Oligarchs Scoop 10 November 2018

The saga of Russia’s art-collecting oligarch and his new corruption woes in Monaco

Dmitry Rybolovlev (right) at a Monaco football game. Photo credit: Wikimedia Commons

Dmitry Rybolovlev is one of a select few Russian businessmen who have been able to successfully sell their primary businesses in Russia and start afresh abroad. This week, Rybolovlev was detained in Monaco and now faces criminal charges in a corruption probe. And just a few years ago, Rybolovlev’s life in the tiny principality of Monaco appeared respectable and serene — apart from a nasty divorce and court battles with his art dealer.But this week, things got a lot more complicated for the businessman (whose fortune is estimated at $6.8 billion by Forbes) when he was accused of corruption in Monaco and detained by police for 24 hours. To make matters worse, he is at risk of being sanctioned by the U.S. like other Russian oligarchs believed to be close to the Kremlin or involved in interfering in the U.S. elections.

Rybolovlev has always been a very private person. A member of The Bell’s team was given an interview by Rybolovlev several years ago — making him the only journalist in Russia to have spoken to the billionaire in depth. Now Rybolovlev’s army of lawyers have forbidden him from talking to journalists. Nevertheless, we have watched Rybolovlev’s over a number of years and can explain how he spends his time in self-imposed exile and how he found himself in the center of a scandal that has already been dubbed “Monaco-gate.”

  • Escape with the money. Rybolovlev sold his fertilizer company Uralkali in 2010 for more than $6 billion. The company is one of just a few firms in the world producing potash and was far more profitable than even the Russian oil business. However, in the years leading up to the sale, Uralkali lost one of its mines in an accident and Rybolovlev got into a fight with the powerful Igor Sechin, then deputy prime minister. Rybolovlev was outspoken in his own defense, which only made things worse. When billionaire Suleiman Kerimov, who recently avoided jail in France, offered Rybolovlev to buy the company at a valuation of $10 billion for 100% shares. he agreed to sell and quickly left Russia. He was exhausted from the fight with Sechin and his messy divorce, which was already underway.
  • Big spending. Like many other wealthy Russians, Rybolovlev kept his money in Cyprus. His first investment after he sold up in Russia was to buy a major stake in the Bank of Cyprus. As its largest shareholder, Rybolovlev apparently planned to — quite literally — “buy the state”, according to a colleague. But Cyprus’ financial system collapsed and he had to shelve the plans. Rybolovlev moved to Monaco and began to spend like crazy. He has a fondness for luxury real estate and bought properties including Donald Trump’s home (which he would later regret), whole islands from descendants of Aristotle Onassis, Will Smith’s Hawaiian villa and the most expensive apartment in Manhattan. Lawyers working on behalf of his soon to be ex-wife, Elena, followed his every step and got the courts to freeze everything they could. Even Trump’s former home in Palm Beach, which Rybolovlev bought for $100 million, was frozen by court order and he couldn’t even begin renovating.
  • Royal friends. More successfully, Rybolovlev made his home in the French city-state of Monaco and was quickly rubbing shoulders with royalty. In photos taken of the celebrations on the return of Monaco’s football team (which Rybolovlev acquired) to France’s top league, Prince Albert II of Monaco is seen patting the billionaire on the back. In fact, the two watched a football game together for the last time just a fortnight before Rybolovlev was taken into custody earlier this week. In 2013, Rybolovlev gave his first interview since leaving Russia to Paris Match. In fact, the article was mostly just photos of the businessman on the terrace of his penthouse in Monte Carlo with his daughter, Yekaterina, an iPad and a lovely view of the royal palace. Russian generosity had opened the doors to high society in the principality.
  • Football champions. In 2011, Rybolovlev bought Monaco football club for €1 and a promise to invest a minimum of $100 million in the then-second division team. A mere $100 million was not enough to turn around Monaco’s fortunes, but Rybolovlev didn’t pour billions into his team like Roman Abramovich at Chelsea. Instead, he spent more than $700 million, according to a person in his circle, and ran it like a business. French superstar striker Kylian Mbappe, a product of Monaco’s football academy, was sold for more than $200 million. Rybolovlev’s approach paid off spectacularly and in 2017 the club won the French championship and turned a profit.
  • The passion of art. The story of the current corruption charges against Rybolovlev go back many years, Rybolovlev moved his family to Switzerland in the mid-1990s because of security concerns. At the time neither he nor his wife spoke any foreign languages and their guide to this new world was the wife of a dentist they knew, Tanya Rappo. She introduced the couple to art dealer Yves Bouvier. Over 10 years, with Bouvier’s help, Rybolovlev spent about $2 billion buying almost 40 paintings. Then, in 2014, after a casual conversation with another dealer, Rybolovlev started to doubt the price of his purchases. He became convinced he had overpaid Bouvier by approximately $1 billion, 10% of which went to Rappo. The fallout of this scandal has been well reported. But now it seems that Rybolovlev’s attempts to put Bouvier in jail may end up with Rybolovlev himself serving a prison sentence.
  • Purchasing influence? The conflict with Bouvier has showed how hard it has been for Rybolovlev to navigate the rules of the game in the European elite. To gift the head of the Monaco police a luxurious samovar or give a ride to the minister of justice and his family on your personal helicopter is, in Russia at least, normal business practice. But in Monaco, this is influence peddling, which is considered a criminal offense. A source close to Rybolovlev said the businessman made no returns on these so-called investments, but text messages on the phone of Rybolovlev’s lawyer, Tatiana Bersheda, raise doubts. She was in close contact with the local police and warned them about Bouvier’s movements before the art dealer was arrested.\

Why the world should care

The purchase of Trump’s home generated lots of U.S. media attention on Rybolovlev as reporters looked for signs of the Kremlin trying to reach the future U.S. president long before he was elected to the country’s highest office. In our view, Rybolovlev has been busy with his own battles — involving his ex-wife and Bouvier — and played absolutely no role in these delicate, high level political games. But this doesn’t necessarily make the story of the post-Soviet billionaire any less revealing, or less colourful.

Irina Malkova

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