Suleyman Kerimov

Suleyman Kerimov is a Russian politician , economist , businessperson and statesman. He was born on March 12, 1966, in Derbent , in the former Soviet Union, but now he holds Russia's citizenship .

Kerimov is a graduate of Dagestan State University. His current employer is Polyus , a company that he also owns . Polyus is a subsidiary of FC Anzhi Makhachkala, a football club which he owns as well.

Suleyman Abusaidovich Kerimov (Russian: Сулейма́н Абусаи́дович Кери́мов; Lezgian: Керимрин Абусаидан хва Сулейман; born 12 March 1966) is a Russia-based billionaire, oligarch, and politician of Lezgian origin. In 2007, Kerimov established the Suleyman Kerimov Foundation as a vehicle to focus his philanthropic efforts. Since 2008, Kerimov has represented the Republic of Dagestan in the Federation Council of Russia. In April 2018, he was placed under sanctions by the United States Department of Treasury. As of December 2021, Kerimov's net worth is estimated at US$15 billion.

Career

Early career

Soon after his university graduation in 1989, Kerimov took a job as an economist at the Eltav electrical plant in Makhachkala, the capital of Dagestan. The state-controlled plant supplied transistors and semi-conductors to television-makers, while also producing diodes, microchips and halogen lamps. Kerimov was paid 150 roubles (approximately $250 dollars) a month and he and his wife lived in a worker's hostel attached to the plant, where they shared one room of a two-room flat.

Eventually, Kerimov rose to the rank of Deputy Director General at Eltav and began to dabble in investing alongside during the fall of the Soviet Union.

Fedprombank

In 1993, Kerimov was put in charge of handling relations between Eltav and Fedprombank, a Moscow bank established by the electrical company. Fedprombank financed lagging industries and Kerimov and his associates soon became creditors to large utility companies, allowing them to continue to provide key services. Once the Russian economy stabilized, the debts were repaid with hefty returns for Fedprombank and, consequently, Kerimov.

In 1995, Kerimov was appointed to head the banking and trading company Soyuz-Finans, and by 1997, Kerimov had built a 50% stake in Vnukovo Airlines and used his leverage to take over Fedprombank, buying out his partners’ shares.

Nafta Moskva

In late 1999, Kerimov bought a 55% stake in the oil trading company Nafta Moskva, the successor to the Soviet monopoly firm Soyuznefteexport, for $50 million. By 2000, he had increased his stake of Nafta Moskva to 100%. Kerimov undertook a mass restructuring of the company, selling off all of the oil-related aspects and creating an investment and holding company. Nafta's investments in the mid-2000s included purchase of the business center Smolensky Passazh and AvtoBank.

Gazprom and Sberbank investments

In 2003, Kerimov managed to secure a $43 million loan from the state-owned Vnesheconombank, which he invested in the oil and gas company Gazprom. Within the next year, share prices for the Russian gas company doubled and Kerimov was able to pay off the entirety of the loan within four months. In 2004 Sberbank, now the largest bank in Russia and Eastern Europe, provided Kerimov with a loan of $3.2 billion., which was later repaid, and these funds were also invested in equities. By 2008, Kerimov had amassed a 5% stake in Gazprom, a 6% stake in Sberbank, along with an estimated fortune of $17.5 billion, making him the 36th richest man in the world. However, in mid-2008, Kerimov sold all his Gazprom and Sberbank shares.

Polymetal

In November 2005, Kerimov's Nafta Moskva acquired JSC Polymetal, one of Russia’s largest gold and silver mining companies. In 2007, he took the company public on the London Stock Exchange, then sold 70% of his shares in 2008 before gold would go on to climb to an all-time high in 2011. In 2008, Kerimov sold control over Polymetal.

Role in the 2008 crisis

As markets around the world began to tighten in 2007, Kerimov and his associates expected that Russia would suffer more than the West from the impending economic crisis. A concerted effort was thus made to build closer ties with Western banks. Kerimov decreased his stakes in Gazprom and other Russian blue chips and approached Wall Street, proposing to invest the vast majority of his fortune to defend the institutions from short-sellers. In return, it was expected that Kerimov would receive favorable lending terms for future loans.

