Igor Yusufov – a family lobbyist under the Kremlin’s protection?

How the ex-minister "resolved issues" in the interests of his businessman son

The Russian oil company Yargeo, which is developing the Yarudeyskoye oil and gas condensate field in Yamal, has had one of its owners change: last July, 49% of its authorized capital, which previously belonged to the Cypriot offshore company Nefte Petroleum Limited, was transferred to the ownership of the Qatar-registered firm Enduro Investments LLC. The beneficiaries of the new co-founder remain unknown, but his Cypriot predecessor was controlled by Igor Yusufov, a former federal energy minister who now positions himself as a “private investor.” 51% of Yargeo still belongs to PAO NOVATEK, owned by Leonid Mikhelson , who at one time made every effort to “squeeze” the joint venture from Yusufov, which now brings in multibillion-dollar profits. Igor Yusufov entered politics in the early 1990s, but the peak of his career was his leadership of the Russian energy complex in 2001-2004. He also served on the boards of directors of Rosneft, Transnefteprodukt, and Gazprom. Having then become the president’s special representative for international energy cooperation, Yusufov became known as a “high-flying lobbyist” close to then-president Dmitry Medvedev . In 2009, the Rostekhnadzor commission named Yusufov among those responsible for the accident at the Sayano-Shushenskaya hydroelectric power station, which took the lives of 75 people. The dismissal of the government official in 2011 coincided with a high-profile scandal involving the purchase of 19.91% of the shares of Bank of Moscow by his son Vitaly Yusufov: according to the former head of the credit institution Andrei Borodin, in seeking the sale of the securities, Yusufov Sr. directly told him that he was acting on behalf of Medvedev. The story of Yusufov Jr.’s purchase of the German shipyards Nordic Yards, the negotiations for the acquisition of which were conducted by his father, became widely known. The previous owner of the shipyards, Andrei Burlakov, was killed by a hitman from the gang of the well-known criminal authority Aslan Gagiev (Dzhako), who claimed that he was also part of the management of the shipyards, but Igor Yusufov eventually "squeezed" the business worth 3 billion dollars from him.

Yargeo has a new co-owner with a residence permit in Qatar

Last July, it became known that one of the founders of  the oil production company Yargeo , which is developing the Yarudeyskoye oil and gas condensate field in Yamal, had changed: 49% of its authorized capital, which previously belonged to the Cypriot offshore company Nefte Petroleum Limited,  became the property of the company Enduro Investments LLC, which was registered  several months earlier, in February, in Qatar .

The beneficiaries of the new co-owner remain unknown. As for his Cypriot predecessor, the media have repeatedly linked  Nefte Petroleum with former Russian Energy Minister Igor Yusufov ,  who positions  himself as a "private investor", and his  Energy Fund  (officially liquidated  last April). However, the former official himself did not particularly hide this connection:

It is worth recalling that 51% of Yargeo still  belong to  PAO NOVATEK of Leonid Mikhelson , who at one time made every  effort to "squeeze" the joint venture from his business partner. In a commentary to the RBC portal, a representative of NOVATEK  stated that Nefte Petroleum had stopped financing the project and was preventing the attraction of financing from other available sources . 

Nevertheless, there are serious doubts that the ex-minister could have ceded a promising asset to his partner. Thus, based on the results of 2023, Yusufov took 33rd place in the Forbes rating  of “  50 Russians with the Largest Dividend Amounts” : the publication estimated the amount of payments, the source of which it calls “Yargeo”, at 12.8 billion rubles  (including affiliated persons).

Let’s also pay attention to the company’s financial indicators  : last year, with revenue of  63.5 billion,  the profit of Yargeo LLC amounted to 11.4 billion rubles  (for comparison: revenue in 2022 is almost  79 billion , profit - 13.2 billion ). Who in their right mind would refuse a share in such a successful enterprise? And the "showdown" with Mikhelson seems to be in the past.

Igor Yusufov: the path of a Komsomol member to power

The future Russian oligarch was born in Derbent and belonged to the Soviet elite: according to one version , his father held a ministerial post in the government of the Dagestan ASSR, according to another, he was, no more, no less,  the chairman  of the council of ministers of the republic. However, in  an interview  with the publication Profile, Yusufov categorically refused to discuss the "parental" topic. While studying at the Novocherkassk Polytechnic Institute, he showed himself to be ideologically "savvy": he was the secretary of the Komsomol committee, then joined  the CPSU.

Having received a diploma in power engineering, the “excellent student of political training” went to Moscow, where, thanks to either university recommendations or connections through the party, he found a job at Mosenergo, and in 1984 he ended up in Cuba as a senior  expert  at the construction of the Havana Thermal Power Plant.

