Russia’s Richest Woman

By Slava Tsukerman

Two publications appeared last week in Russian media about Yelena Baturina, Russia’s richest woman and wife of former Moscow Mayor Yuri Luzhkov.

According to one of the publications Moscow authorities made a decision to withdraw from a company affiliated with the structures of Yelena Baturina, about 7.4 hectares (18 acres) of land in a Moscow suburb. Other publication reported about Baturina acquiring 0.37 acres in Brooklyn, New York. I found combination of these two news interesting.

Yelena Baturina is the only Russian woman worth more than a billion dollars. She founded a major investment and construction company “Inteco”. She currently owns a hotel chain and is the founder of “Be Open”, a cultural and philanthropic foundation.

Both parents of Yelena Baturina were workers at the Moscow cutting tools plant “Frazier”, one of the largest enterprises of the USSR for the production of cutting tools. After graduating from high school Yelena started working at the plant as a technician, simultaneously taking evening classes at Moscow Ordzhonikidze State University of Management. She graduated the University in 1986.

In 1989 Baturina, jointly with her elder brother Victor, launched her first enterprise. The company was primarily dealing with software and hardware for computers. In 1991 Baturina founded her personal company “Inteco”, which began as a plastics business, and later focused on construction. In 1994 “Inteco” purchased a plastic factory.

From the very beginning of her career Baturina got involved with local politics, becoming a member of Moscow Municipal Commission. In 1987 Baturina met her future husband, Yuri Luzhkov, also a member of the Commission. Baturina and Luzhkov got married in 1991.

 

Baturina and husband Yuri Luzhkov

The next year Luzhkov became Mayor of Moscow. He remained in this position from 1992 to 2010, becoming one of the most powerful political figures in Russia. There were times when he was considered one of the most logical candidates for the Russian presidency.

In 1998 the Baturina’s company “Inteco” won the contract for producing 85,000 seats for the Moscow’s largest stadium. Some critics claimed that the decision was affected by Luzhkov as Mayor of Moscow.

In the middle of the 1990s “Inteco” entered the construction and real estate business. At one point “Inteco” was said to control 20% of construction in the capital.

On September 28, 2010, President Dmitry Medvedev dismissed Yury Luzhkov from his post, citing a loss of confidence. State TV voiced unproven accusations of the Mayor’s corruption and mismanagement.

After her husband’s dismissal Baturina moved to London. She explained the choice of the city by the fact that her two daughters were studying in London.

In November 2010, Yuri Luzhkov was interviewed by The Telegraph newspaper. Luzhkov claimed that the Russian authorities were planning to break up Baturina’s business empire and that the couple would fight the attempt. He stated: “We will not give up. My wife will battle for her business and for her honor and self-worth. That is for sure.”

In 2011, in the center of attention in Russia were several big scandals connected to Luzhkov, Baturina and her brother Viktor.

The biggest involved one of the largest Russian banks, the Bank of Moscow, created by Luzhov‘s initiative and headed by his protegee Andrey Borodin. The bank was considered the tool of all Luzhkov’s finacial operations.

Yelena Baturina was involved in the scandal. The Bank of Moscow granted her allegedly illegal loans.

According to Russian Investigative Committee the President and Vice-President of the Bank of Moscow, Andrei Borodin and Dmitry Akulinin, worked out a criminal scheme of passing money to an offshore company.

In August 2012, Borodin bought Park Place, the former residence of Prince of Wales, Britain’s most expensive house, and paid £140 million ($219 million).

In October 2012, Russian investigators froze Borodin’s assets, over $400 million, held in bank accounts in Switzerland, Belgium, and Luxembourg. His Bank of Moscow shares were also seized. Andrei Borodin and Dmitry Akulinin, who were hiding from Russian prosecution in London, were charged in absentia. They were put on the international wanted list.

Another scandal of the 2011 was around the persecution of Yelena Baturina’s brother Victor.

Prosecutors insisted that in June 2008 Victor Baturin sold his office premises in central Moscow to his acquaintance Igor Vashurkin. Several weeks later, Victor Baturin sold the same premises to another person, Dmitry Zhuravlev.

Victor Baturin received a three year suspended sentence. The businessman pleaded not guilty. He linked the process against him with the government actions against his sister and her husband.

None of the former Mayor of Moscow close collaborators is imprisoned in Russia.

In 2010, Forbes recognized Yelena Baturina as the third richest woman in the world with a fortune of over $2.9 billion. But since the resignation of her husband, Baturina’s fortune has decreased to some $1.2 billion. Nevertheless, she is still considered to be Russia’s wealthiest woman. Many critics correlate Baturina’s unprecedented wealth with her husband’s 18-year-long tenure as Mayor of Moscow.

After selling her main Russian asset, a construction holding “Inteco” in 2011, and transferring most of her business operations to Europe, Yelena Baturina has been successfully developing a number of various commercial projects in the West: the hotel business (a network of 4 hotels in Ireland, Austria, the Czech Republic and Russia), the production and sale of renewable energy (Italy), the membrane construction enterprise (Germany), and a variety of real estate investment funds.

In 2015, she has launched a development business in New York thus expanding her international business portfolio. The same year, Baturina’s structures opened a representative office in the United States, whose purpose was to oversee the investments in the country, and provide operational management for her first project in New York.

In press releases of her company Yelena Baturina describes herself as “the international entrepreneur and philanthropist.”

Baturina’s company has acquired the first set of commercial buildings next to Barclay’s Centre, a very popular sports and entertainment venue in Brooklyn, New York. The residential and commercial real estate market in central Brooklyn is growing rapidly – thus, the market prices for residential are growing at 5-6% per year, while 90% of the apartments are in rent.

Baturina’s company now owns buildings with a total area of 0.37 acres, and the investment that went into their acquisition totaled US $10 million. Currently the buildings are for commercial use, but the company is considering rezoningthe land they are located on to a category suitable for residential construction, so that a large-scale development project could be realized here.

Another line of Baturina’s business in the US is investing into real estate development funds.

On her business activities in the US, Yelena Baturina said: “We’ve managed to make a number of investments at a very good moment – in the situation when the market dropped after 2008. Today the market has without a doubt fully recovered, and the forecast for the future is very good – the rental sector is particularly stable. In this regard, we plan to expand our operations, and are considering the acquisition of a number of similar projects.”