Roman Arkadyevich Abramovich (IPA: [rʌˈmɑn ərˈkadʲievɨtɕ əbrʌˈmovɨtɕ]) (Russian: Рома́н Арка́дьевич Абрамо́вич) (born 24 October 1966 in Saratov, Russia) is a Russian oil billionaire and the main owner of private investment company Millhouse Capital, referred to as one of the Russian oligarchs. According to the 2006 Forbes magazine, as of 13 February 2006, he had a net worth of $18.2 billion,[1] and according to Russian Finance magazine, as of January 2007, his fortune was $21.0 billion.[2] He was considered to be the richest person currently living within the United Kingdom in 2003[3].
The stress on his family name is often placed on the second syllable (Abrámovich) when pronounced in English, whereas the original Russian name is stressed on the third (Abramóvich).
In Russia, Abramovich is prominent as the governor of Chukotka, a post to which he was elected in 2000. He is most famous outside Russia as the owner of Chelsea Football Club, an English Premiership football team, and for his wider involvement in European football. Despite his high profile around the world, Abramovich makes virtually no public statements about his activities.
Early life and education
Born into a Jewish family, his father was Jewish, but his mother was a Russian non-Jew. Roman's paternal grandparents were exiled to Siberia from Tauragė, Lithuania by the Soviets after the occupation of Lithuania in 1940.[4] 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.[5] His father Arkady Abramovich was killed in an incident on a construction site when Roman was three years old.[5] Abramovich grew up in his uncle's family in Ukhta and with his grandmother in Moscow. [5] 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.
[edit] Post-Soviet privatization and business success
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 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.[5]
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 was named the second-wealthiest person in the UK in 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 estate 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.[6]
[edit] 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.[7]
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.[8]
[edit] Abramovich and European football
[edit] Chelsea F.C.
- For more details on this topic, see 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 £440 million to January 2006), assuming the £80m debt burden and immediately making available substantial transfer funds.
The club also embarked on an ambitious programme of commercial development, with the aim of making it a worldwide brand, and announced plans to build a new state-of-the-art training complex in Cobham, Surrey.[9] Chelsea finished their first season after the takeover in 2nd place in the Premiership, from 4th the previous year, and reached the semi-finals of the Champions League. A new manager, José Mourinho, was recruited and Chelsea ended the following season as league champions. In the four years since the takeover the club have won five major trophies, more than any other English club in the same period. They are now one of the dominant forces in English football.
It is argued that Abramovich's involvement with Chelsea has distorted the football transfer market throughout Europe [10], as his wealth often allows the club to purchase players virtually at will (frequently at inflated prices), without regard for the effects on the club's financial outturn, as was seen in the year 2005 when Abramovich allegedly offered AC Milan a world record fee of £89.8M for the then European Footballer of the Year, striker Andriy Shevchenko. Shevchenko did eventually join Chelsea in 2006 for a British record transfer fee of around £30m.
The spending has, to some extent, seen wealth re-distributed throughout the game, with the combined fee of £12.5m paid to West Ham United for Glen Johnson and Joe Cole helping to avert administration.[11] In the year ending June 2005, Chelsea posted record losses of £140 million and the club is not expected to record a trading profit before 2010, though this did decrease to reported losses of £80.2 million year ending June 2006.[12]
In a recent interview Abramovich stated that he expects Chelsea's transfer spending to fall in years to come [13], although he subsequently seemed to move away from that position[14]. He is also present at almost every game Chelsea play and shows visible emotion during matches, a sign taken by supporters to indicate a love for the sport, and usually visits the players in the dressing room following each match, although this has not happened for a few months as rumors of a feud between Abramovich and Chelsea manager Jose Mourinho persist in various newspapers.[15] Recently this seemed to have been resolved.[16] But in a shocking development in the early hours of 20 September 2007, Jose Mourinho announced his exit as Chelsea manager by mutual consent with the club following a meeting with the board.[17] Former Israel coach and Chelsea's director of football, Avram Grant, has been named as his replacement.[18] It remains to be seen if this a temporary move or a long-term commitment. Ever since Grant had joined Chelsea (in the summer of 2007) there had been friction between him and Mourinho. Mourinho reportedly told Grant not to interfere in team affairs but with Abramovich's backing, Grant's profile at the club rose after he was made a member of the board. This event apparently did not go down well with Mourinho and may have contributed to his surprise exit.[19]
[edit] CSKA Moscow
In March 2004, Sibneft agreed to a three-year sponsorship deal worth $58 million with the Russian team CSKA Moscow. Despite the company explaining that the decision was made at management level, some viewed the deal as an attempt by Abramovich to counter accusations of being unpatriotic which were made at the time of the Chelsea purchase. UEFA rules prevent one person owning more than one team participating in UEFA competitions, so Abramovich has no equity interest in CSKA. Following an investigation, he was cleared by UEFA of having a conflict of interest.[20] Nevertheless, he was named most influential person in Russian football in the Russian magazine Pro Sport at the end of June 2004. In May 2005, CSKA won the UEFA Cup, becoming the first Russian club ever to win a major European football competition. However, in October 2005, Abramovich sold his interest in Sibneft and the company's new owner Gazprom, which sponsors FC Zenit Saint Petersburg, cancelled the sponsorship deal.
