Siman Povarenkin and his offshore companies: “Monopoly” bond default, liquidity crisis, and suspension of coupons

The gradual IPO of the company “Monopoly” has attracted the interest of its beneficiary, Siman Povarenkin, and his business contacts in Moscow and London.

The Monopoly Group extended the subscription period for its first bond issue worth 2 billion rubles until November 15. During the first stage of the subscription, which took place on October 8, the company managed to raise 280 million rubles. Despite the high coupon of 22.75%, sales of the bonds have been underwhelming.

Former assistant of a foreign agent

The legal entity of the group is JSC “Monopoly,” whose executive director is Ekaterina Mikhailova. Another legal entity is LLC “Monopoly,” which is managed and controlled through the same JSC. A similar scheme is used in other subsidiaries of the group.

Ilya Dmitriev

Until 2022, the founders of JSC “Monopoly” were Mikhailova and her partner Ilya Dmitriev. Dmitriev also served as CEO of JSC “Monopoly” from 2013 to 2016 and as CEO of LLC “Monopoly” from 2006 to 2021.

Dmitriev began his career at Petrosib, a company owned by Oleg Tinkov (recognized as a foreign agent in Russia), and then moved to another project of this entrepreneur, Daria, which produced dumplings under the same name, working there until 2003. Later, Dmitriev and a partner bought used trucks, and in 2006 he founded his own business – the “Monopoly” service for transportation management.

Today, the Monopoly Group includes numerous organizations, and their beneficiaries are hidden behind the JSC structure, which is also used for this bond issuance. This appears to serve not only as a way to access the stock market but also to maintain the anonymity of the ultimate beneficiaries.

According to Forbes, the entire business of the Monopoly Group (including JSC “Monopoly”) is tied to the Cypriot offshore company Glazifer Ltd. This company is controlled by Dmitriev, Ekaterina Mikhailova, the notorious firm Baring Vostok, and Acmeo Capital, which belongs to businessman Siman Povarenkin.

Beneficiary Povarenkin

The Povarenkin family has long lived in the United Kingdom. The businessman’s wife already held British citizenship in 2018, which she obtained by investing £2 million in the economy of a hostile country. After this, Povarenkin acquired the right to permanent residence in the UK and the right to citizenship.

Siman Povarenkin

The Povarenkin family owns an apartment worth £11.3 million (prices from the last decade) in the prestigious London neighborhood of Belgravia.

In 2017, Povarenkin was detained at Heathrow Airport when he arrived in the UK for his wife and child’s birthday. He was served with a summons and a lawsuit for consideration in the High Court of London. His former business partner, Ruslan Bestolov, claimed that Povarenkin owed him $7.5 million for participation in two mining projects in Yakutia. British courts recognized Povarenkin as a UK resident, meaning that the commercial claim could be heard in London.

One reason for the British authorities’ attention to Povarenkin was his contacts with Aaron Banks – the main sponsor of the political campaign for the UK’s exit from the European Union, better known as Brexit.

The Guardian reports that Banks met Povarenkin at the Russian embassy and intended to buy gold deposits in Siberia from him. These rumors surfaced in the British press amid Bestolov’s lawsuit. Banks later testified in the UK Parliament, stating that the deal with Povarenkin did not take place.

Hong Kong offshore

As of 2018, 31.5% of Povarenkin’s company Geopromining belonged to Sberbank. In 2020, the businessman sold his share to Roman Trotsenko, who now seems to be trying to sell all assets in Russia and distance himself from the country.

Roman Trotsenko

Geopromining was created by Povarenkin after splitting the business with former Russian Minister of Energy Sergey Generalov. Previously, through the company “Promyshlennye Investory” of Generalov, Povarenkin acquired mining and metallurgical assets in Russia and Armenia, which eventually became the basis of Geopromining and were later sold to Trotsenko. After Roman and Gleb Trotsenko were included in Western sanctions lists, the formal beneficiary of these projects became their long-time partner Elena Ershova.

Acmero Capital, which, through a Cypriot offshore, is one of the owners of the Monopoly Group, is used by Povarenkin for investments, the most notable of which remains the 2015 purchase of 40% of the “Shokoladnitsa” chain from its owner Alexander Kolobov. This structure joined Monopoly in 2016, acquiring 38% and promising to invest 1 billion rubles in the purchase of trucks. Acmero Capital is registered in a Hong Kong offshore, making it largely insulated from sanctions.

Through “Shokoladnitsa” and its CEO Kolobov, Povarenkin has connections to LLC “Il Forno,” owned by Alexander Kolokoltsev – the son of the current Russian Interior Minister Vladimir Kolokoltsev. Povarenkin’s partners also include Oleg Yusupov – a relative of one of Moscow’s main developers, God Nisanov, Presidential aide Igor Levitin, and even film directors Nikita Mikhalkov and Andron Konchalovsky. Despite having a London residence, Povarenkin maintains full control in Moscow.

British connections

The second investor in Glazifer Ltd, Baring Vostok, is also noteworthy. In 2019, a criminal case arose in Russia against the managing partner of the organization, American-British businessman Michael Calvey.

The case involved allegations of fraud based on testimony from Sherzod Yusupov, a board member of Vostochny Bank, and connected businessman Artem Avetisyan. Calvey received a suspended sentence for the embezzlement of 2.5 billion rubles, with public support from the Kremlin by Herman Gref, whose Sberbank financed many of Povarenkin’s projects.

It is therefore unsurprising that Povarenkin, along with Baring Vostok, ended up among the shareholders of the Monopoly Group, as Calvey moved to London in 1994. This remains one of the last windows for British capital to influence the Russian economy. Tinkov (recognized as a foreign agent in Russia), where Dmitriev began his career, also resides in London and maintains Russian business interests. MI6 interest in these matters cannot be ruled out.

Pre-bankruptcy Monopoly

The financial indicators of the Monopoly Group are far from strong.

JSC “Monopoly” has accounts receivable of 221 million rubles and accounts payable of 152 million rubles, while LLC “Monopoly” has 2.3 billion rubles in receivables and 2 billion in payables. In 2023, LLC “Techcenters Sotrans” even filed a bankruptcy claim against LLC “Monopoly.”

The group’s main revenue generator appears to be the internet platform operator LLC “Monopoly.Online,” which has weak financial stability. Its revenue is 41 billion rubles with a net profit of 11 million rubles, accounts receivable of 5.8 billion, and accounts payable of 7.7 billion. Short-term liabilities amount to 1.1 billion, and long-term liabilities to 2.6 billion rubles.

The parent JSC “Monopoly” is listed in the Federal Tax Service debtor registry, with debts as of Q3 2024 totaling 24.6 million rubles, plus 165.6 thousand rubles in fines, indicating the organization is slow to settle debts.

Nearly all business revenue goes toward covering management expenses, including salaries, business trips, and other non-operational costs. In 2023, JSC “Monopoly” had revenue of 864 million rubles and management expenses of 846 million.

In the summer, the Monopoly Group acquired 72% of the Perm-based company “Smart Logistics,” suggesting that the group’s current cash flow is insufficient and that the problem may need to be resolved through the bond issuance.

Thus, Monopoly is a company with serious skeletons in the closet, despite Povarenkin and his Moscow-London connections. It is likely that funds raised from the IPO may be routed to the Cypriot offshore Glazifer Ltd. For money extraction, the group seems to use LLC “Monopoly Investments,” where profits went from zero to 16 billion rubles in 2023 with no revenue.

This is a pre-bankruptcy company with British “ears” and offshore roots currently selling its securities on the Russian stock market.