‘Conspiring with these people’ How Rosneft trapped one of Russia’s top business newspapers and left the nominal owner with $15.1 million in profits. A joint investigation.

Known for setting industry standards and being one of Russia’s top business newspapers, Vedomosti now finds itself in crisis. The publication’s owners, represented by Demyan Kudryavtsev, have announced their intention to sell to Konstantin Zyatkov (one of the leaders of the “Nasha Versiya” publishing house) and Alexey Golubovich (the managing director of the “Arbat Capital” investment firm). With the transaction still incomplete, Vedomosti quickly hired a new acting editor-in-chief, Andrey Shmarov, whose censorship antics have led to the newsroom’s open revolt. Journalists from Meduza, Forbes, The Bell, and Vedomosti have joined together to determine how much money Demyan Kudryavtsev could have earned on deals involving Vedomosti and what role the oil giant Rosneft played in these recent events.

A poet and an entrepreneur, Demyan Kudryavtsev has been asked for years why he acquired the newspaper Vedomosti. He’s always cited the same three reasons: the opportunity excited him as a media manager, he bought the publication for a song, and he expected to flip it for a profit. “I thought it was a good deal. I’ve always been a businessman,” Kudryavtsev said in a recent interview. “It was possible to buy it cheap and then tighten up a few things and sell it for more. Basically, I still hope to pull this off.”

Kudryavtsev hasn’t managed this feat alone, however. In recent years, he’s reportedly worked alongside Rosneft press secretary Mikhail Leontiev to find buyers for Vedomosti. Two associates told The Bell that Leontiev openly acknowledges in private that he has direct ties to Vedomosti’s current owners (though he doesn’t reveal specific details). One of these sources recalls that Leontiev complained a couple of years ago about working with Kudryavtsev and said replacing him as Vedomosti’s owner was urgent. 

Finally, on March 17, 2020, Demyan Kudryavtsev announced the newspaper’s sale to “Nasha Versiya” executive Konstantin Zyatkov and “Arbat Capital” managing director Alexey Golubovich. The very next day, with the deal only preliminary, Kudryavtsev transferred control over the newspaper to Zyatkov and Golubovich. With still a month left on his contract, Vedomosti’s then editor-in-chief, Ilya Bulavinov, abruptly resigned and outsider Andrey Shmarov was hired as his acting replacement. 

It’s unclear who actually appointed Shmarov. His tenure as chief editor has been so rocky that neither the present nor future owners want to take responsibility for him. Once again, Mikhail Leontiev appears to have played a role. A source with ties to Zyatkov and Golubovich told Meduza that he’s heard repeatedly that Leontiev was involved in Shmarov’s selection. Another source who knows one of the potential buyers told Meduza that Leontiev was pivotal to Vedomosti’s sale, adding that Leontiev claims in private that Rosneft controls Kudryavtsev “through credit.”

It so happens that “Arkan Investment,” the entity through which Kudryavtsev owns Vedomosti, incurred enormous debts when Kudryavtsev bought Vedomosti five years ago.

How Kudryavtsev bought Vedomosti

Until the fateful year of 2015, Vedomosti had three foreign owners: the British company “FT Group” (which owned The Financial Times), the American company “Dow Jones & Co.” (which publishes The Wall Street Journal), and the Finnish publishing holding “Sanoma” (after it acquired the Dutch company “Independent Media,” which co-founded Vedomosti). Each of these enterprises owned a third of the Cypriot offshore “Delovoi Standard Ltd.,” which in turn owned the Russian company “Business News Media,” Vedomosti’s publisher and the owner of its trademark.

This triumvirate first started to collapse in early 2014, when Sanoma adopted a new business strategy that entailed liquidating its assets in Russia. Kudryavtsev emerged as a buyer for Vedomosti, but he also wanted the Finnish company’s rights to publish Russian editions of several glossy magazines, such as Menʼs Health, Womenʼs Health, National Geographic, and others. Sanoma hoped to wrap up the sale quickly, but negotiations dragged on for the better part of a year. A source at the Finnish company told Meduza that the deal took so long to finalize because Kudryavtsev was unable to get approval “at the very top” until he managed to “attract the right partner.” “It became clear that some other buyer was behind him,” says Meduza’s source.

Both Kudryavtsev and Sanoma insisted officially that selling Vedomosti didn’t require the state authorities’ consent, and Kudryavtsev says he informed Putin’s press secretary, Dmitry Peskov, and the Kremlin’s first deputy chief of staff, Alexey Gromov, about the sale as a courtesy. A source close to Vedomosti’s current owners, however, now admits that Kudryavtsev coordinated the acquisition with the Putin administration, relying on help from his friend and business partner, Dmitry Bosov, the president of the “ALLTECH” investment group and owner of the “Sibanthracite Group.” This information cannot be confirmed with Bosov, who shot and killed himself on May 6, 2020. 

