Roman Abramovich - One of Russia's Oligarchs

 

 

 

 

 

 

 

Roman Arkadyevich Abramovich , born on 24 October 1966 in Saratov, Russian SFSR, USSR) is a Russian billionaire and the main owner of private investment company Millhouse Capital, referred to as one of the Russian oligarchs. According to the 2007 Forbes magazine, as of 3 August 2007, he had a net worth of $18.7 billion.

Early life and Education

Born into a Jewish family , Roman's paternal grandparents were exiled to Siberia from Taurage, Lithuania by the Soviets after the occupation of Lithuania in 1940. Roman grew up as an orphan. His mother, Irina Ostrowski Abramovich, died from bacteremia as a result of a back-alley abortion when Roman was one year old. His father Arkady Abramovich was killed in an incident on a construction site when Roman was three years old. Abramovich grew up in his uncle's family in Ukhta and with his grandmother in Moscow. Before moving to Moscow he and his sister lived in Syktyvkar, the capital city of the Komi Republic. Abramovich attended the Industrial Institute in the city of Ukhta before being drafted into the Soviet Army. After military service, he studied briefly at the Moscow State Auto Transport Institute before taking a leave of absence from academics to go into business. He later earned a correspondence degree from the Moscow State Law Academy.

Post Soviet Privatization and Source of his Wealth

Abramovich started his commercial activity in the late 1980s when Soviet president Mikhail Gorbachev's reforms permitted the opening of small private businesses, known as co-operatives. In 1992 to 1995 Abramovich founded five companies that conducted resale and acted as intermediaries, eventually specializing in the trading of oil and oil products. In 1995 Roman Abramovich, together with a partner Boris Berezovsky, acquired the controlling interest in the large oil company Sibneft. The deal was within the controversial loans-for-shares program and partner paid $100m for half of the company, only slightly below the stake's stock market value of $150 million at the time. The fast-rising value of the company led many observers, in hindsight, to suggest that the real cost of the company should have been in the billions of dollars.

During the 1990s, through their holding company Millhouse Capital, Abramovich and his business partner Eugene Shvidler acquired significant stakes in Russia's largest air company Aeroflot and several aluminium plants from Trans World Group owned by David and Simon Reuben which were merged with the metals assets of Oleg Deripaska to create the aluminum giant Rusal. Millhouse LLC, as it is now known, also invested in several smaller companies in the automobile industry, pharmaceuticals, food processing, real estate and other sectors.

Millhouse divested itself of several key assets in 2002–2005. Most notably, the company sold its stake in Sibneft to state energy giant Gazprom for $13 billion, and its stake in Rusal to Oleg Deripaska for $2 billion. In 2006, Millhouse reinvested some of the proceeds by acquiring a 41% stake in Evraz Group, Russia's largest domestic steelmaker and one of the top 10 internationally.

In 2004, Swiss criminal investigators abandoned an investigation into an alleged fraud involving a $4.8 billion loan from the IMF to Russia, in which Abramovich was one of the investigators' key suspects, after the United States and Russia refused to divulge information on the scandal. No evidence linking Abramovich to the IMF funds was ever reported.

Despite maintaining that his primary residence is Moscow, Abramovich is considered the wealthiest Jew living in the UK, declared by the Sunday Times Rich List 2006, with an estimated fortune of £10.8 billion. Abramovich qualified for the list by virtue of retaining residences in Knightsbridge, London, and Sussex. His 440-acre (1.8 km²) estate Fyning Hill in West Sussex was previously owned by King Hussein of Jordan. It has a swimming pool, a clay pigeon shoot, a rifle range and a go-kart track.

Political Career

In 1999, Abramovich was elected to the State Duma as the representative for the Chukotka Autonomous Okrug, an impoverished region in the Russian Far East. He started the charity Pole of Hope to help the people of Chukotka, especially children, and in December 2000 was elected governor of Chukotka, replacing Alexander Nazarov. Since then he has invested hundreds of millions of pounds in Chukotka, which has paid for a college, a hospital, a pre-school and hotels in Anadyr, as well as renovating the airport and funding new or renovated schools in many small towns and villages. He has also used Chukotka as a tax haven for Sibneft, though the company re-invested most of its tax savings in the region and has been exploring for oil there as part of the governor's drive to boost the local economy. Abramovich said that he would not run for governor again after his term of office expired in 2005, as it is "too expensive", and he rarely visits the region. However, Russian President Vladimir Putin changed the law to abolish elections for regional governors, and on 21 October 2005 Abramovich was reappointed governor for another term. In 2006 Abramovich used his power as governor to help out the explorer Karl Bushby who was deported from the region for border violations after walking from Alaska into Russia during his attempt to walk round the world.

Abramovich was awarded the Order of Honor for his "huge contribution to the economic development of the autonomous district [of Chukotka]", by a decree signed by the President of Russia.

Chelsea F.C

In June 2003, he became the owner of the companies that control Chelsea Football Club in the United Kingdom. He had, apparently, investigated the possibility of purchasing several other clubs before deciding on Chelsea, who were financially vulnerable at the time. The deal immediately raised his profile in Britain. As soon as Abramovich took control, he poured massive investment into the club (estimated at £587 million to February 2008), assuming the £80m debt burden and immediately making available substantial transfer funds. Abramovich's money and love for football built Chelsea F.C to the level it is today.

 

Source: Wikipedia