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You are the task. No pupil far and wide. Franz Kafka |
Roman Arkadyevich Abramovich (Рома́н Арка́дьевич Абрамо́вич, ; born 24 October 1966) is a Russian businessman and the main owner of the private investment company Millhouse LLC.
In 2003, Abramovich was named Person of the Year by Expert, a Russian business magazine. He shared this title with Mikhail Khodorkovsky. He is known outside Russia as the owner of Chelsea Football Club, an English Premier League football team, and for his wider involvement in European football.
Abramovich is currently the ninth richest person in Russia and the 53rd richest person in the world, according to the 2011 Forbes list, with an estimated fortune of $13.4 billion.
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Born to a Russian Jewish family, Abramovich was raised in his uncles' families, living first in Ukhta, in the Komi Republic, and then in Moscow. He attended regular state schools and was an average student. Information on his university education is controversial. Some sources suggest that he attended the Ukhta Industrial University, while others point to The Gubkin Russian State University of Oil and Gas in Moscow. Both universities deny his attendance. In Abramovich’s official biography it is stated that he graduated from the Moscow State Law Academy in 2001, but rumours still circulate that he dropped out. Some sources claim that this supposed law-degree was completed in just two years whereas most law-education institutions require at least four years in attendance.
Roman Abramovich started his multi-billion-dollar business during his army service where he sold stolen gasoline to some of the commissioned officers of his unit. After a brief stint in the Soviet Army, he married his first wife, Olga. He first worked as a street-trader and then as a mechanic at a local factory. At the peak of perestroika, Abramovich sold imported rubber ducks from his Moscow apartment. Some sources suggest that these ducks were imported illegally, but no evidence of this exists.
A 2,000-ruble wedding present from Olga's parents (about £1,000 or US$2,000 at that time) was invested by Abramovich in smuggling of black market goods or contraband to sell in Moscow in or around December 1987. Abramovich soon doubled, then tripled, the investment, his confidence growing with each success in this smuggling business. Soon he progressed to making plastic toys (including plastic sailors) and started up an automobile parts cooperative. He attended the Gubkin Institute of Oil and Gas in Moscow (where he sold retreaded car tires as a sideline), then traded commodities for Runicom, a Swiss trading company.
In 1988, as Perestroika opened up opportunities for entrepreneurs in the Soviet Union, Abramovich got a chance to legitimize his underworld business. He and Olga set up a company making dolls. "It brought success almost immediately," says Olga. Due to his business acumen, within a few years his wealth spread from oil conglomerates to pig farms and he also started investing in other businesses. Abramovich set up and liquidated at least 20 companies during the early 1990s, in sectors as diverse as tire retreading and bodyguard recruitment.
From 1992 to 1995, Abramovich founded five companies that conducted resale, produced consumer goods, and acted as intermediaries, eventually specializing in the trading of oil and oil products. However, in 1992, he was arrested and sent to prison in a case of theft of government property: AVEKS-Komi sent a train containing 55 cisterns of diesel fuel, worth 3.8 million roubles, from the Ukhta Oil Refinery; Abramovich met the train in Moscow and resent the shipment to the Kaliningrad military base under a fake agreement, but the fuel arrived in Riga. Abramovich co-operated with the investigation, and the case was closed after the oil production factory was compensated by the diesel's buyer, the Latvian-US company, Chikora International.
In 1995, Abramovich and Boris Berezovsky, an associate of President Boris Yeltsin, acquired the controlling interest in the large oil company Sibneft. The deal was within the controversial loans-for-shares program and each partner paid US$100 million for half of the company, below the stake's stock market value of US$150 million at the time, and rapidly turned it up into billions. The fast-rising value of the company led many observers, in hindsight, to suggest that the real cost of the company should have been in the billions of dollars. Abramovich later admitted in court that he paid huge bribes (in billions) to government officials and obtained protection from gangsters to acquire these and other assets (including aluminium assets during the aluminium wars).
