium business by means of
Silvinit, a second giant of industry since the Soviet times. There was a large
block of shares just being prepared for sale in an investment competition.
According to its conditions, the purchaser was obliged to invest at least 15
million dollars in the enterprise. There had to be an entity with a legal cash flow,
and Neftekhimik was a perfect match.
So, Lomakin being the informal boss, and a legally executed contract for
cooperation where Neftekhimiks products were being sold through the Market
FD trading house, were really getting into the way. Both Rybolovlev, and
Evgeniy Panteleymonov, whom he had made the director, realized that.
In summer 1995, Neftekhimik halted its production several times, completely
ceasing supplies to the Market FD trading house. Then, in September 1995,
Evgeniy Panteleymonov was shot by a killer at the staircase of his own house.
Dmitry Rybolovlev told Forbes that he himself had initiated termination of the
agreement with his business partners, perfectly aware of what could come out
of it, and so he took his wife and daughter to Switzerland, moved around
followed by his guards, and offered the same to Panteleymonov, but
Panteleymonov carelessly refused it. The indictment reads differently: that
Panteleymonov allegedly tried to convince Rybolovlev that Neftekhimik should
not take part in the Silvinit tender, as the enterprise was not financially strong to
fulfill the investment program, which could lead to the cancelation of the tender
results. Aside from that, E. N. Panteleymonov was considering that the
enterprise could operate through the company Solvalub, which owned 20.95 %
of the stocks of the equity capital of Neftekhimik, and was the main competitor
to the enterprises of the FD group, headed by D. E. Rybolovlev.
Whether Panteleymonov alone initiated falling out with the gangsters or that
decision was made together with Rybolovlev, it is obvious that Oleg Lomakin by
no means could have liked it. He did have a motive to have Panteleymonov
murdered. The perpetrators, Ilyinov and Kirsanov, belonged to organized crime.
Did Lomakin have a motive to slander Rybolovlev? Hardly, for that would have
consolidated his role as the mastermind behind a contract murder in the criminal
case. If that was copping a plea, that was not laid down in a formal paper. And
yet, Lomakin pointed out Rybolovlev as the one who ordered the contract
murder. Lomakin was arrested in 1996. The indictment states Rybolovlev got the
weapons first and gave them to Lomakin at a later stage.
"In August 1995, Rybolovlev D.E., without a corresponding license, purchased
in an unidentified place and from an unidentified person, 2 pistols TT, one of
them being a firearm TT N BM 07419, 7.62mm calibre as well as 4 magazines
with 32 rounds 7.62 calibre, which can be used for this specific pistol. In August
1995, Rybolovlev kept and carried these TT pistols, with corresponding
ammunition. Later, near the house located at 64 Lenina Street in the city of
Perm, he gave these firearms and ammunition to Lomakin O.G., so Lomakin
could use these for a premeditated murder of Panteleymonov".
After Panteleymonov's assassination, according to the investigation, the killers
did not get their agreed salary paid, as stated in the indictment:
"The fact that Rybolovlev did not make the payment for Panteleymonovs
murder completely falls in line with Rybolovlevs scheme of work, when he
made promise and did not keep it. This is proven by the testimonies of
Kazancev, Silin, that Rybolovlev broke the earlier made agreements, not
fulfilling them. Lomakin O.G.s, Nelubin V.A.s, and Makarov S.E.s testimonies
also show this."
At first, he was making confessions in minute detail. But things changed after
confrontation with Rybolovlev, who would not provide any evidence, referring to
Article 51 of the Russian Constitution. Then Lomakins answers became evasive
and tangled, and then he just openly declared that he had nothing to do with
Panteleymonovs murder himself and slandered Rybolovlev.

The investigators had no other substantial evidence except for Lomakins words.
Furthermore, Panteleymonovs widow, director of the marketing department of
Neftekhimik, was a witness for the defense. She said her husband had run the
company for 8 years and had been in a good relationship with Rybolovlev; in
1995, Rybolovlev lost control over the FD group and companys money began to
disappear, which made the relationships with the gangsters more complicated.
(Her words were quoted in the Kommersant newspaper.) So, the acquittal for
Rybolovlev, upheld by the Supreme Court, looked reasonable. Rybolovlev was
released from the detention center earlier, through effort of Andrey Pokhmelkin,
brother of Vladimir Pokhmelkin, a prominent congressman representing Perm
District in the Duma. Also, the governor Gennadiy Igumnov publicly stated he
was confident that Rybolovlev was innocent.
After Rybolovlev was victorious in being released, he became close to Igumnov,
and the latters daughter Yelena Arzumanova took high posts in the Credit FD
bank. However, there was a turning point in 2000: when the governor elections
were held, Dmitry Rybolovlev supported Yuri Trutnev, the popular mayor of
Perm, both financially and with public statements. As we are going to see, this
was a good bet by Rybolovlev.

Photo: RIA Novosti

Parallel curves
Actually, this black-and-white saga of a talented guy who was brilliant at
university, got rid of the support of the gangsters and became a billionaire with
a stainless reputation, does not quite tally with the facts. None of his ex-partners,
aside from Lomakin, got into any serious trouble with the law from then on. Say,
Vladimir Nelyubin became a co-owner of the bank Ekoprombank, the one that
serviced Silvinit, and then was a regional congressman for quite a while from
no other party that the Edinaya Rossiya, of course, and would boast being on
close terms with Alexander Karelin and Sergei Shoigu, originators of the party.
As to Sergei Makarov, he became a co-owner of Azot, ran for mayorship of the
town of Berezniki in 2004, and was savagely beaten by a gang of PR guys
engaged by Dmitry Rybolovlev. Regarding Seyfeddin Rustamov, he managed to
leave abroad and has been comfortably living in Virginia for more than 15 years
in a beautiful house he bought for 2.5 million US Dollars in 2005 (according to
tax authorities the house was close to worth 6.5 million US Dollars in 2012).
Even Oleg Lomakin was released in 2009 and from then on was known as just a
well-known Perm businessman. For all these years he had kept his third share
in the Western Ural Chemical Company, successor of the LIPS company that we
mentioned. By the way, that company had been the largest stockholder of the
Ekoprombank up until 2014, until the latter collapsed, together with its clients
money. Now, so goes the world: the one charged with it was Andrey Tuyev, who
had changed his job in the Credit FD bank for Nelyubins bank. Incidentally,
Tuyevs father, Alexander Vassilievich, was the research supervisor for Dmitry
and Yelena Rybolovlevs, medical students at the time.
In short, todays power elite of Perm was more or less born from the same egg,
and Rybolovlev is no exception. He was simply the toughest and luckiest of all.
By the way, his former associates would not call him Ryba (fish) behind his
back, as one could expect, but Scales. Such must be his business portrait.

ANNOUNCEMENT
Read our upcoming issues to find out how the most catastrophic anthropogenic
accident burst out at Uralkali, how Dmitry Rybolovlev held his ground in
confrontation with Igor Sechin, and why 2,000 families in Berezniki are still in
temporary shelters.


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