In 2007, Kerimov invested billions in Morgan Stanley, Goldman Sachs, Deutsche Bank, Credit Suisse and other financial institutions. Though neither Kerimov nor the Western banks have disclosed the exact size of his investment, it was sizeable enough for Kerimov to receive a call from the United States Treasury during the darkest days of the economic crisis imploring the Russian oligarch not to sell his stakes.

Polyus Gold

Following his losses during the economic crisis, Kerimov shifted his investment strategy to buying stakes large enough to influence the strategies of the companies he invests in. In 2009, Nafta Moskva bought a $1.3 billion stake (37% stake) in OAO Polyus Gold, Russia’s largest gold producer, from Vladimir Potanin.

Later the stake was increased up to 40.2%. In 2012 the company held an IPO on the London Stock Exchange.

In 2015 Kerimov's share in Polyus Gold was transferred to his son, Said.

Property developer PIK Group

In the spring of 2009, shareholders of Russia's construction giant PIK Group sold 25% of their company's shares to Kerimov. PIK required extra funding after their debt level reached $1.98 billion, and the value of their capital fell by more than 40 times to $279.9 million. Nafta Moskva later increased its stake in PIK Group to 38.3%.

In December 2013 Kerimov sold his shares to property investor Sergei Gordeev and businessman Alexander Mamut, who owns a stake in precious metals miner Polymetal.

Uralkali

In June 2010, Kerimov and his partners Alexander Nesis and Filaret Galchev together paid Dmitry Rybolovlev an estimated $5.3 billion for a 53% stake in Russian potash giant Uralkali, which, together with Belaruskali, at the time made up the duopoly that controlled 70% of the global potash market: the Belarusian Potash Company (BPC). Kerimov secured substantial loans from Russia's VTB bank for the Uralkali takeover.

In July 2013, Uralkali announced it was pulling out of the BPC cartel, dropping prices and increasing production to maximum capacity in a grab for market share. The immediate consequences on the global economy were a 25% drop in potash prices to around $340 a tonne, harming the prospects of both Canadian producers and the Belarusian economy. Belarusian authorities estimate they may lose up to $1 billion a year.

Two weeks after Uralkali's July announcement, Belarusian prime minister Mikhail Myasnikovich responded by inviting Kerimov and the Uralkali managers to Minsk to discuss the current situation. Uralkali's then-CEO Vladislav Baumgertner attended in Kerimov's place and was arrested by state security forces and charged with "abuse of power".

In the meantime, Belarus also opened a criminal investigation into other Uralkali employees and its main shareholder Suleyman Kerimov. Baumgertner was held in a Belarusian KGB jail until a plan to change ownership of Uralkali was announced, and Belarus then extradited Baumgertner to Russia. Belarus put Kerimov on the national wanted list, and also requested Interpol to publish a Red Notice for him. Interpol clarified later that no Red Notice had been issued and that the request was political in nature. The Belarusian authorities later withdrew the case against Kerimov and closed the criminal investigation. By December 2013, Kerimov sold 21.75% of Uralkali shares to Mikhail Prokhorov for US$3.7 billion and 19,99 % (for approximately US$2.9 billion) to Uralchem.

Media portrayal of business style

Forbes magazine describes Kerimov as one of the most private Russian billionaires, who has not given a single interview over 20 years in business.

Moscow Times quoted a former deputy editor of Forbes Russia Kirill Vishnepolsky as describing Kerimov as a "Russian Warren Buffett" for a similarly astute investment style.

A senior Moscow banker is reported to have said of Kerimov: "Sometimes it is difficult to talk to him. He is always a few steps ahead of you. For foreigners, it is next to impossible, even those used to a Russian environment. He is very quick and creative, in a sense that ideas come to him that don’t come to other people".

Kerimov reportedly made extensive use of leverage for his investments, according to financiers and bankers active in Russia.

His financial success is based on investments that have significant growth potential with a strategy focused on locking in asset capital gain through resale.

Wealth

In 2006 Kerimov was listed among the world's 100 richest people and as Russia's eighth richest man ranked by Forbes.[58][59][60] He had a net worth of $6.9 billion as of 2014, with the previous years' net worth estimated at $7.1 billion (2013) and $6.5 billion (2012).[61] In 2015 Kerimov was listed as the 18th wealthiest person in Russia.[citation needed]

In 2020, Kerimov's fortune doubled due to a sharp rise in gold prices. In August 2020, he became the richest businessman in Russia for a while. His family's fortune almost entirely based on the 77 percent holding in Polyus gold company was estimated at $24.7. At the end of 2020, the value of the assets of the Kerimov family was estimated at $20.9 billion.

