Russian businessmen arrested in Spain on charges of operating a criminal organisation have connections with Russian government officials, politicians, heads of state-owned companies and friends of Vladimir Putin.

Russian businessmen arrested in Spain on charges of operating a criminal organisation have connections with Russian government officials, politicians, heads of state-owned companies and friends of Vladimir Putin.

Gennady Petrov, Alexander Malyshev and their associates, all arrested in Spain for operating a criminal organisation, had significant connections in Russia, including with politicians, government officials, heads of state-owned companies, business leaders and friends of Vladimir Putin. Such is the way things are in Russia. No entrepreneur of note has been able to survive here without getting along with the criminal underworld. Few businesspeople can escape paying protection money or avoid questionable contacts. As long as Russia's business, politics and government service remain connected, a mob boss can have much in common with members of the Russian elite. When members of these two groups meet, they may acknowledge each other or even exchange pleasantries. Not so much has changed since the roaring ‘90s.

According to the Spanish indictment (the important details of which are to be found in Novaya Gazeta No. 50 for 2008), Mr Petrov, Mr Malyshev and a few others, all of whom were arrested at health resorts in Spain in the course of the so-called Operation Troika, set up their headquarters in Malaga, Levante and on the Balearic Islands and carried out a variety of criminal activities, including smuggling, fraud, bribery, drug trafficking, and contract killings.

The examining magistrate, Baltasar Garzón, who is leading the investigation, has described the Russian businessmen arrested in Spain as members of the Tambov-Malyshev criminal organisation, thus establishing a link between Gennady Petrov and Vladimir Kumarin (Barsukov), the leader of the Tambov group who was arrested in Russia in 2007 and accused of planned and attempted murder, as well as robbery.

The indictment describes Mr Petrov as one of the bosses of the Tambov criminal organisation, and notes that in the past he served time in the same Russian detention facility as Sergei Kuzmin, with whom he has established several firms.

As early as May of 1997, the anti-organised crime unit of the Police Department in the Spanish city of Marbella requested Russia's assistance through the Spanish Embassy in Moscow. Spain was investigating a case of money laundering involving a considerable sum invested in real estate, and the trail led to Russian citizens, who had established the Hisparas Company in January 1997. It was then that the investigators took particular note of Gennady Petrov and Sergei Kuzmin.

A Bank for Friends

The Spanish police became interested in individuals who had already attracted attention in Russia's fight with organised crime. These persons appeared on law enforcement officials' list of suspects (available to the editor), in which they were described as members of organised crime groups. Moreover, judging from the Spanish indictment, their names were also known to law enforcement bodies in the United States and the European Union. But this did not mean that the future inmates were unimportant in Russian society. At least from 1998 to 1999, they were co-owners of Rossia Bank, which connects them with acquaintances of Vladimir Putin.

Gennady Petrov and Sergei Kuzmin each owned 2.2% of bank shares, and they were represented at meetings by Andrei Shumkov, who sat on the Bank's board of directors from 1998 to 2000 (as the Vedomosti business newspaper reported). In 1998 and 1999, 14.2% of Rossia's stock belonged to the St Petersburg firms Ergen, Forward Ltd and Fuel Investment Company (TIK), all associated with Mr Shumkov. Mr Shumkov and Mr Kuzmin owned Ergen, while BKhM and Finance Petroleum Company, both affiliated with Mr Kuzmin and Mr Petrov, were TIK co-owners.

ROSSIA BANK: A profile

Rossia Bank shareholders include many St Petersburg friends of the former president and current prime minister of Russia. Yury Kovalchuk, a majority shareholder and chairman of the bank, worked together with Mr Putin to set up the summer house cooperative Ozero. Shareholder Nikolai Shamalov and former shareholder Viktor Myachin were also Ozero co-founders.

It so happened that Rossia Bank was able to obtain a controlling stake in the major Russian insurer SOGAZ (Insurance Company of the Gas Industry), which had split off from Gazprom to become both a majority shareholder of the Derzhavny Financial Union, which in turn owns shares in more than 90 Russian companies, and also the principal owner of the National Media Group, which in turn controls two TV channels and the newspaper Izvestia. Another organisation controlled by Rossia Bank runs Gazfond, Russia's largest non-state pension fund. This is far from a complete list of the bank's acquisitions.

Some of Mr Putin's relatives are connected with the bank and its affiliated bodies. Mikhail Shelomov, the son of Mr Putin's female cousin, is the primary owner of the firm Aktsept, which, according to information from 2008, owned minority stakes in the bank, SOGAZ, and the bank-affiliated management company Abrossia. Mikhail Putin, the son of the Prime Minister's male cousin, spent a short time at Gazprom, and in 2007 became deputy chairman of SOGAZ.

