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Offshore empire of Putin's cellist friend shines light on Kremlin wealth

04 April 2016, 21:39

Moscow - A virtuoso concert cellist who calls President Vladimir Putin a "brother", Sergei Roldugin has flown under the radar while other close friends of the Russian leader openly amassed vast fortunes.

But now the "Panama Papers" leaks have put the godfather to Putin's eldest daughter at the head of an offshore empire worth more than $2 billion and sparked fresh speculation on the Russian leader's personal wealth.

Documents from Panama-based law firm Mossack Fonseca, analysed by Russian journalists, offer a glimpse into a web of obscure deals between Russian state companies and offshore firms owned by Roldugin that made "tens of millions of rubles per day" over the decade between 2006 and 2015.

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The firms, just one of which, Sandalwood Continental, funnelled a total of $2 billion, were managed by individuals linked with Bank Rossiya, according to Novaya Gazeta, whose reporters are part of an international group of journalists poring through the 11.5 million leaked documents.

The companies clinched cheap loans and appeared to make money out of thin air by signing deals with state firms and pocketing hundreds of thousands of dollars in compensation when the deals were broken off.

Among the investments made by the firms linked to Roldugin were into yachts and resorts in Russia. One ski resort was reported as the location of the wedding of Putin's youngest daughter Yekaterina.

Like a brother

The secretive web of Roldugin's assets appears to be just the latest evidence of how an elite close to Putin has amassed huge fortunes through favourable deals during his time in power.

From his former judo sparring partners to ex-KGB comrades, close associates of the strongman leader have become billionaires by winning state contracts in key energy and infrastructure sectors.

Beyond his official salary, the extent of Putin's personal wealth has never been revealed, but allegations are rife that he essentially controls the money his friends have amassed.

The United States and European Union have slapped sanctions over Ukraine against close Putin associates, including Bank Rossiya, which the US Treasury identified in March 2014 as a "personal bank" for the Kremlin elite.

Up until now, Roldugin, 64, has appeared nowhere on these lists, although he is a close confidant of the Russian leader.

In the book "First Person", a collection of interviews published in March 2000, when most of the world had little idea of who Putin was, Roldugin takes centre stage as the Russian president's intimate friend.

A native of Putin's hometown Leningrad, now Saint Petersburg, he met the future Russian leader in 1977 and is the godfather of his oldest daughter Maria.

"We were not apart after that," the musician said in one of the interviews for the book. "He is like a brother to me."

While Putin headed into the KGB secret service, Roldugin turned to arts and rose to become a respected conductor and cellist working in Saint Petersburg's Mariinsky theatre who last year judged the prestigious Tchaikovsky Competition.

A source in the cellist's circle told Novaya Gazeta that Putin picked a modest man "he could trust without any doubt" for the job of guarding his fortune, comparing him with Prince Myshkin, the kind and simple "Idiot" protagonist of Fyodor Dostoyevsky's novel.

No Russia fallout

"Putin's idea was to store his personal stolen cash in the most unexpected of places, with the most unexpected of individuals," wrote protest leader Alexei Navalny, who has been looking into cronyism and suspicious state-backed deals for years.

He added that the leak from the Panama law firm revealed "not even the tip of the iceberg" of the vast capital amassed by Russia's elite, but even this fraction is "perfectly enough for impeachment."

In Russia, however, there is little likelihood that the revelations will rattle Putin's firm grip on power or dent his reputation.

Kremlin spokesman Dmitry Peskov slammed the leaks as an attack on the Kremlin strongman designed to destabilise Russia.

Asked about Putin's connections with Roldugin, Peskov confirmed he is still a friend of the president but insisted that "Putin has a lot of friends".

"From the outside, Russia's leadership already has an image that is hard to tarnish further," said Nikolai Petrov, who lectures at the Higher School of Economics in Moscow.

Inside Russia, public opinion is unlikely to swayed, although some of the elite "may be forced to think about themselves and their prospects."

"The main reaction will be that it's a special campaign against Russia," he said.



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