On April 30, 2015, Sanoma finalized its deal with Demyan Kudryavtsev, selling its 33-percent share of Delovoi Standard Ltd. to Kudryavtsev’s company “Ivania Ltd.” The other asset at stake, “United Press,” which owned the glossy magazines’ publication rights, was sold to another Kudryavtsev-owned firm called “Moscowtimes LLC.” 

As Kudryavtsev negotiated with Sanoma, a new Russian law limiting foreign ownership of mass media outlets to 20 percent was set to take effect in early 2016, which ultimately forced FT Group and Dow Jones & Co. to sell their shares in Delovoi Standard Ltd. When divesting, these Western businesses had to deal first with Kudryavtsev, who acquired the right of first refusal when he bought Sanoma’s stake, as dictated by the company’s charter. Sergey Petrov, the founder of the ROLF automotive dealership and vehicle importer (who says he’d considered bidding on Vedomosti at the time), confirmed these reports in a recent interview. 

In late 2015, FT Group and Dow Jones & Co. sold their 66 percent of Delovoi Standard Ltd. to Kudryavtsev’s wife, Yana Moselle-Kudryavtseva (Kudryavtsev is an Israeli citizen and therefore cannot own Russian media assets directly), along with their share of Business News Media’s debt (sold at a discount). In November 2015, Kudryavtsev’s offshore Ivania Ltd. also transferred its 33 percent of Delovoi Standard Ltd. to Yana Moselle-Kudryavtseva, making her the sole owner of Business News Media (which in turn owns Vedomosti).

What it cost Kudryavtsev to buy the newspaper

Since Kudryavtsev first acquired Vedomosti, rumors have circulated that he was only acting as the frontman for someone else who supplied the money, but no one could prove it. Sergey Petrov, who participated in the negotiations with FT Group and Dow Jones & Co., says Kudryavtsev claimed the money was his, though he also heard rumors that Kudryavtsev borrowed the money. Kudryavtsev says he only involved Vladimir Voronov and Martin Pompadour (two close friends and frequent business partners) in the deal. “They took over the debts, stepped in as creditors, and my family bought the shares,” Kudryavtsev explained in an interview with Elizaveta Osetinskaya.

As part of the deal, Pompadour bought out Vedomosti’s debt obligations to FT Group and Dow Jones & Co in the amount of 6.7 million euros (now roughly $7.2 million) — meaning that Vedomosti now owed this money to Pompadour’s company, “PY Financing LLC.”

A source familiar with the details of the sale told Meduza that Kudryavtsev paid FT Group and Dow Jones & Co. just 500,000 euros (now about $540,000) for their shares in the newspaper. (Corporate rules at the British and U.S. companies made it more important to settle Business News Media’s debts than earn money on selling Vedomosti itself.) Meduza’s source says Pompadour acquired Vedomosti’s debt obligations at a 40-percent discount.

In his interview with Osetinskaya, Kudryavtsev said Business News Media still owes the same amount as before and Pompadour merely bought the debt for cheap, though he has never disclosed specific figures. Multiple participants in the deal told Meduza that the agreement’s terms put the total transaction amount near five million euros ($5.4 million). 

The terms of Kudryavtsev’s deal with Sanoma were also a secret, though sources who spoke to Kommersant and Vedomosti journalists put the price tag between 4 and 6 million euros. Meduza reviewed documents relating to the sale and discovered that it was based on a stock valuation of Delovoi Standard Ltd. (which Ivania Ltd. purchased) at 2.7 million euros and a debt assessment of 2.5 million euros (sold to Moscowtimes LLC).

A source with ties to Delovoi Standard Ltd.’s buyers told Vedomosti journalists that complete ownership of the offshore company was acquired in 2015 for roughly 10 million euros, plus another 3 million euros in purchased debt obligations, though a different source told Meduza that the 10-million-euro figure includes the purchase of Business News Media’s debts.

Demyan Kudryavtsev has always insisted that he and his friends are independently wealthy and used their own money to buy Vedomosti. For years, journalists have tried to corroborate this claim. In late 2015, an investigative report by Meduza concluded that Kudryavtsev had managed to earn more than $20 million in the previous 15 years. Kudryavtsev later admitted that he briefly borrowed money from Dmitry Bosov, his friend and partner in other ventures, to raise some of the cash needed to buy the newspaper. 

