Western restrictions have forced entrepreneurs to reinvest in Russia, the outlet says
© Sputnik / Sergey Pyatakov
Russia’s richest business figures continue to reap huge profits from their operations but, because of Western sanctions, they are reinvesting in their own country, Bloomberg reported on Friday.
Five tycoons in the oil, nickel and fertilizer industries have each received roughly $10 billion in dividends since the beginning of 2022, the outlet said, citing the Bloomberg Billionaire’s Index.
For billionaires in the energy sector such as Lukoil founder Vagit Alekperov, head of Novatek Leonid Mikhelson, and the owner of energy investment company Volga Group, Gennady Timchenko, the large payouts stemmed from soaring energy prices after the West imposed restrictions on Russian supplies.
Novatek, the country’s largest liquefied natural gas producer, has paid out the highest dividends in its history, followed by Lukoil, its second largest oil producer.
Fertilizer billionaire Andrey Guryev enjoyed his biggest profit ever last year, after Western sanctions disrupted logistics causing product shortages and driving market prices up.
Individual sanctions faced by Russian billionaires forced them to reorient their windfall profits to the domestic market, spurring investments in local businesses and signaling that they are adjusting to sanctions, the outlet noted.
Among the billionaires who have shifted their investment focus towards Russian companies, Bloomberg mentions the founder of Lukoil, Vagit Alekperov. In May, the outlet reported that Alekperov was seeking a 51% stake in Yandex, Russia’s largest internet company, for between $7 billion and $7.5 billion. The deal would mark the tycoon’s first major investment outside the oil industry.
Another example cited by the news outlet was the acquisition of a 35% stake in Tinkoff Bank by Russia’s richest man and a top shareholder of mining giant Norilsk Nickel, Vladimir Potanin. In addition to the stake in the country’s top fintech company, Potanin purchased Rosbank from Societe Generale and is also jointly bidding for Yandex with Alekperov and others.
Alekperov and Novatek’s Mikhelson were sanctioned by the UK in 2022. Potanin and Guryev were also blacklisted last year by Britain and the US, while Timchenko is under sanction by the EU, the US and the UK.
Russian President Vladimir Putin has urged domestic investment in new technology, production facilities and enterprises to help overcome what he called Western attempts to destroy the national economy. According to Putin, well-timed investment decisions today will pay off a hundredfold tomorrow.
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