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Russia: Dmitry Rybolovlev, the Quintessential ‘New Russian’

Billionaire Dmitry Rybolovlev serves as an example of the quintessential ‘New Russian’ through his controversial activities during the Yeltsin Era, his modern business practices, and his extravagant international spending – he has just purchased the most expensive New York City apartment to date.

Global Voices placed Russia's ‘oligarchs’ in their historical and economic context in a November 2011 post entitled, “FC Anzhi and the Yeltsin Era Money”:

Ever since the fall of the Soviet Union 20 years ago, the world has watched Russia's transition into capitalism with great interest. The Yeltsin era of the 1990s was characterized by a struggle over who would emerge from the transition with holdings of Russia's major sources of wealth, such as its natural resources. The victors in that struggle are known as the ‘oligarchs’ because they possess a degree of wealth that surpasses most people's ability to conceptualize.

Another term for those who emerged from the process of privatization with vast amounts of wealth is ‘New Russians.’ While the term ‘Oligarchs’ focuses more on the political power of these individuals, ‘New Russians’ emphasizes the economic component of their influence.

ToperJokes Blog – a site that translates Russian and Ukrainian jokes into English – devotes an entire folder to jokes about New Russians. Here is one:

A New Russian asks the priest:
– Father, my cat has died. I want you to read the burial service!
– No, we may not do this in Orthodox Church.
– What should I do then?
– Across the road there is a sectarian church, they will do anything for money.
– Will 4000 dollars be enough?
– My son, why didn't you tell from the start that you had a baptized cat?!

As this joke suggests, New Russians are also characterized by an often unspoken assumption that their wealth was acquired through the use of irregular methods. During any governmental transition there will invariably be periods of time when laws are vague or non-existent. Russia has yet to develop a comprehensive land registry, and so it is little surprise that the Moscow News estimated last fall that 90 percent of Moscow apartments are rented illegally.

Analyseman Blog discussed [ru] Mr. Rybolovlev's activities during the Yeltsin era, including the 11 months he spent in prison accused of murdering a factory executive:

“In the early 1990s, Dmitry Rybolovlev was one of the most active participants in privatization in his region. Mr. Rybolovlev then headed Perm Credit Bank FD and bought shares mainly in the chemical plants. In 1992-1993, first deputy chairman of the Perm region's Property Fund, Vladimir Shevtsov, helped him to privatize a major stake in Uralkali and became his partner. In 1996, both were accused of organizing the murder of the director of the Perm factory Neftekhimik. Mr. Rybolovlev spent 11 months in pre-trial detention and was released on 1-billion bail.” – a little bit of background on how the money [spent on the New York City apartment] had been made.

Other casualties of regime change are issues of safety regulations and infrastructure. The Russian-language MCINC LiveJournal blog discussed [ru] last week how Russian factory owners are not held accountable for accidents, but rather they continue to receive monetary benefits from the state.

Such practices were exemplified by a major accident that occurred in Mr. Rybolovlev's Uralkali factory in 2006. UralKali.com released the Russian government's official findings on the cause of the accident along with the company's legal obligations regarding paying damages to the victims:

Uralkali (Berezniki, Perm region) has received the report of the re-opened investigation into the causes of the accident that occurred at Uralkali Mine 1 in October 2006. As stated previously, the second investigation was conducted by a commission established by Russia’s mining safety watchdog, Rostekhnadzor, on November 11, 2008, by order of the Russian Deputy Prime Minister Igor Sechin. […]

There has to date been no judicial decision requiring Uralkali to reimburse the expenses listed in the report. However, the company cannot give any assurance that claims will not arise for such reimbursements, which could exceed 3.1 billion rubles.

So then the question becomes – What do New Russians do with the money?

The aforementioned Global Voices article about Suleyman Kerimov's FC Anzhi, along with one pertaining to Mikhail Prokhorov's New Jersey Nets, discuss how many New Russians buy international sports teams.

