Resident investor: what friend of Vladimir Putin invests in

Former German intelligence officer Matthias Warnig not only helps projects of Russian state-owned companies, but also owns his own investment business.
23.09.2019
Forbes
Origin source
Together with two partners, he invests in suppliers of state-owned companies and projects related to the state. Forbes found out the details of this investment.

The headquarters of MTV Holding is located on the 61st floor of the Golden Tower (aka Mercury) of the Moscow City. Casual guests are excluded: the office took refuge among residential apartments, and not in the business part of a skyscraper. The founders of MTV are people with “serious resources and connections,” two of their business partners say, but refuse to comment on common matters. In the investment community, it is believed that MTV is an abbreviation that stands for "Matthias, Thomas and Vasily".

According to the Unified State Register of Legal Entities, 40% of MTV is owned by Matthias Warnig, a former Stasi intelligence officer and longtime friend of Vladimir Putin. He is a member of the management of Rosneft, Transneft, VTB and several Gazprom projects. Acquaintances characterize him as a person who "knows how to solve problems." The remaining 60% of MTV is divided in half by Thomas Handel and Vasily Tsuprik, who are usually called “natives of Rosneft” in the media. Both refused to be photographed for this material, citing non-photogenicity. But they told some details of their biography and investments.

Sociable German

One of the symbols of the recent history of St. Petersburg can be considered a beer restaurant "The Seagull". In 1988, in the midst of Perestroika, it was opened by Peter Wolf, a German from Hamburg, 51% of the establishment received a mayor's office. Returning from Dresden, the "Seagull" fell in love with Vice Mayor Vladimir Putin. A regular in a maritime-style zucchini was Thomas Handel, says a longtime acquaintance.

Handel discovered Russia in the same year as Wolf - The Seagull. After studying in East German Halle, a 21-year-old German by distribution fell into an agricultural university near St. Petersburg. Handel was a cheerful and sociable student who “loved to tell a joke,” recalls his Petersburg acquaintance. Here, Handel became interested in sailing and even helped familiar yacht builders organize an exhibition in Hamburg. And in 1993 he headed the representative office of the Hamburg Chamber of Commerce in St. Petersburg.

“Times of change give rise to a certain number of challenges and opportunities,” says Handel. He was more interested in taking part in the "reconstruction of the economy" than "working in a system that had long been established." At the representative office, he was responsible for the internship of Russian specialists in German companies, which, in turn, helped to conduct business in St. Petersburg. “This contributed to the convergence of the economies of the two countries,” says Handel. His acquaintance says that the German also communicated with Putin, who until 1996 headed the Committee on External Relations of the City Hall. Handel himself does not comment on this.
 
In 1998, Handel met Warnig. The first meeting allegedly took place in Moscow, although the ex-intelligence officer moved to St. Petersburg in 1991. Here he opened a representative office of Dresdner Bank, Putin issued permission. In the mid-2000s, after managers loyal to Putin came to Gazprom, Warnig led the international project of the Nord Stream monopoly. A few years later, Handel also joined the Russian energy state projects.

In 2010, he headed the Russian-German energy agency Rudea. Prior to this, Handel supplied Phillips medical equipment to Russia, including to the Ministry of Defense hospitals. The creation of Rudea was initiated by the then President of Russia Dmitry Medvedev and German Chancellor Angela Merkel. The agency was supposed to provide a transfer of energy-efficient technologies from Germany to Russia. The project partner was Gazprombank.

The then Minister of Energy, Sergey Shmatko, suggested Rudea to Hendel. “I needed a person who deeply knows the Russian economy and has experience working with international companies,” Handel explains and adds that “the proposal was supported by the German side.” He met Shmatko in the early 1990s, when he studied in Germany. Shmatko is also friends with Warnig, who, as one of the official’s acquaintances claimed, recommended him to the ministerial post. Shmatko refused to communicate with Forbes.

Rudea had many projects, but few managed to implement, Handel admits: “If a country produces an incredible amount of cheap gas and oil, then the issue of energy efficiency is relegated to the background.” In 2011, Handel joined the Industrial Energy Company (PEC). The legal entity was established on a parity basis by Rostec, which is led by Putin’s former colleague in Dresden, Sergei Chemezov, and Inter RAO, whose board is headed by Boris Kovalchuk, the son of a long-time friend of the president, Yuri Kovalchuk. Working at PEC brought Handel with his future business partner, Vasily Tsuprik.

