Europe South Asia Asia Pacific Americas Middle East Africa BBC Homepage World Service Education
BBC Homepagelow graphics version | feedback | help
BBC News Online
 You are in: Business
Front Page 
UK Politics 
Market Data 
Your Money 
Business Basics 
Talking Point 
In Depth 
Tuesday, 28 March, 2000, 17:09 GMT 18:09 UK
Russia's new oligarchs

Who pulls the strings of power in Russia?

The answer is not as simple as it might first appear. Mr Vladimir Putin, like Boris Yeltsin before him, got elected with the help of a handful of businessmen.

Known as oligarchs, these businessmen wield a great deal of influence over Russia's political and economic life.

They bought most of Russia's national resources at bargain basement prices, often in return for favours to key politicians.

With a little help from their political friends, they are all back in business, despite having been hit hard during the financial crisis.

Boris Berezovsky (LogoVaz-Sibneft)

Boris Berezovsky: the oligarch as survivor
Boris Berezovsky: the oligarch as survivor
Boris Berezovsky is the first among equals of the oligarchs.

Mr Berezovsky says that oligarchs will be more powerful than ever in Putin's Russia.

"Mr Putin cannot decide there will be no oligarchs in Russia. If anything, their role will increase," he says.

A mathematician turned car dealer, he is now the richest man in Russia, with a personal fortune estimated at more than $3bn.

He is also the most influential oligarch politically, close to both Boris Yeltsin and his successor Vladimir Putin.

Mr Berezovksy owns a big stake in the state television channel ORT, which he has used to ruthless effect to discredit Mr Putin's opponents in the election.

Mr Berezovsky has fought back from dismissal from his government position by Mr Yeltsin and a prosecution for corruption. In December he was elected to the Duma, giving him immunity from prosecution.

He says he now wants to retire from politics.

He began his rise to power when he started a car dealership, LogoVAZ, in 1989, to sell Ladas.

He profited from an investment by General Motors and was worth $300m within a few years, eventually owning the company that makes Ladas.

Mr Berezovsky gained control of Russia's most modern oil company, Sibneft, privatised in 1995.

He later bought a stake in Lukoil, Russia's largest oil company, using its pension fund to buy a controlling stake in the television channel ORT and the former state-run Izvestia newspaper.

Mr Berezovsky actually profited from the Russian crisis, as the currency devaluation allowed him to export his goods cheaply.

Unlike the other oligarchs, he does not control his economic group through a holding bank.

Vladimir Gusinsky (Media Most group)

Theatrical opponent: Vladmir Gusinsky
Theatrical opponent: Vladmir Gusinsky
Head of NTV and the Most group, Vladimir Gusinsky is the only oligarch who is now throwing down a direct political challenge to President Putin in the form of criticism of Moscow's policy in Chechnya.

Mr Gusinsky, who models himself on media tycoon Rupert Murdoch, is a close friend of Yuri Luzhkov, the Mayor of Moscow, who ran as part of Yevgeny Primakov's presidential team.

Mr Gusinsky owns the second largest television station, NTV, radio station Ekho Moskvi, Itogi magazine and the Segodnya newspaper.

Mr Gusinsky has been accused of corruption by Mr Berezovsky's ORT, which reported that he illegally owned three villas in Spain. More seriously, it claimed that NTV was $1bn in debt to the Russian state bank.

Mr Gusinsky was seriously damaged in the 1998 financial crisis when his bank, Most, was forcibly merged with rivals Menatep and Oneximbank.

He is personally worth around $400m.

Roman Abramovich

Roman Abramovich is one of the new Russian oligarchs, and a close associate of Boris Berezovsky.

Owner of one of Russia's largest oil companies, Sibneft, and the co-owner of the country's biggest aluminium plants, Mr Abramovich also wields significant influence in the presidential administration

He has been close to the Yeltsin family for a long time, and is said to be behind the government's decision to privatise the Russian telecommunication company, Svyasinvest.

He also controls much of the country's export sectors, and has considerable influence in the nuclear industry and the Railways Ministry.

Together with Aleksandr Mamut, he also took control of Russia's largest state oil company, Transneft.

Aleksandr Mamut

Aleksandr Mamut was described as "the new face of Russian oligarchy" by the newspaper Kommersant, which ranked him top in its 1999 survey of business tsars.

Head of the supervisory council of MDM-Bank he is also very well-connected politically. He is the non-staff advisor to the head of the presidential administration, and is considered a great friend of the "family" of Kremlin insiders, including Boris Berezovsky.

