It is an overhang from Vladimir Putin's Russia, a byword for the cronyism and connections that prevail in government. But Bank Rossiya, otherwise known as the bank of Putin's friends, looks like it is trying to turn over a new leaf.
The growth of the St. Petersburg-based bank has been nothing short of stellar. A little-known bit player in the 1990s, it has emerged as a major corporate bank that holds sway over some of Russia's most valuable media and insurance holdings, including an asset management company with a direct line to Gazprom's finances.
Since it first started disclosing its annual accounts in 2000, Rossiya's net profit has risen from zero rubles as of Jan. 1 of that year to 717 million rubles ($30.4 million) as of the end of 2006, the last year for which figures are available.
In the past year, the bank has leapfrogged 25 places to rank 36th in terms of assets, establishing it firmly among the country's second-tier group of banks.
"Its growth has been really impressive," said Leonid Slipchenko, a banking analyst at UralSib. "Everybody knows this bank is close to the Russian administration, but I wouldn't say that's the main trigger."
Headed by Dmitry Lebedev, who formerly led Yukos-affiliated Bank Menatep, the bank is equipped with a senior management team that knows what it is doing, Slipchenko said. In addition, the bank is actively developing its retail business, another string to its bow in Russia's rapidly developing banking sector.
Some observers wonder whether the bank could have done it alone. In a country where political connections have proved integral to business, Rossiya is no exception.
"This bank is a regional bank … and still managed to grow very rapidly, having very good clients in its portfolio, and it's highly unlikely that they managed to do that on their expertise alone," said an analyst on condition of anonymity, citing the sensitivity of the subject.
But with its majority shareholder landing a spot on Forbes' billionaire list and a new president, Dmitry Medvedev, vowing to come down hard on corruption, some believe it is no longer possible for Rossiya to occupy a place in the shadows, particularly if it wishes to expand and attract funding.
The bank turned down repeated requests for an interview for this report. Requests also were denied for interview with Yury Kovalchuk, the bank's majority shareholder whose personal fortune is estimated by Forbes at $1.9 billion.
Rossiya, however, is taking steps to open up and now publishes a glossy annual report with greater disclosure, including details of shareholders with more than 5 percent. Lebedev recently granted an interview to Vedomosti, in which he answered a number of rumors head on.
Still, there is work to do if Rossiya is to escape a perception spread by Putin's critics that the bank is a front for Putin. The critics claim that the bank has managed his personal finances since at least 2004, when then-presidential candidate Ivan Rybkin dubbed the Kovalchuk brothers — Yury and Mikhail — and Gunvor co-owner Gennady Timchenko as the "cashiers" of Putin. Yury Kovalchuk and Timchenko are shareholders in Bank Rossiya.
"One way [for Putin's allies] to make money, to clean money and to control money is through Bank Rossiya," said businessman Boris Berezovsky, an associate of Rybkin and Kremlin critic who lives in self-imposed exile in Britain.
The executives at Rossiya "work for Putin's personal benefit," Berezovsky said, without elaborating on how he had arrived at that conclusion.
Putin, asked in February about media speculation that he might have accumulated a personal fortune through business links, resorted to gutter slang, lambasting the reports as snot "picked out of someone's nose and smeared on bits of paper."
There is no evidence to suggest that Putin has financially benefited from any connections with the bank, and some industry watchers have dismissed the reports as rumors put out by critics hoping to discredit Putin.
One of the critics, Yevgeny Kiselyov, believes that Putin is rich but has managed his money discreetly. "I think he's an enormously wealthy man, but I think his money is stashed away in a very clever way. I don't think it's as simple as some people depict it," said Kiselyov, a political analyst who lost his job as head of NTV television during a takeover by Gazprom that he blames on Putin.
Bank Rossiya was established in 1990 to service Communist Party accounts in the Leningrad region, before fading into obscurity just a year later.
About the same time, several friends went into the export business together and needed a bank. The friends — Vladimir Yakunin and several physicists from the Joffe Institute, including Yury and Mikhail Kovalchuk, Valery Myachin, and the brothers Andrei and Sergei Fursenko — turned to the ailing Bank Rossiya in 1991, re-registering it and revitalizing it. Andrei Fursenko is now education and science minister, and Yakunin heads Russian Railways.
