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dominicmidgley.comThe online guide to his books and journalism |
Dominic Midgley is a British journalist and author who specialises in biographies of prominent business people and celebrities. HomeSynopsesReviews ExtractsJournalismMedia coverage BiographyContactOrder books ![]() Michael O'Mara, 2004 |
media coverage >> on the ballOn the Ball, Jewish Chronicle, 15 October, 2004 On the ball, October 25 marks the first anniversary of the arrest of Mikhail Khodorkovsky, the Russian oligarch being held on tax fraud charges. While Russia’s richest man languishes in a grim Moscow jail, however, the country’s second richest man, Roman Abramovich, appears to live a charmed life.
The contrast in their fortunes can be attributed to the very different ways in which these two Jewish billionaires behaved towards President Vladimir Putin. From his earliest days as a businessman on the make, Abramovich worked
from within. In the mid Nineties, in tandem with his then partner, Boris
Berezovsky, he charmed Tatyana Dyachenko – the influential daughter
of former president Boris Yeltsin – and succeeded in securing
one of the plum privatisations, Siberian Oil, or Sibneft. Bought for
$200 million, it is now worth seventy five times as much. As Chris Hutchins and I reveal in our new book, Abramovich was so close to Yeltsin and Putin that when Putin was appointed prime minister in August 1999, the oligarch borrowed an office in the Kremlin and interviewed all the ministerial candidates one by one. He later told our source, the influential Russian radio commentator Alexei Venediktov that these were ‘just friendly conversations’. As Venediktov responded in disbelief: ‘Friendly conversations? In the Kremlin?’ And Abramovich’s vetting of Putin’s cabinet was just the beginning of what was to become a highly active career in political power-broking. Throughout his presidency, Yeltsin had been forced to wrestle with a Duma dominated by communists and, while Putin’s popularity rating started rising steadily, a strong showing in the parliamentary elections of 2000 by the communists and the Fatherland-All Russia coalition might have fatally damaged his prospects. What was needed was a party that would offer wholehearted support to Putin. The result was Unity, an entity created from scratch under the leadership of the charismatic and good-looking emergencies minister Sergei Shoygu. But the paymaster and organisational genius behind it was Abramovich. ‘Abramovich put that party together,’ maintains one former associate. And so, while Khodorkovsky was backing oppositionist candidates in
the run-up to the parliamentary elections of 2003, Abramovich was cementing
his relations with the man who had succeeded Yeltsin as president on
New Year’s Day, 2000. Indeed, one fellow oligarch described Abramovich’s acquisition
of Chelsea as ‘the cheapest insurance policy in history’
- the thinking being that no British prime minister could allow the
extradition to Russia of a man who had bought the love of tens of thousands
of fans should his relationship with Putin turn sour. And Abramovich is determined to turn Chelsea into a global brand to rival Manchester United. To achieve this status, the clubs needs to win major trophies: either the Premiership or the European Cup, or both. This would build their international profile and create markets for television rights and merchandise in the lucrative Far Eastern market. Abramovich has already proved his commitment to this vision by spending more than £200 million on new players, stars such as Didier Drogba, Damien Duff, and Paulo Ferreira. A role as the owner of one of the world’s glamour clubs and a personal fortune of up to £7.5 billion is a remarkable transformation in the fortunes of a man born into poverty under a communist regime. Abramovich’s mother Irina died one day before his first birthday
after complications set in following a backstreet abortion and his father
was killed in an industrial accident less than 18 months later He was taken in first by his uncle Leib in the north Russian town of Ukhta and later by his uncle Abram in Moscow and while he never shone at school he is remembered by his teachers as a diligent and lovable child. After spending a traumatic two years in the Red Army on national service, he began a career as a trader. First he would shuttle back and forth between Moscow and Ukhta trading in scarce consumer goods and then set up his stall – literally – as a market trader in plastic dolls in Moscow. With the collapse of communism, opportunities for the switched-on entrepreneur were many and varied, and Abramovich quickly spotted the potential in oil trading. Under the Soviet system, locally-drilled oil had been sold at a multiple discount on the international price and it was through the sale of domestically produced oil on the global market that the Soviet regime had made its petrodollars. With the fall of communism, windfall profits of this type became available to private operators. An oil export licence became a licence to print money. So when the opportunity came to bid for one of the state assets to
be sold under the privatisation programme of that year, Berezovsky was
well-placed to use his contacts to obtain one of the choicest lots.
And Abramovich had just the combination of oil and managerial expertise
to make him the perfect partner. And the signs are that he wants to free up more of his wealth. He has already sold up his stake in RusAl, the country’s biggest aluminium producer, and a number of other ventures and there are reports that he would like to sell a substantial stake in Sibneft to a Western oil giant. As William Browder, chief executive of the Moscow-based Hermitage Capital Management, says: ‘The richer you are, the more vulnerable you are. Abramovich;s great epiphany was to realise that and sell everything he could possibly get out of. It’s better to have $10 billion in cash than $20 billion in assets that are vulnerable to confiscation.’ |
![]() HarperCollins, 2004 ![]() Mainstream Publishing, 1998 ![]() Smith Gryphon, 1996 |
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© Dominic Midgley 2004 |