How Sarkisov’s millions are earned and spent

How Sarkisov’s millions are earned and spent

Forbes has published the ratings of the richest Russian family clans. The ratings are led by the family of the founder of the BIN group, Mikhail Gutseriev, (9.8 billion dollars.), the ‘silver’ and ‘bronze’ are shared by the families of Arkady Rotenberg, who earned 2.8 billion dollars on contracts with Gazprom, and the owners of the company Promsvyazcapital, brothers Alexey and Dmitry Ananiev. Fourth was the family of the co-owner of the bank 'Russia', Nikolay Shamalov (2.4 billion dollars), fifth was the Shaimiev sons of the former head of Tatarstan (1.7 billion dollars), sixth was the Sarkisov brothers, who own more than 60% of the shares of the insurance company RESO-Guarantee. An essential part of their state of 1.4 billion dollars comes from overseas property. 57-year-old Sergei and 48-year-old Nikolay have land in Monaco, homes in Los Angeles, the building of the Chamber of Commerce in Paris, a mansion in London, and property in France and Vilnius.

The ‘Godfather’ of the Russian businessmen of Armenian origin was one of the most influential Soviet politicians, Anastas Mikoyan, who began his career during Lenin's period and resigned only under Brezhnev – from Ilyich to Ilyich without a heart attack or stroke. Immediately after the war the USSR started to think about the reorganization of the People's Commissariat of Foreign Trade. Mikoyan was actively assisted by his compatriot Eduard Sarkisov, the future father of the future billionaires, in creating the Ministry of Foreign Trade.

Shortly after the birth of the first child, Sergey, Eduard Sarkisov went with his family to Cuba on foreign trade cases. It was on the island of Liberty that Sergey spent part of his carefree childhood. But he earned his first ruble when he returned to Moscow. Sergey Sarkisov was unloading wagons at ‘Kurskaya-Tovarnaya’ railway station. He started to earn money systematically when he was a first-year student at MGIMO, working as a designer making posters for the Moscow Association of Fur Ateliers. In those same years Sarkisov learned the basics of public relations, making posters about the winners of socialist competitions in the service sector. "All this is both sad and funny, because to some extent it was a waste of time. It is more useful to make money, being engaged in professional activity, or at least on some translations. As a student I was making some technical translations, but it was not systematic work either. During the whole period of study at the institute I received an increased scholarship, I also consider this as earned and deserved – very few people received an increased scholarship at MGIMO and it was quite high,’’ Sarkisov says.

The MGIMO graduate had to suffer in choosing his place of work. Many of his relatives were working in the Ministry of Foreign Trade, from his grandparents to his uncle – at that time the Sarkisov dynasty was evolving in the Ministry. But it did not happen. In those times nepotism was being fought both in the Foreign Ministry and the Ministry of Foreign Trade. "Dad's brother was forced to resign from the Ministry of Foreign Trade because brothers could not work there together, and it was forbidden for me to get into the Ministry of Foreign Trade in the distribution, although in general, I was going to do just that. I studied at the commercial department and was preparing for a career in Foreign Trade. The only choice left was between Vnesheconombank and Ingosstrakh, where, fortunately, I had no relatives,’’ Sarkisov said.

Eventually, he got into Ingosstrakh in the distribution, though he had never seen an insurance policy during the entire time of his studies.

Sarkisov quickly made a career at Ingosstrakh, having had time to finish the All-Union Correspondence Institute of Law. He became the head of a department at 34, was the official representative of Lloyd's in Russia, was in charge of the entire operation of recourse for goods, and participated in the Maritime Arbitration Commission.

In 1987 Sergey Sarkisov was appointed the head of the representative office of Ingosstrakh in the almost native for him Cuba. Up to 1990 he led the representative office of Ingosstrakh in Latin America, working in Panama and Nicaragua. In 1991 the president of  Ingosstrakh, Vladimir Kruglyak, was searching for a manager for an insurance company that had been created by Autobank. Sarkisov was the only person to agree to leave Ingosstrakh for the new project. ‘’Everybody was doing everything, the whole country was trading everything possible and provided any possible services. And many acquaintances and strangers asked me to help with the drafting of documents, insurance contracts, charters. Looking at all this, I decided to try. At the first stage, it was important to find serious financial partners, because an insurance company is a financial institution,’’ Sarkisov admits.

Kruglyak helped him with this, by acquainting him with Spanish investors wishing to set up a joint venture with Ingosstrakh. But since it was decided that Ingosstrakh would not create competitors for itself, Kruglyak redirected it to Sarkisov, who created the company RESO, along with Avtobank and Chupa Chups – the Russian-European Insurance Company.

Soon a young specialist, Nikolay Sarkisov, the younger brother of Sergey, arrived at the company.

By that time Nikolay had already served in the border troops working as an accountant, and then as an inspector for the foreign trade association Promsyreimport (Ministry of Foreign Economic Relations of the USSR, specializing in the export of iron and ferrous metals. He also traded ferrous metals himself).

Within a few years the brothers acquired the majority shareholding in RESO.

Together with Natalia Mironenko and Sergey Denisov, the Sarkisovs founded the company Deka-Group, which is engaged in investment in residential construction. In 2004 Dekra Group made a deal with the Moscow government for the exchange of real estate owned by the city for a stake in JSC ‘Mosenergo’. 5% of the shares of Mosenergo were previously bought by Dekra Group from Bank of Moscow.