Thus, the main stages of Abramovich's financial career were: January 1989 to May 1991, chairman of the Comfort Co-op (manufacturer of plastic toys); May 1991 to May 1993, director of the ABK small enterprise, Moscow. According to various sources, from 1992 to 1995 Roman Abramovich set up five companies engaged in the production of consumer goods and selling-and-buying. In May 1995, jointly with Boris Berezovsky, he set up the P.K. Trust close joint-stock company. In 1995 and 1996, he established another 10 firms: Mekong close joint-stock company, Centurion-M close joint-stock company, Agrofert limited liability company, Multitrans close joint-stock company, Oilimpex close joint-stock company, Sibreal close joint-stock company, Forneft close joint-stock company, Servet close joint-stock company, Branco close joint-stock company, Vector-A limited liability company, which, again together with Berezovsky, he used to purchase the shares of the Sibneft public company.
The Guardian concludes Abramovich's career as follows:
In 1993, Abramovich founded Mekong. He began selling oil from Noyabrsk. Eventually, he met fellow Russian businessman and entrepreneur Boris Berezovsky.
According to two different sources, he first met Berezovsky either at a meeting of the Russian businessmen in the Caribbean in 1993 or in the summer of 1995 on the yacht of his friend Pyotr Aven.
Berezovsky introduced Abramovich to "the family", the close circle around the then president, Boris Yeltsin, which included his daughter Tatyana Dyachenko and chief security adviser, Alexander Korzhakov.
Together with Berezovsky, Abramovich founded the offshore company Gibraltar-registered Runicom Ltd. and five Western European subsidiaries. Abramovich headed the Moscow affiliate of the Swiss firm, Runicom S.A. In August 1995, Sibneft was created by Boris Yeltsin’s presidential decree. It was rumored that Abramovich was the chief of the organization with Berezovsky promoting the business in higher circles.
In 1995, Abramovich and Berezovsky acquired a controlling interest in the giant Soviet oil company Sibneft. Affiliates of Abramovich, with affiliates of Boris Berezovsky, purchased Russian oil company Sibneft for $100.3 million (the company was worth $2.7 billion at that time). Sibneft produces around $3 billion worth of oil annually. Abramovich established several fly-by-night firms and together with his friend Boris Berezovsky used them to acquire the stock of Sibneft. As a result, the tycoon managed to pay for the company 25 times less than the market price. Bought for a total of $200 million, Sibneft is now worth seventy five times as much.
The Times claimed that he was assisted by Badri Patarkatsishvili. This acquisition was under the controversial loans-for-shares programme initiated by then President Boris Yeltsin. After Sibneft, Abramovich's next target was the aluminium industry. After privatisation the 'aluminium wars' lead to murders of smelting plant managers, metals traders and journalists as groups battled for control of the industry. Abramovich famously emerged winner in the aluminium wars. The Times stated that in a BBC investigation into Abramovich's wealth, reporter John Sweeney noted that, after the oligarch (Abramovich) emerged at the top of the trade, the murders stopped.
The Times also quotes:
Mr Abramovich discloses that there was a showdown at St Moritz airport in Switzerland in 2001 when Mr [Badri] Patarkatsishvili asked him to pay US$1.3 billion (€925 million) to Mr Berezovsky. “The defendant agreed to pay this amount on the basis that it would be the final request for payment by Mr Berezovsky and that he and Mr Patarkatsishvili would cease to associate themselves publicly with him and his business interests.” The payment was duly made. Mr Abramovich was also willing to pay off Mr Patarkatsishvili. He states that he agreed to pay US$585 million (€416 million) “by way of final payment”. Mr Abramovich denies that he helped himself to Mr Berezovsky's interests in Sibneft and aluminium or that he threatened a friend of the exile. “It is denied that Mr Abramovich made or was party to the alleged explicit or implicit coercive threats or intimidation,” he states.
According to court-papers submitted by Abramovich and seen by The Times (UK), Abramovich mentions in the court-papers:
In 1999, Abramovich was elected to the State Duma as the representative for the Chukotka Autonomous Okrug, an impoverished region in the Russian Far East. He started the charity Pole of Hope to help the people of Chukotka, especially children, and in December 2000 was elected governor of Chukotka, replacing Alexander Nazarov.
Abramovich was the governor of Chukotka from 2000 to 2008. It has been estimated that he spent over US$1.3 billion (€925 million) of his own money on the region, which now has one of the highest birth rates in Russia. Under Abramovich, living standards improved, schools and housing were restored and new investors were being drawn to the region.
