Birth: August 11, 1955
Citizenship: Russia
Occupational domain and/or administrative post:
The Chairman of Novatek’s Board of Directors and a Shareholder
Sibur Petrochemical Holding, where Leonid Mikhelson serves as Chairman of the Board and is also a shareholder.
Table of Contents
Biography
Mikhelson Leonid Viktorovich was born into a Jewish family and received his degree in civil engineering from the Kuibyshev Civil Engineering Institute in 1977. After that, Leonid Mikhelson served as the superintendent of the construction trust in the Khanty-Mansiysk autonomous okrug of the Tyumen region near the city of Surgut during the construction of the first line of the Urengoy-Chelyabinsk gas pipeline. This line connected Chelyabinsk and Urengoy.
Leonid Mikhelson was promoted to the position of chief engineer at the Ryazantruboprovodstroy Trust in 1984.
Leonid Mikhelson’s tenure as head of the Kuibyshevtruboprovodstroy Trust began in 1987. Later on in the year 1991, the trust became the first joint-stock business in the region to be privatized, and it subsequently changed its name to Samara People’s Enterprise Nova. Up until 1994, Mikhelson served as the company’s managing director.
In 1994, Leonid Mikhelson was appointed to the position of chief executive officer of Nova, which at the time was controlled by the Novafininvest management business.
With a fortune estimated at $24 billion as of 2019, Leonid Mikhelson held the title of being the richest person in Russia. In 2017, President Donald Trump gave his signature of approval to the Countering America’s Adversaries Through Sanctions Act, also known as CAATSA. This act names a number of Russian oligarchs, Mikhelson being one of them.
The privatization of “Kuybyshevtruboprovodstroy” took place in 1991, and the company was subsequently reorganized as a joint stock company under the name “Samara national enterprise “Nova.” After leading it until October of 1994, Mikhelson moved on to become the general director of the management firm “Novafininvest,” which included “Nova” as one of its assets. Mikhelson led the company until his move.
“Novafininvest” started getting involved in the production of gas. Mikhelson began buying up shares of the association “Purneftegazgeologia,” which controlled the license on numerous sites with huge reserves of gas.
Mikhelson also organized the construction of several new oil and gas enterprises in the Yamalo-Nenets Autonomous Region. Finally, with the active assistance of Joseph Levinsohn, who had moved from the position of administrator in “Purneftegazgeologia” to the position of vice governor of the district, NovaTEK was created. This company, which began producing oil and gas in 1996 on the first of its three main fields, East Tarkosalinskoye, is considered one of the most successful in Russia. In 2002, mining operations were initiated at the Yurkharovskoye deposit, and in 2004, those at the Khancheyskoye deposit got under way.
As soon as he had established NovaTEK, Mikhelson started putting together business relationships and looking for investors in the company’s capital. Igor Makarov was able to achieve a consensus with Itera in the spring of 2002 on the merger of oil and gas assets; however, the business quickly backtracked and rejected the offer without providing an explanation. Following that, Mikhelson had the intention of selling a controlling position in NovaTEK to the French company Total. Nevertheless, the FAS did not give its blessing to this deal.
As a direct consequence of this, Mikhelson opted for the IPO option, and in July of 2005, he listed his 19% holding in NovaTEK on the LSE. Mikhelson was paid 335 million dollars for his 6.6% stake in the company after investors purchased shares with a value of approximately $1 billion. Then another transaction took place, which involved the sale of a 19.99% interest in Gazprom.
Leonid Mikhelson is the majority shareholder in the huge bank in Samara, known as OAO “First United Bank (“Pervobank”), which was established in 2006 by Andrei Ishchuk following the merger of the Nova Bank and the Bank “Samara Credit.” Mikhelson holds around 75% of the bank’s shares.
The rank of “Badge of Honor” was bestowed upon Mikhelson as a token of gratitude.
Interests: volleyball Mikhelson cheers for the men’s volleyball squad known as “Nova.” The soccer squad known as “Wings of the Soviets” has him listed as a sponsor.
Leonid Mikhelson family
He’s married and has a daughter.
Shady interactions with senior Russian authorities
Leonid Mikhelson is allegedly assisted in acquiring additional assets for Novatek by servile authorities and close pals in power. As a result, Mikhelson met Joseph Levinson for the first time in the early 1990s. The Purneftegazgeologiya company, which had gas reserves in the Yamal-Nenets Autonomous Okrug, was led by Levinson as CEO. Since Purneftegazgeologiya lacked the resources to exploit these reserves, Mikhelson’s company worked on Purneftegazgeologiya projects in exchange for the stocks of businesses that held licenses for gas and oil deposits in the Yamal-Nenets Autonomous Okrug.
