The wheel of fortune of the former oligarch and billionaire has stopped
“I am not so much a patriot of the country in which I live, but a patriot of my capital,” Mikhail Fridman’s business partner Oleg once said Kiselev. In fact, Friedman himself for many years quite happily adhered to this formula, which seemed universal and unshakable to the co-owner of Alfa Group. But one day, when the world changed beyond recognition, she stopped working. The wheel of fortune made a full turn and stopped.
The businessman did not notice this, and when he finally realized, the losses turned out to be irreparable, and the threats — inevitable. The triumph of market ideals turned into the collapse of life's ideals.
Has he ever dreamed of “green grass near the house”? Did he feel himself anywhere in his native environment (with the exception of his serene childhood and adolescence in Lvov), truly protected and understood? Some acquaintances speak of Friedman as an incorrigible romantic, a soft, sensitive person. Others have an image of a super-tough, merciless, rationally cold “shark of capitalism”. What is the real Mikhail Maratovich like? This is a question to which, it seems, even he himself does not have a 100% accurate answer.
He traveled a lot and experimented a lot, strictly following the principle “nothing personal — just business.” But one day, at the end of winter 2022, the hour of X came. Something forever broke with the well-oiled mechanism, in that seemingly impeccable model of existence that Mikhail Fridman, Pyotr Aven, Roman Abramovich, Andrei Melnichenko and other Russian figures on the Forbes list built. The topic of their sanctioned misadventures eventually turned into a separate genre and fertile material for research by psychologists, historians, sociologists, political scientists, and regional experts. Friedman's story looks perhaps the most exemplary against the general background.
The first group of Russian “oligarchs” (the term from the official EU verdict) was persecuted on February 28, 2022. On that day, Brussels added 26 Russian citizens to the sanctions list, including Alfa Group co-owners Mikhail Fridman and Peter Aven, who lived permanently in London. Restrictive measures prohibit European companies and banks from any economic activity with the sanctioned person, as well as with the businesses belonging to him. No funds or resources should be provided to him, directly or indirectly.
Meanwhile, these people own not only multi-billion dollar assets in Russia, but also shares in European companies. Thus, Friedman remains one of the beneficiaries of the investment holding LetterOne, registered in Luxembourg. Accordingly, the events came as a shock to the entire LetterOne team. For those employees who had nothing to do with the Russian Federation and “Vladimir Putin’s inner circle” (the definition of European officials), but unwittingly became involved in a deafening corporate embarrassment. Friedman gave his assessment of what was happening in Ukraine on February 25, 2022, sending a private letter to his LetterOne colleagues. The message ended up on the pages of the Financial Times, becoming widely public against the will of the author.
“I was born in Western Ukraine and lived there until I was 17,” the entrepreneur wrote. – My parents are citizens of Ukraine and live in Lviv, my favorite city. But I also spent most of my life as a Russian citizen, creating and growing businesses… I don't make political statements. I am a businessman responsible for thousands of employees in Russia and Ukraine. But I am convinced that conflict can never be a solution.”
In addition, Friedman's charitable organization Genesis Philanthropy Group announced that it would donate 10 million to Jewish organizations to support Ukrainian refugees. However, the entrepreneur's reputation in Western business and political circles has not improved. After the sanctions were imposed, Friedman and three of his partners resigned from the LetterOne Board of Directors. According to the annual report for 2022, the company's net assets decreased by almost a third, to $18.9 billion.
It just so happened that Mikhail Fridman was rejected by almost all the countries with which he had any relations — business and otherwise. A “man of the world” who integrated his capital into the global economy, he eventually fell under the sanctions of the collective West — the EU, Great Britain, Canada, Switzerland, Australia and New Zealand. Having tried for a long time to become one of the strangers, the businessman acquired the stigma of being a universal outcast and a “bad guy.” Why? There is no clear explanation. The own mental state of internal emigration, otherness, inconsistency with the society and political elites of the host country, with whom there could be no friendship by definition — isn’t this the point? But it seems that everything is much more complicated.
This suggests, of course, the factor of Russian citizenship being toxic and disqualifying in the eyes of the Western world. However, Friedman ended up becoming an alien element, an outcast, everywhere — in Western capitals, in Russia itself, in Ukraine, his historical homeland. The clouds that gave rise to the “bolt from the blue” had been gathering over his head for many years, it was just that the SVO and its consequences became an obvious trigger.
