Alisher Usmanov: ‘I was never what you could call an oligarch’
My lunch with Alisher Usmanov is very nearly the shortest in FT history. Moments after we meet, the Uzbek-born Russian billionaire suggests we cancel.
“Today has been a difficult day,” he says, trudging through the lobby of a luxury spa hotel in the Bavarian Alps. “And frankly, if you want to know all about my life, well, for that we will need at least two bottles of vodka.” Fresh off a hastily arranged morning flight from Moscow, I am in no mood to return with an empty notebook or, indeed, stomach.
It has been more than a decade since Usmanov, the $16.5bn metals and technology tycoon who counts presidents as close friends — but not the one in the Kremlin, he stresses — sat down with the FT. He may own a newspaper, but he also exerts considerable effort trying to stay out of them. Particularly ours.
I insist that we continue, with or without those two bottles. Usmanov is one of the biggest names in Russian business, a member of an elite handful of 60-something men with the keys to the country’s economy. His USM holding group controls Russia’s biggest internet company Mail.ru, its second-largest phone network MegaFon and Metalloinvest, the iron and steel producer.
Unlike many Russian tycoons, not all of his wealth comes from selling stuff dug out of the ground. At one point he was one of Facebook’s biggest investors. He is Alibaba’s main corporate partner in Russia. Until 2018 he owned a chunk of Arsenal FC. Now he brands himself as a philanthropist and has donated more than $2bn — but, I will learn, has unfinished business in the Premier League.
In modern shorthand, many describe Usmanov, 66, as an oligarch — unsurprisingly perhaps, given that he fits the broad rubric of an oligarch, having made a fortune in the era of robber-baron capitalism in the 1990s. But in Russia the word has a more precise sense — which Usmanov leverages in his defence.
“Never in any situation was I what you could call an oligarch,” he says. “All the assets my partners and I bought in Russia were from the secondary market, not in any so-called privatisation processes. No one ever gifted anything to me.
“But I would be indecent to say the state didn’t give me this opportunity. All the time, since I started doing big business, with big industrial assets, the power, the state, has been very co-operative and helpful and never refused us anything,” he says.
We are on the shore of the Tegernsee lake below snow-capped mountains, a short drive from the Austrian border. His doctor — Usmanov has had seven operations on a troublesome eye, “a Guinness World Record”, he says — lives nearby. During two periods of recuperation at the hotel, he took a shine to the area and found a place to rent.
The hotel restaurant is a classic tavern mock-up with wooden walls and waitresses in dirndls. I look for a menu but Usmanov has called ahead. His interpreter joins us to pick up the thread when he veers from deep, booming English into freer-flowing Russian. We begin with sausages and pints of local lager. He tucks into both with gusto.
Born in Chust, a small Uzbek city, in 1953, to a well-connected family, Usmanov attended the prestigious Moscow State Institute of International Relations, a training ground for Soviet diplomats, statesmen and spooks.
“I wanted to do everything, and be everywhere,” he recalls. “Until 4pm, I was an exemplary student . . . and after 4pm I was studying Moscow life, with all of its beauty. For people like myself, who came from different republics of the USSR, it was the centre of the universe. Beautiful theatre, art, ballet, clubs, restaurants, beautiful girls. It was close to power. I discovered all that there was to be discovered. So when I returned [from Moscow], I was very focused on my goal.”
That goal-seeking was derailed four years after his return, when the 26-year-old was sent to jail for fraud and “theft of socialist property”. He served six years of an eight-year sentence. The conviction was ultimately overturned in 2000.
He is reluctant to discuss the experience. “What happened totally rendered my future diplomatic career unfeasible,” he says. But while he entered prison at a time of little freedom, he left in 1986, as Mikhail Gorbachev’s liberalisation reforms were beginning. “It was a different country. There were opportunities to make money legally,” he says.
Before we get to the money, the promised vodka arrives, along with a hearty spread of Bavarian dishes: duck, lake fish and pork knuckles. He toasts “to friendship”. I grab the opportunity to ask about two men who have played an oversized and controversial role in Usmanov’s rise.
Andrei Skoch was placed under US sanctions in 2014 for “longstanding ties to Russian organised criminal groups”. Skoch is Usmanov’s longtime partner and the two men built Metalloinvest together in the 1990s. When he entered parliament in 1999, Skoch transferred his shares to his father Vladimir, who now owns 30 per cent of USM.