Novaya Gazeta has established that Rossia Bank has also been associated with partners of Gennady Petrov's son. Anton Petrov is 28 years old, and is the co-founder and board chairman of the construction company Baltiisky Monolit, which builds upmarket real estate in Moscow, St Petersburg and Sochi. Petrov's partner, Baltiisky Monolit CEO Arkady Buravoi, was a co-owner of Kontsern Ekomt-Investconsulting. According to sources from 1995, the firm owned a 5% stake in Rossia Bank, while Buravoi sat on the bank's auditing commission at least until 2001.

The list of Kontsern's co-owners also includes Oleg Noskov, a former Rossia shareholder, member of the bank's board, and partner of Anton Petrov. Together with his son, Alexei Noskov, and Anton Petrov, he founded the Moscow-based firm Capital Plus. Another of its co-founders was Olga Solovyova.

According to the Spanish indictment, Solovyova is Alexander Malyshev's partner and relative (the document says that her sister is reportedly the wife of Malyshev's brother). Mr Malyshev had no education in economics, so Solovyova's expertise and a team of lawyers helped to manage the organisation's finances. After analysing accounting transactions between several firms and receipts from Switzerland, Hungary, Russia, Estonia and Latvia to Olga Solovyova's and her sister's accounts, the investigation came to the conclusion that she was connected with Mr Petrov, Mr Malyshev and Mr Kuzmin, and took part in legalising the funds that were invested in Spanish real estate.

In Russia, Ms Solovyova and Mr Malyshev's names appear as the co-founders of the St Petersburg trading firm Tornado, which was established in April 1991. In 2001, its list of co-founders also included Vladimir Blank.

Vladimir Blank, a former member of the St Petersburg government, the former deputy head of the Federal Agency for Construction, Housing and Utilities, and a former deputy minister for regional development, told Novaya Gazeta through his assistant that he had never had any relation to Tornado. Someone with his exact same name was registered as its co-founder. Our attempts to reach the other Vladimir Blank have been of no avail.


Established by Anton Petrov, Olga Solovyova and the Noskovs, the Moscow-based Capital Plus had a subsidiary called Transinvest 2000. According to SKRIN's database, it was linked to the Novosibirsk-based Centre for Business Cooperation, which owned half of the Left-bank Sand Quarry in the Novosibirsk Region and an 18% stake in the trans-Baikal mining and metal company Zabaikalstalinvest. Russian Railways also controlled a 25% stake in the firm. Since 2003, Zabaikalstalinvest has been part of Oleg Deripaska's BasEl.

Transinvest 2000 also shows up in court suits. In 2003, Mostostroi-9 tried, unsuccessfully, to prove the existence of a fictional deal between Transinvest 2000 and Baltic Construction Company-30. The deal's alleged purpose was to make it difficult to recover 19 million roubles from BCC-30 for the benefit of Mostostroi-9. The case was lost both in the trial and appeal courts.


Investment in real estate and the construction business is where the Petrovs are most noticeable. It so happened that the interests of Anton Petrov and his partners overlapped with a major Russian investment and construction group, the Baltic Construction Company (BCC) owned by Igor Naivalt. This group, too, can be described as close to Vladimir Putin and his associates. Rossia Bank was also one of the shareholders of its subsidiary BCC SPb up until February 2005. Moreover, Mikhail Shelomov, the son of Mr Putin's female cousin, shows up as the founder of BCC-65 from May to December of 2007.

Anton Petrov and Oleg Noskov owned the St Petersburg firm Finance and Management. Together with BCC, the firm founded the Baltic Management Systems consultancy group and was also a shareholder in the Samara crane manufacturer, Sokol, which belonged to BCC.

According to the company's report, Alexei Petrov, who was born in 1997, sat on the Sokol board together with Igor Naivalt. Alexei Petrov was also CEO of the Baltic Management Systems consultancy group.
Igor Naivalt failed to reply to Novaya Gazeta's inquiry, and did not say whether he knew Petrov and whether Alexei Petrov is the eldest son of Gennady Petrov. Anton Petrov and Arkady Buravoi also refused to comment.
Attempts to contact Alexei Petrov have failed. But we have also found out that he was head of the National Federation of Sporting, whose founders included Igor Naivalt; former shareholder and board member of Rossia Bank Viktor Myachin; bank majority shareholder Yury Kovalchuk; and State Duma Speaker Boris Gryzlov, leader of United Russia.
When the Spanish police finished searching the luxury summer cottage of Russian State Duma deputy Vladislav Reznik, who had bought that villa and a yacht from Gennady Petrov's companies (for details see Novaya Gazeta No. 79, 2008), chief parliamentarian Gryzlov made a public statement branding the actions of Spanish authorities as a provocation against Russia.

