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From boat to island

Andrey Melnichenko’s offshore moves to the Russian jurisdiction in the Far East

From boat to island
Photo: "Vedomosti"

A part of Andrei Melnichenko’s holding, Donalink, became a resident of a special administrative region (SAR) on Russky Island, said Far East Development Corporation JSC, the management company of preferential regimes in the macroregion, last week. "The company owns foreign and Russian (in particular, Far Eastern) assets," the CRDC said, adding that the main purpose of the change of jurisdiction was to transfer assets to Russia. “The company plans to continue its current investment activity and develop its business presence in the Far East, while maintaining it in the international markets,” said the RDC.

Как уже Wrote EastRussiaThere are no queues from investors wishing to become residents of the SAR in the Far East. The regime has been in effect in Vladivostok and Kaliningrad since August 2018, but in the DFO so far managed to attract only Finvision Holdings Ltd. Artem Avetisyan - a company that owns 32,01% of PJSC Vostochny Commercial Bank. According to list of affiliates Bank on 31 December 2018, the company has already changed the address from Cyprus to Russia - now it is located on the island of Russian, in the house number 20 in the village of Voyevoda. Artem Avetisyan has a corporate conflict with the beneficiary of the owner of 51,62% of Vostochny Design Bureau, the founder of the Baring Vostok direct investment fund Michael Calvi. Mr. Calvi 15 February was detained on suspicion of embezzling 2,5 billion rubles. at CB "Vostochny" under the guise of a deal with shares.

Andrei Melnichenko more than once came into the sight of the media as one of the main owners of the coal-mining holding SUEK and fertilizer company EuroChem, which owns assets in Russia through offshore companies. In 2017, Forbes, citing sources in the Russian government and around the businessman, even reported that Andrei Melnichenko is a non-resident of Russia, that is, a citizen who does not pay any taxes in the country at all. "He literally lives on his boat," - quoted the publication of a friend Melnichenko. Now the entrepreneur, apparently, decided to improve.

According to Cyprus registry of legal entitiesDonalink Ltd. registered on the island since November 2002 of the year and is still a functioning local organization. According to Bloomberg, the company is a "daughter" of the Cyprus Linea Ltd. Last, according to the list of affiliates PJSC Far Eastern Energy Company on December 31 of 2018, indirectly (through Cyprus AIM Capital SE) controls the company 40,38%.

DEK, a member of the RusHydro group, supplies more than 55 thousand legal entities and more than 1,8 million people in the Russian Far East with energy. The subsidiaries for the company are Far Eastern Generating Company JSC (uniting power plants and heat networks in the Amur Region, the Jewish Autonomous Region, Primorsky and Khabarovsk Territories and in the south of Yakutia) and Far Eastern Distribution Network Company JSC (provides transmission of electricity in the same regions ).

AIM Capital SE also controls 90% of the Swiss EuroChem Group AG, which owns EuroChem Mineral and Chemical Company, stated in the materials of EuroChem. The Russian company consolidates the key Russian chemical industry enterprises producing fertilizers in several regions, the largest fertilizer producer in the Baltic countries, Lithuanian AB Lifosa, a logistics company.

Via Donalink Ltd. Andrei Melnichenko previously controlled 84,64% of the capital of JSC Siberian Coal Energy Company, one of the largest coal producers and exporters in Russia. But after the legislation on controlled foreign companies was changed, representatives of the businessman claimed that the Russian legal entity SUEK had become a holding company consolidating all the assets, and the shareholders had completely transferred both the management and all tax operations to Moscow. On the company website Andrei Melnichenko marked just as "the ultimate beneficiary of JSC SUEK". The ownership structure of SUEK at Russian open sites for issuers was last disclosed in 2015, when the holding company owned 100% in Cyprus owned SUEK Plc. (the company was then renamed SUEK Ltd.).

Interestingly, Andrei Melnichenko chose Donalink Ltd. rather than, say, AIM Capital SE, which directly owns 40,5% DEC and 90% of EuroChem, to register in SAR. Probably, now Donalink, if it has control over some assets, as the KRGD claims, is more likely indirect. However, “as provided by law, in connection with the redomicilation, the SAR resident assumed obligations to make investments in the form of capital investments in the amount of at least 50 million rubles within six months,” the CRDV notes.

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