Russian billionaire Dmitry Rybolovlev has invested $120 million into a Norwegian company that produces nothing
While young entrepreneurs have to invent, test, report, present, meet and convince investors and eventually market their products, Norwegian serial entrepreneur Jostein Eikeland simply raises cash. His company Alevo Group apparently makes the new generation of batteries: faster, bigger and with an almost infinite lifespan. Alevo claims to be very pleased with the test results. Too bad that the product has never been sold to anyone or even shown to the public. And yet, despite no publicity and no proof of concept or product, Alevo has been valued at NOK13 billion ($1.55 billion).
But then Eikeland has good friends. Not “good” in the sense of their morality, but “good” in terms of cash-flow. Among his investors – and he raised NOK 2.5 billion ($200 million) as soon as he started Alevo – are convicted drug smuggler Gjermund Cappelen, a pyramid company and other criminals, according to Norwegian daily Dagens Næringsliv. And his biggest investor: Dmitry Rybolovlev.
Rybolovlev is in a different league to Alevo’s other unscrupulous investors: the Russian billionaire made his fortune with potash company Uralkali, which caused the country’s biggest environmental disaster after Chernobyl. When one of its mines near the city of Berezniki was flooded in the early 2000s, Uralkali simply abandoned it. In 2006 and 2007, vast sinkholes emerged. Around 17,000 residents of Berezniki abandoned the city after the disaster. New sinkholes continue to emerge, the latest in 2014 in a holiday region near the town.
Despite the catastrophe, neither Uralkali nor Rybolovlev was ever held to account. The Russian government conducted an investigation, but its Minister of natural ressources, Yuri Trutnev was a close confidant of Rybolovlev, who financed his 2004 campaign for governor of the Perm region, where Uralkali’s mines are based. The investigation concluded geological factors were at play, absolving Uralkali of any responsibility. Years later, Russian president Vladimir Putin sought to reopen the case. But by then, Rybolovlev had left Russia and placed the $6.5 billion proceeds from the sale of Uralkali in a complicated web of trusts based in Cyprus and in Panama.
But Rybolovlev has not sat still, even though he has a number of properties in which he could simply enjoy the fruits of his disastrous labor. He owns a substantial plot in Geneva, on which he built a replica of Marie Antoinette’s palace, as well as the most expensive property in Monaco, the Belle Epoque penthouse bought from an Arab sheik for $200 million. He also bought Donald Trump’s Florida beach palace for $100 million and New York’s most expensive apartment for $88 million.
But it’s not just real estate: Rybolovlev owns a vast art collection, which he favours as “movable assets” stored in a vault rather than for the public to enjoy. He also owns the controlling share of the AS Monaco football club, and has also been mentioned in an investigation by the European Investigative Collaborations (EIC) found to also trade in shares of football players (football leaks). The investigation, following a substantial data release by Football Leaks, showed that Rybolovlev traded almost exclusively with Portuguese football agent Jorge Mendes, and made losses to the tune of millions during various deals with Mendes. This has led to allegations of bribery and conflict of interest, as AS Monaco’s team consists substantially of Portuguese players.
All these investments and deliberate losses are serving one purpose: to hide Rybolovlev’s billions from the long arm of Putin – and also from Rybolovlev’s ex-wife, who sought half his fortune in a bitter divorce battle that was called the most expensive divorce in history.
Back at Alevo, two Russians joined the board at a shareholder meeting in Switzerland last year. Both Kuzma Marchuk and Mikhail Sazonov worked at Uralkali, while the latter is also considered Rybolovlev’s “financial adviser”. But despite the substantial commitment to Alevo both financially and personally, the Russian seems content with the fact that no product has ever been sold. Perhaps, what Alevo is really producing is not so much battery power, but sinkholes to hide money in. That would explain why Dmitry Rybolovlev is so interested in the company.