Roman Abramovich
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Categories: 1966 births | Living people | Russian Jews | Jewish businesspeople | Russian billionaires | Russian businesspeople | Russian politicians | Chelsea F.C. chairmen and investors | Russian football chairmen and investors | Russian adoptees | Russian oil industrialists | Yukos | Oil magnates
Roman Arkadyevich Abramovich (IPA: [rɐˈman ɐrˈkadʲjevʲɪtɕ ɐbrɐˈmovʲɪtɕ]; Russian: Рома́н Арка́дьевич Абрамо́вич; born on 24 October 1966 in Saratov, Russian SFSR, USSR) is a Russian billionaire and the main owner of private investment company Millhouse Capital, referred to as one of the Russian oligarchs. According to the 2007 Forbes magazine, as of 3 August 2007, he had a net worth of $18.7 billion,[1] and according to Russian Finance magazine, as of January 2007, his fortune was 551.0 billion rubles.[2] He was considered to be the richest person currently living within the United Kingdom in 2003.[3] The stress on his family name is often placed on the second syllable (Abrámovich) when pronounced in English, whereas the original Russian name is stressed on the third (Abramóvich). In Russia, Abramovich is prominent as the governor of Chukotka, a post to which he was elected in 2000. He is most famous outside Russia as the owner of Chelsea Football Club, an English Premiership football team, and for his wider involvement in European football. Despite his high profile around the world, Abramovich makes virtually no public statements about his activities. In 2003 Roman Abramovich was named Person of the Year by Expert magazine, influential and respected Russian business weekly. He shared the title in 2003 with Mikhail Khodorkovsky.
Early life and educationBorn into a Jewish family[4] , Roman's paternal grandparents were exiled to Siberia from Tauragė, Lithuania by the Soviets after the occupation of Lithuania in 1940.[5] Roman grew up as an orphan. His mother, Irina Ostrowski Abramovich, died from bacteremia as a result of a back-alley abortion when Roman was one year old.[6] His father Arkady Abramovich was killed in an incident on a construction site when Roman was three years old.[6] Abramovich grew up in his uncle's family in Ukhta and with his grandmother in Moscow. [6] Before moving to Moscow he and his sister lived in Syktyvkar, the capital city of the Komi Republic. Abramovich attended the Industrial Institute in the city of Ukhta before being drafted into the Soviet Army. After military service, he studied briefly at the Moscow State Auto Transport Institute before taking a leave of absence from academics to go into business. He later earned a correspondence degree from the Moscow State Law Academy. Post-Soviet privatization and business successAbramovich started his commercial activity in the late 1980s when Soviet president Mikhail Gorbachev's reforms permitted the opening of small private businesses, known as co-operatives. In 1992 to 1995 Abramovich founded five companies that conducted resale and acted as intermediaries, eventually specializing in the trading of oil and oil products. In 1995 Roman Abramovich, together with Boris Berezovsky, acquired the controlling interest in the large oil company Sibneft. The deal was within the controversial loans-for-shares program and partner paid $100m for half of the company, only slightly below the stake's stock market value of $150 million at the time. The fast-rising value of the company led many observers, in hindsight, to suggest that the real cost of the company should have been in the billions of dollars.[6] During the 1990s, through their holding company Millhouse Capital, Abramovich and his business partner Eugene Shvidler acquired significant stakes in Russia's largest air company Aeroflot and several aluminium plants from Trans World Group owned by David and Simon Reuben which were merged with the metals assets of Oleg Deripaska to create the aluminum giant Rusal. Millhouse LLC, as it is now known, also invested in several smaller companies in the automobile industry, pharmaceuticals, food processing, real estate and other sectors. Millhouse divested itself of several key assets in 2002–2005. Most notably, the company sold its stake in Sibneft to state energy giant Gazprom for $13 billion, and its stake in Rusal to Oleg Deripaska for $2 billion. In 2006, Millhouse reinvested some of the proceeds by acquiring a 41% stake in Evraz Group, Russia's largest domestic steelmaker and one of the top 10 internationally. In 2004, Swiss criminal investigators abandoned an investigation into an