Abramovich said that he would not run for governor again after his term of office expired in 2005, as it is "too expensive", and he rarely visits the region. However, Russian President Vladimir Putin changed the law to abolish elections for regional governors, and on 21 October 2005 Abramovich was reappointed governor for another term.
Abramovich was awarded the Order of Honour for his "huge contribution to the economic development of the autonomous district [of Chukotka]", by a decree signed by the President of Russia.
In early July 2008 it was announced that President Dmitri Medvedev had accepted Abramovich's latest request to resign as governor of Chukotka, although his various charitable activities in the region would continue. In the period 2000–2006 the average salaries in Chukotka increased from about US$165 (€117/£100) per month in 2000 to US$826 (€588/£500) per month in 2006.
The regional government estimates that, during his tenure, Abramovich directed investments in the range of $2.5 billion to rebuild Chukotka's crumbling housing, schools, hospitals and infrastructure, much of the money coming from his own pocket and through affiliated companies and his two foundations – Pole of Hope and Territoria.
Roman Abramovich has been alleged to be involved in various wrongdoings by many people. It is also alleged that, at one time, then Russian president Boris Yeltsin himself provided Abramovich with protection from prosecution for various criminal activities ranging from stealing diesel fuel to illegally acquiring Sibneft at a staged contest. The Times said that Abramovich "famously emerged triumphant after the “aluminium wars”, in which more than 100 people are believed to have been killed in gangland feuds over control of the lucrative smelters. He avoided the fate of a rival oligarch who annoyed the Kremlin and ended up being transported to jail in Siberia for ten years," and "Numerous officials and executives are said to have lost their lives". Nonetheless, many of the allegations against Abramovich are unproven and he has never been convicted of any crime in any world court.
BBC reporter John Sweeney memorably asked a Russian editor: “Is Mr Abramovich more powerful than the gangsters?” The Russian paused, then smiled: “Good observation.”
Boris Berezovsky (his one-time business partner) alleged in 2008 that Abramovich harassed him with "threats and intimidation" to cheat him to sell his valuable shares at less than their true worth. Abramovich has been sued for US$3.3 billion(€2.35 billion/£2 billion).
Berezovsky is said to have sold his stake in Sibneft for $650 million (€462 million/£326 million) at today's prices. He received $450 million (€320 million/£272 million), for the Rusal shares. He claims the price should have been much higher US$2 billion (€1.42 billion/£1.2 billion) more for the Sibneft shares, and US$1.5 billion (€1.06 billion/£900 million) for Rusal. The former forestry engineer and used car salesman is claiming a total of US$ 3.36 billion (€2.39 billion/£2.03 billion), a significant part of Abramovich's estimated US$17.9 billion (€12.73 billion/£10.8 billion) fortune. Berezovsky is believed to be worth around £500 million. Abramovich apologised to Berezovsky later.
In 2008, The Times reported that Abramovich admitted that he, along with close associate and partner, oil titan, Constantine Alexander-Goulandris, paid billions of dollars for political favours and protection fees to obtain a big share of Russia's oil and aluminium assets as was shown by court papers The Times obtained.
Yugraneft, an affiliate of Sibir Energy, is seeking billions of dollars in damages in a lawsuit in London against Roman Abramovich and his investment company Millhouse Capital, alleging that it was cheated out of its Russian assets. It alleges that another of Roman Abramovich's companies, Sibneft, illegally diluted Yugraneft's interest in their joint-company that had oil fields in Russia from 50% to 1%. The proceedings "involve substantial claims to recover the proceeds of the diluted interest", said Sibir Energy, a company co-owned by the billionaire Shalva Chigirinsky.
In 1992 he was arrested in a case of theft of government property: AVEKS-Komi sent a train containing 55 cisterns (tankers) of diesel fuel, worth Р3.8 million (Roubles), from the Ukhta Oil Refinery (Case No. 79067 for the large-scale theft of state property); Abramovich met the train in Moscow and resent the shipment to the Kaliningrad military base under a fake agreement, but the fuel arrived in Riga. Abramovich co-operated with the investigation, and the charges were dropped after the oil production factory was compensated by the diesel's buyer, the Latvian-US concern, Chikora International.
An allegation emerging from a Swiss investigation links Roman Abramovich, through a former company, and numerous other Russian politicians, industrialists and bankers to using a US$4.8 billion (€3.4 billion) loan from International Monetary Fund as personal slush fund; an audit sponsored by the IMF itself determined that all of the IMF funds had been used appropriately.
