Farit Gazizullin's turkeys: how ‘father of Tatar privatization’ almost becomes the main poultry breeder in RF
From a poor family from Kazan suburb – to the chair of a member of the Board of Directors of PJSC Gazprom
In the business community there has been a real information bomb. The founder of the first Russian enterprise for breeding turkeys Evrodon Vadim Vaneyev publicly accused the member of the Board of Directors of Gazprom, a prominent native of Tatarstan Farit Gazizullin of the involvement in the attempted seizure of his company by fraud. The point is that even Vladimir Putin participated in the project, and the loans for its development was given by one of the largest banks in the country, close to the Russian President Vnesheconombank. The online newspaper Realnoe Vremya remembered the past of Farit Gazizullin, who had a great influence on Tatarstan in the 1990s.
Large wigwam for turkeys
Late Tuesday night, the owner of the largest Russian producer of turkey meat Evrodon Vadim Vaneyev gave a big interview to RBC, a Russian media holding, in which, in addition to the comments on the sensational arrest of the former head of the department of natural resources and construction of Vnesheconombank and a native of Tatarstan Ilgiz Valitov, accused of the involvement in the large-scale fraud another, even more prominent Kazan native — Farit Gazizullin, a member of the Board of Directors of Gazprom and a former Minister of Property of Russia.
At one of the stages of the project financing, his creditor — VTB Bank — demanded to re-register the half-constructed production on it. Vaneyev managed to convince another bank — Vnesheconombank (VEB) to repurchase from VTB this project. Besides, VEB financed the ill-fated rising costs of the project, adding another $7 million. Not for beautiful eyes they managed to persuade the Bank: the entrepreneur had to say goodbye to 40% of Evrodon shares, that is the standard practice in such project financing. However, instead of VEB, the buyer of 40% of the project for a symbolic price — only 4000 rubles — in 2007 was… an offshore company from Belize Brimstone Investments ltd. A native of Tatarstan Ilgiz Valitov headed the deal on behalf of VEB on crediting of Evrodon. He is a graduate of the Kazan Financial-Economic Institute, worked on different positions in large companies, was the managing director of the branch, then – the Vice-President of JSC Bank VTB, a member of the Board of Directors of JSC KAMAZ. From 2007 to 2010 he was the director of the department of regional development of VEB, then headed the department of natural resources of the corporation.
Working in the Bank, Valitov was a member of the Board of Directors of a dozen companies – Moscow JSC Slava (Second watch factory), JSC Group Razgulyay, JSC Group LSR, JSC Novinsky Boulevard 31, PLC Titan-Agro, PLC VEB-Invest, PLC VEB Upravleniye Proyektami, JSC Belvnesheconombank, JSC Federal center for project finance, JSC Corporation of development of Krasnoyarsk Krai, PLC Verkhnekamsk Kaliynaya Companiya. They all are the leading companies of the Russian economy.
Even taking a position in the state corporation, Valitov used to earn (we are talking only about official sources) huge money. So, according to the declaration, in 2013 Ilgiz Valitov earned 322.6 million rubles, which is more than threefold than the income of the chairperson of VEB Vladimir Dmitriev in the same period (95 million rubles).
It must be said that Vnesheconombank and Tatarstan are tied by a very close business relationship. The Bank's participation in such landmark multi-billion projects as the creation of the infrastructure of special economic zone Alabuga, the construction of a cargo logistics terminal Biek Tau in Kazan, the complex on the production of ammonia, methanol and granulated carbamide JSC Ammonia. Ilgiz Valitov took part in all of them to one degree or another.
'It is generally accepted this way and offshore companies are everywhere'
But let's go back to turkeys and Valitov. In this story, the most fun begins: for some reason an entrepereneur Vadim Vaneyev was not confused that the buyer of 40% of Evrodon — an offshore company from Belize, not some transparent structure associated with the state VEB. He was satisfied by the explanations of the manager of Vnesheconombank Ilgiz Valitov, that 'it is generally accepted this way and offshore companies are everywhere'. Moreover, the entrepreneur even did not specify or 'check' the real owner of Brimstone offshore company. The reasons for such carelessness are clear: the state bank VEB after the sale of 40% of Evrodonshares, in its turn, redeemed from VTB the loan and even made additional funding. Well, how can you not be sure that Brimstone is supported by the Bank? In addition to 40% of Evrodon, using the same scheme of the project financing, previously owned by Vaneyev 49%of PLC Ursdon (production of hatching eggs), 49%of PLC Metall-Don (the sale of metal structures) and 49%of PLC Irdon (house-building complex) were re-registered on the same offshore Brimstone.
The construction continued, but in 2012 the entrepreneur (through Ilgiz Valitov) 'opened the eyes': the beneficiary of the Belize offshore company Brimstone Investments ltd. was… Farit Gazizullin, a member of the Board of Directors of Gazprom, and the former Minister of Property of Russia (1997-2004).
In 2012, to another structure of the group Evrodon — PLC Evrodon-Yug, 100% owned by Vaneyev, VEB opened a credit line to expand production at the amount of 17.9 billion rubles. From this credit line Vaneyev managed to take about 6.9 billion rubles. On that money about 700 000 sq. m. of new production area were built and involved in the total production chain. Production amount in 2015 amounted to 47 000 tonnes of turkey meat in live weight.
In 2015, according to Vaneyev, Gazizullin called him, and then he even came to inspect the object under construction in the town of Shakhty, near Rostov-on-Don. This was followed by the proposal to register 40% of the new structure of PLC Evrodon-Yug on Gazizullin. The entrepreneur refused.
