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Dmitri Arkadievich Mazepin

Dmitri Mazepin Dmitry Mazepin (born 1968) is a Russian businessman born in Belarus. He is the largest shareholder of Russian fertilizer companies Uralchem and Uralkali. These positions make him one of the most important players in the Russian chemicals and fertilizer industries, which are among the most important industries in Russia. Forbes magazine in 2015 put his net worth at $1.3 billion. In 2021, after not having been listed by Forbes for the past five years, Forbes Russia listed Dmitry Mazepin as the 150th richest Russian with a net worth of $800 million.

Uralkali is a Russian potash producer that has substantial investments in Africa. Both Uralchem and Uralkali have been designated as “strategic assets” by the Russian state under an initiative spearheaded by Putin to bring strategic Russian companies under state control. As in the case of other oligarchs within Putin’s inner circle, Mazepin and his company Uralkali have attracted the attention of Western governments.

The European Union imposed sanctions on Dmitry Mazepin on March 9, 2022, on the basis that he is part of Putin’s inner circle, and that his company Uralchem provides a substantial amount of revenue to the Russian state. Shortly after the European Union took measures, Switzerland followed suit by sanctioning multiple Russian oligarchs including Mazepin. On March 25, 2022, the United Kingdom mirrored sanctions passed by the European Union and sanctioned Mazepin with an asset freeze and travel ban. Furthermore, Uralkali was recently mentioned during a U.S. Congressional Human Rights Commission hearing as a company that the U.S. government should consider for sanctions due to its attempts to profit from unrest in Belarus. Furthermore, Mazepin was recently described by the U.S think tank Atlantic Council as someone that the US government should consider for sanctions due to his attempt to profit from recent unrest in Belarus, and his apparent intention to take over the Belarusian fertilizer giant Belaruskali.

Since the imposition of sanctions, Mazepin engaged in a transaction whereby he reportedly purported to sell 52% of his Uralchem empire to two executives, Dmitry Konyaev (4%) and Dmitry Tatyanin (48%), that have been part of Uralchem’s management nearly since its establishment. Mazepin and Tatyanin’s relationship appears to precede the establishment of Uralchem. Tatyanin was the director of legal affairs for the Russian petrochemical company SIBUR when Mazepin was the President of SIBUR from June 2002 to approximately January 2003.

In addition to selling off 52% of Uralchem, Mazepin has taken other steps to divest his assets, particularly in Latvia, where he controls two major fertilizer export terminals. On March 21, 2022, an article appeared in the Latvian press titled “Suspicions of sanctions evasion by Russian businessmen in Latvia”, referencing reporting by a Latvian investigative television program which stated that Dmitry Mazepin was no longer the principal beneficiary of SIA Riga Fertilizer Terminal (RFT) and SIA Ventamonjaks. Arturs Skadata whose LinkedIn profile identifies him as working for Uralchem and as Chairman of the Board of Directors of RFT, issued two statements which said that both Latvian companies had made changes in the structure of their shareholders. On March 1, a company registered in Switzerland, Svizraa SA, was listed as co-owner of the terminals. According to the statements by Skadata, Mazepin ceased to be the principal beneficiary in the terminals as of that date. Currently Bhidwal Aamer Atta, whose nationality is not mentioned, is reportedly the new principal beneficiary.

It is unknown where Mazepin acquired the capital to support his acquisition of major chemical companies, as he does not come from a wealthy background. There is little information regarding the participation of co-investors in his early investments dating back to 2004-2005. Prior to these substantial asset acquisitions, he was CEO of the chemical company SIBUR from around 2003-2004, where he was dismissed after a little more than six months. Prior to joining SIBUR, Mazepin worked from 1999 to 2003 at the Russian Federal Property Fund, the agency tasked with managing and privatizing Russian state assets.

