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CORRUPTION

Blood red: Sanctioned oligarch Gennady Timchenko owns wineries in Tuscany and Krasnodar via entourage

The Divnomorskoye estate at Vladimir Putin's palace in Gelendzhik is Gennady Timchenko’s most famous winery project. Timchenko, a close friend of Vladimir Putin since the early 1990s, is an oligarch who often acts as a nominal holder of Putin's assets. As The Insider has learned, Timchenko is connected to at least two other wineries through his relatives and managers – one in the Krasnodar region and one in Tuscany. Through a chain of nominal owners as well as his son-in-law, Timchenko, often referred to as “Putin's purse,” easily bypasses European sanctions by producing and selling wine in Italy and the United States.

ALL CARDS
  • Suspicious losses

  • Timchenko's people

  • The Tuscan trail and Timchenko's son-in-law

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Suspicious losses

Strange financial indicators are the primary marker of a winery’s potential links to Russian officials or oligarchs. If a business has remained unprofitable for years, continuing to operate via external financial injections, that may suggest that it was founded not to make a profit, but as entertainment for its owner. A notable example of this is the interest-free loan of 7.5 billion roubles ($124.2 million) received by Divnomorye – a winery adjacent to Putin's palace. A more modest case is Alexander Tkachov's Chateau de Talou winery. The construction of a pompous chateau in the Provencal style for the former Minister of Agriculture was funded by a 1.6 billion rouble ($26.5 million) loan from the Russian Agriculural Bank (RusAg), which helped cover 69% of the building expenses. As Minister of Agriculture, Tkachov had influence over the selection of investment sites, and influenced the approval of loans as a member of RusAg’s Board of Trustees.

The financial statements of the Krasnodar winery Burnier raise similar questions. Its official history is painted in romantic tones – in the 1990s, the seventh generation Swiss winemaker Renaud Burnier firstly fell in love with Marina, a Russian student, and then with the vineyards of the Taman Peninsula. But the romantic story hardly matches up with the reality of their enterprise.

Renaud and Marina Burnier in their vineyards
Renaud and Marina Burnier in their vineyards

Winemaking is a long-term business: vines do not start producing grapes of the right quality until the third year after planting, while premium wines need further aging. But even these factors cannot explain how a functioning winery has recorded a loss throughout the entirety of its existence while remaining operational. Domaine Burnier was founded in 2001 – one of its investors was the Russian Commercial Bank in Zurich, which provided two tranches worth 6 million francs. If this loan was repaid, it was most likely from outside sources. According to the financial statements of the winery’s two legal entities – Grand Vino LLC and Wine House Burnier LLC – both have had a negative balance for the majority of the last decade, with the total amount of the losses amounted to 1.134 billion roubles ($18.7 million). This may have been the main reason for the partial sale of the business.

Timchenko's people

The two legal entities mentioned above, Grand Vino LLC and Wine House Burnier LLC, are owned by YugProduct Holding LLC, which in turn was owned by the Cypriot offshore firm Dinerco Ventures Limited (its owners are Renaud and Marina Burnier). In 2018, Dinerco sold 51% of YugProduct Holding to DB Holding LLC, which is owned by YugAgroProm JSC. The beneficiary of this joint-stock company is now Denis Norenko, and one Sergey Malyavin was his predecessor. Who are these people?

Aside from Norenko and Malyavin, the new director of Grand Wine LLC and YugProduct Holding LLC, Alexander Muravitsky, also deserves attention. Hard-working Alexander combines his duties at the winery with the management of a dozen other enterprises. For instance, he was director of the Vostochno-Yarainerskoe oil and gas extraction company in Russia’s Yamalo-Nenets Autonomous District until March 2020.

Malyavin, Muravitsky and Norenko are all linked to companies that have nothing to do with Swiss wines or indigenous Krasnodar grapes. Muravitsky is a director at WS Capital Ventures, a company founded by Malyavin and Norenko and associated with Volga Group, which manages the assets of Gennady Timchenko. WS Capital Ventures is the founder of F.B.S., whose director, Olga Kiryanova, was the CEO of Volga Group's Businesstrade. On top of that, Malyavin was also the CEO of Timchenko's Belona LLC.

The Tuscan trail and Timchenko's son-in-law

Another winery associated with Timchenko's entourage, Riecine, is not in the Krasnodar region but in Italy – a part of the world favored by the Russian elite. Information on the company found on Russian websites is strikingly different from what can be found in other languages. Even the Russian distributor's website lists the Englishman John Dunkley as its owner, claiming he bought the winery way back in 1971. However, the site of the winery itself states that it belonged to one Lana Frank since 2011. This is confirmed by legal documents – apart from the fact that Lana's full name is Svetlana Frank, the wife of Sergey Frank, former Russian Minister of Transport and now head of the Board of Directors of Sovcomflot, Russia’s largest shipping company.

Svetlana Frank (middle)
Svetlana Frank (middle)

Frank's son Gleb was never short of money – gifts came pouring in nonetheless following his marriage to Ksenia Timchenko, the oligarch’s daughter, in 2010. A year after the wedding, Gleb became a board member and co-owner of the Russian Fishery Company. By the start of the war with Ukraine, Timchenko's son-in-law had become the sole owner of the firm and made it the largest producer of pollock in Russia. He also owns the Russian Crab Group – the country’s largest crab producer. After the imposition of sanctions, Frank Jr. promptly got rid of these assets, formally transferring them to the managers of his own companies.

Two years after Gleb and Ksenia's wedding and a year after the purchase of Riecine, a generous stream of investments poured into Tuscany. In 2012, a new winery building was erected and the total vineyard area was increased to 21 hectares.

Riecine's impressive fleet of fermentation tanks is constantly upgraded with new devices, such as cutting-edge concrete vats from French company Nomblot. The winery's main consultant is Carlo Ferrini – one of Italy’s best-known winemakers. Ferrini ranks among the world's top wine professionals, having received the title of the best winemaker of the year from Wine Advocate and a resume featuring contracts with top Italian estates like Brancaia, Fonterutoli and Tenuta San Leonardo.

Unlike her son, Svetlana Frank is not under sanctions and can freely dispose of her European property. The family, which owes Timchenko its well-being, sells wines in the United States through Arizona-registered distributor Societa Agricola Riecine S.S. LLP. Renaud Burnier, who sold a stake in the Russian winery to Timchenko-associated companies, can also import Krasnodar-manufactured wines to Europe through his own distributor Artvino SARL and develop Domaine Renaud Burnier on more fertile Swiss soil.

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