In January 2005, the European Bank for Reconstruction and Development (EBRD) indicated that it would be suing Abramovich over a £9 million (US$14.9 million/€10.6 million) loan. The EBRD said that it is owed US$17.5 million (€12.45 million/£10.6 million) by Runicom, a Switzerland-based oil trading business which had been controlled by Abramovich and Eugene Shvidler. Abramovich's spokesman indicated that the loan had previously been repaid.
International Herald Tribune report that "Russia's antitrust body said Wednesday that Evraz Holding—part-owned by Kremlin-friendly businessman Roman Abramovich – has breached anti-monopoly rules, overcharging customers for coking coal."
In June 2003, Abramovich became the owner of the companies that control Chelsea Football Club in London. Former owner of the club was Ken Bates, who then bought Leeds United with the money gleaned from the sale. The club immediately embarked on an ambitious programme of commercial development, with the aim of making it a worldwide brand on a par with footballing dynasties like Manchester United and Real Madrid, and also announced plans to build a new state-of-the-art training complex in Cobham, Surrey. Chelsea finished their first season after the takeover in second place in the Premiership, up from fourth the previous year. They also reached the semi-finals of the Champions League, which was eventually won by the surprise package of Porto, managed by José Mourinho. For Abramovich's second season at Stamford Bridge Mourinho was recruited as the new manager, replacing the incumbent Claudio Ranieri. Chelsea ended the following season as league champions, for the first time in 50 years, and only the second time in their history. Since the takeover the club have won eight major trophies – the Premier League 3 times, the FA Cup 3 times (with 2010 providing the club's first ever league and FA Cup double) and the League Cup twice. Manchester United are the only English club to have won more honours in that time.
It is argued that Abramovich's involvement with Chelsea has distorted the football transfer market throughout Europe, as his wealth often allows the club to purchase players virtually at will although that has changed in recent years. He did however sanction the transfer of Andriy Shevchenko for a then British record transfer fee of around £30 million (€35.3 million).
In the year ending June 2005, Chelsea posted record losses of £140 million (€165 million) and the club is not expected to record a trading profit before 2010, though this did decrease to reported losses of £80.2 million (€94.3 million) year ending June 2006.
In a December 2006 interview Abramovich stated that he expected Chelsea's transfer spending to fall in years to come, although he subsequently seemed to move away from this position. He is also present at almost every game Chelsea plays and shows visible emotion during matches, a sign taken by supporters to indicate a genuine love for the sport, and usually visits the players in the dressing room following each match, although this stopped for a time in early 2007 as rumours of a feud between Abramovich and manager Mourinho, regarding the appearances of certain players, notably Andriy Shevchenko, appeared in the press. In the early hours of 20 September 2007, José Mourinho announced his shock exit as Chelsea manager by mutual consent with the club following a meeting with the board. Former Israel coach and Chelsea's director of football, Avram Grant, was named as his replacement. Ever since Grant had joined Chelsea (in the summer of 2007) there had been friction between him and Mourinho. Mourinho reportedly told Grant not to interfere in team affairs but with Abramovich's backing, Grant's profile at the club rose after he was made a member of the board. This event apparently did not go down well with Mourinho and may have contributed to his surprise departure. Avram Grant led Chelsea to the position of runners-up in the Premiership and the club's first Champions League final appearance, beaten by Manchester United on both accounts. Nevertheless, on 24 May, Grant was sacked as manager by Abramovich. On 11 June 2008, it was announced that Luiz Felipe Scolari, who had taken Brazil to World Cup glory in 2002, would be taking over as manager. But he only lasted until 9 February 2009 before being sacked. In February 2009, acclaimed coach Guus Hiddink was appointed caretaker manager for the rest of the 2008/09 season, delivering Chelsea's first post-Mourinho trophy with the FA Cup. He was replaced by another former European Cup winning boss, Carlo Ancelotti. Ancelotti won Chelsea their first ever Double in his first season but was also sacked at the end of his second after Chelsea's storming form at the start of the campaign collapsed spectacularly during the winter months. André Villas-Boas, after taking Porto to a Europa League triumph, and having previously worked alongside Mourinho at Stamford Bridge, was appointed as Abramovich's seventh different manager of Chelsea on 22 June 2011. As of May 2008, Abramovich has spent approximately £600 million (€705 million) on the club since arriving in 2003.
