Vladimir Putin's daughter and Russia's second-generation elite

Since Vladimir Putin began cementing his grip on Russia in the 1990s, many of his friends have grown famously rich.

Not so the president himself, say his supporters, who insist Putin is above the money grab that has marked his reign. 

In April, Putin declared an income for 2014 of 7.65 million roubles (Bt4.3 million). He listed the ownership of two modest apartments and a share in a car-parking garage.

His daughter Katerina is doing considerably better, supported by some of the Russian president’s wealthy friends, a Reuters investigation shows.

After media speculation about Katerina’s identity, a senior Russian figure told Reuters that she uses the surname Tikhonova. 

Andrey Akimov, deputy chairman of Russian lender Gazprombank, said he had met Katerina when she was little and more recently, and that Tikhonova was Putin’s daughter.

Reuters has also learned that earlier this year Katerina, 29, described herself as the “spouse” of Kirill Shamalov, son of Nikolai Shamalov, a long-time friend of the president. Shamalov senior is a shareholder in Bank Rossiya, which US officials have described as the personal bank of the Russian elite.

As husband and wife, Kirill and Katerina would have corporate holdings worth about $2 billion (Bt71.7 billion), according to estimates provided by financial analysts. That wealth stems mainly from a large publicly disclosed stake in a major gas and petrochemical company that Kirill acquired from Gennady Timchenko, another long-time friend of Putin.

Also among the young couple’s holdings is a seaside villa in Biarritz, France, estimated to be worth about $3.7 million. That asset, too, was acquired by Kirill from Timchenko, a commodities trader who has known the president since at least the 1990s.

Katerina is also thriving in academia and running publicly funded projects at Moscow State University. A Reuters examination of public documents shows that the president’s younger daughter has signed contracts worth several million dollars from state-owned organisations for work at the university to be carried out by organisations she directs. There is no indication she has made any personal financial gain from this work.

She holds a senior position at the university, and helps direct a $1.7-billion plan to expand its campus. Katerina’s official advisers at Moscow State University include five members of Putin’s inner circle – including two former KGB officers who knew her when she was a toddler. They served with her father in the 1980s when he was deployed to Dresden, East Germany.

Putin’s elder daughter, Maria, is linked to Moscow State University as well. She is a graduate of the school’s Fundamental Medicine Department and is forging a career in endocrinology, according to public documents.

Katerina, Maria and Kirill Shamalov all declined to comment for this article. 

The stock acquisitions, state business deals, French property and oligarch connections offer a rare glimpse into the lives of Putin’s children. The president has been very protective of his private life and his daughters, who seldom appear in the media. The transactions also provide insight into the family finances of Russia’s most powerful man and the elite that has formed around him.

 

Russia’s ‘princelings’

Katerina and Kirill, 33, are among a new generation of Russians enjoying a rapid rise in the wake of their well-connected parents. The phenomenon bears similarities to the “princelings” of China – the children and grandchildren of Communist Party leaders who have gone on to gain positions of power and amass great wealth.

Olga Kryshtanovskaya, a sociologist and former member of Putin’s United Russia political party, says that a “new aristocracy” is emerging in politics and state companies, with a second generation inheriting the status of the current circle around Putin. “Many in society think they haven’t worked for it, and they question who these people really are,” she says.

Among other children of the Putin circle with growing influence are:

l Boris Kovalchuk, son of Yuri Kovalchuk, the largest shareholder of Bank Rossiya and a close Putin associate 

l Gleb Frank, son of former transport minister Sergei Frankand son-in-law of commodity billionaire Timchenko

l Igor Rotenberg, son of the billionaire Arkady Rotenberg, Putin’s former judo partner

l Sergei S Ivanov, son of Kremlin Chief of Staff Sergei B Ivanov.

“Today in Russia, it is absolutely normal that the boards of directors at state banks are headed by children of security service officials, who aren’t even 30 years old when they are appointed,” says Alexei Navalny, a Russian opposition leader. “It is more than just a dynastic succession. Children don’t just inherit their parents’ posts, but also the right to choose any other post they fancy. The danger is that very soon all key resources will end up in the hands of five to seven families.”

Reuters asked the Kremlin whether Katerina Tikhonova was the daughter of Putin and whether she is married to Kirill Shamalov. Dmitry Peskov, press secretary of the Russian Federation, replied: “We have no information whatsoever about the personal life, family connection, marital status, academic activities, involvement in particular projects and family tree of Tikhonova, or about other individuals mentioned in your letter.

 

Rock ’n’ roll lifestyle

Tikhonova is active beyond the university. Under that name, she has competed for years as an acrobatic rock ’n’ roll dancer. In 2013, she and her dancing partner came fifth in a world championship event in Switzerland.

Today, she is chairman of two organising committees of the All-Russian Acrobatic Rock ’n’ Roll Federation, according to its website. The Federation’s sponsors include Sibur, Novatek and Gazprombank – companies that are co-owned or co-controlled by friends and associates of the president. These people include Timchenko; Kirill Shamalov; and Kirill’s elder brother, Yury Shamalov. 

Tikhonova identified herself as Shamalov’s “spouse” during their visit to Switzerland in January.

In 2008, young businessman Shamalov became a member of the management board of Sibur Holding, a large, privately held gas-processing and petrochemicals company. He acquired a 4.3 per cent stake.

In 2014, he acquired an additional 17 per cent holding in Sibur from Timchenko and became a member of Sibur’s board of directors. Timchenko has known the Russian leader at least since Putin’s days as deputy mayor in St Petersburg in the 1990s, and the two prospered together. While Putin went on to become president, Timchenko co-created Gunvor, a company that traded Russian oil, and became a multibillionaire.

Sibur recorded revenues of 361 billion roubles and net profit of 25 billion roubles in 2014. 

Shamalov’s 21 per cent stake in Sibur is worth about $2 billion, possibly more, according to estimates by three financial analysts.

The price Shamalov paid for his stake in Sibur has not been disclosed, and it isn’t clear where he obtained the capital to purchase the shares. In an interview with Kommersant in August, Shamalov said he had acquired the stake at a market price and had borrowed money to buy it, but did not specify how much. When Reuters asked about the stake, a spokeswoman for Shamalov declined to comment.

In comparison to this rising young Russian generation, Vladimir Putin remains a man of the middle class, according to his asset declaration. As well as his salary, he declared the ownership of one apartment in Moscow and another in St Petersburg. He listed no property abroad.

The president’s spokesman has repeatedly denied that a luxurious estate built on the Black Sea and popularly known as “Putin’s palace” was intended for the Russian president. The mansion was partly funded by Nikolai Shamalov – father of Kirill, the man whom the president’s daughter has described as her spouse.