Corporate crossfire
On 2 February of 2016, completely unexpectedly, the company A1, an investment division of Alpha-Group, redeemed the offshore company Brimstone Investments ltd, having owned the company Evrodon (the producer of turkey meat) and 49% of PLC Ursdon (the producer of hatching eggs), PLC Metall-Don (the sale of metal structures) and PLC Irdon (the house-building complex), 40% each.
The offshore company was redeemed from Gazizullin (the amount of the transaction is unknown, but, according to our calculations, amounted to no less than 11-12 billion rubles, as the group Evrodon managed to attract almost 30 billion rubles). Immediately after the transaction, on 9 February, A1 filed lawsuits on Evrodon and its main owner Vadim Vaneyev with the requirement to nullify the contracts of guarantee of Evrodon on loans issued to other companies of Vaneyev, and 'to exclude Vaneyev from the membership' of PLC Evrodon.
But it was not to be so — an Ossetian Vaneyev took advantage of connections of an accepted in high offices countryman, the Director of the Mariinsky Theatre, Maestro Valery Gergiev, who is respected by Vladimir Putin… Perhaps, having realized the futility of corporate capture, A1 sold all 'turkey' assets structures to VEB (the cost of the transaction is unknown) on 26 February 2016. The most interesting is that the day before, i.e. on 18 February, the head of VEB Vladimir Dmitriev announced at the meeting with the staff about his upcoming resignation as the president of the state corporation. Whether this story was the final touch in the sad picture of the loss of confidence in the head of VEB, we can only guess.
The day of reckoning
Three days later, on 29 February, the Moscow's Lefortovsky District Court under the application of the FSB the former head of the department of natural resources and construction Ilgiz Valitov was arrested on suspicion of fraud in the sphere of entrepreneurial activity on a large scale. He faces a fine at 1.5 million rubles, up to five years of forced labor or imprisonment for the same term. He is blamed for that Ilgiz Valitov together with unidentified persons misled the owner of Evrodon Vadim Vaneyev and persuaded to sell for a pittance 40% of shares to the company, allegedly controlled by the VEB, Brimstone Investments ltd from Belize.
One can only guess how the direct public accusation by the entrepreneur of the involvement in the crime of high-ranking officials such as Farit Gazizullin, who still remains a member of the Board of Directors of PJSC Gazprom, will affect. If they manage to prove the involvement of Gazizullin to the large-scale fraud, his prospects to stay in that position are very vague as well as the prospects of criminal prosecution. The online newspaper Realnoe Vremya will closely follow further developments.
Who is Gazizullin?
If they manage to prove the involvement of Gazizullin to the large-scale fraud, his prospects to stay in that position are very vague. Photo: gazprom.ru
To say that Farit Gazizullin is a significant for Tatarstan character, it is to say nothing. In the 1990s he was one of the most important and the key players in political and economic field of the Republic. The present embodiment of the ideal politician: reliable instincts, reaction, huge charisma and remarkable managerial abilities. For Tatarstan of that stormy time he was certainly one of the most vivid characters.
Farit Gazizullin, from a poor Tatar family of Zelenodolsk rayon of the Tatar ASSR. He started his career from the All-Union Leninist Young Communist League – that school of Komsomol for our compatriots was similar to Yale for Anglo-Saxon politicians. In the 1970s, he was the First Chairperson of the City Committee of the Komsomol, the Secretary of the Tatar Oblast Committee VLKSM. At the beginning of 1980s he became the party functionary – the Second Secretary of Komsomol Rayon Committee of the CPSU in Naberezhnye Chelny, then – the chairperson of the Executive Committee of Komsomol Rayon Council. In 1897, he became the head of the department of complex socio-economic development of the Ministry Counsel of Tatar ASSR. In 1989-1991 – the First Deputy Chairperson of Gosplan of Tatar ASSR.
The father of privatization
After the dissolution of the Soviet Union and the dissolution of the CPSU, Farit Gazizullin headed the most reformist direction — privatization. From 1991 to 1996 — First Deputy Prime Minister — Chairman of the State Committee on state property and industry of the Republic of Tatarstan.
The privatization in Tatarstan, conducted according to a unique scheme and under the direct supervision of Farit Gazizullin, laid a solid foundation for the economic sovereignty of the Republic. The result of the successful privatization was the sharply increased significance of Gazizullin in Tatarstan. The balance of the restrainings and counterbalances in the political elite of the Republic had been violated. In order to restore it, with the approval of Moscow, the father of Tatar privatization was 'sent' to Moscow in June 1996 as the First Deputy Chairman of the RF State Committee for State Property, which then was headed by Aleksander Kazakov, the future First Deputy Head of Presidential Administration of Russia.
The mentor of German Gref and Igor Shuvalov
The capital couldn't 'devour' Gazizullin – he managed not only to stay at his 'hot' place, like the State Property Committee of the Russian Federation was in the 1990s, but also to grow: from 15 November 1997 to 9 March of 2004 (with a small break in 3 months in 1999) he headed the Ministry of Property of the Russian Federation. In order to understand how powerful genius Gazizullin is, it is enough to say that in the period from 1997 to 2004, we had eight different Prime Ministers (including current Russian President Vladimir Putin), and each had his approach to personnel policy. But Farit Rafikovich never left the chair of the Minister.
In those unstable times, a year at such politically hot position was considered as five. The Ministers used to be changed almost every month. Only Gazizullin and Shoigu have passed this 'institutional grinder' unscathed and unreplaced. Under the leadership of Gazizullin, there have been raised the pleiad of current senior leaders of the country. It is enough to mention one of his Deputies – German Gref and Igor Shuvalov. Even after the resignation as the Minister, Farit Gazizullin continues to stay – he is still a member of the Board of Directors of PJSC Gazprom, and in 1998-1999 he was the chairperson of the Board of Directors of JSC Gazprom.