How Russian giants hide their huge energy investments and live happily
Control of a large $850 million gas storage project in Uzbekistan linked to sanctioned Russian tycoon Gennady Timchenko , a close associate of Russian President Vladimir Putin, has been transferred to a shadowy offshore company owned by a political insider Uzbek with whom Timchenko has business ties, an RFE/RL investigation found.
The expansion of the underground gas storage facility in Uzbekistan's largest gas field, near the city of Gazli in the southwestern Bukhara region, is being overseen by a Russian-Uzbek joint venture called Gazli Gas Storage.
The majority shareholder of the joint venture, launched in a secret 2018 deal with the administration of Uzbek President Shavkat Mirziyoev, was the Russian company Forus, which RFE journalists discovered last year was owned by a linked proxy to Timchenko, a Kremlin insider who is under US and EU sanctions.
But a new investment program authorized by Uzbek Prime Minister Abdulla Aripov on February 14 revealed that the 60% stake in Gazli Gas Storage, previously held by Forus, was transferred to a Hong Kong-based company called Daxon Holdings Limited.
Company records show that Daxon's ultimate beneficiary is Uzbek energy tycoon Bakhtiyor Fozilov. In this way the mega investment project emerges from sanctions and enters into apparent legality.
Companies controlled by Fozilov, who is a key figure in Moscow's energy ties with Tashkent, received billions of dollars in contracts under Mirziyoev's energy program, the investigation found.
The investigation, published in February 2023, also revealed that a secret Uzbek government report had warned that offshore control of Gazli's expansion put the country's energy security at risk, giving control of the strategic asset to Forus, linked to Timchenko, which the authors called a company of “dubious origin”.
Fozilov's control of Gazli Gas Storage, in which Uzbek state energy monopoly Uzbekneftegaz holds a 40% stake, is now held through a matryoshka doll of offshore Hong Kong companies.
The secret report said Gazli's expansion, which plans to increase storage capacity from 3 billion cubic meters of gas to 10 billion cubic meters by 2025, makes no economic sense, an assessment echoed from a confidential report by Boston Consulting Group that called the project “impracticable.”
A series of Chinese boxes
Daxon, the 60% shareholder, is owned by three other companies incorporated in Hong Kong: Kenfame Limited and Denmount Limited, which are owned by Fozilov and hold 34% and 33% of Daxon, respectively; and Sunworth Limited, which holds the remaining stake and is owned by Fozilov's cousin, Sanjar Samiev. A nice system of Chinese boxes to confuse ideas and hide the actual owners.
Kenfame Limited was founded by Russian businessman Ivan Yegorov, who was identified in an August 2023 investigation by the Dossier Center as a business partner of Timchenko, a longtime close associate of Putin.
The real founder of Forus, along with the Russian company with which the Uzbek state collaborated for the expansion of Gazli, was a legal assistant named Aida Chachkhalia, who has multiple ties to Timchenko and who was the sole shareholder of Forus until December 2021. The company was therefore clearly a shield company prepared in advance to hide ownership.
Yegorov later took a 34% stake in Forus, while Fozilov and an unnamed Cypriot company called Kunlun Red Star Investment each took a 33% stake, the Dossier Center investigation reported, citing Forus financial documents .
Fozilov and Timchenko also have other business ties. Fozilov is president of Eriell Group, a monopoly contractor in Uzbekistan's state energy sector, which he previously owned through an offshore company together with Gazprombank and a Russian company called AMGA Consulting that shares an address in Moscow with Timchenko and his companies son in law.
All this demonstrates how the famous Russian magnates close to Putin can easily continue their business with the collaboration of friends who, probably not free of charge, take on the burden of their operations transiting through Central Asian states. All this by fooling the American and Western authorities.
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The article How Russian giants hide their huge energy investments and live happily comes from Economic Scenarios .
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/come-i-maganti-russi-nascondono-i-propri-enormi-investimenti-energetici-e-vivono-felici/ on Sun, 10 Mar 2024 08:00:37 +0000.