Initially, such a deal could not be recognized as legitimate, because it did not correspond to the law ‘On privatization of state and municipal property.’ However, in November 2004, the then-mayor of Moscow, Yury Luzhkov, signed a decree on the establishment of the ‘Open Energy Company’ (OEC), and handed to its authorized capital the shares of companies, owning large estate – the JSC ‘Manezh Square’, the shopping center ‘Atrium’ and the JSC ‘Miosor’. After that, the first deputy mayor Yuri Roslyak proposed a barter of assets between OEC and Dekra Group.

However, the assets of the companies owning real estate appeared more expansive than the 5% stake of Mosenergo, so the authorities decided to give only a 100% stake in LLC ‘Miosor’ for it, managing the Tower-2000 complex in ‘Moscow City’. The company owned 80% of the retail space of the complex.

In November 2005 the Sarkisovs said that RESO-Guarantee might leave the MTPL market if the government did not raise rates on this type of insurance, in which the company is a leader, in a year and a half. The exit of the company could result in serious problems, but the government did not succumb to the blackmail.

A year later, RESO-Guarantee, in which, incidentally, ​​Sarkisov brothers Eduard and Vladimir were working, announced the resignation of the head of its controlled reinsurer Unity Re, Gregory Fidelman. This meant that the attempt by the Sarkisov brothers to create a reinsurance company capable of competing with foreign competitors had failed.

In late 2006 the CTP "RESO-Guarantee"  was audited for compliance with the insurance legislation of the Russian Federation. The audit revealed numerous violations, and the unreliability of the formation of the insurance reserves of the company, operations, unlicensed and distortion of accounting and financial reporting. The company tried to bribe auditors for the amended act, but law enforcement officials intervened in the case. In fact, they were let off easy.

In early 2007 RESO-Guarantee agreed to the opening of a large credit line with Dresdner Bank. A large stake in the company was laid out in support of this transaction.

In the spring of 2007 RESO-Guarantee announced the sale of a 10% stake in the European Bank for Reconstruction and Development. This was done before the scheduled release of the company for IPO. Deutsche Bank and Morgan Stanley were looking for investors. However, it was decided to postpone the placement. The Sarkisovs were afraid that the IPO could pass along the lower boundary of the corridor. In addition, there were only hedge funds among the potential investors, which was not part of the plan. Instead of a public placement, the Sarkisovs then sold a 37% stake to the French insurance group AXA.

In summer 2008 the company RESO-Guarantee was checked by the tax authorities. The tax claims amounted to 2 billion rubles. However, the Sarkisovs  argued that the debt was much smaller and wrote off this information as being from its competitors.

In 2009 the insurance business of the Sarkisovs brought them revenues totaling more than thirty billion rubles, although they had to adjust their business plans in accordance with the realities of the crisis. In particular, several construction projects were suspended and a previously scheduled issuance of loans by the mortgage bank RESO-Credit was postponed.

At the same time, the name of the younger Sarkisov’s wife, the former model Julia Lyubichanskaya, who decided to become a fashion designer, started to appear in the media. Sarkisova’s collection was shown in Courchevel and at ‘Russian Fashion Week’ in Moscow under the brand J.L. Sark. The designer did not hesitate to say that the fabric for her work was delivered by a private plane from Italy. Colleagues and critics were skeptical of the collection of the oligarch's wife, saying that if someone sees a wedding dress from Sarkisova, she wouldn’t want to get married. But the billionaire was not embarrassed – he really was proud of the achievements of his wife and believed that she had a great future in the fashion world.

The spouses of the Sarkisovs organized parties with soup and dumplings for several years at their villa in Saint-Tropez, but the composition of those invited has to be updated greatly each year. It was said that not everyone could control the passions raging in the oligarchic family. Soon Sarkisov left his wife, and was seen among the coterie of Hollywood celebrities on the French Riviera with a 26-year-old TV presenter, Olga Danko. Now it is said that Nikolai Sarkisov is with a 23-year-old model, Ilona Koteluh, which is about to give birth to a fourth child for the businessman (Sarkisov already has three children from his ex-wife Julia).

Meanwhile, the wife of the senior Sarkisov was engaged in more profitable projects – the organization of health insurers' customer service through the  MedSwiss network of clinics, the Swiss company contracted to manage medical centers in the Russian market of services in 2002. Until recently the Sarkisovs were going to expand this network, including through the revitalization of private ambulances. However Sarkisova had to stop working because of Sergey’s trip to Los Angeles.

Unexpectedly for many, the Russian businessman was appointed as the Consul General of Armenia in Los Angeles, home to one of the largest communities in the Armenian diaspora. In California there are more than five hundred organizations of the Armenian community. Some of Sarkisov’s achievements in this post are the recognition of "Nagorno-Karabakh's independence" by the two legislatures of California and numerous events, untwisting the theme of the ‘Armenian genocide’.

"In my opinion, the first condition for a diplomat is patriotism and a willingness to serve the motherland selflessly,’’ Sarkisov has said, but it remains unclear what kind of motherland he had in mind. Russia, where the Sarkisovs, starting from scratch, earned billions through privatization and illegal appropriation of state property; a country which is in a difficult economic situation and in dire need of major financial investments due to the sanctions? Or Armenia, which is in a deep economic crisis, and the Armenians en masse are forced to leave their homes in search of work? It seems that if the economic situation in Armenia does not change, this ancient land will soon be deserted. Probably, it is possible and necessary to say fine words, but only when these words are backed up by real action. The historical and real homeland of the Sarkisovs expects from them efforts to address the problems in the region, and not for their complexity. If you are yourself beyond these problems, maybe you should not declaim too loudly about patriotism.



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