According to estimates, there are 235 million metric tons of oil in the Purneftegazgeologiya field reserves. As a result, these assets were turned into the company’s main assets. In 2001, Mikhelson purchased Purneftegazgeologiya. From 1996 to 2005, Levinson was the Yamal-Nenets Autonomous Okrug’s first deputy governor.
The well-known CEO of the oil trader Gunvor, Gennady Timchenko, entered Putin’s inner circle in 2009 and acquired stock in Novatek. Mikhelson bought Sibur, the biggest petrochemical holding in Eastern Europe, along with a few other enterprises in partnership with Timchenko. According to rumours, Michelson and Timchenko were successful in persuading local officials to support their goals in the joint purchase of firms. For instance, the government of Bashkortostan held an auction in 2015 to buy equity in Polyef, the nation’s sole producer of terephthalic acid.
The local business rebuke was the early victor. However, the arrangement was later terminated by the Bashkiria government and Rebus LLC, and Sibur came into possession of the Polyef assets. The sale of Polyef shares was handled by the Bashkirian Ministry of Land and Property Affairs. It is interesting that before selling Polyef, Leonid Mikhelson had a meeting with Rustem Khamitov, the head of Bashkortostan. Mikhelson’s conversations with the president of Bashkortostan have received substantial media attention.
Leonid Mikhelson and other regional leaders have remained friendly. Dmitry Kobylkin, 38, was appointed governor of the Yamal-Nenets Autonomous Okrug in 2010. He began his career at Khancheyneftegaz (a Novatek affiliate) and Purneftegazgeologiya. Kobykin was referred to as “a nominee from Novatek” in the media before to the governor’s race because the head of the Yamal-Nenets Autonomous Okrug was already believed to be Mikhelson’s ally. Since then, Novatek has benefited greatly from the region’s administrative and political advantages.
Leonid Mikhelson, links, and content
Newspapers claimed in 2005 that “NovaTEK” ran the possibility of becoming another victim of Gazprom, which was attempting to monopolise gas in a number of ways. Leonid Mikhelson and Joseph Levinson, the vice-governor of the Yamalo-Nenets Autonomous District, were then NovaTEK’s principal shareholders. In response to pressure from Gazprom, the latter gave Alexei Miller a stake in NovaTEK. Chairman Leonid Simanovsky made an effort to defend NovaTEK, and as a result, the company enjoyed significant backing from regional officials, particularly governor Vladimir Neelov.
A licence was granted to a subsidiary of NovaTEK to develop the South Russian field, but Gazprom later assumed control of it. The Yamalo-Nenets Autonomous District’s prosecutors were employed by “Gazprom” in the battle for NovaTEK; the company’s stockholders were accused of profit-hiding and asset-stripping. The beginning of legal action coincided with NovaTEK’s attempt to sell a controlling position to the Franco-Belgian business Total, as if the shares had gone to the West, Gazprom would not have been able to acquire control of the company.
The Russian Federal Antimonopoly Agency changed the resolution it had first given, which prevented the merger with Total from going through. Due to the murky sources of the company’s assets, the Franco-Belgian corporation Total ultimately rejected the merger with NovaTEK.
“Novaya Gazeta” on July 4, 2005, as source
By utilising the connections of his buddy Joseph Levinsohn, vice-governor of Yamal, Leonid Mikhelson was able to get gas field permits, draw in fresh assets, explain his ties with major corporations, and avoid paying taxes. Leonid Simanovsky, a vice president at Yukos, served as a cover for Mikhelson’s actions in the professional sphere.
Source: Compromat.ru, a website, as of June 23, 2005
Newspapers reported on Leonid Mikhelson’s problems in 2005, when law enforcement officers raided NovaTEK offices in Samara, Salekhard, and Moscow and seized documents in connection with the filing of two civil lawsuits by prosecutors from the Yamalo-Nenets region for the illegal transfer of a 5.6% stake in the company to VEB, which belonged to the Regional Development Fund of Yamal and was intended to invalidate the fund’s very creation.
Vedomosti of June 22, 2005; www.polit.ru of July 6, 2005
In 2005, Leonid Mikhelson’s name was mentioned in the news in relation to a lawsuit in the Stavropol district. On on behalf of Russneft, the Cyprus-based Broadwood Trading & Investments Ltd. (BTI), which owns 34% of Geoilbent, charged NovaTEK’s management with violating its pre-emptive right to purchase shares in Geoilbent.
To the oil giant LUKoil, NovaTEK was planning to sell its 66% stake in “Geoilbent” for a lesser price; however, LUKoil needed the Federal Antimonopoly Service’s (FAS) permission to proceed with the deal. The management of NovaTEK sold a share in a deal that did not require a direct purchase in order to lessen the likelihood that the second co-owner of OOO “Geoilbent” would challenge the deal: NovaTEK submitted all the paperwork for the company it owned to the share capital of the oil holding company registered in Salekhard; its owner became a subsidiary structure of LUKOIL.