Chemical and energy resources
Andrei Shumkov (who represented the interests of Gennady Petrov and Sergei Kuzmin at Rossia shareholders' meetings) and certain firms connected with Mr Kuzmin and Mr Petrov also had connections with the St Petersburg fuel and energy sector and chemical industry. These connections lead to Vladimir Kumarin (Barsukov).
According to SKRIN, Mr Shumkov was head of the Industrial Group Kingbow and Fininvest, which were both officially 100% owned by Kingbow Trading Ltd from the British Virgin Islands.
The two Russian firms were shareholders in St Petersburg's Red Chemist. Since 1996, its primary owner and CEO has been Vyacheslav Rutshtein, who was one of the founders of the St Petersburg Public Charity Fund IMTO-XXI Century, a fund for supporting the University of Information Technologies for Mechanics and Optics. One of the fund's founders was Vladimir Kumarin.
In the late 1990s, Red Chemist, Rossia Bank, St Petersburg Sea Port, the Committee for the Management of City Property (KUGI), Pulkovo Airlines, and the Oktyabrskaya Railway Company all belonged to shareholders of the St Petersburg Fuel Company (PTK), the largest in the region. Their stakes during that period could not be called large; almost all of them had a 5% stake each, except KUGI, which owned 14.5%. In this context, some shareholders stood out, such as the firm Petroleum (12%), which had the same address as the Financial Company Petroleum and Red Chemist, affiliated with Petrov and Kuzmin, and Information Bureau Peter (12%), which included such shareholders as the famous St Petersburg antique dealer Ilya Traber, now living in Spain, the former KGB officer Viktor Korytov, who later became deputy board chairman of Gazprombank, and Mikhail Sirotkin, who would later become deputy chief of Gazprom's legal department.
From 1998 to 1999, Vladimir Kumarin was vice-president and deputy board chairman of the PTK, according to SKRIN. In 1999, he also joined the board of directors of the Znamenskaya project of Germany's SPAG (St Petersburg Immobilien und Beteiligungs AG) firm. One of SPAG's advisers was Vladimir Putin. The PTK refuses to comment on a situation that took place several years ago, and notes that Mr Kumarin was in no way connected with the company.

State-controlled companies

Gennady Petrov and his son are also acquainted with top executives of state-controlled companies. Anton Petrov was a co-founder of the Moscow-based firm Severfinans, along with Nail Malyutin, CEO of Finance Leasing Co (FLC), which belongs to the state-owned United Aircraft Building Corporation (UABC). An FLC spokesman explained that this had taken place long ago, and that Mr Malyutin was not connected with Severfinans.

Sources close to the Spanish investigation reported that the arrested Russians had reportedly discussed shipbuilding projects involving the United Shipbuilding Corporation (USBC). As far as we have been able to find out, Gennady Petrov was acquainted with former FLC first deputy CEO Andrei Burlakov, who is currently a co-owner of Widan Yards (shipbuilding yards in Germany and Ukraine).

We contacted Mr Burlakov, and he explained that he was acquainted with Mr Petrov and had met with him a couple of times, but had never participated in any joint projects or discussed business with him.

"Gennady Petrov was on familiar terms with almost half the country, and certainly knew practically all the key personalities in St Petersburg," recalls Petrov's friend, a staff member at one of the state-controlled companies, speaking on conditions of anonymity.

He does not believe Mr Petrov is guilty of anything, and thinks the cause of the arrest could be money. Mr Petrov's friend sympathizes with him. He says Mr Petrov is an elderly man and poor in health, while in Spain he has been moved from jail to jail, evidently to prevent him from establishing contacts. This was done in such a rush that parcels sent to prison could not always keep pace with him.

"He would give a lot if others forgot his past forever. He has long wished to live without attracting others' attention. But police commandos and helicopters were involved in his arrest."
However, the source notes that Mr Petrov could solve many problems regardless of whether he was free or in prison.

"Criminal groups and mob bosses directly participated in the redistribution of property in the 1990s," said State Duma deputy Alexander Kulikov, a former Criminal Investigation Division officer. "If we do not sort out our cases in Russia, and let scandals erupt abroad, we will not be able to persuade anyone that we are building society based on the rule of law."

"Why are elites in Russia so close to the criminal underworld? Because they share the same roots, because elites spring up from the same sources," says one of the members of the Russian Union of Industrialists and Entrepreneurs. He says that other countries, too, have lived through such a period. In the period of great transformations everyone to some extent or another emerged from the "school of hard-knocks", but it was not necessary to prominently display this.

This study has been done as part of the Organised Crime and Corruption Reporting Project (OCCRP), a joint programme involving the Centre of Investigative Reporting (Sarajevo), the Romanian Centre of Investigative Reporting, the Bulgarian Centre of Investigative Reporting, Media Focus, the Caucasian Centre of Journalistic Investigations, Novaya Gazeta, as well as reporters from Montenegro, Moldova, Albania, Ukraine, Georgia and Macedonia.

"Why are elites in Russia so close to the criminal underworld? Because they spring up from the same sources."

"No entrepreneur of note has been able to survive here without getting along with the criminal underworld.

Roman Shleinov