Throughout the 1990s, the bank kept to the shadows, working with a few local and trusted clients. It worked on several projects with the St. Petersburg Mayor's Office, where Putin served on the Committee for Foreign Relations in the early 1990s. It was while overseeing these projects that Putin is said to have come into contact and struck up friendships with members of the Rossiya group.
It was also during this period that Putin was investigated by city lawmakers for awarding export contracts to friends, part of a deal to bring food supplies into the city in return for raw material export contracts. An investigation — which was never completed — claimed that the food never turned up. Putin has denied any wrongdoing.
While no link has ever been proved, some media reports have suggested that Stream, a company that corporate documents show was owned by Yakunin, Yury Kovalchuk and other businessmen, was in some way implicated in the export contracts program. But the reports are among a series of claims about the bank and its shareholders, and there is no proof to support both these and other claims.
Stanislav Belkovsky, a former Kremlin consultant who fueled the media reports that Putin had accumulated a personal fortune, said Rossiya in its early days was used for "delicate operations." He said companies channeled payments through the bank — either in the form of share purchases or deposits — to win contracts and other favors from local officials. He would not provide evidence to back his claims.
In the Vedomosti interview, Lebedev confirmed that Timchenko, the secretive tycoon who co-owns Gunvor, is a shareholder in the bank. He holds an interest via the company Transoil CIS, according to multiple media reports and Kiselyov. Transoil CIS has a 9.57 percent stake in Rossiya, according to the bank's corporate filings.
"There are entities among our shareholders, which are affiliated to Gennady Nikolayevich [Timchenko]," Lebedev said. "But these companies do not have any control nor any existing influence at the bank. The representatives of these companies do not sit on the board of directors. We work with them as we would with ordinary clients, and the share of their participation in the general business of the bank is insignificant."
At the end of 2003, Severstal, the steel holding owned by Alexei Mordashov, bought into Rossiya, paying 600 million rubles for a 9 percent stake (now decreased to 6.66 percent). It was a deal that raised eyebrows at the time, the price being roughly equivalent to Rossiya's own capital.
Speculation swirled that Severstal was looking to gain a financial institution of its own and that the acquisition was the first step toward a full takeover.
Yulia Latynina, an outspoken commentator and journalist, believes that Mordashov acquired a stake in the bank in return for protection against the advances of metals moguls Oleg Deripaska and Iskander Makhmudov.
In early 2007, Surgutneftegaz, the reclusive oil company with close ties to the administration, acquired a minority stake in Rossiya for 1.1 billion rubles after it was strongly recommended to do so, Vedomosti reported at the time, citing sources within Surgutneftegaz.
Surgutnefegaz has a 6.6 percent stake in the bank, according to corporate filings.
In an effort to attract funding to the bank, Rossiya has carried out more than 10 additional share issues, Lebedev said. But it appears to have been a struggle, and bank ratings agencies have noted their concern that Sogaz, a 51 percent subsidiary of Rossiya, has helped fund the bank, putting unwelcome pressure on the insurer.
Even with shareholder support, the bank will still require outside financing. In March, Rossiya successfully raised its first financing from abroad, albeit a modest sum, in a deal that lends credibility to the bank. Barclays Capital, whose retail arm announced a $745 million deal to buy Russia's Expobank the same month, provided Rossiya with a $10 million loan.
Global financial institutions have robust compliance systems in place, and attracting a loan from Barclays Capital, the investment arm of Britain's third-biggest lender, assumes a level of comfort with the bank, sources in the risk business said.
"It doesn't matter how much money they loan to the bank. If something goes wrong — if the bank goes bust or is linked to a scandal tomorrow — it reflects badly on the lender," said one Moscow-based political risk executive not connected to Barclays or the loan.
While Yury Kovalchuk now holds 28.33 percent in Rossiya, influential individuals with ties to Putin also own shares, including Dmitry Gorelov and Nikolai Shamalov, who have 11.73 percent apiece, according to the bank's corporate filings.
Abros, a subsidiary of the bank run by Myachin, holds 5.86 percent, according to corporate filings.
Vedomosti recently reported that Sergei Matviyenko, the son of St. Petersburg Governor Valentina Matviyenko, owns a 4.12 percent stake in the bank.