Skoch loaned Usmanov $14m in 1993, when even a small amount of capital could make enormous returns with chunks of Russia’s economy up for sale.
Usmanov, who had a business making plastic bags and selling cigarettes, says he turned that loan into $86m within a year. “We shared that, and then decided that we want to work together,” he says. “After he was elected an MP, he left. He plays no role in the business now.”
Seehotel Überfahrt, Tegernsee
Überfahrtstraße 10, 83700 Rottach-Egern, Germany
Bavarian menu x 2 €178
Selection of sausages and pickles
Kaiserschmarrn with apple and cranberry sauce
Vodka shots €62
Pot of tea €19
Still water €17
Skoch told the FT in 2012 that his relationship with Usmanov was “something romantic”, and that in the 1990s he had some dealings with two men whom the FBI later claimed headed one of Russia’s biggest organised crime groups.
“Everyone tells so much bullshit [about Skoch]. Now, slowly, slowly it is cooling down,” says Usmanov, between mouthfuls of shredded red cabbage.
Around the same time, Usmanov began working with Farhad Moshiri, a British-Iranian commodity trader. The two bonded over the FT, with Moshiri translating it for him.
“My biggest textbook in western business was the FT . . . It was a new world for me,” he says. Soon he was whispering this newly acquired knowledge into the ear of the head of Russia’s state-owned gas company Gazprom, as it issued its first eurobonds and syndicated loans.
“In 1994 none of these oligarchs knew what a share was,” he chuckles. “They were under the impression that I knew this market very well. It caused a great deal of irritation among the financial teams at Gazprom.”
By 2000 he was heading Gazprom’s investment arm, using the company’s cash — ultimately owned by the taxpayer — to buy steel assets, a sector in which he had personal investments. The potential conflicts of interest are obvious. Usmanov is po-faced.
“My concept was that the only industry Gazprom sourced from was the steel industry . . . to build pipelines,” he explains. Predictably, when Gazprom decided they were noncore, Usmanov and his partners “were first in line to purchase these assets”.
So he bought shares from Gazprom that Gazprom had previously purchased under his orders? “Yes, yes, yes, yes,” he says. “I thought then, and think now, that pipelines represent a major part of the gas industry . . . and you had to have a position in that industry.”
It was not the only time his own capital blended with that of his employers. With a broad smile, he tells me that $36m he put into the company was worth $1bn five years later. “I worked for Gazprom very diligently and honestly and I am very proud of that.”
Some US senators have called for him to be sanctioned. I ask if he is fearful of this. “How can I be scared of sanctions when I have experienced things in life that were much more severe?” he says. “I don’t deserve them, so it will be hurtful if they come . . . I don’t get involved. I don’t interfere in any political issues.”
In an attempt to change the subject, he raises his refilled vodka glass and toasts to “sport, friends and female beauty”. I drink the shot and ask him directly: are you close to Putin?
“Look, I recognise the leader of the country where I am a citizen. I respect him; I think he is the number one leader in the world today . . . But I never had anything to do with any of these so-called special assignments,” he says, referring to US claims that Russian businessmen act on behalf of the Kremlin. “He doesn’t need anything. He doesn’t need oligarchs, just a solid state.”
In 2014, shortly after western countries imposed sanctions on Russia and some oligarchs after Moscow’s invasion of Crimea, Usmanov reduced his formal ownership of USM below 50 per cent — coincidentally, he says, the threshold for personal sanctions to affect an asset.
“To apply political and military [approaches] to business . . . The damage [the US] is doing is great. But damage can be done to an extent that it is seen as a declaration of war. And what do you do then?” he says. “Russia is a big country and in some ways is a superpower. And it will fight for its place. And the sooner its partners realise and understand that, it will be easier for them to make a deal,” he says pointedly. “And I am sure millions think like me.”
One country where he has undeniable political influence is Uzbekistan. President Shavkat Mirziyoyev is a relative by marriage. Usmanov says he has invested “several hundred million dollars” into what he calls not-for-profit projects “to help the new president and his team”. Their friendship sparked concerns after Mirziyoyev flew to a UN meeting on Usmanov’s private jet. “Look, he paid [for the plane],” Usmanov retorts. “He checked the market price and paid.”