Energetic Investigator

Vasily Tsuprik can hardly be called an emotional interlocutor. Throughout the interview, he firmly fixed his hands on the surface of the table and did not change his posture or intonation, only occasionally allowing himself a slight smile. Direct posture and the military style of clearly minting answers give out in it belonging to the power structures. In 2001, he graduated from the prosecution and investigation department of the Military University of the Ministry of Defense. Then he was assigned to the military prosecutor's office of the St. Petersburg garrison, where he worked as an investigator for three years.

In 2003, Tsuprik got a job in the Goznak association: “A new team was forming at that time, I was invited to be a lawyer.” A sensitive enterprise subordinate to the Ministry of Finance is engaged in printing security documents - from passports to money. Former Goznak top manager Andrei Cheglakov, whom Tsuprik calls his mentor, he was remembered for his military attitude, “remarkable energy” and clear ideas about good and bad: “If I had such a son-in-law, I would be proud of him.”

In the structures of Goznak, Tsuprik worked until 2010. In parallel, he invested in several third-party business projects. According to the Unified State Register of Legal Entities, together with Evgeny Savkin, he owned a ship service company at the Sea Port of St. Petersburg. In the 90s, the port was in the zone of influence of the authoritative St. Petersburg businessman Ilya Traber, and Savkin, as Fontanka wrote, managed several of his port assets. For a short time, Tsuprik worked as a lawyer in the Sea Port of St. Petersburg.

In 2010, Tsuprik was invited by the Deputy General Director to the Rostec RT-Biotechprom pharmaceutical subholding. There, the former investigator was in charge of the GE medical technology localization project. And on this he agreed with Hendel, who also collaborated with the American corporation - for PEC, he mastered her experience in gas turbines. Soon their paths diverged briefly.
 
After starting the project with GE, Handel, at the invitation of the then head of Rosneft, Eduard Khudainatov (the state company was the customer of the turbines PEC), headed the department of material and technical resources of the state company. And Tsuprik rose to the rank of RT-Biotechprom CEO and in 2013 he moved to another Rostekh RT-Invest subsidiary. Its CEO Andrei Shipelov, for whom Tsuprik worked as the first deputy, considers the former subordinate "a good example of a successful person."

In 2014, Handel invited Tsuprik to Rosneft as his deputy finance manager. By that time, Igor Sechin became president of the state-owned company, and Handel took up the position of manager in the rank of vice president.

Hunting passion

“Take the little basket” - a phrase from the transcript of a conversation by Igor Sechin with former Minister of Economics Alexei Ulyukaev became a meme in 2017. The head of Rosneft pronounced it a few minutes before the ex-minister was detained by FSB fighters at the exit from the state-owned company’s office. They found a bag with $ 2 million in the trunk of Ulyukaev’s car, although he claimed that he received only a basket of branded sausages from Sechin.

In 2015, Forbes sources said that the manufacture of sausages from hunting trophies Sechin oversaw Handel. He denies this, and calls the reform in transport services his most significant project at Rosneft. “We, in fact, canceled most of the official personal cars and drivers, created a pool of cars that serviced the central office and subsidiaries, all transferred to a single brand,” Handel lists. According to him, this reduced Rosneft’s expenses by several billion rubles.

In 2016, Handel began to think about leaving Rosneft. The load affected, he admits: "You work in rhythm 16 working hours a day, 6-7 days a week." Sechin established such a rhythm, says Handel: “It requires high returns and accuracy in all respects.” Having left at the end of 2016, he thought about his own business.

At about the same time, Andrei Cheglakov told his former Goznak colleague Vasily Tsuprik about the startup “New Cloud Technologies” (NOT). The company, in which Cheglakov now owns the largest share, developed the My Office software package and was about to supplant Microsoft office products. This should be helped by priority for domestic programs in public procurement, which the government introduced on January 1, 2016.

