Two new investigations conducted by Russian independent journalists provide an insight into the life of luxury of the Russian leadership. Putin’s yacht, Scheherazade, cost close to 600 million EUR, a sum raised by inner-circle oligarchs, journalists say. A different investigation shows how the family of Andrey Turchak, the secretary of United Russia party and vice-president of the Federation Council, made a fortune by privatizing and destroying the most important manufacturing compound in Russia’s entire defense industry.
DOSSIER: Russian oligarchs’ New Year’s gift to Putin
“Putin’s yacht” cost approximately 600 million EUR.
Vladimir Putin’s yacht, “Scheherazade”, was presented as a gift to the Russian president on New Year’s Eve and cost 583.1 million EUR, according to an investigation carried out by law enforcement agencies from a number of EU states. The money for building the ship was raised by a group of business people led by Gennady Timchenko. The investor list allegedly included Ziyavudin Magomedov, who has been behind bars for the last four years and in whose favor Timchenko recently bore testimony in court.
Against the backdrop of the events of 2014-2015 (the Sochi Olympics, the annexation of Crimea, the start of the war in Eastern Ukraine, the Minsk Protocols, the birth of Putin and his alleged girlfriend Alina Kabaeva’s first son), the president’s friends decided to offer him a lavish present on New Year’s Eve, and the money was collected by Gennady Timchenko, a source close to the Russian businessman has told Dossier. According to a joint investigation conducted by authorities in Spain, Italy, Germany and Finland, on December 30, Diams Overseas, a company registered in the British Virgil Islands, signed a contract with the German shipyard Lürssen for the construction of a 140-meter yacht, Scheherazade.
The German company was not selected at random. Lürssen had previously built other vessels for Russian oligarchs, including the 156-meter Dilbar yacht owned by Alisher Usmanov. In 2016, the company purchased Blohm+Voss, which designed another yacht for Putin – Graceful. Scheherazade was officially launched in 2020, and was spotted several times off the coast of Sochi, which is home to Bocharov Ruchey, Vladimir Putin’s official residence, as well as near cape Idokopas, which is home to Putin’s informal residence, the Gelendzhik Palace. Its crew is made up of employees of the Federal Security Service, as Navalnyi’s staff had previously stated. In September 2021, the yacht wintered in the port of Marina di Carrara. In March 2022, representatives of Italy’s Financial Guard boarded the yacht to find out its owner’s name.
It was not easy to link the yacht to Vladimir Putin. The owner of Scheherazade is Bielor Asset, an offshore company registered in the Marshall Islands. The company CEO was originally a Swiss national, Daniel Kolarov, later to be replaced by a native of Bulgaria settled in Monaco, Ivan Kolarov. In a letter dated March 7, 2022, the latter stated Bielor Asset’s client was Eduard Khudainatov (Khudainatov thus tried to lift the ban and get the yacht to break for open water).
Khudainatov, who is Rosneft’s former president, has been the chairman of the Russian Independent Oil and Gas Company (NNK) since 2013.
Although the owner of NNK is a wealthy man, he is not so rich as to afford to buy a few superyachts, European law enforcement agencies point out in their investigation. Khudainatov acts as an intermediary on behalf of Putin and his inner circle. Several luxurious vessels are registered in his name, although he never uses them. He is the formal owner not just of Putin’s yacht, but also of Amadea, the 106-meter yacht owned by Suleiman Kerimov, and Igor Sechin’s 135-meter Crescent. Khudainatov is also the titleholder of two other offshore companies – Hoxton Resources and Lonfort Bay (both registered in the British Virgil Islands). Another two pleasure boats, Milagro and Divina Barbara appear to have been registered as assets of these companies.
EU authorities estimated the price of Scheherazade at 583.1 million EUR. The money was transferred by five different companies, as follows:
- Alera Assets — 225.9 million EUR;
- Diams Overseas — 288.4 million EUR;
- High Definition — 60 million EUR;
- Imperial Yachts — 3.9 million EUR;
- Onda Mare — 3.9 million EUR.
Imperial Yachts is a company that services some of the most expensive watercraft owned by Russian tycoons. It oversaw the building Kerimov’s Amadea, Sechin’s Crescent and Putin’s Scheherazade. Onda Mare is another company specializing in servicing luxury boats. The British branch is run by the captain of Scheherazade, Guy Bennett-Pearce.
Diams Overseas has transferred all the rights and obligations deriving from its contract related to the building of the yacht to Khudainatov’s company.
At least one of these offshore companies is directly linked to Russian oligarchs. The co-owner of the Summa Holding, Ziyavudin Magomedov, owns the company High Definition – a legal entity of the same name is mentioned in the investigation of European law-enforcement agencies.
In a conversation with The New York Times journalists, the yacht’s captain, Guy Bennet-Pearce, insisted that he never saw Vladimir Putin on board. The crew of Federal Security agents arrived in the port where the yacht was docked via Milan. In December 2020, on the same date as the security officers arrived, Alina Kabaeva landed in Milan. One of the Dossier sources close to the former Olympic champion claims that the athlete had been on board.
PROEKT: How patriot Andrey Turchak’s family built villas and shopping centers on the ruins of military plants
Andrey Turchak is one of the leaders of pro-war partisanship in Russia. He discredits the West and supports Russia’s aggression in Ukraine. Why, then, does he feel the need to vacation with his family in France and why did he built a villa on the site of a military plant?
Andrey Turchak is second-in-command in the Russian Federation Council and in the United Russia Party. He is one of the standard-bearers of the war in Ukraine, travelling to the occupied territories, spending time with Russian troops on the ground and criticizing any colleagues who are less belligerent as him.
The Turchaks built their wealth on the ruins of the Soviet and Russian military defense plants they purchased in the 1990s.