Suleyman Abusaidovich Kerimov (Russian: Сулейма́н Абусаи́дович Кери́мов; Lezgian: Керимрин Абусаидан хва Сулейман; born 12 March 1966) is a Russia-based billionaire, oligarch, and politician of Lezgian origin. In 2007, Kerimov established the Suleyman Kerimov Foundation as a vehicle to focus his philanthropic efforts. Since 2008, Kerimov has represented the Republic of Dagestan in the Federation Council of Russia. In April 2018, he was placed under sanctions by the United States Department of Treasury. As of December 2021, Kerimov's net worth is estimated at US$15 billion.

Career

Early career

Soon after his university graduation in 1989, Kerimov took a job as an economist at the Eltav electrical plant in Makhachkala, the capital of Dagestan. The state-controlled plant supplied transistors and semi-conductors to television-makers, while also producing diodes, microchips and halogen lamps. Kerimov was paid 150 roubles (approximately $250 dollars) a month and he and his wife lived in a worker's hostel attached to the plant, where they shared one room of a two-room flat.

Eventually, Kerimov rose to the rank of Deputy Director General at Eltav and began to dabble in investing alongside during the fall of the Soviet Union.

Fedprombank

In 1993, Kerimov was put in charge of handling relations between Eltav and Fedprombank, a Moscow bank established by the electrical company. Fedprombank financed lagging industries and Kerimov and his associates soon became creditors to large utility companies, allowing them to continue to provide key services. Once the Russian economy stabilized, the debts were repaid with hefty returns for Fedprombank and, consequently, Kerimov.

In 1995, Kerimov was appointed to head the banking and trading company Soyuz-Finans, and by 1997, Kerimov had built a 50% stake in Vnukovo Airlines and used his leverage to take over Fedprombank, buying out his partners’ shares.

Nafta Moskva

In late 1999, Kerimov bought a 55% stake in the oil trading company Nafta Moskva, the successor to the Soviet monopoly firm Soyuznefteexport, for $50 million. By 2000, he had increased his stake of Nafta Moskva to 100%. Kerimov undertook a mass restructuring of the company, selling off all of the oil-related aspects and creating an investment and holding company. Nafta's investments in the mid-2000s included purchase of the business center Smolensky Passazh and AvtoBank.

Gazprom and Sberbank investments

In 2003, Kerimov managed to secure a $43 million loan from the state-owned Vnesheconombank, which he invested in the oil and gas company Gazprom. Within the next year, share prices for the Russian gas company doubled and Kerimov was able to pay off the entirety of the loan within four months. In 2004 Sberbank, now the largest bank in Russia and Eastern Europe, provided Kerimov with a loan of $3.2 billion., which was later repaid, and these funds were also invested in equities. By 2008, Kerimov had amassed a 5% stake in Gazprom, a 6% stake in Sberbank, along with an estimated fortune of $17.5 billion, making him the 36th richest man in the world. However, in mid-2008, Kerimov sold all his Gazprom and Sberbank shares.

Polymetal

In November 2005, Kerimov's Nafta Moskva acquired JSC Polymetal, one of Russia’s largest gold and silver mining companies. In 2007, he took the company public on the London Stock Exchange, then sold 70% of his shares in 2008 before gold would go on to climb to an all-time high in 2011. In 2008, Kerimov sold control over Polymetal.

Role in the 2008 crisis

As markets around the world began to tighten in 2007, Kerimov and his associates expected that Russia would suffer more than the West from the impending economic crisis. A concerted effort was thus made to build closer ties with Western banks. Kerimov decreased his stakes in Gazprom and other Russian blue chips and approached Wall Street, proposing to invest the vast majority of his fortune to defend the institutions from short-sellers. In return, it was expected that Kerimov would receive favorable lending terms for future loans.

In 2007, Kerimov invested billions in Morgan Stanley, Goldman Sachs, Deutsche Bank, Credit Suisse and other financial institutions. Though neither Kerimov nor the Western banks have disclosed the exact size of his investment, it was sizeable enough for Kerimov to receive a call from the United States Treasury during the darkest days of the economic crisis imploring the Russian oligarch not to sell his stakes.