“A large number of people are absolutely sure that it is impossible to challenge the leader,” says Cheglakov. But Tsuprik was not one of those: "He had such a hunting passion." Handel became interested in the project, with whom Cheglakov had been familiar with the hat from the 90s in St. Petersburg. According to SPARK, Tsuprik became the owner of 1.6% NOT in August 2017, a month later the same package was acquired by Handel. And in November 2017, Matthias Warnig became the owner of 1.8% of NOT. First of all, it was a financial investment based on the growth of the company's value, explains Cheglakov, who sold the shares. He does not disclose the parameters of transactions.

“We liked the scale,” says Tsuprik. The main clients of NOT are departments and state companies. Among them are Rostec, Rostelecom, Russian Railways, the Ministry of Transport and the Russian Guard. Cheglakov denies any protection from influential partners: “I can’t even imagine if some kind of administrative shoulder is possible in the business I am engaged in.” Serious customers are the merit of the NOT team, assures Tsuprik: “They participated in competitions, introduced pilots at Rostelecom, the Russian Post, Russian Railways.” He “only consulted” with partners.

Warnig and Handel decided to take profits in April 2019. At least, this is how Cheglakov, who bought their shares, explained the partners' exit from the business in an official press release. Tsuprik is still a co-owner of NOT. The company does not disclose its financial results. From the SPARK database it follows that the business of NOT and its subsidiary "Cloud Technology Laboratory" brings losses of hundreds of millions of rubles. The company also did not reach the planned million users, while several hundred thousand people use My Office. Be that as it may, Warnig, Handel and Tsuprik were definitely not disappointed in each other. For joint investments, the partners created a separate holding.

Between startup and business
“The decision was born spontaneously,” says Tsuprik. According to him, to create an investment company that "will collect competencies from the market in the energy, transport, IT and telecommunications", suggested by Handel. Tsuprik liked the idea. MTV Holding was registered in July 2017. Warnig received 40%, and Handel and Tsuprik each received 30%. The authorized capital amounted to 1.5 million rubles, the director general was Daniil Stukalov, a native of Goznak.

Handel and Tsuprik became managing partners. “We are engaged in operational activities, we participate in the adoption of almost all decisions, in all negotiations,” Tsuprik lists, adding that this is a business in which he and Thomas are involved “from morning till night.” He also had to leave Rosneft: corporate rules forbade combining private business with work in a state company.

Matthias is not involved in the operational activities of MTV, Tsuprik emphasizes: “He gives advice, but does not make any managerial decisions.” He was called "as an experienced leader": "He is an independent director on many boards of directors of state-owned companies, has experience in making complex decisions, creating big businesses." And also has extensive experience, allowing the transfer of foreign technology to Russia, said Tsuprik. According to him, this is one of MTV's priorities. Warnig himself did not answer Forbes questions transmitted through an MTV representative.

The first five months were spent on the selection of projects. The partners did not consider the existing large enterprises, the priority was projects “at the stage between startups and businesses,” says Tsuprik. The first investment of MTV was the startup Smart Camera. In 2016, the company was founded by Boris Noskov, a friend of Tsuprik. His team has developed a program for counting public transport passengers. The complex is unique in that it works without failures, regardless of temperature or network coverage, explains Tsuprik. At the end of 2017, MTV at face value (for 4,000 rubles) bought 40% of the Smart Camera from Noskov. “The company was not formed as a business,” explains Tsuprik. According to him, Noskov created the product, but did not understand, "how to sell and monetize it." With the advent of MTV, the business came to life.

The Smart Camera equipped its complexes with more than 500 electric train cars on the Oktyabrskaya and Gorky Railways. In addition, pilot projects have been launched at the Central Suburban Passenger Company, Avtolayn and Mosgortrans, Tsuprik said. At the end of 2019, Smart Camera can earn the first billion rubles, a company source said. As a financial investor (MTV only manages the project), Tsuprik drew another graduate of the Military University of the Ministry of Defense, Andrei Severilov, who received 25% of the Smart Camera.

National scope

In 2013, President Xi Jinping delivered a keynote speech in Kazakhstan calling for the revival of the Silk Road. It smelled of transcontinental megastroy. Two years later, in Beijing, Russian Railways and the Chinese port of Yingkou, in the presence of Vladimir Putin, agreed to establish Sino-Russian logistics centers in the Moscow region. And in 2016, under the supervision of Dmitry Medvedev, Yingkou solemnly bought 49% of the Bely Rast terminal near Moscow.