During Mazepin’s time at the Russian Federal Property Fund, he worked with Nikolai Gornovsky who eventually became the CEO of Gazprom subsidiary Mezhregiongaz. Gornovsky was ultimately jailed for stripping assets away from the Gazprom subsidiary. Those assets would eventually become property of Uralchem.

Mazepin’s first asset was the Kirovo-Chepetsk Chemical Plant (KCCW), acquired through a privatization around 2005. He initially purchased 18% of the plant which shortly thereafter was purchased by a Russian company called Fintrascom, which was managed by the Swiss investment manager Credit Prive SA, who then ultimately sold a majority stake of KCCW back to Mazepin. At the time of the KCCW purchase, Mazepin was in the process of acquiring 50% of another chemical company in Perm called OJSC Halogen. The ultimate beneficial owners of Fintrascom have not been identified, but are reported to be a “pool of Russian and foreign investors”.

Mazepin’s path to acquiring a majority stake of Uralkali was incremental over a time period of eight years. For several years prior to 2013, when Suleiman Kerimov was the majority owner of Uralkali, Belaruskali and Uralkali had an agreement that potash would be sold and traded exclusively under a joint venture called BPC, essentially forming a cartel over the world’s potash market. However, in December 2012, Belarusian President Aleksander Lukashenko cancelled BPC’s exclusive right to export Belaruskali potash. Subsequently, on July 30th 2013, the then CEO of Uralkali announced that the company was exiting the cartel as Belaruskali was accused of selling potash outside the cartel’s initial agreement. Uralkali’s CEO Vladislav Baumgertner was then lured to Belarus by an invitation from the Prime Minister and arrested at Minsk airport on charges of “abuse of power” as the chairman of BPC.

Belarus later agreed to extradite Mr. Baumgertner to Russia, but it was reported that the extradition was arranged on the understanding that Suleiman Kerimov would sell his shares of Uralkali to new owners. It has been reported that the changes to Uralkali’s ownership may have been a political move directed by the Russian government to satisfy a souring relationship between Uralkali and Belaruskali. The finalized 2013 agreement resulted in a 20% and 21.75% share sale of Uralkali to Mazepin and Mikhail Prokhorov, respectively. A Reuters article quotes a partner from a Moscow hedge fund as saying that Mazepin has “good” connections in Belarus, and that an Uralkali deal including a Russian, Mikhail Prokhorov, and Mazepin helps heal the relationship between Russia and Belarus on a political level. In December 2020, a Belarussian businessman and close friend of Mazepin, Dmitry Lobyak, sold his Uralkali shares to Mazepin, resulting in the latter consolidating an 81% ownership stake in Uralkali.

Dmitry Mazepin and his company Uralchem are defendants in a conspiracy case in Ireland where the majority owners of the chemical company TogliattiAzot (ToAZ) are seeking damages for a government-sponsored corporate raid which resulted in the state seizure and auction of their shares to Mazepin-controlled entities. The corporate conflict between Uralchem/Mazepin and ToAZ and its majority owners has been the subject of extensive press attention and has featured in various extradition and other legal skirmishes. For instance, in 2016 a Westminster magistrate judge, in the context of a Russian effort to extradite a former ToAZ executive from the United Kingdom, called Mazepin “a corporate raider” for his attempts to seize ToAZ. In the Irish case, the plaintiffs allege that Mazepin, Uralchem and other defendants engaged in a conspiracy in Russia involving unlawful abuses of its prosecutorial and judicial system to rule against ToAZ, its officers and shareholders. These included allegedly procuring improper arrest warrants and Interpol “red” notices (international arrest warrants) against ToAZ officers and those perceived to be connected with it.

In a separate dispute involving the purchase and ownership of a Formula 1 racing team, Mazepin brought a case against the bid administrators claiming that he made the highest bid to acquire the team, and that confidential information was disclosed to rival bidders. The Judge dismissed the claims in their entirety and found that the bid administrators had conducted the sales process “fairly and properly”.