The newspaper also said Mikhail Shelomov, a cousin of Putin — the first relative of the former president known to hold any direct stake in the bank — has a 3.93 percent holding through Aksept.
There is one foreign director on the bank's board, Matthias Warnig, a former chairman of Dresdner Kleinwort Wasserstein who currently heads Nord Stream AG, which manages Gazprom's North European Gas Pipeline project.
The Wall Street Journal has reported that Warnig is a former official with the East German secret police who met Putin during Putin's KGB posting in Dresden in the 1980s.
The relationships do not stop there. Yury Kovalchuk's elder brother is a senior academician and heads the prestigious and powerful Kurchatov Institute.
Yury Shamalov, the son of Rossiya shareholder Nikolai, heads Gazfond, the organization charged with overseeing Gazprom's massive pension fund. Gazfond is, in turn, managed by Lider, which Rossiya acquired in 2006 for an undisclosed sum. Lider holds a 3 percent stake in Gazprom.
It is through Lider and its affiliates that Rossiya now effectively controls Gazprombank, after Gazprom reduced its controlling interest in 2007 to 41.7 percent. Lider holds a stake of 8.57 percent in Gazprombank, while its subsidiaries Gazkon and Gaz Servis own 17.5 percent stakes each, according to Interfax's corporate database, which is based on corporate filings. The remaining shares are held by Gazfond and Nofintekh.
Gorelov's son, Vasily, meanwhile, is a co-owner of the Vyborg shipbuilding yard. Since he became co-owner, the yard has won lucrative contracts from Gazprom at its Shtokman project.
Boris Kovalchuk, son of Yury, was appointed to then-Deputy Prime Minister Dmitry Medvedev's office in 2006 — with little experience under his belt — to head work on the multibillion-dollar national projects. Medvedev was less than enamored of the choice and had favored the appointment of Ilya Petrov, Kommersant reported.
Some of the individuals who passed through Rossiya went on to work for Gazprom, and while the two companies remain close, the gas monopoly has seen a gradual loss of control over many of its assets to the bank.
In 2004, Gazprom sold a majority stake in Sogaz, the small insurer, to Rossiya in a series of separate deals that were widely criticized for a lack of transparency, particularly for not opening it up to outside bidders. Claims have dogged Gazprom, a publicly listed company, that it sold Sogaz on the cheap. The claims are difficult to investigate, given the different measures for determining true market value.
Rossiya's management has consistently denied that it underpaid for the asset, and Lebedev pre-empted the question in his interview, pointing out that Sogaz was "not cheap" and was posting a modest profit of $6 million to $7 million a year, compared with $130 million now.
Gazprom accounts for 53 percent of Sogaz's client base, down from 80 percent before, Lebedev said.
A spokesman for Sogaz, Pavel Prytkov, declined comment Wednesday, referring questions to Bank Rossiya.
Meanwhile, Rossiya now indirectly controls choice media assets that once belonged to Gazprom. Gazprom transferred its media assets — which included NTV, TNT television and Ekho Moskvy — to Gazprombank in mid-2005 for $166 million, and the assets fell under Rossiya's control when the bank secured a controlling stake in Gazprombank via Lider.
In a recent book on the subject, Boris Nemtsov and Vladimir Milov refer to the transfer of stakes to the Rossiya group as little better than asset stripping. "Two years after the sale, in July 2007, First Deputy Prime Minister Dmitry Medvedev valued the Gazprom-Media assets at $7.5 billion," the authors wrote.
Rossiya went on to strengthen its hold over the media sector, gaining control over Ren-TV and St. Petersburg's Channel 5, and later acquiring the Izvestia newspaper from Gazprom.
Earlier this year, Yury Kovalchuk created the National Media Group on the foundation of the media stakes held by Rossiya, Severstal, Surgutneftegaz and Sogaz. It recently acquired a controlling stake in National Telecommunications, an Internet and pay-television group, from Suleiman Kerimov's Nafta Moskva.
During Putin's presidency, the state grabbed almost all of the national television channels, either owning them directly, or wielding influence over them through shareholders known to be close to the state.
Lebedev has denied that the move into media is in any way politically motivated, underlining that the media business is both strategic and profitable to Rossiya.