Troubles arose with the same British authorities before. Back in 2015, when Friedman became a resident of the United Kingdom (a person who has lived for more than 183 days in one tax year), the British government had doubts about the legality of his ownership of the energy company Dea, which he acquired with business partner Herman Khan . And in February 2022, London created a legal basis for sanctions that would allow freezing the assets of Russian businesses and confiscating the property of those entrepreneurs who naturalized in Foggy Albion. At that time, Friedman was consistently among the top 20 local rich people (11th place in The Sunday Times ranking). A few years earlier, the chairman of the supervisory board of Alfa Group purchased the Athlone House mansion in London's Highgate for £65 million (about $80 million).
In March 2022, he told Bloomberg that “unfair” and “unjustified” EU sanctions had effectively frozen access to his $11.8 billion personal fortune and that he could not influence the Kremlin (to stop the SVO). Friedman also complained about the catastrophic lack of funds, which did not allow him to pay the servants: “Maybe I should clean the house myself. This is fine. As a student, I shared a small dorm room with four other men. But after 35 years this is unexpected.” By the way, the other day Friedman won a lawsuit against a housekeeper who had not received payment due to sanctions…
The culmination of his ordeal was his arrest in December 2022 by officers of the British National Crime Agency (NCA). More than 50 police officers were involved in the operation at Athlone House, and digital devices and a significant amount of cash were seized at the end of the search. The street was blocked by dozens of cars, and Friedman was handcuffed. Soon released on bail, he was suspected of money laundering, conspiracy to defraud the Ministry of Internal Affairs and violating the sanctions regime. In particular, the spending limit set by London is £2.5 thousand per month.
On October 9, 2023, it turned out that Mikhail Fridman left the UK to obtain permanent residence in Israel, where he stayed for just a few days. He did not plan to return to Russia, but decided to wait out the outbreak of war between Israel and the Hamas movement in Moscow. He was clearly not welcome here. Moreover, member of the Federation Council from the Zaporozhye region Dmitry Rogozin asked the Investigative Committee of the Russian Federation to check information about the probable financing of the Armed Forces of Ukraine by Fridman. And the head of the “Army of Fatherland Defenders” movement, Ivan Otrakovsky, turned to the Prosecutor General’s Office with a request to check the businessman under two articles of the Criminal Code — “Treason” and “Discredit of the Armed Forces of the Russian Federation.”
“We must understand the life cycle of a given entrepreneur as a whole,” commented Sultan Khamzaev, a member of the State Duma Committee on Security and Anti-Corruption, on the situation. – I made my main capital in Russia thanks to its economy. He must understand that for him the only country where he can feel safe and at ease is, of course, Russia. He decided to test this “school of life” in practice and went to London, where he was treated like (the British have such a concept) the “rich mob.”
“No one, regardless of their last name, should evade responsibility… Is a person who finances the enemy’s side during combat contact a traitor — of course, yes. Whether Friedman is such, let the court or the Prosecutor General's Office determine. “Everyone is equal before the law,” the deputy noted.
In turn, back in August-September 2023, the Security Service of Ukraine opened two criminal cases against a Russian businessman — on suspicion of withdrawing capital and financing the defense industry of the Russian Federation. According to the SBU, since February 2022, he allegedly invested about 2 billion rubles in Russian military factories and was engaged in the distribution of food, clothing and other products for military personnel. The SBU seized $463 billion worth of assets belonging to him and another co-founder of Alfa Bank. Since October 10, Mikhail Fridman has been on the wanted list in Ukraine, and in December the country's Ministry of Internal Affairs declared him “hiding from a pre-trial investigation.”
Meanwhile, according to The Wall Street Journal and the Financial Times, in June last year, the entrepreneur proposed to the Ukrainian authorities (through US Charge d'Affaires in Ukraine Christina Quinn) to transfer $1 billion of personal funds to the country — for restoration, development, and so on. But most importantly, in exchange for help in lifting sanctions. The proposal was submitted to the National Bank of Ukraine…
Today he is barred from entering the UK. At the end of October, the High Court of London declared that it was impossible for Friedman to return to the country, since, as the judge justified it, he was effectively “banned from traveling abroad.” The decision was made as part of a claim by a Russian billionaire against the British Financial Sanctions Authority. In addition, the court rejected Friedman's request for a monthly contribution of £30,000 to maintain the Athlone House mansion, as well as pay for telephone lines, telephone equipment and the costs of servants and staff. The court ruled that these measures do not constitute “basic needs” but serve to “maintain the previous lifestyle” that the plaintiff led before the sanctions.