Russian state banks Sberbank and VTB have provided very generous loans to Mazepin that have and continue to allow him to strengthen his control over the Russian fertilizer industry by consolidating assets. In October 2008, Sberbank loaned Uralchem $700 million to consolidate ownership over chemical plants in which it had a minority stake. In December 2013, VTB gave Uralchem a $4.5 billion loan to acquire shares in Uralkali. In December 2020, Sberbank provided a $4 billion loan to Uralchem for the purchase of further shares in Uralkali.

Dmitri Mazepin

Mazepin is believed to be a close ally to, and possibly a proxy in his ownership of Uralchem and Uralkali for, Sergey Chemezov, CEO of the Russian defense and technology company Rostec. Chemezov, who is part of Vladimir Putin’s inner circle, was added to the US Department of Treasury’s OFAC sanctions list on April 28, 2014. According to a press release by the Department of Treasury, he was listed as a sanctioned person because he was an official of the Russian Government. The press release mentions his close relationship with Putin, his leadership of Rostec, and his role on the board of Rosneft. The EU similarly sanctioned Chemezov in September 2014 for his close relationship with Putin and his leadership role in Rostec.

In March 2014, one month before he was sanctioned by the US, Chemezov was elected as chairman of the Board of Directors of Uralkali. In 2021, Chemezov’s chairmanship of Uralkali’s Board of Directors was renewed and additionally he was named Independent Director. He also serves as chairman of the board on the export arm of Rostec, Rosoboronexport, and VSMPO-AVISMA, a Russian titanium company partially owned by Rostec. Several senior Uralkali executives have taken up senior positions at VSMPO-AVISMA since 2019. This includes former Uralkali CEO Dmitry Osipov and former Uralkali CFO Anton Vishchanenko.

In the Russian media, a Kommersant article speculates that Chemezov was appointed to the Board of Directors of Uralkali to ensure the smooth functioning of management between Rostec and Uralkali. A Reuters article suggested that the changes to Uralkali’s ownership during the Uralkali-Belaruskali BPC cartel dispute in 2013 may have been a political move directed by the Russian government to bring Uralkali closer to Russian state control, and to satisfy a souring relationship with Uralkali’s counterpart in Belarus; a country where Mazepin is a native.

Both Uralchem and Uralkali’s governance have become centralized and significantly less transparent since the imposition of sanctions against Sergey Chemezov and Rostec in 2014, and the enactment of CAATSA in 2017. Over a period of just three years, Uralchem and Uralkali delisted from financial markets in both London and Moscow. Moreover, three months after CAATSA was signed into law in August 2017, Uralkali’s Board of Directors recommended to delist the company from the Moscow Stock Exchange. Moreover, the Board of Directors agreed that 10% of shares from Uralkali’s subsidiary “Uralkali-Technology”, would be sold to Mazepin, raising his ownership in Uralkali to approximately 30%. In December 2017, Uralkali delisted from the Moscow Stock Exchange, making it solely a private enterprise. In October 2021, Mazepin was named CEO of Uralchem, a company he principally owns, and he today also sits on the Board of Directors of both Uralchem and Uralkali.

Uralchem and Uralkali have notably embarked on an aggressive expansion in Africa, with operations in Zambia, Angola, Zimbabwe, Sudan, and most recently Nigeria. In Zambia and Zimbabwe, Uralchem and Uralkali plan to build a distribution hub in both countries as the governments struggle to provide fertilizers at an affordable cost to farmers (Zimbabwe). In Angola, Uralchem plans to build a fertilizer production plant, and in Nigeria it is planning to open a representative office and potentially establish a production plant focused on the West African fertilizer market. Dmitry Mazepin is chairman of the Russia-Zimbabwe Business Council as part of the Kremlin’s efforts to expand Russian influence through fertilizer sales, at a time when fertilizer imports are becoming increasingly expensive in local currencies.

 Dmitri Mazepin

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Page last modified: 27-04-2022 13:58:29 ZULU