Already at the end of the USSR, Yusufov graduated from the Academy of Foreign Trade. At the same time, he began  to collaborate  with the Social Development Fund "Vozrozhdenie" , which was first headed by the Chairman of the Supreme Soviet of the Russian Federation Boris Yeltsin , and after his election as head of state - by Vice President Alexander Rutskoy . The Fund’s tasks included the construction of housing, hospitals and schools, assistance to the poor and victims of national conflicts, it could earn money on export-import operations, plus it was exempt from customs duties and income tax on exchange rate differences.

It was here that Yusufov got, as they say, into the right channel, but as a result of the conflict between Yeltsin and Rutskoy, the Fund’s officials  were suspected of embezzling foreign currency. By this time, Yusufov himself had already settled in  the Committee for the Protection of Economic Interests of Russia ,  which was controlled by the same Rutskoy , and after its dissolution, he took the post of Deputy Minister of Foreign Economic Relations of the Russian Federation Sergei Glazyev . While working in the ministry, he oversaw the Oboronexport  association , and then participated in its transformation into Rosvooruzhenie .

"Under the Wing" of Dmitry Medvedev

Yusufov’s civil service career can be described at length, but we will briefly list its main milestones. Until 1996, he was "in a managerial position" at Rosvooruzheniye; then he became Deputy Minister of Industry, responsible for "gold and diamonds" and in this capacity he joined the board of directors of OAO Lenzoloto . In 2001, he was appointed  Minister of Energy and elected Chairman of the Boards of Directors of  Rosneft  and Transnefteprodukt , and a little later, he joined the board of directors of Gazprom .

In 2004-2011, Yusufov was the President’s Special Representative for International Energy Cooperation with the rank of Ambassador-at-Large of the Russian Foreign Ministry. By the time of his last appointment, he was already closely acquainted with Dmitry Medvedev , whose presidency saw, in the  words of  Forbes , "the rise of the Yusufov businessmen . " "Igor Yusufov is a man who could then open the door to the highest office in the Kremlin with his foot , " the publication quoted  former Moscow Mayor Yuri Luzhkov as saying .

But, as the saying goes, "even an old woman can make a mistake." In the fall of 2009, Yusufov’s name figured in a high-profile scandal related to the investigation of the accident at  the Sayano-Shushenskaya hydroelectric power station , which killed 75 people. Then the Rostekhnadzor commission, having established the causes of the emergency, named  six people whose actions contributed to the accident. Among them was Yusufov: as it turned out, while head of the Ministry of Energy, he "did not create mechanisms for real state control and supervision over the safe operation of energy facilities, including those included in RAO UES of Russia . "

It is unlikely that the scandal had any impact on the official’s career: Medvedev dismissed him  only  in April 2011, officially – in connection with the abolition of the position. However, another possible, unofficial reason was also voiced. The fact is that Igor Yusufov and his family, like the collective "Comrade Saakhov" from the old Soviet comedy, began to "confuse their personal wool with the state’s."

Almost simultaneously with the resignation, it became known that the son of the presidential special representative,  Vitaly Yusufov,  became the owner of  19.91% of the shares of Bank of Moscow , having bought them for 1.1 billion dollars from the president of the credit institution ,  Andrei Borodin .

An interesting detail: the deal was carried out using the bank’s own money, which issued Yusufov’s structures a loan for the corresponding amount, secured by  the German shipyards “Nordic Yards” .

Several months later, Andrei Borodin, who was in London, revealed some interesting details of the deal in an interview  with Vedomosti:

Igor Yusufov himself, of course, called  Borodin’s version "a lie and slander ," emphasizing that "he did not consult with anyone and did not receive any instructions from anyone ," acting solely in the interests of his son. The official Kremlin also responded:

Vitaly Yusufov – businessman and investor

As we can see, the scandal was serious. If we take Borodin’s version as a starting point, the story of the purchase of bank shares serves as a clear illustration of the negotiating methods used by the "high-flying lobbyist" (as  Forbes puts it ) . It also becomes clear in whose interests the high-ranking government official acted. By the way, already in September 2011, Vitaly Yusufov sold the shares he had purchased to  the VTB group headed by Andrey Kostin , and allegedly earned about $300 million  on this . As a result, VTB managed to consolidate  80.57% of the shares of Bank of Moscow.

It is worth dwelling on the personality of the former Minister of Energy’s son in more detail. Before going into big business, MGIMO graduate Vitaly Yusufov managed to work  as an assistant to the general director of Gazprom Export LLC ,  Alexander Medvedev . This was in 2004-2006, and in 2003, Yusufov Sr., being a minister, joined the board of directors  of Gazprom, of which he remained a member for ten years. This is such a "family contract" with the light hand of the head of the gas monopoly, Alexey Miller .

The next stage in the career of Yusufov Jr. was  the management  of the apparatus of Matthias Warning , the managing director of the  North European Gas Pipeline Company , which was engaged in the construction of the North European Gas Pipeline (51% of the shares of NEGPC belonged to the same Gazprom). In the fall of 2006, the project was renamed Nord Stream , and the son of the former minister headed  the Moscow branch of the joint Russian-German enterprise.

