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Russian tycoons save $11 billion from war economy

At least a dozen Russian tycoons received 11.3 billion dollars (10.4 billion euros at current exchange rates) in dividends throughout 2023 and in the first quarter of this year, Bloomberg reported this Tuesday the fair. Many have close links to Vladimir Putin and run companies sanctioned following the February 2022 invasion of Ukraine.

According to Bloomberg, tycoon Vagit Alekperov, former president of the oil company Lukoil, tops the list with around 186 billion rubles in dividends (1.95 billion euros). It was sanctioned by the United Kingdom and Australia. Alekperov is followed by Alexey Mordashov, from the Severstal steel company, and Vladimir Lisin, from the Novolipetsk steel company, with 1.55 billion euros and 1.27 billion euros in profits, respectively. Mordashov has been sanctioned by the United States, United Kingdom and European Union, while Lisin is not currently subject to any sanctions.

The list also includes Gennady Timchenko, a billionaire ally of Putin, and Tatyana Litvinenko, who received a stake in fertilizer company PhosAgro, before her husband, Vladimir, was sanctioned by the US in 2023 . Vladimir Litvinenko, known for his academic and political ties to Putin, was the president’s campaign director in St. Petersburg, writes Bloomberg.

The US and its allies imposed severe sanctions on Russia in response to the February 2022 invasion, which led many companies to suspend dividend payments due to uncertainty over a potential economic collapse. These fears were not confirmed, as the Russian economy gradually adjusted to the new conditions and exporters found alternative markets.

After experiencing a contraction in the year following the start of the war, the Russian economy recovered as the government made large investments to expand the defense industry. Gross domestic product grew 5.4% in the first quarter of 2024 compared to the same period in the same period. Many raw materials exporters have resumed paying dividends after reshaping their businesses and reorienting sales to markets in China, India and other countries in the Global South that did not apply sanctions.

Still, the Russian economy could face significant problems in the second half of the year and into 2025, which could lead the government to increase taxes. Companies may face increasing payment difficulties, which could lead to shortages of industrial components and consumer goods.

One problem Russian tycoons may face is where to invest their dividends, after sanctions forced many of them to turn to the domestic market.

Source

Francesco Giganti

Journalist, social media, blogger and pop culture obsessive in newshubpro

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