In January 2011, Spanish footballer Fernando Torres completed his move to Chelsea on a five-and-a-half year contract on 31 January for an undisclosed fee reported to be £50 million, which set a new record for a British transfer and made him the fourth most expensive footballer in history.
In March 2004, Sibneft agreed to a three-year sponsorship deal worth €41.3 million (US$58 million) with the Russian team CSKA Moscow. Although the company explained that the decision was made at management level, some viewed the deal as an attempt by Abramovich to counter accusations of being unpatriotic which were made at the time of the Chelsea purchase. Union of European Football Associations (UEFA) rules prevent one person owning more than one team participating in UEFA competitions, so Abramovich has no equity interest in CSKA. A lawyer, Alexandre Garese, is one of his partners in CSKA. Following an investigation, he was cleared by UEFA of having a conflict of interest. Nevertheless, he was named most influential person in Russian football in the Russian magazine Pro Sport at the end of June 2004. In May 2005, CSKA won the UEFA Cup, becoming the first Russian club ever to win a major European football competition. However, in October 2005, Abramovich sold his interest in Sibneft and the company's new owner Gazprom, which sponsors FC Zenit Saint Petersburg, cancelled the sponsorship deal.
Abramovich also played a large role in bringing Guus Hiddink to Russia to coach the Russia national football team. Piet de Visser, a former head scout of Hiddink's club PSV Eindhoven and now a personal assistant to Abramovich at Chelsea, recommended Hiddink to the Chelsea owner. De Visser was also instrumental in the appointment of Hiddink as temporary Chelsea manager for the final months of the 2008–09 season.
In addition to his involvement in professional football, Abramovich sponsors a foundation in Russia called the National Academy of Football. The organization sponsors youth sports programs throughout the country and has constructed more than fifty football pitches in various cities and towns. It also funds training programs for coaches, prints instruction materials, renovates sports facilities and takes top coaches and students on trips to visit professional football clubs in England, Holland and Spain. In 2006 the Academy of Football took over the administration of the Konoplyov football academy at Primorsky, near Togliatti, Samara Oblast, where over 1000 youths are in residence, following the death at 38 of its founder, Yuri Konoplev.
The proposed merger of Sibneft with Yukos was seen by most as a move to distance himself from Russia, at a time when the Kremlin appears to have decided to bring at least some of the oligarchs to account for their colourful past business practices. Abramovich was a close associate of controversial Boris Berezovsky who sold him his stake in Sibneft, although in July 2005 Berezovsky announced his intention to sue Abramovich in the British courts for pressuring him into selling most of his Russian assets cheaply to Abramovich after Berezovsky fled the country.
The Kremlin press service reported that Abramovich's name had been sent for approval as governor for another term to Chukotka's local parliament, which confirmed his appointment on 21 October 2005.
Chris Hutchins, a biographer of Russian Prime Minister Vladimir Putin, describes the relationship between the former Russian president and Abramovich as like that between a father and a favorite son; Abramovich himself has stated that his relationship with Putin is a professional business relationship, as signified by his use of the Russian language's formal "Вы" (like Spanish "usted" or French "vous") in addressing Putin, as opposed to the informal "ты" (Spanish "tú" or French "tu").
Abramovich has been married twice, to Olga Yurevna Lysova in December 1987 (divorced 1990), and to Irina Vyacheslavovna Malandina in October 1991 (divorced 2007). He and Irina have five children; Ilya, Arina, Sofia, Arkady and Anna.
On 15 October 2006, the News of the World reported that Irina had hired two top UK divorce lawyers, following reports of Abramovich's close relationship with then-25-year-old Daria Zhukova, the former girlfriend of tennis player Marat Safin and daughter of a prominent Russian oligarch Alexander Radkin Zhukov. It was speculated that a future divorce settlement (amounting to a conjectured £5.5 billion (€6.5 billion)) might be the highest ever on record. The Abramoviches replied that neither had consulted attorneys at that point. However, they later divorced in Russia in March 2007, with a settlement reported as being US$300 million (€213 million). On 4 December 2009, in Los Angeles, Daria gave birth to her first child and Roman's sixth, named Aaron Alexander.