[edit] Russian national team
Abramovich also played a large role in bringing Guus Hiddink to Russia to coach the Russia national football team.[21] Piet de Visser, a former head scout of Hiddink's club PSV Eindhoven and now a personal assistant to Abramovich at Chelsea, recommended Hiddink to the Chelsea owner.[22]
[edit] National Academy of Football
In addition to his involvement in professional football, Abramovich sponsors a foundation in Russian called the National Academy of Football. The organization sponsors youth sports programs throughout the country and has constructed more than fifty football pitches in various cities and towns. It also funds training programs for coaches, prints instruction materials, renovates sports facilities and takes top coaches and students on trips to visit professional football clubs in England, Holland and Spain.
[edit] Relationship with Kremlin
Abramovich's close relationship with Boris Yeltsin and his family was well known.[23] At first he was described as an aide to the powerful tycoon Boris Berezovsky: "At every stage of Berezovsky's rise, Abramovich was there, watching and learning."[24]
The proposed merger of Sibneft with Yukos was seen by most as a move to distance himself from Russia, at a time when the Kremlin appears to have decided to bring at least some of the oligarchs to account for their colourful past business practices. Abramovich was a close associate of controversial Boris Berezovsky who sold him his stake in Sibneft, although in July 2005 Berezovsky announced his intention to sue Abramovich in the British courts for pressuring him into selling most of his Russian assets cheaply to Abramovich after Berezovsky fled the country.[25]
The Kremlin press service reported that Abramovich's name had been sent for approval as governor for another term to Chukotka's local parliament, which confirmed his appointment on 21 October 2005.
Chris Hutchins, a biographer of Vladimir Putin, claims that the relationship between the Russian president and Abramovich is like that between a father and a favourite son; when rumours began about the latter's relationship with Zhukova, Putin reportedly told him "to clean up his act".[26] Reports of such a conversation are hearsay and have never been verified. Abramovich himself has stated that his relationship with Putin is professional, as signified by his use of the Russian language's formal "vy" in addressing Putin, as opposed to the informal "ty".[27]
[edit] Family, other interests, and activities
Abramovich has been married twice, to Olga (divorced 1990), and to Irina (née Malandina) in 1991 (divorced 2007).
On 15 October 2006, the News of the World reported that Irina had hired two top UK divorce lawyers, following reports of Abramovich's close relationship with a 23-year old beauty called Daria Zhukova, the former girlfriend of tennis player Marat Safin. It was speculated that a future divorce settlement (amounting to a conjectured £5.5 billion) might be the highest ever on record. The Abramoviches replied that neither had consulted attorneys at that point.[28] However, they later divorced in Russia in March 2007, with a settlement reported as being $300 million.[29]
Roman Abramovich sponsored an exhibition of photographs of Uzbekistan by renowned Soviet photographer Max Penson (1893–1959) which opened on 29 November 2006 at the Gilbert Collection at Somerset House in London. He previously funded the exhibition "Quiet Resistance: Russian Pictorial Photography 1900s-1930s" at the same gallery in 2005.[30] Both exhibits were organized by the Moscow House of Photography.
[edit] Boats and planes
Abramovich has become the world's greatest spender on luxury yachts, and had four boats in what the media have called "Abramovich's Navy":[31][32]
- Eclipse - Currently known as project M147 it was designed by the french design studio Atabeyki. The interior is being designed by Terrence Disdale. Eclipse is being built in Germany by Blohm + Voss and when completed will be 147 meters long. It is believed to cost Abramovich around $300 million and will be the world's third largest yacht with at least two swimming pools, two helipads, several on board tenders and a submarine. It's ultra modern design is similar to Pelorus with even more aggressive lines and tri-colour scheme.[33]
- Ecstasea (282 feet / 85 meter long) - Largest Feadship built to date.[34]
- Pelorus (377 feet / 115 meter long) - A frequent visitor to the Islands of Malta and Santorini, whereby her agent Simon Borg Cardona of Nautica Ltd, provide all of his yachts with services and duty free fuels.
- Le Grand Bleu (370 feet / 112 meter long) – formely owned by Paul Allen(Microsoft), Abramovich bought her in 2002 and had her completely refitted including a 16ft swim platform and sports dock. He presented her to his associate and friend Eugene Shvidler in June 2006.
- Sussurro (163 feet / 50 meter long) - built by Feadship in 1998 with the interior designed by Terence Disdale.
