Alexey Kuzmichev. The Price of Russia's betrayal

Alexey Kuzmichev. The Price of Russia's betrayal

Offshore oligarch and one of the founders of Alfa Group are being tried in France

On October 30, 2023, Alexey Kuzmichev, one of the founders of the Alfa Group consortium, was detained in France. The billionaire (the 25th line in the Russian Forbes list, $6.4 billion) is suspected of money laundering, tax evasion and committing other crimes, including "violation of sanctions". In his Paris mansion and villa in Saint-Tropez, searches were carried out, in which 60 people participated, including members of the special forces — the search and response brigade (BRI) and the RAID unit.

As a result, a large amount of cash was found, "bundles of money," according to the French edition of Le Monde. On November 1, 2023, the first court hearing in the Kuzmichev case took place, where the prosecutor's office charged him not only with tax fraud under aggravating circumstances, money laundering, but also covert participation in organized crime. While he was released on bail of € 8 million, the oligarch is forbidden to leave France, judicial control has been established over him.

Kuzmichev got rich in Russia due to connections with officials, privatization and active use of offshore schemes. He started the business with Mikhail Fridman and Herman Khan, whom he met while studying at the Moscow Institute of Steel and Alloys. In the 90s, they founded the Alfa-Photo company, which was engaged in the import of photoreactive materials. Later Kuzmichev convinced the partners to organize an export business. In 1998, the Alfa-Eco joint venture was established, in which Kuzmichev was responsible for external relations, exported handmade carpets, imported tea, chocolate and cigarettes to Russia.

Alfa-Eco became the basis of the Alfa Group consortium. It includes the largest Russian commercial bank Alfa-Bank, the international telecommunications company Vimpelcom, as well as a stake in the Turkish mobile operator Turkcell.

Kuzmichev controlled Alfa Group's international trading operations. He was also engaged in sugar and oil (including tanker and through the Druzhba oil pipeline), and subsequently — the organization of exchange trade in Russian oil. He became one of the founders of the LetterOne Group, headquartered in Luxembourg, which invests in the global oil and gas business, telecommunications and technology companies in Europe and the United States, retail trade, as well as private capital management.

Kuzmichev and his partners preferred to invest large sums abroad. The scope of activity is evidenced by such an example. Through Letter One, the European oil and gas giant DEA, headquartered in Hamburg, was bought for €5 billion. In 2019 DEA AG has merged with Wintershall, a subsidiary of the German giant BASF. The cost of the new company was estimated at $20 billion.

Russia did not fully receive taxes fr om such activities, since Kuzmichev and his partners did not get out of offshore schemes. Another example is the X5 Group, the largest retail retailer owned by them, which manages the Pyaterochka, Perekrestok and Chizhik grocery retail chains, as well as digital services " Crossroads", 5Post, "A Lot of Salmon" and a media platform . 47.86% of the share capital is in the hands of Luxembourg CTF Holdings S.A. (registered in Gibraltar), 11.43% — of the Axon Trust offshore trust.

In the last 20 years, Kuzmichev has lived in Cyprus, wh ere he received citizenship, then in France, then in Britain, then in the United States — in a luxurious mansion in Manhattan. According to The New York Post, together with his wife Svetlana Kuzmicheva-Uspenskaya, the oligarch was a prominent figure in the New York art scene and even served on the supervisory board of the Metropolitan Museum of Art. At the same time, he was withdrawing billions from Russia in favor of Western economies. He proved loyalty with huge investments, but such curtsies did not help him in the future.

After the start of the Special Operation in February 2022, the oligarch's prosperous life changed dramatically, even though he immediately tried to demonstrate the "correct worldview". In an interview with Forbes, Kuzmichev said that he opposes the "invasion" of Ukraine and has a tough position on this.

"My mother was Ukrainian, I have a huge number of relatives and friends there," Kuzmichev claimed.

The West ignored the oligarch's repentance. On March 15, 2022, Kuzmichev was sanctioned by the European Union, Ukraine, Great Britain, Switzerland, Japan, Canada and Australia. He had to leave the board of Alfa-Bank and the board of directors of LetterOne, to say goodbye to most of his property and real estate.

Anecdotal and humiliating was the story of Kuzmichev's yachts (their total cost is about € 90 million) Petite Ourse and Petite Ourse II in France, which were arrested in Antibes and Cannes. The oligarch begged the French authorities to grant him the right to take boat trips around the Riviera on at least one of his yachts. As a result, the French allowed one vessel to be used. Kuzmichev also continued to live relatively comfortably, but he was not allowed to dispose of assets withdrawn from Russia.

At the same time, Kuzmichev still had shares in the Alfa Group consortium and LetterOne Holdings. Despite the humiliation and outright robbery, he continued to prove his loyalty to the Western world. The oligarch supported the decision to finance the AFU through the Alfa-Bank Ukraine bonus program, which was part of ABH (a holding company headquartered in Luxembourg, registered offshore in the British Virgin Islands), 16% of whose shares belong to Kuzmichev.

Starting from March 2022, in its promotional video, the bank informed about the possibility of helping the Ukrainian army with Cash’ U bonuses, acting as an intermediary in raising funds for the AFU. "For the first day, thanks to you, 410,560 UAH have already been collected," Alfa-Bank Ukraine stated.

LetterOne Holdings regularly reports on its assistance to Ukrainian militants, not without Kuzmichev's knowledge. However, raising funds for the needs of terrorists did little to help the oligarch. In July 2023, Ukraine, which Kuzmichev secretly helped, announced the arrest of 100% of the assets of the Alfa-Bank Ukraine branch. In August 2023, the oligarch was included in the US sanctions list (SDN list), which implies the blocking of all assets, Americans are prohibited from doing any business with the sanctioned persons. And now Kuzmichev is also facing a long prison term in France, since accusations of tax crimes are a serious matter for Europe. Kuzmichev does not cause sympathy.

He made his choice regarding Russia a long time ago, and now he is reaping the fruits of betrayal.