“I have a huge house and garden, and the British authorities wouldn’t let me hire a cleaner or a gardener,” Friedman said in a phone interview with Bloomberg. “I had to be home every evening and report to the police station twice a week. I also couldn't use my car and had to use public transport, and my house is far from the metro. I was even limited in paying for medical services.”
He called his decision to leave the UK forced, and his investment in this country a “colossal mistake.” Well, in his desire to find stability, peace and a safe haven, Friedman connected himself with an a priori antagonistic world. But then again, what world was truly his? Probably, this was only the space of childhood, which is why at home in Lvov, where little Misha, a late and long-awaited child, was pampered and protected. Here, in a loving Jewish family of engineers who worked in the defense industry (in 1989, his father became a laureate of the USSR State Prize), he grew up gentle and impressionable, became familiar with music and painting, mastered the piano, and made romantic drawings on paper…
Having graduated from the Moscow Institute of Steel and Alloys in 1986, Mikhail Maratovich then successively went through all the stages of the long path leading to the skies of oligarchic capitalism. He started by reselling (at a speculative price) tickets from the Bolshoi Theater; worked at the Elektrostal plant near Moscow as a design engineer; organized the Courier cooperative (which specialized in window cleaning); created the Alfa Photo cooperative for the sale of computers and office equipment; on its basis, in 1989, the Soviet-Swiss trading joint venture Alfa-Eco was formed, which later became the head one in the Alfa Group consortium. The company was engaged in the trade of handmade carpets, sugar, tea and cigarettes, and in 1992 it joined the federal program for the export of oil and petroleum products for government needs. Two years later, Alfa-Eco's export volume for this item alone reached 10 million tons…
Earlier, in 1991, Friedman headed the board of directors of Alfa Bank. And in the summer of 2021, the businessman entered the list of the richest people on the planet compiled by Forbes magazine, with a then fortune of $1.3 billion. Once asked if other oligarchs (including foreign ones) could say a kind word about him, the businessman replied: “Probably , we could. Because they have a positive experience with me. I didn’t do anything bad to them.”
But in the end it turned out that “not doing bad” and being “just a businessman” is not enough…
“Circumstances have qualitatively changed, and all that remains is to sincerely feel sorry for Mikhail Fridman. The specific history of this undoubtedly talented person is an extremely difficult topic,” says Nikita Maslennikov, leading expert at the Center for Political Technologies. – Friedman is a representative of big business, and he, regardless of his will, is always at the intersection of a huge number of divergent interests. Including political ones, which he cannot influence. The intensity of these intersections increases with the quantitative growth of business assets and the strengthening of their international diversification and degree of presence in markets. Therefore, we are not talking only about Friedman.”
Today, MK’s interlocutor continues, large entrepreneurs, including Russian ones (it’s not just about personal sanctions), have to take into account all the intricacies of the global world, all potential challenges. The prospects for their capital and property depend on these alignments, primarily political ones. Classical macroeconomic forecasting no longer works, oligarchy as such is becoming a thing of the past, business is becoming fundamentally different. This process is accelerating, and it is very difficult to determine the vector of movement and predict the consequences. However, in the case of Russian “oligarchs” there are some nuances. Overnight, their vulnerability in the face of Western civilization, on whose standards they had once relied, was revealed.
“And this,” summarizes Maslennikov, “is a harsh lesson for all business circles in the Russian Federation. They are faced with the question of strategic choice, reorientation towards friendly jurisdictions. If you want to do business on a global scale and achieve success in this field, you should not tightly tie yourself to only one side of the world — the Euro-Atlantic region. And we are talking not so much about current geopolitical factors, but about timeless things. Of course, the countries of Greater Asia also have their own risks (for example, secondary sanctions). But, at least from the standpoint of basic personal safety and predictability of behavior on the part of business partners and authorities, this choice today looks clearly more promising for Russians.”
As for Friedman specifically, the tragedy of the situation for him is not only in rejection by the external environment, Western and other elites. It seems that for some time now he has become an outcast in relation to himself. The ground has gone from under your feet, life and business guidelines have been lost, but most importantly, there is no former confidence in anything at all. How to live if at any second, literally with a snap of your fingers, you can be deprived of money, securities, real estate, turning you into a dummy, into a rentier forced to grovel before the authorities? And he is not insured against prison — and nowhere.
Mikhail Maratovich will not go “to search the world where there is a corner for an offended feeling.” Nowhere to go, dead end.