Abramovich, a regular visitor to the Principality of Monaco, made a request to register his yacht(s) in the Principality, but his request was rejected: "for maintaining the peace of the country, and the safety of its citizens".[citation needed]
He owns a private Boeing 767-33A/ER (registration P4-MES, registered in Aruba), known as "The Bandit" due to its cockpit area paint detail. Originally the aircraft was ordered by Hawaiian Airlines but the order was cancelled. The Boeing 767 replaces a smaller Boeing 737-7CG BBJ, registration P4-GJC. Abramovich also owns several Eurocopter helicopters (EC-145, registration P4-LGB, EC-135T1, registration P4-XTC and EC-155B, registration LX-HEC) based on his superyachts or at his home in Sussex.
As of early 2007 he has been using a smaller aircraft for his European travels. The Dassault Falcon 900 registration OE-IDX is instantly recognizable by the livery similar to P4-MES.
In 2004 Abramovich bought two Maybach 62 limousines. He had these customized to be bomb proof and have bullet-proof glass. They were reported to have cost him £1 million.[35] He also owns a Ferrari FXX, a $2.2 million dollar race-only car, of which only 32 were built.[citation needed]
In September 2007, the French newspaper Le Figaro claimed that Abramovich was the previously unidentified customer of an Airbus A380 Superjumbo.[36] This was however later rebuffed.[37]
[edit] References
- ^ Forbes magazine (February 2006). #11 Roman Abramovich. Forbes.com. Retrieved on 2007-06-03.
- ^ Finance magazine 2007 (January 2007). Rating of Russian Billionaires (Russian). FinansMag.ru. Retrieved on 2007-06-03.
- ^ [1]
- ^ Jones, David (2005-10-22). Tortured Past of Britain's Richest Man. The Daily Mail (London, England). Retrieved on 2007-06-03.
- ^ a b c d Dominic Midgley and Chris Hutchins Abramovich. The billionaire from nowhere Harper-Collins, 2005 ISBN 0007189842
- ^ "Abramovich’s Sidekick Shvidler Buys Into Posh Realty in Britain" – MosNews 25.04.2005
- ^ BBC News
- ^ Russia’s Putin Awards Order of Honor to Abramovich 20 January 2006 MosNews.com. Retrieved 19 October 2006.
- ^ "Chelsea to build new training complex", Worldsoccer.com, 2004-09-27. Retrieved on 2007-07-03.
- ^ "Rummenigge hits out over Chelsea's massive spending", The Guardian. Retrieved on 2006-11-28.
- ^ "Chelsea cash saved Hammers - Pardew", Ananovan. Retrieved on 2007-01-19.
- ^ "Roman Abramovich Calm About Chelsea’s Record Losses", MosNews, 2006-01-30. Retrieved on 2007-01-19.
- ^ "We will cut spending - Abramovich", BBC, 2006-12-24. Retrieved on 2007-01-19.
- ^ "Abramovich speaks out over 'nonsense' budget cut claims", Daily Mail. Retrieved on 2007-05-30.
- ^ "Instability at Chelsea could force me to leave, says Mourinho", The Guardian. Retrieved on 2007-04-13.
- ^ "Mourinho and Abramovich end rift", BBC Sport. Retrieved on 2007-07-15.
- ^ "Mourinho makes shock Chelsea Exit", BBC Sport. Retrieved on 2007-09-20.
- ^ "Chelsea name Grant as new manager", BBC Sport. Retrieved on 2007-09-20.
- ^ "Mourinho issues warning to Grant", BBC Sport. Retrieved on 2007-09-20.
- ^ Abramovich’s Soccer Interests Cleared by Uefa 02 September 2004, mosnews.com. Retrieved 19 October 2006.
- ^ Australia & PSV Coach Guus Hiddink Recommended To Russia Football Union By Chelsea Owner Roman Abramovich, Who Will Pay Wages
- ^ Dutch scout is Abramovich's secret link
- ^ "Russia: Abramovich Shows Himself the Door", Stratfor, 2003-08-25. Retrieved on 2007-05-20.
- ^ Ibidem.
- ^ The Independent
- ^ http://in.news.yahoo.com/070315/139/6dcde.html
- ^ http://football.guardian.co.uk/comment/story/0,,1978514,00.html The Observer
- ^ http://business.timesonline.co.uk/tol/business/law/public/article602912.ece The Times
- ^ Harding, Luke (2007-03-16). Goodnight Irina: Abramovich settles for mere £155m. Vedomosti reported in The Guardian. Guardian News and Media Ltd. Retrieved on 2007-03-16.
- ^ http://www.theartnewspaper.com/article01.asp?id=522
- ^ "In the Roman Navy" Mail on Sunday 23 October 2005
- ^ "Admiral Chelski wins sea supremacy" The Sunday Times 17 January 2007
- ^ http://online.wsj.com/public/article/SB116855284281574368-JG3DuDyAnCAbmCNJeYoWZXnN_c8_20070211.html?mod=tff_main_tff_top
- ^ Ecstasea video and pictures
- ^ http://findarticles.com/p/articles/mi_qn4161/is_20040530/ai_n12893983
- ^ Roman Abramovich buys A380 jumbo jet for 300 million dollars
- ^ I did not buy A380 as private jet: Billionaire
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