- Putin’s ally, Vladimir Potanin, is said to have bought Russian banks at a reduced rate.
- Western businesses fled the country en masse after Putin’s invasion of Ukraine.
- According to Forbes, Potanin is considered the richest man in Russia, with a value of just under $30 billion.
Russia’s richest man has taken over domestic banks at a discount rate, after their Western owners abandoned the country, according to reports.
Russia’s economy has been in freefall since the invasion of Ukraine, after Western powers imposed sanctions on a number of President Vladimir Putin’s closest allies, seizing and freezing their assets, and a multitude top companies – from McDonald’s to Goldman Sachs – have gone out of business. in all the countries.
Metals tycoon Vladimir Potanin, a longtime Putin ally, has largely avoided Western sanctions, despite his close personal ties to the regime. Experts say Potanin, who played ice hockey with Putin in the past, has largely remained off the West’s radar due to his personal importance to global metals markets.
On Thursday, the Financial Times reported that Potanin, believed to be worth $30 billion, had dipped into his estimated $30 billion fortune to secure stakes in major Russian banks, which saw their value decline after the Western stakeholders have abandoned the country.
The billionaire’s Interros group is said to have acquired Rosbank after Societe Generale (SocGen), a French bank which bought the company from Potanin in 2008, opted for a quick exit from Russia. Insider previously reported that banks still operating in Russia were preparing to lose huge sums of money for their exit.
Potanin reportedly got Oleg Tinkov’s stake in TCS Group Holding, for which Tinkov, who said he was forced to sell his shares after criticizing the war, complained that Potanin had only paid 3% of the value real stakes, according to the newspaper. Insider reached out to TCS and SocGen but did not immediately get a response.
Tatiana Stanovaya, founder of political analysis firm R.Politik, told the FT: “The Kremlin had a geopolitically problematic asset [in Tinkoff] and Potanin had a solution.”
Potanin’s recent acquisitions make him a key figure in the banking sector. In February, Rosbank and Tinkoff, the main assets of TCS, combined assets of nearly $45 billion (RBS 3 trillion).
A person involved in the negotiations for SocGen told the FT: ‘We wanted to find a way out in the most orderly way while preserving our 12,000 employees.
They added, “Potanin…says he wants to preserve the bank and its culture,” which is why they decided to accept his offer which was quick and he knows the bank, according to the report.
Potanin founded Interros – a conglomerate with stakes in sectors including mining, energy and real estate – in 1990, and is Russia’s richest man, according to Forbes. But he is best known for mastering loan-for-equity schemes, which many other oligarchs, including Roman Abramovich, have made their fortunes from these schemes.
Under “loans for equity” programs, wealthy entrepreneurs and banks lent money to the Russian government in the 1990s in exchange for stakes in the country’s natural resource companies. The government often could not repay these loans, leaving many resource companies in the hands of wealthy individuals.