Did Kudryavtsev and his partners have enough money independently to buy Vedomosti? Yes. But that is not what they did. A joint investigation by journalists from Meduza, Forbes, The Bell, and Vedomosti has discovered that the newspaper was acquired using entirely borrowed funds, meaning it was essentially pledged. Since 2017, the oil giant Rosneft has controlled this debt, thanks in large part to actions by Dmitry Bosov.

Whose money was used to buy Vedomosti and how did Kudryavtsev turn a profit on the deal?

Answers to questions about the money used to buy Vedomosti can be found in financial statements released by Delovoi Standard Ltd. and Arkan Investment, which has owned the former since 2016. That year, new media regulations in Russia banned the Cypriot offshore company “Delovoi Standard Ltd.” from remaining Vedomosti’s shareholder and forced the business to re-register the publication to a Russian company with Russian founders. As a result, the offshore’s stake in Business News Media was transferred on February 19, 2016, to Arkan Investment, which was also owned by Kudryavtsev’s wife.

In Delovoi Standard Ltd.’s annual report, the deal was recorded as a sale for 1.8 billion rubles (now about $24.4 million). On paper, it looked like a simple transfer, with money moving from one of Kudryavtsev’s pockets to another. In fact, the transaction was something else entirely: Arkan Investment acquired Vedomosti for more than Kudryavtsev paid to buy it, and the deal was financed using borrowed money.

At the time of the deal, Arkan Investment was a new entity with just 10,000 rubles ($135) in equity capital, a single employee (director Alexander Karpov, who manages several businesses owned by Kudryavtsev), and no assets. According to the organization’s own financial records, this tiny firm suddenly received a loan for 1.88 billion rubles (more than $25 million) and promptly spent 1.74 billion rubles ($23.6 million) of the money on “equity acquisition.”

As it turns out, Arkan spent more than twice as much money to buy Vedomosti from Kudryavtsev’s offshore in 2016 than he and his partners paid for it in 2015. But how could the newspaper double in value within just a few months?

A source close to Vedomosti’s owners told reporters at the newspaper that the publication gained value after it shed its obligations to pay foreigners large branding fees. Royalties under the new agreement were also significantly lower. The same source could not recall the deal’s details, but he insists that no “additional money” was involved and says the transaction was perfectly legal.

Based on official reports released by Arkan Investment and Delovoi Standard Ltd., however, the resale netted Kudryavtsev nearly 14 million euros (about $15.1 million) in profits, while leaving the Russian company Arkan Investment with an astounding 1.88 billion rubles in debt and no way to repay it. 

Speaking to Meduza, Arkan CEO Alexander Karpov declined to identify the firm’s generous lenders, though a source close to Vedomosti’s owners told reporters at the newspaper that the money came from Gazprombank in the form of a loan for 25 million euros (now about $27 million), reportedly issued thanks to Dmitry Bosov’s intervention. 

Arkan Investment’s only assets today are Vedomosti itself and the right to demand the newspaper’s repayment of roughly 500 million rubles ($6.8 million) in debts. But Vedomosti is incapable of repaying this money: in 2019, the newspaper earned 860 million rubles ($11.7 million) on an operating budget of 835 million rubles ($11.3 million), losing 13 million rubles ($176,670) on the year, with debts reaching 810 million rubles ($11 million).

Arkan Investment owes massive debts of its own: 2 billion rubles ($27.2 million) by late 2019, one source told Meduza. According to the company’s last financial statement (published in late 2018), Arkan Investment’s liabilities were 2.4 billion rubles ($32.6 million).

A source with knowledge of Vedomosti’s current sale told Meduza that Kudryavtsev decided to sell the newspaper under pressure from Arkan Investment’s creditors, arranging a complex transaction to get the deal’s participants to pay off and restructure Arkan Investment’s sizable debts. Kudryavtsev declined to discuss the deal’s structure with Meduza.

Who are these creditors and what’s Rosneft’s role?

Arkan Investment CEO Alexander Karpov declined to discuss the company’s debts with Meduza, citing commercial secrecy, but a source told Forbes that the situation was described to Vedomosti’s potential buyers like this: Arkan Investment received a loan in 2016 from Gazprombank through a shell company to buy Business News Media. In 2017, this debt was resold to “Konstanta LLC,” which got the money for this purchase in a 28-million-euro ($30.3-million) loan from Rosneft’s Russian Regional Development Bank (RRDB). 

Journalists from Meduza, Forbes, The Bell, and Vedomosti were able to verify these claims using multiple documents.

