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szdaily -> Person of the week
Tycoon Timchenko, Putin’s ally, under U.S. investigation
     2014-November-7  08:53    Shenzhen Daily

    U.S. prosecutors have launched a money-laundering investigation of a member of Vladimir Putin ’s inner circle in a politically sensitive escalation of pressure on the Russian president’s cadre of billionaire supporters.

    U.S. PROSECUTORS are investigating allegations of money laundering against a member of Russian President Vladimir Putin’s inner circle of billionaire supporters, the Wall Street Journal reported Thursday.

    According to the newspaper, prosecutors are investigating whether oligarch Gennady Timchenko transferred funds linked to allegedly corrupt deals in Russia through the U.S. financial system.

    At issue are transactions in which Gunvor Group, the international trading company that Timchenko founded, purchased oil from a company that is majority-controlled by the Russian state, and later sold it to third parties. Financial transfers could constitute money laundering if the funds were discovered to have derived from illegal activities, according to the Journal.

    The investigation represents the latest front in U.S. authorities’ campaign against key Russian and Ukrainian figures, stemming from Russia’s intervention in Ukraine. Any U.S. assets that belong to prescribed individuals can be seized, and Russian institutions have been denied access to sectors of the international financial system.

    The E.U. has also placed sanctions on a number of wealthy individuals and companies close to Putin, but Timchenko is not among them.

    The U.S. sanctions against Timchenko started in March. In explaining the sanctions, the U.S. Treasury Department said, “Timchenko’s activities in the energy sector have been directly linked to Putin. Putin has investments in Gunvor and may have access to Gunvor funds.”

    Gunvor denied the Putin link, calling the allegations “outrageous” and saying: “President Putin has not and never has had any ownership, beneficial or otherwise, in Gunvor.”

    The filing of criminal money-laundering charges would allow the U.S. to obtain an Interpol Red Notice on Timchenko, which would make him subject to arrest and potential extradition from many countries. Timchenko told Russian news agency Itar-Tass in August that he’s afraid to travel to much of Europe.

    Forbes magazine estimated Timchenko’s wealth at US$15.3 billion, calling him “one of the most powerful people in Russia.”

    Putin has said he has had nothing to do with the oligarch’s business activities. In 2011, Putin said that although he had known Timchenko from when Putin worked in St. Petersburg city hall in the 1990s, he “had never meddled” in Timchenko’s interests and did not plan to.

    But Timchenko and a committee headed by Putin had a short-lived venture in the 1990s, and a firm headed by Timchenko gained from an oil-for-food scheme set up by Putin in 1991, Britain’s Financial Times said.

    Timchenko set up Gunvor in 2000. It held a small share of the market until 2003, when the break-up of Yukos, the oil firm of Putin’s enemy Mikhail Khodorkovsky, offered a big opportunity.

    Gunvor’s revenues grew from US$5 billion in 2005 to US$43 billion in 2007, a feat that many doubt could have been accomplished without good political connections.

    According to Investcafe analyst Andrei Shenk, U.S. treasury claims that Putin is a beneficiary of Gunvor are not very believable.

    “It’s hard to imagine that Putin would directly own any stakes. First, it would be almost impossible to prove this, and secondly, there is no need [to own shares]. It would carry a risk but no especially good commercial benefit,” he said.

    In early October, Russia’s parliament, or Duma, progressed the passage of a law that would allow foreign-owned assets to be seized and used to compensate citizens and companies that have been targeted by Western sanctions over the war in Ukraine.

    The so-called “Rotenberg Law” is named after Arkady Rotenberg, a wealthy industrialist and close ally of Putin who had US$40 million of real estate in Italy seized under E.U. sanctions.

    Timchenko sold his stake in Guvnor to a partner the day before U.S. sanctions against him came into effect. Since then, the Geneva-based company has been seeking to limit its exposure to Russia, which has long been one of the main generators of its profits, according to a Reuters report.

    U.S. and EU sanctions on Russia have threatened to tip the country’s economy into recession. Increasing the pain being caused by international sanctions, the price of oil, a key revenue generator for Russia, is at a 27-month low, according to Bloomberg.

    Further compounding Russia’s woes, the rouble hit an all-time low Wednesday after the country’s central bank said it would dial back its support for the struggling currency in international markets, according to the Associated Press.

    In addition, the United States and Germany warned Russia Wednesday that it risked further sanctions over the conflict in Ukraine, as the two-month-old truce in the country appeared to be close to unraveling, with fighting erupting in eastern areas of the country, according to Bloomberg.

    Timchenko was born on Nov. 9, 1952. He holds a Bachelor of Arts/Science, which he attained from the Leningrad Mechanical Institute. He is the owner of the Volga Group, a private investment group that specializes in investments in infrastructure, transport and energy assets. He was also the co-owner of the Gunvo-Group, which is one of the largest international energy trading companies.

    Timchenko is not only one of the wealthiest Russians, he is also one of the most powerful people in the country. In an interview with Forbes Russia, he stated that Putin is his close friend, whom he has known for years.

    Timchenko started out his engineering career in 1977 and worked as an engineer at Izhorsky plant, which specialized in building power generators. Between 1982 and 1988, he worked with the Ministry of Foreign Trade as a senior engineer. He was then promoted to the position of deputy director of Kirshineftekhimexport enterprise, which is a state-owned oil company. During this time, Timchenko became one of the who’s who in the Russian oil trading industry.

    In 1991, Timchenko moved from Russia to Finland, and was hired by Urals Finland, a Finland-based company that specialized in importing Russian oil to European countries. He decided to become a citizen of Finland and abandoned his Russian citizenship. He however regained his Russian citizenship soon after. In 1995, Timchenko became the CEO of IPP OY.

    In the year 1997, Timchenko teamed up with Torbjorn Tornqvist and established Guvnor Group. In 2007, he established the Volga Group, a private investment fund that holds Russian and international assets that covers transport, infrastructure, construction, energy and financial services among others.

    In mid 2013, Timchenko’s work in developing permanent exhibition of Russian art was recognized, earning him the appointment that made him the Chevalier of the Legion d’Honneur.

    Timchenko is married to Elena Timchenko, with whom he has three children. He and his wife reside in Geneva, Switzerland. In addition to business assets, Timchenko owns over 1 hectare of land in Geneva.(SD-Agencies)

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