He has also been involved in various political scandals, including allegedly laundering money through the Banks of New York and bribing politicians.

Vladimir Potanin (Oneximbank-Interros)

How the mighty are fallen: Vladimir Potanin
How the mighty are fallen: Vladimir Potanin
Mr Potanin is a bitter rival of Mr Berezovsky who was originally a close ally during the Yeltsin years.

Mr Potanin, a former communist party official involved in regulating foreign trade, set up Oneximbank to finance foreign trade after the Russian economy was opened up to the West. It soon became Russia's biggest private bank.

He was reported to be the fifth richest man in Russia, with a personal worth of between $1.5bn and $2.5bn - but his fortune has been seriously dented by the Russian economic crisis in 1998.

His interests remain in gas, oil, real estate and newspapers.

Mr Potanin was deputy prime minister just before privatisation began and he managed to snap up a stake in the Russian telephone system Svyazinvest (in conjunction with financier George Soros), oil company Sidanko, and the valuable mining concession, Norilsk Nickel - for a fraction of their real worth.

So far, the biggest losers in his investments have been Western investors.

BP Amoco invested $571m for a 10% stake in his oil company Sidanko (Mr Potanin had bought the entire company for $530m), only to find the company forced into bankruptcy and its assets sold off to rivals.

And George Soros, who put up $980m to buy half a 25% stake in the state-owned telecom company Svyazinvest in July 1997, just before the collapse of the rouble, says it was the worst investment he ever made.

But although damaged, he is far from being finished off, and has set up numerous shell companies to shelter his real assets.

Mikhael Khodorkovsky (Yukos-Menatep)

Mikhael Khodorkovsky is another oligarch with a knack for survival.

A former Communist Youth League leader, Mr Khodorkovsky has a controlling interest in Russia's second biggest oil company, Yukos, which is ranked fourth in the world measured by the size of its reserves. He managed to obtain Yukos from the Russian government for $168m at auction.

Mr Khodorkovksy also owned Bank Menatep, which was badly damaged by the collapse of the rouble, and Rosprom, an industrial conglomerate. His business interests include food processing, textiles, construction, metals, chemicals and shipbuilding.

Mr Khodorkovsky has benefited from his political connections which have allowed him to preserve most of his fortune.

His personal wealth has been estimated at $2bn-$2.5bn.

Mikhail Friedman (Alfa Group)

Mr Friedman's bank, Alfa-Bank, has a controlling interest in Tyumen Oil Company, which controls the legendary Samotlor field in Siberia.

In Soviet days, it produced more than Kuwait and Iraq combined, but poor production techniques have left it inefficient and waterlogged.

Mr Friedman has been seeking Western capital to help rebuild his oilfields, but like his fellow oligarchs, he is reluctant to concede control to outsiders.

He has spent vast sums on public relations firms in Washington, including such US political luminaries as Richard Holbroke, in an effort to gain a $489m export credit guarantee from the US government for capital equipment.

Unlike other oligarchs, he did not hold a position in government himself, but his partner Pyotr Aven was trade minister in the 1992 government of Yegor Gaidor.

Mr Friedman, who is still only 35, keeps a low profile.

Alexander Smolensky (SBS-Agro)

Mr Smolensky, a close ally of Boris Berezovsky, ran one of Russia's biggest banks, SBS-Agro - which ran into serious difficulties during the financial crisis.

But unlike some other banks, it was ultimately bailed out by the Russian government.

SBS held the accounts of the key government agencies in Moscow, including the law enforcement agencies, the Duma, and the presidential administration.

But more recently Mr Smolensky seems to have been caught up in a web of corruption and money-laundering allegations.

In 1999, he was accused of corruption along with Mr Berezovsky, and more recently he has been linked to the money-laundering scandal that saw $10bn in Russian funds channelled through London into accounts at the Bank of New York.

But like many of the oligarchs, his political connections may well be his salvation.

Search BBC News Online

Advanced search options
Launch console
See also:

11 Feb 00 | Business
Russia negotiates debt relief
24 Sep 99 | The Economy
Russia: The IMF's biggest failure
05 Feb 99 | Europe
Police raid Berezovsky firms
29 Aug 98 | Russia crisis
The power behind the throne
10 Jun 99 | Monitoring
Russian tycoon expands empire
Links to other Business stories are at the foot of the page.

E-mail this story to a friend

Links to more Business stories