When Russia invaded Ukraine, Alexei Mordashov moved swiftly to transfer billions of dollars of stock holdings out of his name, while a $ 500mn superyacht linked to the oligarch sailed back to his home country.
Mordashov, who made his fortune in steel but has interests in sectors from coal and gold to travel and media, is one of Russia’s richest men. But after the EU and UK targeted him with sanctions, he faces a tussle to keep hold of some of his most prized assets.
Like many oligarchs, he is exposed by an international web of interests but shielded by the use of opaque ownership structures and the patchwork of imperfect legislation that differs from one jurisdiction to the next.
“It’s becoming very clear there are gaps in the framework,” said Maira Martini, an expert on money flows at campaign group Transparency International. “It’s just a joke, the number of loopholes people can use to circumvent the rules.”
On February 28, four days after the invasion and the same day the EU imposed sanctions on him, Mordashov transferred his 29.9 per cent stake in German travel group Tui from his Cyprus-registered Unifirm to a British Virgin Islands entity controlled by Marina Mordashova, believed to be his third wife.
He also passed to her a controlling stake in Nordgold, his London-based mining company, two weeks before the UK targeted him with sanctions.
Then in mid-March, the $ 500mn yacht reportedly delivered to Mordashov last year, weighed anchor in the Seychelles. The last tracked position of Nord, a 142m vessel that sails under a Cayman Islands flag, is at the Russian port of Vladivostok.
Despite such moves, he is under pressure. His wealth – up to $ 28bn before the war, according to Bloomberg data – has dropped.
The German government has ruled the transfer of Tui stock “invalid” until an official investigation has concluded.
The Russian tycoon’s Severstal group risks a debt default after Citigroup froze interest payments pending regulatory probes, while foreign advisers and directors have resigned.
Italian authorities have seized his € 105mn compound in Sardinia, as well as another yacht, the € 65mn Lady M.
Mordashov made his fortune during the post-Soviet chaos of the 1990s by taking a controlling stake in Severstal, the steel factory established by Stalin in the gritty town of Cherepovets where his parents worked. He went on to build a group that acquired steel plants in the US and beyond – although Severstal sold its North American assets in 2014 – and diversified into coal, gold, turbines, retail, travel, media and telecoms.
From 2007 he started buying shares in Tui, joining the supervisory board and building a stake as high as 34 per cent last year during emergency fundraising.
People who have worked with Mordashov described him as shrewd, astute and a good spotter of business opportunities but not a person for small talk or flamboyance. He never spoke about politics, they said.
He created a joint venture with Tui in 2009 in Russia and Ukraine offering beach holidays in Egypt and Turkey. But he wanted to move faster than the others in the company considered comfortable. Tui completed its divestment in 2021.
Mordashov holds an MBA and honorary doctorate from Northumbria University’s business school in Newcastle, where he has funded more than 200 Severstal managers’ degrees over a decade.
“The UK for him was more about services like education,” said Andrew Kakabadse, an emeritus professor at Cranfield School of Management, who received £ 1.7m from Mordashov to research boardroom governance. “His business was much more in the US than Europe. At one time he was [Vladimir] Putin’s favorite not because of politics but because of his technical skills. He’s a very good manager. He kept his distance. He was invited to become a minister and refused. “
While avoiding any direct criticism of Putin, Mordashov in early March called for an end to the bloodshed in Ukraine and claimed to be distant from politics.
“I have absolutely nothing to do with the emergence of the current geopolitical tension and I do not understand why the EU has imposed sanctions on me,” he told the Tass news agency.
Nevertheless, he has long cultivated people close to Putin. In 2003, Mordashov bought a stake in Rossiya Bank, which also counts as shareholders Putin proxy Yury Kovalchuk; Nikolay Shamalov, whose son Kirill was reportedly once married to one of the Russian president’s daughters; and oil company Surgutneftegaz.
Together with the bank and Surgutneftegaz, Mordashov set up Russia’s largest private media holding, National Media Group, with stakes in several newspapers and television channels, including the main state Channel One, which has fiercely defended Putin’s “special operation” in Ukraine.
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When Rossiya Bank came under US sanctions in 2014 after Russia’s annexation of Crimea, it opened branches in the region and an account for Putin for his Kremlin salary. As last month’s EU sanctions order described, Mordashov’s Power Machines also sold four wind turbines to the peninsula.
He was an assistant at Leningrad Economic and Engineering University to Anatoly Chubais, the businessman and politician behind the “loans for shares” privatizations in the 1990s who recently quit as Russia’s climate envoy.
Responding to a Putin call for businesses to reinvest their profits rather than reward investors, Mordashov told the FT last year it was “important to acknowledge that Mr Putin is our president and the leader of our nation, and he reflects pretty much what every average Russian has in mind ”.
But as governments target Mordashov and other oligarchs with close ties to Putin, the issue of transferred assets promises to complicate their efforts.
“One of the biggest challenges is when people shift assets to trusted associates, family and people standing in their shoes,” said Tom Stocks, senior investigator with the Organized Crime and Corruption Reporting Project. “It’s quite hard to unpick.”
Reporting by Andrew Jack, Nastassia Astrasheuskaya, Alice Hancock, Amy Kazmin and Cynthia O’Murchu