alleged fraud involving a $4.8 billion loan from the IMF to Russia, in which Abramovich was one of the investigators' key suspects, after the United States and Russia refused to divulge information on the scandal. No evidence linking Abramovich to the IMF funds was ever reported. Despite maintaining that his primary residence is Moscow, Abramovich is considered the wealthiest person to live in the UK, declared by the Sunday Times Rich List 2006, with an estimated fortune of £10.8 billion. Abramovich qualified for the list by virtue of retaining residences in Knightsbridge, London, and Sussex. His 440-acre (1.8 km²) estate in West Sussex was previously owned by King Hussein of Jordan. It has a swimming pool, a clay pigeon shoot, a rifle range and a go-kart track.[7] Political careerIn 1999, Abramovich was elected to the State Duma as the representative for the Chukotka Autonomous Okrug, an impoverished region in the Russian Far East. He started the charity Pole of Hope to help the people of Chukotka, especially children, and in December 2000 was elected governor of Chukotka, replacing Alexander Nazarov. Since then he has invested hundreds of millions of pounds in Chukotka, which has paid for a college, a hospital, a pre-school and hotels in Anadyr, as well as renovating the airport and funding new or renovated schools in many small towns and villages. He has also used Chukotka as a tax haven for Sibneft, though the company re-invested most of its tax savings in the region and has been exploring for oil there as part of the governor's drive to boost the local economy. Abramovich said that he would not run for governor again after his term of office expired in 2005, as it is "too expensive", and he rarely visits the region. However, Russian President Vladimir Putin changed the law to abolish elections for regional governors, and on 21 October 2005 Abramovich was reappointed governor for another term. In 2006 Abramovich used his power as governor to help out the explorer Karl Bushby who was deported from the region for border violations after walking from Alaska into Russia during his attempt to walk round the world.[8] Abramovich was awarded the Order of Honor for his "huge contribution to the economic development of the autonomous district [of Chukotka]", by a decree signed by the President of Russia.[9] Abramovich and European footballChelsea F.C.
In June 2003, he became the owner of the companies that control Chelsea Football Club in the United Kingdom. He had, apparently, investigated the possibility of purchasing several other clubs before deciding on Chelsea, who were financially vulnerable at the time. The deal immediately raised his profile in Britain. As soon as Abramovich took control, he poured massive investment into the club (estimated at £587 million to February 2008), assuming the £80m debt burden and immediately making available substantial transfer funds. The club also embarked on an ambitious programme of commercial development, with the aim of making it a worldwide brand, and announced plans to build a new state-of-the-art training complex in Cobham, Surrey.[10] Chelsea finished their first season after the takeover in 2nd place in the Premiership, from 4th the previous year, and reached the semi-finals of the Champions League. A new manager, José Mourinho, was recruited and Chelsea ended the following season as league champions. In the four years since the takeover the club have won five major trophies, more than any other English club in the same period. It is argued that Abramovich's involvement with Chelsea has distorted the football transfer market throughout Europe [11], as his wealth often allows the club to purchase players virtually at will (frequently at inflated prices), without regard for the effects on the club's financial outturn, as was seen in the year 2005 when Abramovich allegedly offered AC Milan a world record fee of £89.8M for the then European Footballer of the Year, striker Andriy Shevchenko. Shevchenko did eventually join Chelsea in 2006 for a British record transfer fee of around £30m. The spending has, to some extent, seen wealth re-distributed throughout the game, with the combined fee of £12.5m paid to West Ham United for Glen Johnson and Joe Cole helping to avert administration.[12] In the year ending June 2005, Chelsea posted record losses of £140 million and the club is not expected to record a trading profit before 2010, though this did decrease to reported losses of £80.2 million year ending June 2006.