Usmanov is a convivial luncher. But I had been warned that his charm can quickly dissipate and I get a flavour of this when I ask how he shifted from Russian industrial assets into Silicon Valley start-ups. “You are a British journalist, representing a very high-level newspaper,” he snaps. “And you cannot believe that somebody from Tashkent can find these investments?
“I knew this company would turn the world on its head,” he says of his early investment in Facebook. He tells me he invested $460m directly into the social media company and another $420m through a fund managed by his partner Yuri Milner, now seen as Russia’s most influential tech investor. At one point Usmanov says he controlled almost 8 per cent of the company’s stock. His return was “more than five-fold,” he says.
The memory seems to cheer him up. He raises a third vodka — “to freedom of choice” — and calls for a refill. It dawns on me that his lunchtime spirit tolerance may be higher than mine. I wave to the waiter to bring more water and shovel a pile of Kaiserschmarrn — shredded pancake — on my plate.
Usmanov has known fellow billionaire and Chelsea FC owner Roman Abramovich since 1986 and describes him as a “very good friend”. I ask if he thinks Britain’s decision not to renew Abramovich’s visa in 2018 was a warning to Russian tycoons.
“In my opinion, somebody who invested so much money in Britain, who is a fan of Chelsea, who is proud of London, at least someone could have spoken with him and explained what he had to do to stay in the UK. This I think is more about political influence.”
Are we meeting in Germany because he no longer feels comfortable in the UK? This touches a nerve.
“Why do you want to talk so much about negative situations? . . . What is the problem? Why should people care about the UK’s calculations?” he barks.
Last year he gave up an attempt to take control of Arsenal, selling his 30 per cent stake in the club to his American rival shareholder — a decision that irks him. “If we had worked together, we would definitely have achieved so much more. But the time will come, you know, for more success and Arsenal’s fans will come back to the stadium.”
But Usmanov may have another option. His old partner Moshiri owns a majority of Everton FC. Would Usmanov like to join him there? “Yes. With great pleasure, if he asks,” he says. “I am thinking about my investment in this club . . . I cannot reject Arsenal. I will not leave them as a fan. But if I join Everton, then I will wear an Everton shirt, because I am a professional.
“They are going to build a new stadium. Why not the USM Arena? It is not obligatory for me to participate myself. I could just sponsor them.” A week after our meeting, Usmanov brokers a deal to bring Carlo Ancelotti, the former Real Madrid manager, to Everton.
“What is the remedy for love? New love,” he laughs. “If you think like a Muslim, who can have four wives, or a harem? . . . I love Arsenal, but I failed. What can I do? But I also believe Arsenal lost something without Usmanov.”
The shots are raised again — to sport. (He was a keen fencer and is president of the International Fencing Federation.) He finally waves away the Belvedere and asks for tea. I’ve survived.
I ask about his ownership of Kommersant, one of Russia’s biggest newspapers, which he bought in 2006. Last summer its political reporting team resigned after two reporters were fired for a story about a Kremlin reshuffle. He has denied claims that he ordered the firings. “The journalists are good . . . But it doesn’t occupy me now,” he says. “Sometimes I give my opinion [to the editor] about articles, or something.”
I know of one former reporter who was summoned to Usmanov’s estate outside Moscow and given a dressing-down over coverage of a business magnate. “Look, rumours about me often surface in Kommersant,” he says. Should I believe them? “Absolutely not. Often they are wrong.”
We have crossed two hours and I am keen to ask about how he will decide succession at the head of his USM empire. “Life is not forever . . . Many people have helped me. So I want to help my family and my management by giving them my shares.”
He reels off names of some of his 12 grandchildren: Yasmin, Alisher, Usman.
“Fifty per cent to family, fifty per cent to management, who deserve this, in my view,” he says. “Everybody who today is in a high level of my management will participate. This is my nature. If you have, from destiny, got something, you must share it.”
Usmanov suggests he has had enough. The table is strewn with half-eaten food and dirty crockery. As I request the bill, I ask if he enjoyed our conversation.
“No, not really,” he replies. “But I had to drink vodka with you . . . Without vodka, what is talking between men?”
Henry Foy is the FT’s Moscow bureau chief