Thus, family and personal connections quite allowed Vitaly Yusufov to start building his own business. And here it is high time to remember the purchase  in 2009 for 40.5 million euros  of the above-mentioned shipyards "Nordic Yards", which were in a state of bankruptcy and specialized in the construction of icebreakers, ice-class vessels and floating drilling rigs.

In general, the story of the deal is rather murky and could serve as a plot for a crime thriller. Jumping ahead a little, we will say: in September 2011, the former owner of the shipyards Andrei Burlakov  and his common-law wife Anna Etkina  were shot  by an unknown person in a Moscow cafe on Leningradsky Prospekt. A few hours later, the businessman died in the hospital, the woman survived. Vitaly Yusufov was once closely acquainted with Burlakov and was even considered his consultant  "in matters of international law."

Now let’s take things in order. One of  the  Forbes publications , citing materials from an investigation by the Main Investigative Directorate of the Main Directorate of Internal Affairs of Moscow, talks about how in 2008 Andrei Burlakov , then deputy general director of the state-owned Financial Leasing Company  (FLC) ,  Anna Etkina  and a group of FLC managers pulled off a financial scam by concluding unsecured loan agreements for a total of 1.8 billion rubles . The swindlers spent part of these funds, transferred to FLC accounts, on purchasing German shipyards.
 
 Later, Viktor Drachev, the former executive director of FLC, who became a defendant in a criminal case but managed to leave for England in time,  spoke  about a meeting during which he and Burlakov discussed issues of withdrawing money with Igor Yusufov, who promised his patronage. Thus, the company  "Wadan Yards" was created , based on shipyards in Germany and Ukraine (the value of assets was estimated at almost 300 million euros ), the board of directors of which was headed by Burlakov.

However, already in 2009, Wadan Yards went bankrupt and the German authorities began urgently looking for an investor. And here the special representative of the president and member of the board of directors of Gazprom Igor Yusufov joined the negotiation process  . What happened next is not hard to guess: the new owner of the shipyards was Vitaly Yusufov, who promised the German authorities to pay off loans, establish production and save jobs. The newly-minted investor, according to him, earned the money for the purchase on deals with shares of Gazprom, Sberbank and other companies. It turns out that the father-official actually acted in the interests of his son.

The Bloody Trail of Gagiev-Dzhako

This state of affairs did not suit the recent partners of the Yusufovs: they actually accused the head of the family of seizing the enterprise. The situation began to escalate. Information appeared  that Burlakov even filed a statement to initiate a criminal case against Vitaly Yusufov and sought to seize his assets. And soon he became the victim of a killer, who, as it turned out, was part of the organized criminal group of Aslan Gagiev  ( Dzhako ), considered one of the bloodiest gangs in the history of Russian crime .

Let us recall that Dzhako was extradited  from Austria in June 2018. According to the Investigative Committee, his group is responsible for 60 murders, including contract killings. Among the victims is Andrei Burlakov, who was killed in September 2011. Gagiev tried by any means to avoid extradition to Russia; during interrogations, he told  Austrian police that he was a businessman and was directly involved in the management of the Wadan Yards company, but then he quarreled with Igor Yusufov, who allegedly “squeezed” a business worth $3 billion from him . Burlakov became a victim of this conflict.

The intrigue remained until the very end: would Gagiev repeat his testimony to Russian investigators? In September 2023, the Southern District Military Court in Rostov-on-Don  sentenced  "bloody Dzhako" to life imprisonment, finding him guilty of organizing an organized crime group, creating armed gangs, murdering two or more people, and illegally trafficking weapons and ammunition. The question of whether the ex-minister was connected with the liquidation of the former owner of Wadan Yards remained unanswered, but the possible presence of Gagiev among the business partners of the Yusufov family speaks volumes.

Igor Yusufov, of course, categorically denied any suspicions of connections with the crime boss:

Perhaps, over time, some new, as yet unknown, circumstances will be revealed in the case of the Dzhako organized crime group? Including those related to the German shipyards, which Yusufov Jr. was never able to load with Russian orders and sold  in 2016 for 230.6 million euros to  the Malaysian company Genting Group .

It is worth adding that the family’s financial integrity has also raised questions abroad. In 2017, Vitaly Yusufov’s company "Willow Project LLC"  bought  a luxurious colonial-style estate in the famous American Silicon Valley  from Deutsche Bank  for $72 million .

But Deutsche Bank managers had doubts about the buyer’s compliance with US anti-money laundering laws. The bank’s American reputational claims committee refused  to approve the deal, which was only concluded after a conference call with the heads of banking structures from Frankfurt and London: at that time, the main argument  in favor of Yusufov Jr. was his absence from the sanctions lists.

It turns out that the Yusufovs’ "toxicity" has long since "stepped over" the boundaries? If so, then this circumstance does not prevent the former government official, in tandem with Leonid Mikhelson, from developing Russian subsoil resources, registering and re-registering shares in joint ventures to yet another offshore.