According to the press, Mikhelson simply kept up a front of tender in order to receive extra payments in “cold cash” from corporate leaders. Mikhelson claimed to require money for a variety of reasons, including to support Mikhail Kasyanov and his potential political party, to fund his divorce proceedings, or to lower the customary portion of his friends Levinzon and Simanovsky.
Source: “Kommersant” No. 113, dated June 23, 2005
The European Bank for Reconstruction and Development (EBRD), where NovaTEK took the credit in the late 1990s, pledged the sold shares of Geoilbent. The newspapers were how the bank found out about their selling. Since the sale of the promise contravened the terms of the loan agreement, the Bank froze all regular loans for NovaTEK and said that it would carry out thorough internal audits of the business and turn to international arbitration in the event of disputes.
Source: Bigness.ru on July 1, 2005
ye.commastmastmastmastmastmastmastmastmas, and. Previous to that, Leonid Mikhelson held ownership interests in the Russian ZAO “Levit” and the Cyprus SWGI Growth Fund, the direct owners of NovaTEK. Leonid Mikhelson ceased to be the controlling shareholder of NovaTEK in December 2003 when his ownership stake in “Levit” was lowered to a level below 50%.
“Kommersant” No. 113 (3197), June 23, 2005
In 2005, the names of Leonid Mikhelson’s friends, Leonid Simanovsky and Joseph Levinzon, were included in articles about the financial manoeuvrings at NovaTEK. They claimed that Levinson estimated the “Yurharovneftegaza” gas fields’ reserves to be 9 billion cubic metres in official remarks. There were around a trillion cubic metres of reserves when the Yurkharovskoye field was turned over to OAO NovaTEK after the subsidiaries of Gazprom rejected it. Levinzon was charged with deliberately influencing the mining companies’ access to the richest reserves for mining in order to benefit NovaTEK.
For instance, the sale of “Purneftegazgeologia” to NovaTEK was followed by the mysterious loss of a sizeable portion of investments and the degradation of 30% of the stock in Zapsibgazprom, a subsidiary of Gazprom.
Source: Compromat.ru, a website, as of June 3, 2005
In November 2003, the Supreme Arbitration Court rendered a ruling in favour of Gazprom, overturning the extra issuance of shares of AO “Purneftegazgeologia” (PNGG), a division of Leonid Mikhelson’s NovaTEK. The firm “Vermann,” led by Fedor Khoroshilov, made the decision. The minority shareholder of PNGG-Zapsibgazprom, a subsidiary of Gazprom, was able to assert a sizeable interest in the business thanks to the cancellation of the extra issuance. The company holds licences in a variety of industries.
Source: “Fresh News,” dated March 15, 2004
In the Samara region, Leonid Mikhelson and Sergey Matvienko, the son of Governor Valentina Matvienko of St. Petersburg, founded OOO “Brend” in 2005. The prospect appraisal study in YaNAO – Oil and Gas Company was one of the projects of the newly established company (OGC) The prospect appraisal survey was headed by “Gorny” (in which “Brend” owned 27,5% of the shares) in the Yamalo-Nenets Autonomous District (YaNAO) on the Voerg- Missyursk site.
The licence for this website was obtained in 2005, and by 2012 it was essential to open and register resources (as per the license’s requirements), which cost 300–400 million rubles annually. OGC began looking for investors and it was only Mikhelson who agreed to work on the terms of OGC. For some reason, Mikhelson chose not to invite Valentina Matvienko’s son to an investment. Since the site’s resources didn’t go beyond 10–20 million tonnes of oil equivalent, its level of expertise was relatively low, and the production circumstances were harsh, it wasn’t yet evident why Mikhelson needed it.
Vedomosti, April 28, 2008
Some media outlets charged Leonid Mikhelson with fabricating the controversy around the building of the mansion in Istra, which was supposedly Alexei Miller, the head of Gazprom. According to press reports, Mikhelson gathered a group of Miller compromises as part of his efforts to join the Gazprom board of directors. From a helicopter, panoramic images of the palace complex’s 32 acres and the palace on the banks of the Istra River near Moscow were captured in particular.
The launch of Miller’s information campaign fell on the same days as Gazprom’s next annual shareholder meeting. Miller’s ability to spend money from the public Gazprom on personal luxury during the country’s economic crisis was meant to cast doubt on him. Journalists claim that as a result, Mikhelson carried out his preparations to join the Gazprom board of directors.
Source: Rospres, as of July 27, 2009.