“Leninets” was established in 1945 as part of the USSR Ministry of Aviation Industry. By the time the USSR collapsed, Leninets had become a huge enterprise incorporating some thirty manufacturing plants and institutes, most of which were headquartered in Leningrad. The enterprise primarily specialized in manufacturing radar equipment and navigation systems for the army and the navy.
Turchak Sr. was hired at Leninets ever since the 1960s, where he worked as a locksmith. Over the years, he met the young Putin, according to some versions of the story, in the judo section. His friendship with Putin would play an important role in Turchak’s life: in the early 90s, by which time Turchak was already the director of Leninets, the Saint Petersburg’s City Hall authorized Turchak to start joint ventures with Western companies. At City Hall level, these matters were handled by Putin as head of the committee on external relations. Putin would invite Turchak Sr. to enter politics, making him his deputy in the Saint Petersburg branch of the “Our Home – Russia” movement.
1992 marked the start of the privatization of Leninets.
Proekt has managed to identify over 100 buildings and 35 plots of land with a total surface of over half a million square meters, belonging to companies connected to Leninets. The market price for a square meter of office space in the Saint Petersburg area prior to the war was 150 thousand rubles. If we consider this amount, then according to rough calculations, the commercial real estate properties owned by the Turchak family would stand at about 50 billion rubles (tantamount to some 850 million USD in present-day value).
Only a fourth of these properties are destined for military use, while all the others were converted to shopping centers, warehouses or industrial areas on lease. “They’re playing military manufacturers. They pretend to be working, but in fact they are nothing but common landlords”, the former top-manager of one of the Leninets military enterprises claims.
Renting out these properties yields a stable, handsome income to the family – 1.5 billion rubles in 2021, with a net profit of half a billion USD. In some cases, the premises of the former military enterprises are sold for the development of commercial venues. Such is the case, for instance, of the historical building of the Sputnik electromechanical plant on Volkovsky Boulevard in Leningrad: one of the companies tied to Leninets sued the City Hall in 2016, claiming the right to buy the property land. It eventually won in court, went on to purchase the land, and a year later it sold it to the CDS construction company. In 2021, the Volkovsky apartment complex was built here, where Andrey Turchak’s wife, Kira, owns 20 apartments and office areas.
Their joint net worth
“Everything we have is ours to share, but I’m the main shareholder: whatever I say goes”, Anatoly Turchak said in 2015, responding to a query as to who handles the family business. At the time, Anatoly’s son, Andrey, had been involved in politics for a long time, and, according to the law, he had no right to do business, but that didn’t seem to bother his father.
Brothers Boris and Andrey have been involved in the management of Leninets assets since the 1990s, and everything that happened to the former military defense enterprises is also their doing. At present, Boris owns and manages a series of enterprises, and in Andrey’s family, his wife Kira owns the business, providing her with a stable source of income.
This is what their joint net worth looks like right now. The House of Soviets was almost immediately converted from the headquarters of a military enterprise into the Moskovsky-212 business center. It’s a huge building, with approximately seven hundred office spaces available for rent. Its total yearly turnover stands at approximately 100 million rubles.
The Soviet-style building on Bucharest Street used to house the Leninets Institute of Technical Systems Research. At the 2019 MAKS air show, you could still see the results of its research, for instance the Novella search and targeting system, installed on fighter jets to search for and escort enemy ships and aircraft.
At present, the grey façade of the building bears the logo of the Bucharest 24 Business Center. The rent is much lower here compared to the House of Soviets, but it still brings in approximately 20 million rubles per year to the Turchak family.
The Leninets Mechanical Plant in Leningrad, which gave the name to the entire Leninets Holding, takes up to half a block. The plant used to manufacture on-board radar systems for fighter jets. It produced the Zaslon interception system for MiG-31s. Over the years, almost every industrial space here was turned into shopping centers, sold by the Turchak family to various companies. In 2012, the largest segment of the plant was torn down, and a car park was built in its stead. In 2021, multi-story apartment buildings were added as part of the Atlas-City business compound. The building opened for business shortly after the failure of the Russian armed forces at the start of the war in Ukraine. Part of the building in this district is owned by Kira Turchak.
As a matter of fact, Leninets continues to manufacture a limited amount of military equipment. For instance, Zaslon (JSC) continues to use part of the buildings it obtained for its production activity. In 2013, the Russian Defense Ministry signed a contract with this enterprise for the development of the 360-degree Krugozor radar for Mi-8 and Ka-226 helicopters. Subsequently, the Prosecutor’s Office announced that state funds had been embezzled by means of contracts signed with dummy corporations with headquarters in public restrooms in Samara.
The success of the Turchak family business, built on the ruins of former state-run enterprises, is also reflected in their living standards. The family owns at least 14 apartments, 7 plots of land and 5 villas. The market value of these properties stands at approximately 1.5 billion rubles, tantamount to some 25 million USD. One of these properties deserves special attention.
The industrial military villa
The Technical Systems Research Institute was a lucrative Soviet enterprise which, for nearly half a century, before its liquidation in 2019, produced aviation and navy radio-electronic systems. Apart from its headquarters on Bucharest Street, the Institute also owns a plot of land on the Gulf of Finland seacoast near Logi village in the Kingisepp District in the Leningrad Oblast. The Institute built a testing center on its sandy shores fringed with thickets of scenic forests.
The Internet provides little information about this center, since whatever tests are conducted here are classified. The center tested sensors used for the detection of submarines. The Institute premises is under guard to this day, although for different reasons. Two guard posts separate the rest of the world from a private village, built particularly for the Turchak family.
The largest house here is a two-story villa with a beachfront in the middle of a pine forest. It is registered in Boris Turchak;’s name. It has an 80-square-meter pool in its backyard and a well-kept garden on the other side of the house.