“This will be the main stronghold of the new Silk Road in the European part of Russia,” says the website of the Bely Rast industrial park. The project occupies 600 hectares around the terminal of the same name and MTV owns 20%. “This is a huge project in terms of scalability,” said Daniil Stukalov, MTV CEO. The capacity of the terminal for transshipment will be about 700,000 containers per year. Thus, "White Rast" will become a center of attraction for potential residents of the industrial park, counts Stukalov. According to him, the infrastructure for the industrial park will cost billions of rubles. He does not disclose MTV's current project partners.

According to SPARK, the remaining 80% of the company managing the industrial park is owned by the Cypriot Darcio Holdings. It, according to the Cypriot registry, belongs to Tingueta Holding, which in turn is the nominal holder of Loko-Bank shares in the interests of Andrei Severilov and Alexander Mineev, follows from the disclosure on the Central Bank website. Co-owner of the bank is also a business partner of Severilov and a friend of the former head of Russian Railways, Vladimir Yakunin, Mikhail Rabinovich. In the mid-2000s, he headed the “daughter” of the state monopoly “Industry Center for the Implementation of New Equipment and Technologies” (OCV), which even then was developing the concept of a terminal near the village of Bely Rast near Moscow. After Rabinovich, OTsV was headed by one of the co-owners of NOT, Alexander Timchenko, and Mineev worked in OTsV as his deputy on legal issues. Severilov is also not a stranger to Russian Railways. Companies associated with his family were major contractors of the state monopoly, which in 2017 attracted the attention of KPMG auditors, Vedomosti wrote.
Tsuprik describes Severilov as a “successful businessman”. He himself declined to comment, citing a "strict confidentiality agreement." MTV and Severilov have a third joint project. This is the company "Express Industry" - a joint venture with the German TransTec, which has developed an innovative trolley for Russian cars. “Express Industry” had problems finding a production site. At the beginning of 2018, MTV received 25% of the company at face value (for 125,000 rubles). After that, Express Industry agreed on a joint production with Uralvagonzavod (UVZ; owned by Rostec).

In August 2019, UVZ presented a joint development to the head of Russian Railways Oleg Belozerov. Since 2022, Express Industry plans to produce up to 10,000 trolleys annually. With an average cart cost of 600,000 rubles, the business’s turnover is 6 billion rubles. “Maybe more, depending on the needs of UVZ,” adds Tsuprik.

Perhaps the most ambitious MTV project is associated with Rostec. Using the achievements of the "daughter" of the RT-Invest State Corporation, MTV plans to create a federal operator of fire protection systems, Prometey. This is a new market of billions of rubles, previously estimated by Forbes. “These are important and necessary initiatives that are promoted by professional managers with extensive experience in project work in large companies, including Rostec,” the press service of the state corporation said, adding that it acts as a “technological partner” in MTV projects.

Masters of Cooperation

Similar to a giant spider, a steel robot was proprietiously flattened inside a heat supply pipe and blinked with numerous bulbs. Such an apparatus appeared before the President of Tatarstan Rustam Minnikhanov and other visitors to the exhibition "Oil, Gas, Petrochemicals" in September 2019. The robot will check the wear of the pipes from the inside, thereby reducing the cost of diagnostics and repairs. Interested in the device are Tatenergo and Gazprom. Among the developers is “Device Engineering”, which has been part of MTV since 2018.

Tsuprik says that the founder of Device Engineering, Andrei Dorensky, a friend of his in St. Petersburg, had difficulty developing his business: “It was important for him to have an experienced partner.” Now an engineering company with a staff of several dozen specialists is working with the structures of Gazprom, Rosneft and Inter RAO.

However, this is MTV's most modest asset in the energy sector. In May 2018, the holding received a blocking stake in the Moselectro group. It was formed on the basis of the Moscow plant "Electroshield", which has been producing electrical equipment since 1946. But in 2016, the plant was declared bankrupt, after which the property was sold out, and the production site was transferred to Kovrov.

