- Putin’s ally Vladimir Potanin is reportedly taking on Russian banks at a discount rate.
- Western businesses fled the country largely after Putin’s invasion of Ukraine.
- According to Forbes, Potanin is said to be Russia’s richest man – worth just $ 30 billion.
Russia’s richest man snapped domestic banks at a discount rate, after their Western owners evicted the country, reports said.
Russia’s economy has been in freefall since the invasion of Ukraine, after Western powers issued sanctions against many of President Vladimir Putin’s closest allies, seizing and freezing their assets, and many leading businesses – from McDonald’s to Goldman Sachs – have ceased operations. across the country.
Metal tycoon Vladimir Potanin, a longtime ally of Putin, has largely avoided Western sanctions, despite his close personal ties with the regime. Experts say Potanin, who has played ice hockey with Putin in the past, largely remains on the Western radar because of his personal importance in the world’s metal markets.
On Thursday, the Financial Times reported that Potanin, said to be worth $ 30 billion, tapped into his estimated $ 30 billion fortune to take stakes in Russia’s major banks, which saw their value decline. after Western stakeholders left the country.
The billionaire’s Interros group is said to have acquired Rosbank after Société Générale (SocGen), a French bank that bought the business from Potanin in 2008, opted for a quick exit from Russia. Insiders previously reported that banks still operating in Russia were preparing to lose large amounts of money for the exit.
Potanin reportedly acquired Oleg Tinkov’s stake in TCS Group Holding, where Tinkov, who said he was forced to sell his stakes after he criticized the war, complained that Potanin paid only 3% of the actual stake, per newspaper. The insider contacted TCS and SocGen but did not immediately receive a response.
Tatiana Stanovaya, founder of political analysis firm R.Politik told FT: “The Kremlin has a geopolitically problematic asset [in Tinkoff] and Potanin has a solution. ”
Potanin’s recent acquisitions have made him a key individual in the banking sector. In February, Rosbank and Tinkoff, TCS’s primary assets, combined assets of nearly $ 45 billion (RBS3 trillion).
A person involved in the negotiations for SocGen told FT: “We want to find a way to get out in the most orderly way while preserving our 12,000 staff.”
They added: “Potanin… says he wants to preserve the bank and its culture,” so they decided to accept his offer quickly and he knew the bank, according to the report.
Potanin founded Interros – a conglomerate with stakes in industries including mining, energy, and real estate – in 1990, and is Russia’s richest man, per Forbes. But he is often known for his expertise in “loan-for-shares” programs, where many other oligarchs, including Roman Abramovich, have earned their fortune through programs.
Under “loan-for-shares” programs, wealthy businessmen and banks lent money to the Russian government in the 1990s in exchange for equity in the country’s natural resource companies. The government is often unable to repay these loans, leaving many natural resource companies in the hands of wealthy individuals.