According to the SPARK-Interfax database, Konstanta LLC was created in April 2017. Cash flow statements reveal that the company spent 1.8 billion rubles (then 26 million euros) either to buy debt obligations or issue a loan, borrowing 1.9 billion rubles (then 26.9 million euros). 

Despite the fact that Konstanta LLC provides oil and natural gas production services, the company is registered at a Moscow apartment, has just 50,000 rubles ($680) in equity capital, and is technically a small business. The company’s annual reports do not mention revenues or taxes related to oil and gas production — just salary expenditures, which amount to 1.5 million rubles ($20,350) annually. Konstanta’s owner and CEO, Igor Lavrukhin, previously worked in the publishing business, co-owning the now dissolved “Legend Media LLC.” He declined to speak to journalists from Vedomosti about either RRDB’s loans or Arkan Investment’s debt.

A source close to Vedomosti’s owners told reporters from the newspaper that Konstanta LLC is affiliated with companies that were owned by Dmitry Bosov, who allegedly arranged a loan to Arkan Investment to pay off its debts to Gazprombank. As a result, based on Arkan Investment’s 2018 financial statements, it became indebted to Konstanta LLC — a company that is itself far from independent.

Records from Russia’s Uniform State Register of Legal Entities show that Konstanta LLC’s ownership rights have been pledged to Rosneft’s Russian Regional Development Bank since June 20, 2017. Vedomosti’s source close to the newspaper’s owners says he learned about Konstanta LLC’s debt to RRDB just a few weeks ago, and Bosov declined to explain this arrangement before his suicide.

Studying the financial reports, the following picture emerges: Rosneft now controls Vedomosti’s publisher through a debt chain that links RRDB, Konstanta LLC, Arkan Investment, and Business News Media. No enterprise in this string is capable of repaying its loans.

A source familiar with Vedomosti’s current sale told Meduza that it’s now impossible to sell shares in Business News Media (and therefore the newspaper itself) without repaying Arkan Investment’s loan obligations because they’re integrated, meaning that Vedomosti’s potential buyers will have to resolve this issue to complete the purchase. 

Meduza was unable to verify that Arkan Investment’s debt burden formally extends to Business News Media, and Alexander Karpov told Forbes that BNM’s shares have never been pledged or otherwise encumbered, claiming that BNM’s management can confirm this. Business News media CEO Gleb Prozorov told Meduza that management has no documents indicating that the company’s shares are pledged.

Nevertheless, Arkan Investment’s credit circumstances suggest that its assets are likely encumbered, a lawyer at a multinational firm with extensive experience in credit and corporate transactions told Meduza. “When a special-purpose company (without any assets but the one it acquired) is financed to acquire the corresponding asset, like in [Vedomosti’s] case, the lender most often requires collateralization and settlements on its acquisition through accounts in its own bank,” the attorney explains. “But information about a pledge of shares in Vedomosti would become available to a wider circle of people, since the fact of the pledge would have to be reflected in the company’s shareholder registry and so on. If the goal is avoiding publicity, a lender will protect its interests through other mechanisms, like banning asset disposition in the loan agreement and encumbering the asset with options.”

The same lawyer told Meduza that he suspects that Arkan Investment simply lacks the ability to dispose of its Business News Media shares without repaying the loan it received to buy them in the first place.

Demyan Kudryavtsev told reporters from Vedomosti that he and his partners have never done anything that would risk foreclosure on shares in Business News Media. Representatives of Gazprombank and RRDB did not respond to Vedomosti’s questions about lending money to Arkan Investment and Konstanta LLC, and Yvette Voronova (Arkan Investment’s current owner) declined to answer questions from Forbes about Arkan Investment’s debts to Konstanta.

Where this has led us

Technically speaking, Vedomosti changed its owner in mid-2018, but Kudryavtsev didn’t reveal this information until an interview in late 2019, when he declared that he hadn’t been the newspaper’s owner for some time already, explaining that it had been re-registered to Yvette Voronova, the niece of Vladimir Voronov (one of Kudryavtsev’s business partners). Voronova confirmed to Forbes that she now owns Arkan Investment. Based on her Facebook profile, she’s a 33-year-old graduate of the Moscow State Institute of International Relations and now works at the television station TNT.

On March 17, 2020 Vedomosti’s current owners (technically this is Arkan Investment, but informally it’s Kudryavtsev and his partners) announced the sale of Vedomosti (technically, Business News Media) to publisher Konstantin Zyatkov and financier Alexey Golubovich. 