Abramovich has recently boosted his security staff to a 40 person "private army", making him one of the best protected businessmen in the world.
According to Forbes, as of March 2011, he had a net worth of US$13.4 billion up from US$11.2 billion the previous year, ranking him as the 53rd richest person in the world. Prior to the financial crisis, he was considered to be the second richest person living within the United Kingdom. Early in 2009, The Times estimated that due to the global economic crisis he has lost £3 billion from his £11.7 billion wealth.
Roman Abramovich sponsored an exhibition of photographs of Uzbekistan by renowned Soviet photographer Max Penson (1893–1959) which opened on 29 November 2006 at the Gilbert Collection at Somerset House in London. He previously funded the exhibition "Quiet Resistance: Russian Pictorial Photography 1900s–1930s" at the same gallery in 2005. Both exhibits were organized by the Moscow House of Photography.
In May 2008 Abramovich emerged as a major buyer in the international art auction market. He purchased Francis Bacon's Triptych 1976 for €61.4 million (US$86.3 million) (a record price for a post-war work of art) and Lucian Freud's Benefits Supervisor Sleeping for €23.9 million (US$33.6 million) (a record price for a work by a living artist).
His partner Dasha Zhukova is managing a gallery of contemporary art in Moscow that occupies a historical Bakhmetevsky Bus Garage building by Konstantin Melnikov. The building, neglected for decades and partially taken apart by previous tenants, was restored in 2007–2008 and reopened to the public in September 2008. Speed and expense of restoration is credited to sponsorship by Abramovich.
Abramovich qualified for the Sunday Times Rich List 2008, with an estimated fortune of €13.8 billion (£11.7 billion/US$19.3 billion), by virtue of retaining a property in Belgravia, London on Lowndes Square.
In May 2008, Abramovich bought the former Wildcat Ridge near Aspen, Colorado estate of American businessman Leon Hirsch, founder of United States Surgical Corporation, for €21.2 million (£18 million/US$29.7 million).
In late 2009, he purchased 9 apartments spread across 2 adjacent buildings in Lowndes Square, London. Planning to demolish all but the facades, the plan was to build a £150m ($233m) eight bedroomed, eight storey (3 below ground, 5 above) home. However, due to part of the complex being owned by the National Trust and the resultant time delays, he abandoned the project.
Abramovich has become the world's greatest spender on luxury yachts, and had been linked to five yachts in what the media have called "Abramovich's Navy":
Motor Yacht Luna 115m Delivered to Roman Abramovich , the world's largest expedition yacht
Former boats:
He owns a private Boeing 767-33A/ER, registered in Aruba as P4-MES. It is known as "The Bandit" due to its cockpit paint detail. Originally the aircraft was ordered by Hawaiian Airlines but the order was canceled and Abramovich bought it from Boeing and refitted it to his own requirements. Interior details or images are not available anywhere. P4-MES is frequently parked at the Harrods Aviation facility at Stansted Airport, UK. It is said that the aircraft is, as with his yachts, fitted with radar to detect missile threats, and different defensive countermeasures.
Additionally Mr. Abramovich's collection of aircraft includes an Airbus A340-313X Prestige named Bourkhan, so named after Bourkhan Cape on Lake Baikal.
Abramovich also owns three Eurocopter helicopters, all with Aruba registration as well. An EC-145 with the registration P4-LGB, an EC-135T1 with the registration P4-XTC and an EC-155B with the registration P4-HEC. The helicopters are based on his yachts, at Blackbushe airport or at his estate Fyning Hill near Rogate in West Sussex, UK.
In 2004, Abramovich bought two Maybach 62 limousines, which were customized to be bomb and bullet-proof and reportedly cost £1 million (€1.18 million/US$1.65 million). Abramovich also owns a Ferrari FXX, a US$2.2 million (€1.57 million) "racetrack-only" car, of which only 29 were built. He also owns a Bugatti Veyron (blue on black), Maserati MC12 Corsa, Ferrari 360, Porsche Carrera GT, Rolls Royce Corniche with the licence plate VIP 1, originally Republic of Ireland registration, Porsche 911 GT1 and a Mercedes-Benz CLK GTR.
be-x-old:Раман Абрамовіч
Roman Abramovich
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