Polyus Gold

Following his losses during the economic crisis, Kerimov shifted his investment strategy to buying stakes large enough to influence the strategies of the companies he invests in. In 2009, Nafta Moskva bought a $1.3 billion stake (37% stake) in OAO Polyus Gold, Russia’s largest gold producer, from Vladimir Potanin.

Later the stake was increased up to 40.2%. In 2012 the company held an IPO on the London Stock Exchange.

In 2015 Kerimov's share in Polyus Gold was transferred to his son, Said.

Property developer PIK Group

In the spring of 2009, shareholders of Russia's construction giant PIK Group sold 25% of their company's shares to Kerimov. PIK required extra funding after their debt level reached $1.98 billion, and the value of their capital fell by more than 40 times to $279.9 million. Nafta Moskva later increased its stake in PIK Group to 38.3%.

In December 2013 Kerimov sold his shares to property investor Sergei Gordeev and businessman Alexander Mamut, who owns a stake in precious metals miner Polymetal.

Uralkali

In June 2010, Kerimov and his partners Alexander Nesis and Filaret Galchev together paid Dmitry Rybolovlev an estimated $5.3 billion for a 53% stake in Russian potash giant Uralkali, which, together with Belaruskali, at the time made up the duopoly that controlled 70% of the global potash market: the Belarusian Potash Company (BPC). Kerimov secured substantial loans from Russia's VTB bank for the Uralkali takeover.

In July 2013, Uralkali announced it was pulling out of the BPC cartel, dropping prices and increasing production to maximum capacity in a grab for market share. The immediate consequences on the global economy were a 25% drop in potash prices to around $340 a tonne, harming the prospects of both Canadian producers and the Belarusian economy. Belarusian authorities estimate they may lose up to $1 billion a year.

Two weeks after Uralkali's July announcement, Belarusian prime minister Mikhail Myasnikovich responded by inviting Kerimov and the Uralkali managers to Minsk to discuss the current situation. Uralkali's then-CEO Vladislav Baumgertner attended in Kerimov's place and was arrested by state security forces and charged with "abuse of power".

In the meantime, Belarus also opened a criminal investigation into other Uralkali employees and its main shareholder Suleyman Kerimov. Baumgertner was held in a Belarusian KGB jail until a plan to change ownership of Uralkali was announced, and Belarus then extradited Baumgertner to Russia. Belarus put Kerimov on the national wanted list, and also requested Interpol to publish a Red Notice for him. Interpol clarified later that no Red Notice had been issued and that the request was political in nature. The Belarusian authorities later withdrew the case against Kerimov and closed the criminal investigation. By December 2013, Kerimov sold 21.75% of Uralkali shares to Mikhail Prokhorov for US$3.7 billion and 19,99 % (for approximately US$2.9 billion) to Uralchem.

Media portrayal of business style

Forbes magazine describes Kerimov as one of the most private Russian billionaires, who has not given a single interview over 20 years in business.

Moscow Times quoted a former deputy editor of Forbes Russia Kirill Vishnepolsky as describing Kerimov as a "Russian Warren Buffett" for a similarly astute investment style.

A senior Moscow banker is reported to have said of Kerimov: "Sometimes it is difficult to talk to him. He is always a few steps ahead of you. For foreigners, it is next to impossible, even those used to a Russian environment. He is very quick and creative, in a sense that ideas come to him that don’t come to other people".

Kerimov reportedly made extensive use of leverage for his investments, according to financiers and bankers active in Russia.

His financial success is based on investments that have significant growth potential with a strategy focused on locking in asset capital gain through resale.

Wealth

In 2006 Kerimov was listed among the world's 100 richest people and as Russia's eighth richest man ranked by Forbes.[58][59][60] He had a net worth of $6.9 billion as of 2014, with the previous years' net worth estimated at $7.1 billion (2013) and $6.5 billion (2012).[61] In 2015 Kerimov was listed as the 18th wealthiest person in Russia.[citation needed]

In 2020, Kerimov's fortune doubled due to a sharp rise in gold prices. In August 2020, he became the richest businessman in Russia for a while. His family's fortune almost entirely based on the 77 percent holding in Polyus gold company was estimated at $24.7. At the end of 2020, the value of the assets of the Kerimov family was estimated at $20.9 billion.