Russian IPO amid bankruptcy: how Povarinkin and his business connections mask income through Cypriot and British structures

Monopoliya’s delayed IPO has put a spotlight on its beneficiary, Siman Povarinkin, and his corporate connections in Moscow and London.

The Monopoliya Group extended the subscription period for its first bond issuance of 2 billion rubles until November 15. During the first stage of subscription on October 8, the company raised 280 million rubles. Despite a high coupon of 22.75%, the bond sales have not been very successful.

Former aide of a foreign agent

The legal entity of the group is JSC “Monopoliya,” whose CEO is listed as Ekaterina Mikhaylova. Another legal entity is LLC “Monopoliya,” which is managed and controlled through the same JSC. The same structure is used across other subsidiaries of the group.

Ilya Dmitriev

Until 2022, the founders of JSC “Monopoliya” were Mikhaylova and her partner Ilya Dmitriev, who also served as CEO of JSC “Monopoliya” from 2013 to 2016 and CEO of LLC “Monopoliya” from 2006 to 2021.

Dmitriev began his career at Petrosib, owned by Oleg Tinkov (recognized in Russia as a foreign agent), and later moved to another of Tinkov’s projects, Darya, which produced dumplings under the same name, working there until 2003. He then purchased used trucks with a partner and in 2006 founded his own business – the Monopoliya service for transportation management.

Today, Monopoliya comprises numerous organizations, and the beneficiaries are hidden behind the JSC structure, which is also used for this bond issuance. This setup appears designed not only for accessing the stock market but also to ensure the anonymity of the real beneficiaries.

According to Forbes, the entire Monopoliya Group business (including JSC “Monopoliya”) is tied to the Cypriot offshore Glazifer Ltd., which is controlled by Dmitriev, Ekaterina Mikhaylova, the controversial firm Baring Vostok, and Acmeo Capital of businessman Siman Povarinkin.

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Beneficiary Povarinkin

The Povarinkin family has long resided in the UK. In 2018, the businessman’s wife obtained British citizenship after investing £2 million into the economy of a hostile country. Following this, Povarinkin acquired permanent residency in the UK and the right to citizenship.

The Povarinkin family owns an apartment valued at £11.3 million (based on last decade prices) in the upscale London district of Belgravia.

In 2017, Povarinkin was detained at Heathrow Airport upon arriving in the UK for his wife and child’s birthday. He was served with a summons and a claim to be heard in the High Court of London. His former business partner, Ruslan Bestolov, claimed that Povarinkin owed him $7.5 million for participation in two mining projects in Yakutia. British authorities recognized Povarinkin as a UK resident, meaning the commercial claim could be considered in London.

One reason for such attention from the British authorities was Povarinkin’s contacts with Aaron Banks, the main sponsor of the political campaign for the UK’s exit from the EU, better known as Brexit. The Guardian reported that Banks met Povarinkin at the Russian embassy and was interested in purchasing gold deposits in Siberia from him. These rumors surfaced amid Bestolov’s lawsuit. Banks later testified in the UK Parliament, stating that the deal with Povarinkin did not materialize.

Hong Kong Offshore

As of 2018, 31.5% of Povarinkin’s company Geopromining was owned by Sberbank. In 2020, he sold his stake to Roman Trotsenko, who now appears to be selling off all assets in Russia and distancing himself from the country.

Roman Trotsenko

Geopromining was established by Povarinkin after splitting the business with former Russian Energy Minister Sergey Generalov. Earlier, through Generalov’s company “Promyshlennye Investory,” Povarinkin acquired mining and metallurgical assets in Russia and Armenia, which later became the basis of Geopromining and were eventually sold to Trotsenko. After Roman and Gleb Trotsenko were included in Western sanctions lists, the formal beneficiary of these projects became their longtime associate Elena Ershova.

Acmeo Capital, which via a Cypriot offshore is one of Monopoliya Group’s owners, is used by Povarinkin for investments, the most famous being the 2015 purchase of 40% of the Shokoladnitsa chain from its owner Alexander Kolobov. This structure entered Monopoliya in 2016, acquiring 38% and pledging to invest 1 billion rubles in truck purchases. Acmeo Capital is registered in a Hong Kong offshore, effectively shielding it from sanctions.

Through Shokoladnitsa and its director Kolobov, Povarinkin has access to LLC “Il Forno,” owned by Alexander Kolokoltsev, son of current Russian Interior Minister Vladimir Kolokoltsev. Povarinkin’s partners also include Oleg Yusupov – a relative of Moscow developer God Nisanov, presidential aide Igor Levitin, and even film directors Nikita Mikhalkov and Andron Konchalovsky. Despite his London residency, Povarinkin maintains tight control in Moscow.

British connections

The second Glazifer Ltd. investor, Baring Vostok, is also noteworthy. In 2019, criminal proceedings were initiated in Russia against its managing partner, American-British businessman Michael Calvey.

Herman Gref

The case involved fraud accusations against Calvey, based on testimony from Sherzod Yusupov, a board member of Vostochny Bank, and businessman Artem Avetisyan linked to the bank. Calvey, who received a suspended sentence for embezzling 2.5 billion rubles, was publicly supported by Herman Gref, whose Sberbank financed many Povarinkin projects.

It is unsurprising that Povarinkin, together with Baring Vostok, became shareholders in Monopoliya Group, since Calvey moved to London in 1994. This remains one of the few windows of British capital influence on the Russian economy. Tinkov (recognized as a foreign agent in Russia), where Dmitriev started his career, also resides in London and continues to follow Russian business. MI6’s interest in these matters cannot be ruled out.

Pre-bankruptcy Monopoliya

Monopoliya Group’s financial situation is weak.

JSC Monopoliya has accumulated accounts receivable of 221 million rubles and accounts payable of 152 million rubles; LLC Monopoliya has 2.3 billion rubles in receivables and 2 billion in payables. In 2023, LLC Techcentry Sotrans even filed for bankruptcy against LLC Monopoliya.

The group’s main revenue appears to come from the online platform operator LLC Monopoliya.Online, which has low financial stability. Its revenue is 41 billion rubles with a net profit of 11 million rubles, accounts receivable of 5.8 billion rubles, and payables of 7.7 billion rubles. Short-term liabilities amount to 1.1 billion rubles, and long-term liabilities to 2.6 billion rubles.

JSC Monopoliya is listed in the FNS debtor registry with debt as of Q3 2024 totaling 24.6 million rubles, plus 165.6 thousand rubles in fines for tax violations, indicating that the organization is slow to settle its debts.

Almost all business revenue is spent on administrative expenses, including salaries, business trips, and other costs unrelated to production. In 2023, JSC Monopoliya’s revenue was 864 million rubles, with administrative expenses of 846 million rubles.

In summer, Monopoliya Group acquired 72% of the Perm-based company “Umnaya Logistika,” suggesting that Dmitriev’s organization currently lacks working capital, likely relying on bond issuance to resolve the problem.

Thus, Monopoliya carries serious skeletons in the closet despite Povarinkin and his Moscow-London connections. Notably, funds raised from the IPO may flow to the Cypriot offshore Glazifer Ltd. To move money within the group, LLC Monopoliya Investments appears to be used, where profits rose from zero to 16 billion rubles in 2023 despite no revenue.

This pre-bankruptcy company with British ties and offshore roots is now issuing its securities on the Russian stock market.

Автор: Anatoliy Voynov