Kiselyov, the former NTV chief, believes that until May, when Medvedev became president, Rossiya bankers were capitalizing on their closeness to Putin to build up their financial empire.
"They were accumulating new assets for the very reason that Putin was in the Kremlin," he said. "Now there's life after life. Life did not end for them the moment Putin stepped down, and none of them can vouch for the same popularity of Putin two years from now."
How much protection and influence the bankers will wield under Medvedev remains to be seen. The continuing influence of Putin in Medvedev's government has most political analysts stumped.
"For the moment, Medvedev has no power, so what's going to change [at Rossiya]?" said Vladimir Pribylovsky, a political analyst.
But in an apparent rebuke to Putin, Mikhail Kovalchuk failed to secure full membership in the Russian Academy of Sciences in May, just hours after Putin had promised the institution in a televised address that it would receive 600 billion rubles in funding through 2010.
Mikhail Kovalchuk was widely seen as the Kremlin's candidate to take over the academy.
Denied the coveted membership, Mikhail Kovalchuk is effectively prevented from being confirmed as the head of Rosnanotekh, a high-tech brainchild of Putin's, remaining acting head.
Nevertheless, it is clear that Rossiya can no longer hide behind the protection of Putin if it wishes to lay to rest the speculation that has dogged it for so many years, Kiselyov said. "The amount of criticism … has grown to a critical mass, and they have to deal with it," he said. "Transparency is the best way to cure a bad reputation."
The growth of the St. Petersburg-based bank has been nothing short of stellar. A little-known bit player in the 1990s, it has emerged as a major corporate bank that holds sway over some of Russia's most valuable media and insurance holdings, including an asset management company with a direct line to Gazprom's finances.
Since it first started disclosing its annual accounts in 2000, Rossiya's net profit has risen from zero rubles as of Jan. 1 of that year to 717 million rubles ($30.4 million) as of the end of 2006, the last year for which figures are available.
In the past year, the bank has leapfrogged 25 places to rank 36th in terms of assets, establishing it firmly among the country's second-tier group of banks.
"Its growth has been really impressive," said Leonid Slipchenko, a banking analyst at UralSib. "Everybody knows this bank is close to the Russian administration, but I wouldn't say that's the main trigger."
Headed by Dmitry Lebedev, who formerly led Yukos-affiliated Bank Menatep, the bank is equipped with a senior management team that knows what it is doing, Slipchenko said. In addition, the bank is actively developing its retail business, another string to its bow in Russia's rapidly developing banking sector.
Some observers wonder whether the bank could have done it alone. In a country where political connections have proved integral to business, Rossiya is no exception.
"This bank is a regional bank … and still managed to grow very rapidly, having very good clients in its portfolio, and it's highly unlikely that they managed to do that on their expertise alone," said an analyst on condition of anonymity, citing the sensitivity of the subject.
But with its majority shareholder landing a spot on Forbes' billionaire list and a new president, Dmitry Medvedev, vowing to come down hard on corruption, some believe it is no longer possible for Rossiya to occupy a place in the shadows, particularly if it wishes to expand and attract funding.
The bank turned down repeated requests for an interview for this report. Requests also were denied for interview with Yury Kovalchuk, the bank's majority shareholder whose personal fortune is estimated by Forbes at $1.9 billion.
Rossiya, however, is taking steps to open up and now publishes a glossy annual report with greater disclosure, including details of shareholders with more than 5 percent. Lebedev recently granted an interview to Vedomosti, in which he answered a number of rumors head on.
Still, there is work to do if Rossiya is to escape a perception spread by Putin's critics that the bank is a front for Putin. The critics claim that the bank has managed his personal finances since at least 2004, when then-presidential candidate Ivan Rybkin dubbed the Kovalchuk brothers — Yury and Mikhail — and Gunvor co-owner Gennady Timchenko as the "cashiers" of Putin. Yury Kovalchuk and Timchenko are shareholders in Bank Rossiya.
"One way [for Putin's allies] to make money, to clean money and to control money is through Bank Rossiya," said businessman Boris Berezovsky, an associate of Rybkin and Kremlin critic who lives in self-imposed exile in Britain.
The executives at Rossiya "work for Putin's personal benefit," Berezovsky said, without elaborating on how he had arrived at that conclusion.
