How Russian Oligarchs Came Into Being And The Who Are The Richest Of Them

According to Forbes' Billionaires list, there are eighty-three billionaires in Russia, sixty-eight of whom are oligarchs. Their collective worth is about $320 billion. As QZ.com writes, "Looking at Forbes billionaire ranking, the paper noted billionaire wealth appeared to be 25% to 40% of national income between 2005 to 2015." Russian oligarchs operate in natural resources, tourism, telecoms, banking, real estate, etc. So how come such a small number of people own such a significant sum of money? Here's what you need to know.

Once a new country occurred in the international arena, the Russian Federation underwent profound privatization changes. And that's how money came into their pockets. It was two prominent events that made them rich.

The first was the issuance of privatization vouchers that were supposed to serve as means for sale and trade among Russians. This way, the new Russian government wanted to sell its assets to the public. They aimed to transform the state-owned businesses into profit-seeking ones, and, to distribute the property quickly, the government decided to implement voucher privatization. They thought people would buy shares in state enterprises, but that's not how it turned out. Instead, a small group of individuals took control over the privatized enterprises.

Among this group were former factory directors, who eventually became factory owners. Others were the Soviet economic elites, who used their positions to privatize their controlled industries. And the last group was those who oversaw natural gas production during Soviet times. They, by the way, later ran Gazprom, a well-known Russian natural gas company that delivers gas to the EU. So the last group became the richest because its members acquired cash and managed its flow through the banks they owned themselves. So, eventually, they bought most of the vouchers and bought up stocks in newly private companies.

Another event that brought luck to the Russian oligarchs was Loans For Shares. Here's how npr.org explains it, "the richest oligarchs loaned the government billions of dollars in exchange for massive shares of Russia's most valuable state enterprises." So when the government failed to pay back the loans, the corporations remained belonging to the oligarchs. As a result, the oligarchs got twelve of Russia's largest industrial enterprises in the 90s for low prices.

RELATED: A Look At Vladimir Putin's Most Expensive Real-Estate Purchases

After acquiring the golden hen, the oligarchs grew their enterprises smartly to reap maximum profits. Here are some of the biggest companies owned by the oligarchs

As time passed, the oligarchs became richer and richer. Here's a list of the biggest private companies owned by Russian oligarchs with companies' net incomes for 2021.

Recognized as Nornickel, the company is the number one producer of refined nickel and palladium globally. Additionally, it produces platinum, rhodium, cobalt, and copper. Norilsk-Nikel is known as one of the largest industrial polluters in Russia. The company's resident is the second richest person in Russia, Vladimir Potanin, whose net worth is $27 billion as of 2022. Potanin owns Interros, a Russian conglomerate that subsidizes Nornikel, and two other businesses: Rosa Khutor Ski Resort and NPO Petrovax Pharm. He's not the only company shareholder (he shares 35%). The other one is Oleg Deripaska, a Russian billionaire who shares 27%. He owns several companies: RUSAL (aluminum company), Volnoe Delo Foundation, and Basic Element, a diversified industrial group.

RELATED: The 10 Richest Russian Billionaires

One of Russia's largest steel producer companies, NLMK or Novolipetsk Steel, produces semi-finished steel, flat steel, and electrical steel. Its chairman is one of the wealthiest people in Russia, Vladimir Lisin ($24.4 billion), who was once an electrical fitter in Siberian coal mine. NLMK Group is the 22nd-largest steelmaker in the world.

This company operates in the steel and mining industries. In 2018, Severstal joined the UN Global Compact. The owner Alexey Mordashov s worth $19.5 billion. A son of mill workers, he aimed to become the finance director of a steel mill. Mordashov used to own shares of TUI, a leisure company, and Norgold, a mining outfit. However, he transferred the ownership of the companies to his wife due to the current events.

The second-largest company in Russia, Lukoil is one of the biggest crude oil producers globally; it produces 2% of all oil worldwide. Lukoil's founder, Vagit Alekperov, worth $20.4 billion, was a Caspian Sea oil rig worker and then the USSR's deputy oil and gas minister from 1990 to 1991.

The second-largest natural gas producer worldwide, it was founded by Leonid Mikhelson, who, today, is worth $21.7 billion. Together with Gennady Timchenko, he runs Novatek, while both have stakes in petrochemical producer Sibur Holding. In 2021, Novatek was ranked 19th among 60 companies in the Arctic Environmental Responsibility Index. Interestingly, Mikhelson started his career as a construction foreman in Tyumen, Russia, and worked on a gas pipeline. Today, he also runs an art foundation connected with the New York Art Museum and the UK Tate museums. As for Timchenko, he owns a private investment group Volga Group. In the 1990s, he ran a state-owned oil-exporting company, Gunvor.

Obviously, the number of companies, private and state, owned by the oligarchs combined is quite significant. Globally, these oligarchs have a significant impact on businesses and politics.

READ NEXT: Alex Jones' Conspiracy Website Infowars Has Filed For Bankruptcy

Sources: visualcapitalist.com, forbes.com

from TheRichest - Feed https://ift.tt/kIfzg0d