In early April 2020, Kudryavtsev said in another interview that he and his partners had run out of the money and credit needed to keep Vedomosti afloat, noting also that “the situation in this country has changed extraordinarily in these past five years and Vedomosti is an opposition outlet, though I don’t see it that way.”

A source with knowledge of Vedomosti’s sale told Meduza: “Kudryavtsev is now selling something that doesn’t belong to him, which he bought with loaned money. These debts will be written off, apparently, because they’re impossible to repay and nothing can be sold without the creditors’ approval.”

This is why Vedomosti’s main lender, Rosneft, has been so closely involved in the newspaper’s sale.

The Bell spoke to a businessman who says he was offered the chance roughly a year and a half ago to take control of Vedomosti. The individual says “a senior person from [Rosneft head Igor] Sechin’s team” led negotiations about replacing Kudryavtsev with another nominal owner in exchange for managing the business and taking control over the newsroom. The talks stalled, however. According to The Bell’s source, it wasn’t yet an urgent matter for Rosneft.

A businessman who knew “ALLTECH” investment group president and “Sibanthracite Group” owner Dmitry Bosov says Bosov also tried to convince Sechin to find another owner for Vedomosti. After his relationship with Sechin apparently soured, Bosov reportedly tried to negotiate the newspaper’s sale on his own, says The Bell’s source, but no buyers were interested after learning that Rosneft was involved.

A source with ties to one of the negotiation’s participants told The Bell that Rosneft press secretary Mikhail Leontiev was directly involved in the selection of Andrey Shmarov as Vedomosti’s new acting editor-in-chief during Kudryavtsev’s negotiations with Golubovich and Zyatkov. Asked to comment on these claims, Leontiev told The Bell: “That’s just trash. Leave me alone. I’ve never seen anything shittier than this newspaper in all my life.”

In addition to financial records and anonymous sources, Andrey Shmarov’s behavior as acting editor-in-chief has only further bolstered suspicions that Rosneft is involved in Vedomosti’s sale. 

After he was hired, Shmarov changed a headline about Rosneft selling assets, giving the story a positive spin. Soon thereafter, he unpublished an op-ed written by economist and long-time Vedomosti columnist Konstantin Sonin that criticized Igor Sechin. Shmarov then forbade the newsroom from mentioning research by the independent Levada Center in Vedomosti news coverage, citing the Putin administration’s apparent dissatisfaction with such reporting.

On May 8, a Vedomosti employee told Meduza that Shmarov thrice removed the following text from an article about Rosneft creating a new center for genetic research at Moscow State University: “Citing sources, the BBC’s Russian-language service reported that pediatric endocrinologist Maria Vorontsova might oversee the project. In 2016, The New Times magazine identified her as Putin’s supposed eldest daughter. Vorontsova is also on the council for the implementation of genetic technologies development.”

When Shmarov’s antics led to such a public controversy that Vedomosti’s senior editors openly rebelled in an editorial where they nominated a replacement, an alarmed Alexey Golubovich broached the subject of appointing a new acting editor-in-chief, but Leontiev has refused to abandon his old friend, a source close to the newspaper’s new buyers told Forbes.

Sources familiar with Vedomosti’s sale told Meduza that Shmarov can’t be replaced at the moment because the Kremlin approved his appointment and Zyatkov and Golubovich are reluctant to return to the Putin administration for more negotiations, in light of the controversy surrounding Shmarov’s comments that Vedomosti should adapt its coverage to suit the Kremlin’s tastes. 

While the sale has encountered major difficulties, it is being managed by first deputy chief of staff Alexey Gromov and is still expected to go ahead. A media manager who works with the Kremlin told The Bell it would be too complicated to find new buyers for Vedomosti. Meanwhile, a source in the Putin administration familiar with the situation denied that the Kremlin played any role in negotiating Vedomosti’s sale or selecting Andrey Shmarov. 

In late April, Alexey Golubovich backed out of the deal, leaving only Konstantin Zyatkov. In an interview on May 1, Kudryavtsev vowed to follow through on the sale to Zyatkov, who later confirmed to Forbes that he’ll do what is necessary to complete the transaction as agreed.

Asked about the influence of Rosneft and Mikhail Leontiev on Vedomosti’s sale, Kudryavtsev told journalists from Vedomosti: “After two lawsuits against Vedomosti by this infamous corporation, being stripped of my [Russian] citizenship, and now essentially they’re chasing me out of the country, it’s just ridiculous to suspect me of conspiring with these people. I think they’ve always wanted to gobble up Vedomosti, but you’ve got to stop the drinking before you can eat something.”