Moselectro needed a different level of management, ”explains Tsuprik. According to him, the electric equipment market is characterized by high competition, the main player is the Samara plant “Electric Shield”, which is controlled by the French concern Schneider Electric. MTV was invited by Denis Surovtsev, the sole owner of Moselectro and a native of ABS Electro. The latter company belongs to the Serbian entrepreneur and politician Nenad Popovic. The former vice speaker of the Serbian government and founder of the pro-Russian Serbian People’s Party has repeatedly supported Gazprom’s European projects, and in 2014 he was awarded the title of Honorary Power Engineer by the Russian Ministry of Energy.
 
MTV “ensured intra-group cooperation” and introduced European technologies ABB and Siemens to Moselectro, Tsuprik said. At the end of 2018, Moselectro's revenue almost doubled - up to 2.1 billion rubles. Among its largest customers, the group indicates Gazprom, Rosneft, Transneft, Russian Railways and UVZ.

MTV became a co-owner of another Gazprom supplier at the end of 2018. Zvezda-Energokompleks JV is controlled by the Sinara group of billionaire Dmitry Pumpyansky F 46, 10% is owned by MTV, and another 39% is owned by Zvezda-Energetika. Since the mid-2000s, the latter has supplied Gazprom with diesel power stations. Gazprom’s chief energy engineer Garry Schwartz and his deputy Igor Belousenko were associated with this business with billions in turnover. Now, according to SPARK, Belousenko owns 31.75% of Zvezda, another 68.25% is owned by Cypriot Lavenco Limited, which is associated with the former shareholders of St. Petersburg Baltinvestbank (now undergoing rehabilitation from Absolut Bank) Igor Shvidak and Vadim Egiazarov. In 2011-2012, Viktor Yakunin, the youngest son of the former head of Russian Railways, was a member of the Zvezda board of directors.

Zvezda equipped its power plants with Western engines, which they bought for foreign currency. The collapse of the ruble exchange rate in 2014-2015 caused the company “certain financial difficulties,” says Tsuprik. According to him, for the last 2-3 years, business has stagnated, since almost all profits are consumed by debts. Zvezda has ceased to cope with its debt burden and has “quite seriously degraded,” confirms business partner Shvidak and Egiazarova. According to him, Pumpyansky became interested in business, whose Sinara produces diesel engines. He allegedly invited MTV, as he is well acquainted with Handel, says a Forbes source. Tsuprik has a different version: MTV previously advised Sinara on the topic of power plants. He explains that the task is to “solve operational problems” and bring “Star” “to the level until 2015”. The new joint venture will allow the company to service and pay off debt through dividends. MTV also relies on them. The joint venture claims at least 10% of the market, the total volume of which Tsuprik estimates at 100 billion rubles. According to SPARK, in June 2019, the joint venture won the first major contract worth 162 million rubles for the supply of a gas piston power plant for Gazprom dobycha Noyabrsk.

MTV's most recent investment is Berezkagaz Company. The founders of the company - Dmitry Lipyavko and Igor Lysenko - began to build gas processing mini-plants in the mid-2000s. One of them is for Rosneft on a loan from Gazprombank. In 2014, Lipyavko announced a project to process dry gas into gas engine fuel. In the same year, Gazprom launched a program to convert its fleet to gas. The initiative led to mass layoffs of drivers, either joking, or seriously worried about Vladimir Putin at the end of 2017: there was nothing to merge. Since then, the president has repeatedly demanded to accelerate market development. By 2024, the budget will allocate 58 billion rubles to the industry, another 500 billion should be provided by Rosneft, Gazprom and Novatek, Vedomosti wrote. In April 2019, MTV became the owner of 10% of Berezkagaz. According to Tsuprik, while Berezkagaz is processing associated petroleum gas, the gas fuel project has not yet been launched, the Volkswagen Group may become a partner.

The main projects of MTV are “large and technological”, with a long investment period, states a businessman who is familiar with the shareholders of the holding. Their future is foggy and will largely depend on state lobbyism, according to Forbes. MTV’s participation “organically” fits into the business associated with the state, agrees the financier, also familiar with the shareholders of the holding. But unlike other investors with an administrative resource, MTV shareholders use it “less aggressively,” the Forbes interlocutor notes: “They have some kind of technology, they come up with something.” Moselectro, Sinar, Zvezda-Energetika and Berezkagaz did not respond to Forbes requests.

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