Mikhail Prokhorov sold off assets in Russia and became an Israeli
The former Russian presidential candidate was the only one, unlike many other wealthy business leaders, who managed to avoid sanctions from Western countries. Now the money he earned will allow Mikhail Prokhorov to live a comfortable life for the rest of his days, enjoying champagne with young women.
Amid recent reports of European and American authorities seizing properties and boats from Russian wealthy business leaders, Mikhail Prokhorov somehow stayed out of the spotlight. The latest news about him came from Israel. It was reported that in April, he flew there on a regular flight from Switzerland to obtain a passport. It probably didn’t take much effort – according to Prokhorov’s grandmother, he was of Jewish descent. Therefore, the photos of Mikhail Prokhorov's Israeli passport, which have been circulated on the Internet, are unlikely to be doubted. Meanwhile, the billionaire’s economic connections with Russia are being severed one after another.
Red diploma career
Mikhail Prokhorov started to move away from the real economy sector at the end of the 2000s. Although his enormous fortune was known to come from giants of the former Soviet industry, such as Norilsk Nickel, he initially entered this sector from a financial standpoint.
In the 90s, Prokhorov held a high-ranking management position at ONEXIMbank. How a young man attained such a high-level position remains unknown. It is possible that his honors diploma from the Financial University under the Government of the Russian Federation played a role, or his father's connections, as he was in charge of international affairs for the USSR State Committee for Transport (it is known that the bank was established under the protection of high-ranking officials). “ONEXIMbank was granted all conceivable “degrees of authority,” Kommersant wrote in 1995, referring to the advantages that the authorities gave it. Perhaps the goal was to leave debts and distressed assets in the semi-state Vnesheconombank, which was on the verge of collapse, and transfer all valuable assets to a new structure.
The bank acquired industrial assets in Russia in two ways. With the assistance of regional governors, it acquired stakes in local banks that provided loans to various plants and factories. Unpaid debts were effortlessly converted into shares. There was another mechanism as well. The federal government obtained loans from ONEXIMbank secured by shares of industrial giants. The climax of this saga occurred in 1998-1999, when the government, along with ONEXIMbank, declared a default. The assets accumulated in the bank were swiftly distributed among the “effective owners”. The chairman of the bank's board, Mikhail Prokhorov, also emerged from default not empty-handed. One can only wonder why, in 2007, he started to use the already meaningless abbreviation “ONEXIM” again for the company that managed his assets. This is where the billionaire's business success story might have concluded. His subsequent projects ended rather infamously or scandalously, and Prokhorov became renowned not so much as a skilled businessman, but as a partygoer and ladies' man.
From beauties to "Yo-mobile"
When French authorities arrested a Russian wealthy man on pimping charges in 2007 in Courchevel, he had brought nearly two dozen young beautiful women with him. It was reported that he provided them with champagne in clubs and took four people to his room at once. Before this incident, this man had publicly flaunted his attractive girlfriends on the Cote d'Azur. However, he spent four days in a French jail, despite the pimping accusations not being proven – he did not profit from the girls, but rather spent money on them. Nevertheless, this negatively impacted the image of Russian business in Europe.
The event on the Aurora cruiser, organized by Prokhorov in 2009, became memorable when Sergei Shnurov performed obscene songs, which were heard far across the Neva.
The Yo-mobile project presented an opportunity for Prokhorov to improve his image. However, the first Russian electric car turned out to be nothing more than a PR stunt initiated in 2010 with an eye on the 2012 presidential elections, in which Prokhorov participated. This project was eventually terminated in 2014. The plan to incorporate 90% of Russian components in the car fell through, leading to missed opportunities for the country's auto industry.
$10,000,000,000 in cash
Mikhail Prokhorov's transition from industrial assets to cash began around 2008. Prokhorov has been gradually exiting the Russian economy for over 10 years, a process that has not been swift.
In 2008, ONEXIM sold its stake in Norilsk Nickel. Reports suggested that Prokhorov could have received around $7 billion in cash from this transaction. In 2016, ONEXIM divested its development business and land bank, potentially worth tens of billions of rubles.
The sale of Vedomosti by Prokhorov was described as follows: "ONEXIM had been seeking a buyer for Quadra and IC Soglasie for a couple of years, and had been trying to offload Renaissance Credit (ONEXIM has 100% ownership) for several years. The plan to part ways with Uralkali was in the works a year prior. In May 2016, there were discussions of Uralkali purchasing ONEXIM's 27% stake at market value, estimated at about $5.1 billion in 2013".
However, Prokhorov’s attempt to escape from the ship apparently attracted attention. In 2016, the tax authorities said they uncovered offshore schemes that may have allowed them to evade taxes and withdraw money from Russia. Initially, the Federal Tax Service demanded to pay about 2 billion rubles to the budget, but then the “ONEXIM case” fell apart into many episodes and branches. A new wave of searches took place in the company in 2019. According to leaks, the amount of tax claims was then half a billion rubles. However, whether it was possible to collect all these amounts in the end, there was no information yet.
Meanwhile, Mikhail Prokhorov was increasingly active in cash. The last major deal took place in January. Finally, a buyer was found for the Kvadra energy company, in which ONEXIM has had shares since 2008 (the sale of the asset to other participants in the generation market was hampered by the FAS for a long time). The company unites 20 power plants in the Central Federal District. And although the buyer was the state-owned Rosatom, the price of the transaction remained a secret. But in any case, we can talk about tens of billions of rubles.
The last notable business of Mikhail Prokhorov in Russia was the Renaissance Credit bank – the capitalist owns it through offshore Cyprus. However, at the end of last year it became known that the bank was put up for sale. And at the end of May, the news came that the investment bank was closing its branches in the US and the UK. Founded back in the 90s, the bank has a network of branches in Nigeria, Kenya and South Africa, Cairo and Cyprus. The company is also engaged in transactions in the stock markets of the Middle East countries – the UAE, Saudi Arabia, Kuwait, Morocco, Oman and Tunisia. Will this structure help its beneficiary to leave Russia beautifully and safely hide his billions from both Russian tax authorities and oligarch money hunters in the West? So far, Prokhorov is succeeding. They say that now he has about 10 billion dollars in his hands. There will definitely be enough for girls and champagne. So, maybe for the sake of this, corporate wars were started at Siberian factories, courts with tax officials and beautiful speeches as part of the presidential campaign?