At the same time, there were journalistic rumours that Leonid Mikhelson might secure lucrative gas contracts with customers as a result of his special connections to Gazprom. The sale of gas condensate was also given to NovaTEK almost exclusively, despite the fact that Gazprom itself could have made significant profits by trading these raw materials internationally.
Despite this, NovaTEK currently uses gas condensate, with the exception of a tiny amount of condensate that Gazprom sends to Europe. Journalists claimed that Gazprom’s disregard for the gas condensate market may be an indication of managerial wrongdoing.
The Gazeta on March 30, 2009
They said that the only reason Leonid Mikhelson was able to maintain his company was because he gave a stake of NovaTEK to Gennady Timchenko, a close friend of Vladimir Putin. Timchenko bought 13,13% of NovaTEK’s shares from Cartagena Development Inc., increasing the ownership of the Volga Resources fund’s stake to 18.2% of the firm; as a result, his compensation package now exceeds that of the management.
It was an asset exchange in which Timchenko expanded his interest in NovaTEK by selling a 51% stake in Yamal LNG to Mikhelson’s company for less than market value. Leonid Mikhelson had to include Timchenko onto the board of directors of the corporation. Analysts claim that the agreement created strategic state control of NovaTEK.
Source: “Kommersant” Nos. 94 (4149) and 93 (4148), all from May 28, 2009.
NovaTEK fabricated the minutes of the general meeting of OOO “Geoilbent” and continued to purchase oil from that company at a price that was half that of the market. Afterwards, OAO “NOVATEK” exported the same oil at market rates. As a result, there was a major reduction in revenue as well as probable participant dividends and payment prospects. Profits from OOO “Geoilbent” were dispersed by NovaTEK to themselves and to other parties.
Source: Kommersant No. 120, dated July 2, 2005
The name Leonid Mikhelson was brought up in the media in relation to the scandal surrounding the building of the sports and fitness complex in Anapa, in the Krasnodar Krai, on the protected Utrish region (journalists refer to the new item as a state house). The official originator of the construction was Fund of the Regional Non-Profit Projects “Dar” (Controlled by Leonid Mikhelson).
The Fund leased the site and signed a construction agreement with OOO “Harvinter”. The public started complaining about the destruction of rare nature and blaming Medvedev’s Presidential Property Management Service. Journalists claim that under that situation Mikhelson and his Fund served as both a target for the public’s ire and the source of funding for the presidential initiative.
‘Living Kuban’ on January 18, 2010 as source
Newspapers reported on Mikhelson’s involvement in the plan to develop the Gulf of Finland Coast within the context of St. Petersburg’s expanding boundaries. They mentioned that “Severo-Zapad Invest” will participate in the tender; the company had already won an auction in September 2009 for the right to lease a 140-hectare coastline land tract from Lisiy Nos to the Sestroretsk area. OOO ” Severo-Zapad Invest ” spent 36 million rubles on the Gulf Coast. Seventy percent of “Severo-Zapad Invest” is owned by OOO “Levit,” a majority of whose shares are held by Leonid Mikhelson.
Newspaper, November 17, 2009
Recently, Gennady Timchenko started to increase his ownership of NovaTEK, while the organization’s management team, led by Leonid Mikhelson, is losing ground. Two divisions of the Gennady Timchenko-owned Luxembourg Fund Volga Resources asserted ownership of more than 20% of NovaTEK. Leonid Mikhelson is relenting: Volga can acquire 24.99% of shares after the consolidation of more than 20% of NovaTEK. Volga’s official percentage is 5.07%.
However, the Fund and Cartagena Development Inc., which is run by NovaTEK management, reached an agreement in May 2009 for the Fund to buy an additional 13.13% of the company; the deal has not yet been finalised. In the meantime, Leonid Mikhelson’s shareholdings are made up of 5.7% of shares through his OOO “Levit” and 0.47% of his personal shares.
21.12.09 source: www.fedpress.ru
The possibility of Mikhelson purchasing the Count Kushelev-Bezborodko palace on the Kutuzov embankment was raised. Officially, OOO “Tsertum-invest,” a joint venture between “Tashir” and Gazprombank and co-owner of the Blagovoshensky Valve Factory, purchased the castle. Philip Polyansky, 29, is the owner of this business, which specialises in financial intermediation. Up until 2008, Polyansky served as the director of the Leonid Mikhelson-controlled “DAR Fund,” a regional non-profit organisation.
Vedomosti, 26 February 2010
OAO Gazprom keeps making aggressive market purchases of NovaTEK stock. Also, Gennady Timchenko collaborates with Gazprom; their shared objective is the total subordination of NovaTEK to the government, not merely a tightening of state control over the corporation. In order to gain control of NovaTEK, the president of Rosneft, Alexey Bogdanchikov, sends his eldest son to work there.
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