Coincidentally, it was to Mr. Kerimov that Mr. Rybolovlev sold his stake of Uralkali in 2010 amidst a costly divorce from his wife of 21 years, Elena. Analize Faktor blog discussed [ru] the details of the divorce that had international implications:

A Geneva court imposed an interim measure on the assets of Uralkali, a major Russian Federation potassium fertilizer producer, in connection with the divorce between the shareholder Dmitry Rybolovlev and his wife Elena […]

Elena Rybolovleva initiated divorce proceedings in late 2008 in Switzerland. She's claimed to have a legal right to half of her husband's assets and has filed lawsuits against him in the United States, the Virgin Islands, and in Cyprus, as well as in the UK and Singapore. […]

A mill at one of Uralkali’s processing plants in Berezniki, Russia. Flickr photo by ICT Group (CC BY-SA 2.0).

A mill at one of Uralkali’s processing plants in Berezniki, Russia. Flickr photo by ICT Group (CC BY-SA 2.0).

Agent 4 Stars Blog contextualized Mr. Rybolovlev's December 2011 investment in AS Monaco FC, following the sale of his stake in Uralkali:

Monaco’s Prince Albert II says Russian billionaire Dmitry Rybolovlev is eager to invest €200 million into the local football club. “We’re going to discuss the investment issue with the club’s administration in the coming days,” the monarch told Nice Matin newspaper. Seven-time French champions AS Monaco are experiencing serious money shortages after being relegated from Ligue 1 last season. Rybolovlev, who used to be the owner of Russia’s biggest potash fertilizer company, Uralkaly, currently lives in Monaco. […]

Previously, the Monaco club enjoyed the support of another Russian tycoon, Aleksey Fedorychev.

The post went on to list other assets held by Mr. Rybolovlev and his ex-wife Elena:

Donald Trump’s Palm Beach mansion now belongs to Dmitry Rybolovlev and ex. wife Elena Rybolovlev. Through County Road Property LLC, Rybolovlev in 2008 paid cash for the 515 N. County Road estate, which boasts 475 feet of unobstructed oceanfront and 6 acres. Rybolovlev closed the deal for $5 million less than Trump’s $100 million asking price. Trump snapped up the property in 2004 for $41.4 million.In a June 2008 statement to the Wall Street Journal, Rybolovlev confirmed he was the mystery Russian behind the Trump purchase. He said he did not plan to make Palm Beach his home. Palm Beach County’s property appraiser has assessed the estate’s value at $48 million for 2010.

Dmitry Rybolovlev also owns a string of lavish properties from London to Singapore and an unfinished Dream home a replica of the Petit Trianon, which he planned to build in Cologny, the most upper-crust hill of Geneva.

Mr Rybolovlev’s assets also include an art collection stuffed with paintings by Picasso, Van Gogh, Gauguin and Monet. These paintings were originally intended to decorate the property of Cologny.

Finally, last week both the English- and Russian-language media were filled with mentions of a record-breaking purchase: Mr. Rybolovlev had aquired the most expensive apartment in the history of New York City and placed the property in the name of his 22-year-old daughter. LiveInternet user dispepsia provided [ru] the specifics of the sale:

Last week a 22-year-old Russian student, Ekaterina Rybolovleva, purchased an apartment in Manhattan for $88 million. Of course, Ekaterina is the daughter of the Russian billionaire Dmitry Rybolovlev who recently sold his shares in Uralkali. […]

Uralkali shareholder Dmitry Rybolovlev is worth an estimated $9.5 billion – which makes him the 93rd richest person in the world.

The former owner of the apartment, Sandy Weill (Former CEO of Citigroup), sold it to the rich Russian for $88 million! Mr. Weill had purchased the apartment in 2007 for $48 million. […]

The apartment is located in a building considered the best ever built in 15 Central Park West. It was built in 2006-2007 by the famous architect, Robert Stern. The apartment occupies the 20th floor in its entirety and has an area of 6,774 square ft (626.5 square meters). Also, the apartment is surrounded on three sides by a 2,077 square ft terrace (193 sq. meters).

Replying to a commenter, user dispepsia wrote:

In my opinion, it's a good investment – because the place is so beautiful! And he didn't spend the money on booze or on gambling, and the fact that it's so expensive – well, he [can easily afford it]! Unlike us, [the ordinary people].

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