Putin, asked in February about media speculation that he might have accumulated a personal fortune through business links, resorted to gutter slang, lambasting the reports as snot "picked out of someone's nose and smeared on bits of paper."
There is no evidence to suggest that Putin has financially benefited from any connections with the bank, and some industry watchers have dismissed the reports as rumors put out by critics hoping to discredit Putin.
One of the critics, Yevgeny Kiselyov, believes that Putin is rich but has managed his money discreetly. "I think he's an enormously wealthy man, but I think his money is stashed away in a very clever way. I don't think it's as simple as some people depict it," said Kiselyov, a political analyst who lost his job as head of NTV television during a takeover by Gazprom that he blames on Putin.
The Bank's History
Bank Rossiya was established in 1990 to service Communist Party accounts in the Leningrad region, before fading into obscurity just a year later.
About the same time, several friends went into the export business together and needed a bank. The friends — Vladimir Yakunin and several physicists from the Joffe Institute, including Yury and Mikhail Kovalchuk, Valery Myachin, and the brothers Andrei and Sergei Fursenko — turned to the ailing Bank Rossiya in 1991, re-registering it and revitalizing it. Andrei Fursenko is now education and science minister, and Yakunin heads Russian Railways.
Throughout the 1990s, the bank kept to the shadows, working with a few local and trusted clients. It worked on several projects with the St. Petersburg Mayor's Office, where Putin served on the Committee for Foreign Relations in the early 1990s. It was while overseeing these projects that Putin is said to have come into contact and struck up friendships with members of the Rossiya group.
It was also during this period that Putin was investigated by city lawmakers for awarding export contracts to friends, part of a deal to bring food supplies into the city in return for raw material export contracts. An investigation — which was never completed — claimed that the food never turned up. Putin has denied any wrongdoing.
While no link has ever been proved, some media reports have suggested that Stream, a company that corporate documents show was owned by Yakunin, Yury Kovalchuk and other businessmen, was in some way implicated in the export contracts program. But the reports are among a series of claims about the bank and its shareholders, and there is no proof to support both these and other claims.
Stanislav Belkovsky, a former Kremlin consultant who fueled the media reports that Putin had accumulated a personal fortune, said Rossiya in its early days was used for "delicate operations." He said companies channeled payments through the bank — either in the form of share purchases or deposits — to win contracts and other favors from local officials. He would not provide evidence to back his claims.
In the Vedomosti interview, Lebedev confirmed that Timchenko, the secretive tycoon who co-owns Gunvor, is a shareholder in the bank. He holds an interest via the company Transoil CIS, according to multiple media reports and Kiselyov. Transoil CIS has a 9.57 percent stake in Rossiya, according to the bank's corporate filings.
"There are entities among our shareholders, which are affiliated to Gennady Nikolayevich [Timchenko]," Lebedev said. "But these companies do not have any control nor any existing influence at the bank. The representatives of these companies do not sit on the board of directors. We work with them as we would with ordinary clients, and the share of their participation in the general business of the bank is insignificant."
At the end of 2003, Severstal, the steel holding owned by Alexei Mordashov, bought into Rossiya, paying 600 million rubles for a 9 percent stake (now decreased to 6.66 percent). It was a deal that raised eyebrows at the time, the price being roughly equivalent to Rossiya's own capital.
Yekaterina Kuzmina / Vedomosti
Bank Rossiya's main office in St. Petersburg. Some people who passed through Rossiya went on to work for Gazprom, which has lost control over assets to the bank.
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Yulia Latynina, an outspoken commentator and journalist, believes that Mordashov acquired a stake in the bank in return for protection against the advances of metals moguls Oleg Deripaska and Iskander Makhmudov.
In early 2007, Surgutneftegaz, the reclusive oil company with close ties to the administration, acquired a minority stake in Rossiya for 1.1 billion rubles after it was strongly recommended to do so, Vedomosti reported at the time, citing sources within Surgutneftegaz.
Surgutnefegaz has a 6.6 percent stake in the bank, according to corporate filings.
In an effort to attract funding to the bank, Rossiya has carried out more than 10 additional share issues, Lebedev said. But it appears to have been a struggle, and bank ratings agencies have noted their concern that Sogaz, a 51 percent subsidiary of Rossiya, has helped fund the bank, putting unwelcome pressure on the insurer.
