We've been checking in on this story, off-and-on, for many years, fertilizer and art, a match made in heaven, some links below.
From Spear's Magazine, April 10;
From the magazine: Dmitry Rybolovlev built a multibillion-dollar fortune and navigated the vagaries of Putin's Russia. But nothing had prepared him for the cut and thrust of the international art market
When Russian billionaire Dmitry Rybolovlev is spotted, it is usually in salubrious surroundings over which he enjoys full control. Perhaps he’s gazing serenely out from his $300 million Monaco penthouse; reclining in his Airbus private jet; applauding in the royal box at AS Monaco, the football team in which he owns a majority share; or celebrating a victory in his $20 million racing yacht, Skorpios, which is named after the Greek island he also owns.
But in January, the 57-year-old businessman, whose fortune is estimated at between $6 billion and $7 billion, found himself somewhere less glamorous. He was photographed walking into a Manhattan courtroom. He wore a modest dark navy suit, a coat draped like a cloak over his shoulders and an anxious look. After a nine-year legal battle, in which one development after another had gone against him, this seemed like a final chance to obtain what he considered to be justice.
In a courthouse just a stone’s throw away sat Donald Trump, who – along with his company – was being prosecuted for fraud by New York attorney general Letitia James, and who was ultimately ordered to pay a $354 million fine. Rybolovlev was also prosecuting an alleged fraud – one he claimed had been committed by Sotheby’s auction house, which he felt merited a similar amount in damages: $380 million.
The other main player in the legal saga was a Swiss art dealer named Yves Bouvier, a man Rybolovlev claimed had duped him out of $1.1 billion from the $2 billion sale of 38 works of art between 2003 and 2014. Bouvier consistently denied any wrongdoing, claiming he acted as a dealer, free to set his own profit margins, and not as Rybolovlev’s agent.
At midday on 11 January, Rybolovlev took to the stand. Eyes glistening, he told the court that his mistake was to trust someone he had considered a friend. ‘When a person is like a member of your family, there’s a point in time at which you begin to completely and utterly trust a person,’ he said.
The declaration raised eyebrows: could a billionaire, one presumably used to people trying to gain his confidence in order to extract some of his vast fortune, really have fallen for one of the oldest tricks in the book: the street hustler who promises to get his customer the very best price? And did any deception – if indeed it had taken place – amount to fraud?
The ascent of Dmitry RybolovlevBorn in 1966 in the city of Perm near the Ural mountains, Dmitry Rybolovlev initially followed in the footsteps of his doctor parents before studying economics in Moscow. In 1994 he set up his own investment bank, Kredit FD, backed by businessmen from various large industrial concerns.Rybolovlev’s ascent to wealth, amid the economic anarchy of Boris Yeltsin’s Russia, has all the classic ingredients of an oligarch’s rise: a swiftly accumulated fortune, useful political connections, the death of business associates, and the takeover of his business by Vladimir Putin’s allies.
As Yeltsin sold off thousands of state-owned businesses following the ruinous Western prescription of ‘shock therapy’ capitalism, Rybolovlev bought one of the heavy industrial concerns of resource-rich Russia. He built up major stakes in two Urals potash firms: a majority stake in Uralkali and a fifth of the shares in Silvinit.
By 1995, Rybolovlev, then 29, was a multimillionaire who wore a bulletproof vest, employed bodyguards and was chauffeured around in an armoured car. That same year, he moved his family to Geneva, out of harm’s way. Months later he was arrested and imprisoned for allegedly arranging a hit on a business partner, who had been gunned down in his home. Rybolovlev, who said he was framed, spent 11 months behind bars before being released. He was indicted, but in 1997 was acquitted by the Perm Regional Court. The verdict was later confirmed by the Presidium of the Supreme Court, the highest court in the Russian Federation.
Now he experienced the other end of post-Soviet Russia: its brutal prison regime. At times he shared a cell with 60 other prisoners – ‘an entire summer in jail in burning heat’ with bunk beds three tiers high, he recalled to the journalist Arnaud Ramsay in the book Dmitry Rybolovlev: The Man behind Monaco’s Football Renaissance. The former aspiring doctor handed out medical advice to inmates and understood there were no ‘guarantees in prison’, whatever his status on the outside might have been. ‘It’s vital to adapt,’ he added. ‘I thought of it as an experience.’
He survived the Russian prison system by developing super-human levels of determination and self-belief. Dmitry Chechkin, the businessman’s spokesperson, later credited Rybolovlev’s willpower, explaining how he rejected an offer of freedom in exchange for the sale of his company Uralkali: ‘Rybolovlev is impervious to pressure; it is one of his strongest character traits.’
Out of jail, Rybolovlev joined his family in Geneva and continued to build his empire. He formed an alliance with Belaruskali, the state-owned potash company of neighbouring Belarus, and by 2006 his companies supplied 40 per cent of the global potash export market. In 2007 he listed 12.5 per cent of Uralkali on the London Stock Exchange, instantly becoming a billionaire and one of the 100 richest people on the planet. His company’s share price rose 300 per cent in the next eight months. In the same period, he set up a network of offshore companies and trusts in the tax haven of Cyprus, bought 10 per cent of the Bank of Cyprus, and, in 2012, acquired a Cypriot passport.
Rybolovlev left a void in Russia. Literally. In 2006, in the town of Berezniki, under which ran the deep tunnels of one of Rybolovlev’s potash mines, a vast sinkhole opened up. The town had seen sinkholes before and has seen more since, but this one was bigger than a football pitch at 170 metres by 90 metres. It swallowed up buildings and threatened to force the relocation of much of the town. In 2008, Putin’s deputy Igor Sechin, who was leading a widespread crackdown on oligarchs at the time, launched an inquiry into Berezniki’s sinkholes; Uralkali paid $250 million in compensation.
The political pressure on Rybolovlev grew as the soaring value of Uralkali attracted the interest of the Russian state. In 2010, three businessmen with Kremlin ties, financed with a $3 billion loan from the Russian state-owned bank VTB (which has been under sanctions since 2014), expressed an interest in taking over his company.
But Rybolovlev’s luck held. He faced no further consequences for the disaster in Berezniki and, what’s more, managed to obtain a premium price for a 53 per cent majority stake in his business empire – reportedly between $5 billion and $7 billion in cash. Now all he had to do was decide how to spend it.
The oligarch playbook....
....MUCH MORE
- The Sotheby’s trial revealed the art market’s unsavoury practices
- "Sotheby’s to “vigorously challenge” Russian billionaire over legal action in UK" (BID)
- Felix Salmon Talks Da Vinci: "Notes on $450,312,500 "
- "Monaco’s Justice Minister Resigns After Texts Reveal ‘Vast Influence Peddling’ in Billion-Dollar Art Fraud Case"
- WTH Is Up With Rybolovlev? "A $100 Million Mystery: A Russian, His Art, and His Big Losses"
- Big Money: What Geneva’s Art King Lost in Battle with Russian Billionaire
- Big Money: "What Did Sotheby’s Know And When Did They Know It"
Dirty deeds, not dirt cheap.
It's pretty well established that the punishment for an agent's breach of the duty of loyalty to his principal is death.
At least in Russia at any rate
