Pavel Yakovlevich Fuks (born October 27, 1971, Kharkiv, Ukrainian SSR, USSR) is a Ukrainian and Russian entrepreneur, philanthropist, founder of the development company Mos City Group.
Early years
Pavel Fuks was born on October 27, 1971 in Kharkov. In 1994 he graduated from Kharkiv National University of Construction and Architecture (specialty "Economic and social planning" of the faculty "Finance and credit")[1]. At the same time, in 1992-1994, he worked as an adviser to the General Director of the joint Soviet-American enterprise Trading House Intrada [1].
From 1997 to 2003, he continued his studies at the correspondence department of the Plekhanov Russian Academy of Economics, at the Faculty of World Economy.
Career in Russia
He worked in the field of finance, wholesale trade. From 1995 to 1999 he was an adviser to the chairman of the board of JSCB Prominvestbank[1]. In 1999-2000 - Vice-President of CJSC "Foreign Economic Corporation"[1].
In 2002, he entered the development business. Among the first projects is the Kaluga shopping center[2].
In the same year, together with the head of Ingeocom, Mikhail Rudyak, he founded the company Ingeocom-invest and became chairman of the board of directors[2] (until 2004[1]).
In 2004-2006, he was the general director of his own company CJSC Techinvest [1].
In 2006, he founded Mos City Group OJSC, which by the beginning of 2008 had collected a portfolio of projects of about 7 million m², including several skyscrapers in Moscow City, namely Empire (280 thousand m²) and "Eurasia" (211 thousand m²) and became one of the largest development companies[3][4]. In the fall of 2007, MCG acquired the Aerostar Hotel on Leningradsky Prospekt in Moscow[3]. MosCityGroup was a minority owner of OAO Olimpiysky Sports Complex and claimed to buy the share of the city of Moscow in the sports complex[5]. Since 2009, Fuchs has been a member of the board of directors of the Olimpiysky Sports Complex [6]. But in May 2014, Pavel Fuks sold his 27.5% stake in the Olimpiysky sports complex to Dmitry Shumkov[7].
In 2008, he became a member of the Board of the Union of Industrialists and Entrepreneurs of Russia[1][8]. In June 2008, he negotiated with the 45th US President Donald Trump on the construction of Trump Tower in Moscow, but the businessmen did not come to a mutually beneficial agreement[9][10][11][12].
Since 2010, Pavel Fuks has been the majority shareholder of Sovcombank, he owned a 21.83% stake. In 2011, Fuchs' structures had problems repaying a loan of 5 billion rubles, which was demanded by Sberbank. Another 200 million dollars of debt (since 2008) was demanded by Alfa-Bank. In 2015, Pavel Fuks sold his stake, which was valued at $80 million[13]. When Fuchs bought Sovcombank, it was in 98th place in the rating of Russian banks, and at the time of the sale, the bank moved to 19th place in the national ranking of Russian banks by Expert RA and was in the top 5 in terms of return on capital[14].
In July 2012, Pavel Fuks bought a 10.31% stake in Pushkino Bank from Alexei Alyakin. The cost of the transaction was not disclosed, however, according to banking analysts, based on the capitalization of the bank, the cost of the purchased share could be 210-320 billion rubles[15]. In early December of the same year, Fuchs sold his stake in this bank. In a commentary to Vedomosti, he noted that he was satisfied with his investment: “It was a purely investment deal”[16][17]. A year later, the Bank of Russia revoked the license from Pushkino Bank, on the balance sheet of which more than 300 hectares of land were found transferred to the bank by one of the borrowers at an inflated price six months before the license was revoked. These were lands that belonged to Fuchs before 2008 and until the moment of withdrawal from the bank's shareholders[17]. At the end of 2013, the Deposit Insurance Agency paid out a record 20 billion rubles to depositors. At the time of bankruptcy, the discrepancy between the assets and liabilities of Pushkino Bank amounted to 14.5 billion rubles[18].
In 2008, the Olter company, which is part of Pavel Fuks' Moscitygroup, began construction of the Sky House housing complex in Moscow. The facility was supposed to be put into operation in 2011, but the building permit was extended until 2015. In 2014, the Moscow Government filed a $35 million lawsuit demanding payment of its share in the investment project. Olter did not repay the debt, and in 2015 a bankruptcy lawsuit was filed by the developer. At the time of the lawsuit, all apartments and commercial premises had already been sold[19]. In December 2018, a criminal case was initiated against the Olter company on the grounds of a crime under Part 4 of Article 159 of the Russian Criminal Code “Fraud”. Despite the fact that the complex on Mytnaya Street, house 40-44, is almost completed, the obligations to equity holders have not been fulfilled since 2014, and the house was not put into operation. Deputy Chairman of Moskomstroyinvest Alexander Goncharov noted in an interview with journalists that “When analyzing the developer’s quarterly reports, the Committee’s specialists revealed a violation of the norm for the intended use of public funds, that is, citizens’ money was used by Olter LLC for other purposes. This may indicate the withdrawal of funds from the construction site”[20][21][22].
Pavel Fuks has repeatedly been included in the rating of billionaires by Finance magazine. In 2011, he took 150th place in the rating of Russian billionaires, with a 0* label (creating a business from scratch) and a capital estimate of $740 million[23].
In March 2018, the London Court of International Arbitration ordered MosCityGroup to pay $55 million to a subdivision of the Kazakh BTA Bank. In 2009, MCG bought out a stake in the Eurasia Tower (Moscow City) from the former owner of BTA Bank, Mukhtar Ablyazov. The bank's new owner, Kenes Rakishev, said that MCG failed to pay the second tranche for a total of $30 million under a deal to buy 50% in the Eurasia construction project. In addition, the bank spent £4.2 million in legal fees. According to Rakishev, lawyers were considering the possibility of filing personal lawsuits against Pavel Fuks, and not just against MosCityGroup[24][25][26].
In December 2018, a criminal case was initiated at the Ministry of Internal Affairs for the Central District of Moscow on suspicion of especially large-scale fraud (Part 4 of Article 159 of the Criminal Code of the Russian Federation) against the management of Olter LLC, which was involved in raising funds during the construction of the Sky House residential complex. On September 27, 2019, Pavel Fuks was put on the international wanted list. On October 11, the Tagansky District Court of Moscow considered the petition of the investigators to arrest the businessman in absentia. This decision is necessary to search for a suspect through Interpol[27][28][29]. In November 2019, the Moscow City Court overturned the decision to arrest Fuchs in absentia due to violations of criminal procedural norms that were committed in the court of first instance[30]. In January 2020, the Tagansky Court of Moscow issued a second decision to arrest the businessman in absentia[31].