Even with shareholder support, the bank will still require outside financing. In March, Rossiya successfully raised its first financing from abroad, albeit a modest sum, in a deal that lends credibility to the bank. Barclays Capital, whose retail arm announced a $745 million deal to buy Russia's Expobank the same month, provided Rossiya with a $10 million loan.
Global financial institutions have robust compliance systems in place, and attracting a loan from Barclays Capital, the investment arm of Britain's third-biggest lender, assumes a level of comfort with the bank, sources in the risk business said.
"It doesn't matter how much money they loan to the bank. If something goes wrong — if the bank goes bust or is linked to a scandal tomorrow — it reflects badly on the lender," said one Moscow-based political risk executive not connected to Barclays or the loan.
The Bank's Ownership
While Yury Kovalchuk now holds 28.33 percent in Rossiya, influential individuals with ties to Putin also own shares, including Dmitry Gorelov and Nikolai Shamalov, who have 11.73 percent apiece, according to the bank's corporate filings.
Abros, a subsidiary of the bank run by Myachin, holds 5.86 percent, according to corporate filings.
Vedomosti recently reported that Sergei Matviyenko, the son of St. Petersburg Governor Valentina Matviyenko, owns a 4.12 percent stake in the bank.
The newspaper also said Mikhail Shelomov, a cousin of Putin — the first relative of the former president known to hold any direct stake in the bank — has a 3.93 percent holding through Aksept.
There is one foreign director on the bank's board, Matthias Warnig, a former chairman of Dresdner Kleinwort Wasserstein who currently heads Nord Stream AG, which manages Gazprom's North European Gas Pipeline project.
The Wall Street Journal has reported that Warnig is a former official with the East German secret police who met Putin during Putin's KGB posting in Dresden in the 1980s.
The relationships do not stop there. Yury Kovalchuk's elder brother is a senior academician and heads the prestigious and powerful Kurchatov Institute.
Yury Shamalov, the son of Rossiya shareholder Nikolai, heads Gazfond, the organization charged with overseeing Gazprom's massive pension fund. Gazfond is, in turn, managed by Lider, which Rossiya acquired in 2006 for an undisclosed sum. Lider holds a 3 percent stake in Gazprom.
It is through Lider and its affiliates that Rossiya now effectively controls Gazprombank, after Gazprom reduced its controlling interest in 2007 to 41.7 percent. Lider holds a stake of 8.57 percent in Gazprombank, while its subsidiaries Gazkon and Gaz Servis own 17.5 percent stakes each, according to Interfax's corporate database, which is based on corporate filings. The remaining shares are held by Gazfond and Nofintekh.
Gorelov's son, Vasily, meanwhile, is a co-owner of the Vyborg shipbuilding yard. Since he became co-owner, the yard has won lucrative contracts from Gazprom at its Shtokman project.
Boris Kovalchuk, son of Yury, was appointed to then-Deputy Prime Minister Dmitry Medvedev's office in 2006 — with little experience under his belt — to head work on the multibillion-dollar national projects. Medvedev was less than enamored of the choice and had favored the appointment of Ilya Petrov, Kommersant reported.
Links to Gazprom
Some of the individuals who passed through Rossiya went on to work for Gazprom, and while the two companies remain close, the gas monopoly has seen a gradual loss of control over many of its assets to the bank.
In 2004, Gazprom sold a majority stake in Sogaz, the small insurer, to Rossiya in a series of separate deals that were widely criticized for a lack of transparency, particularly for not opening it up to outside bidders. Claims have dogged Gazprom, a publicly listed company, that it sold Sogaz on the cheap. The claims are difficult to investigate, given the different measures for determining true market value.
Rossiya's management has consistently denied that it underpaid for the asset, and Lebedev pre-empted the question in his interview, pointing out that Sogaz was "not cheap" and was posting a modest profit of $6 million to $7 million a year, compared with $130 million now.
Gazprom accounts for 53 percent of Sogaz's client base, down from 80 percent before, Lebedev said.
A spokesman for Sogaz, Pavel Prytkov, declined comment Wednesday, referring questions to Bank Rossiya.
Meanwhile, Rossiya now indirectly controls choice media assets that once belonged to Gazprom. Gazprom transferred its media assets — which included NTV, TNT television and Ekho Moskvy — to Gazprombank in mid-2005 for $166 million, and the assets fell under Rossiya's control when the bank secured a controlling stake in Gazprombank via Lider.
In a recent book on the subject, Boris Nemtsov and Vladimir Milov refer to the transfer of stakes to the Rossiya group as little better than asset stripping. "Two years after the sale, in July 2007, First Deputy Prime Minister Dmitry Medvedev valued the Gazprom-Media assets at $7.5 billion," the authors wrote.
Rossiya went on to strengthen its hold over the media sector, gaining control over Ren-TV and St. Petersburg's Channel 5, and later acquiring the Izvestia newspaper from Gazprom.
Earlier this year, Yury Kovalchuk created the National Media Group on the foundation of the media stakes held by Rossiya, Severstal, Surgutneftegaz and Sogaz. It recently acquired a controlling stake in National Telecommunications, an Internet and pay-television group, from Suleiman Kerimov's Nafta Moskva.
During Putin's presidency, the state grabbed almost all of the national television channels, either owning them directly, or wielding influence over them through shareholders known to be close to the state.
Lebedev has denied that the move into media is in any way politically motivated, underlining that the media business is both strategic and profitable to Rossiya.
Kiselyov, the former NTV chief, believes that until May, when Medvedev became president, Rossiya bankers were capitalizing on their closeness to Putin to build up their financial empire.
"They were accumulating new assets for the very reason that Putin was in the Kremlin," he said. "Now there's life after life. Life did not end for them the moment Putin stepped down, and none of them can vouch for the same popularity of Putin two years from now."
How much protection and influence the bankers will wield under Medvedev remains to be seen. The continuing influence of Putin in Medvedev's government has most political analysts stumped.
"For the moment, Medvedev has no power, so what's going to change [at Rossiya]?" said Vladimir Pribylovsky, a political analyst.
But in an apparent rebuke to Putin, Mikhail Kovalchuk failed to secure full membership in the Russian Academy of Sciences in May, just hours after Putin had promised the institution in a televised address that it would receive 600 billion rubles in funding through 2010.
Mikhail Kovalchuk was widely seen as the Kremlin's candidate to take over the academy.
Denied the coveted membership, Mikhail Kovalchuk is effectively prevented from being confirmed as the head of Rosnanotekh, a high-tech brainchild of Putin's, remaining acting head.
Nevertheless, it is clear that Rossiya can no longer hide behind the protection of Putin if it wishes to lay to rest the speculation that has dogged it for so many years, Kiselyov said. "The amount of criticism … has grown to a critical mass, and they have to deal with it," he said. "Transparency is the best way to cure a bad reputation."
Bank Rossiya's Players | ||||||||||||||||||||||||||||||||||||||||||
Owns 11.73 percent of Bank Rossiya Nikolai Shamalov: Owns 11.73 percent of Bank Rossiya
Founding shareholder of Bank Rossiya; owns 5.8 percent stake through Abros, a subsidiary of the bank.
| Mikhail Shelomov:
Owns 3.93 percent of Bank Rossiya through Aksept; cousin of Putin's. Surgutneftegaz: Owns 6.6 percent of Bank Rossiya. Severstal: Owns 6.6 percent of Bank Rossiya.
| Mikhail Kovalchuk:
Founding shareholder of Bank Rossiya; brother of Yury Kovalchuk.
Web of RelativesBoris Kovalchuk: Son of Rossiya shareholder Yury Kovalchuk; appointed in 2006 to then-Deputy Prime Minister Dmitry Medvedev's office to head work on the multibillion-dollar national projects. Yury Shamalov: Son of Rossiya shareholder Nikolai Shamalov, heads Gazfond, the organization charged with overseeing Gazprom's massive pension fund. Gazfond is, in turn, managed by Lider, which Rossiya acquired in 2006 for an undisclosed sum. Lider holds a 3 percent stake in Gazprom. Vasily Gorelov: Son of Rossiya shareholder Dmitry Gorelov; co-owner of the Vyborg shipbuilding yard, which has won lucrative contracts from Gazprom for its Shtokman project. | ||||||||||||||||||||||||||||||||||||||||
| Sources: Bank Rossiya's corporate filings, Vedomosti, Interfax
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