[13] In a December 2006 interview Abramovich stated that he expected Chelsea's transfer spending to fall in years to come [14], although he subsequently seemed to move away from that position[15]. He is also present at almost every game Chelsea play and shows visible emotion during matches, a sign taken by supporters to indicate a love for the sport, and usually visits the players in the dressing room following each match, although this stopped for a time in early 2007 as rumours of a feud between Abramovich and Chelsea manager Jose Mourinho appeared in the press.[16] In a shocking development in the early hours of 20 September 2007, Jose Mourinho announced his exit as Chelsea manager by mutual consent with the club following a meeting with the board.[17] Former Israel coach and Chelsea's director of football, Avram Grant, was named as his replacement.[18] Ever since Grant had joined Chelsea (in the summer of 2007) there had been friction between him and Mourinho. Mourinho reportedly told Grant not to interfere in team affairs but with Abramovich's backing, Grant's profile at the club rose after he was made a member of the board. This event apparently did not go down well with Mourinho and may have contributed to his surprise exit.[19] CSKA MoscowIn March 2004, Sibneft agreed to a three-year sponsorship deal worth $58 million with the Russian team CSKA Moscow. Despite the company explaining that the decision was made at management level, some viewed the deal as an attempt by Abramovich to counter accusations of being unpatriotic which were made at the time of the Chelsea purchase. UEFA rules prevent one person owning more than one team participating in UEFA competitions, so Abramovich has no equity interest in CSKA. A lawyer, Alexandre Garese, is one of his partners in CSKA. Following an investigation, he was cleared by UEFA of having a conflict of interest.[20] Nevertheless, he was named most influential person in Russian football in the Russian magazine Pro Sport at the end of June 2004. In May 2005, CSKA won the UEFA Cup, becoming the first Russian club ever to win a major European football competition. However, in October 2005, Abramovich sold his interest in Sibneft and the company's new owner Gazprom, which sponsors FC Zenit Saint Petersburg, cancelled the sponsorship deal. Russian national teamImage:RomanAbramovic.jpg
Abramovich at the World Cup in Germany
Abramovich also played a large role in bringing Guus Hiddink to Russia to coach the Russia national football team.[21] Piet de Visser, a former head scout of Hiddink's club PSV Eindhoven and now a personal assistant to Abramovich at Chelsea, recommended Hiddink to the Chelsea owner.[22] National Academy of FootballIn addition to his involvement in professional football, Abramovich sponsors a foundation in Russian called the National Academy of Football. The organization sponsors youth sports programs throughout the country and has constructed more than fifty football pitches in various cities and towns. It also funds training programs for coaches, prints instruction materials, renovates sports facilities and takes top coaches and students on trips to visit professional football clubs in England, Holland and Spain. In 2006 the Academy of Football took over the administration of the football academy at Primorksy, near Togliatti, Samara region, where over 1000 youths are in residence, following the death at 38 of its founder, Yuri Konoplev.[23] Relationship with KremlinAbramovich's close relationship with Boris Yeltsin and his family was well known.[24] At first he was described as an aide to the powerful tycoon Boris Berezovsky: "At every stage of Berezovsky's rise, Abramovich was there, watching and learning."[25] The proposed merger of Sibneft with Yukos was seen by most as a move to distance himself from Russia, at a time when the Kremlin appears to have decided to bring at least some of the oligarchs to account for their colourful past business practices. Abramovich was a close associate of controversial Boris Berezovsky who sold him his stake in Sibneft, although in July 2005 Berezovsky announced his intention to sue Abramovich in the British courts for pressuring him into selling most of his Russian assets cheaply to Abramovich after Berezovsky fled the country.[26] The Kremlin press service reported that Abramovich's name had been sent for approval as governor for another term to Chukotka's local parliament, which confirmed his appointment on 21 October 2005. Chris Hutchins, a biographer of Vladimir Putin, claims that the relationship between the Russian president and Abramovich is like that between a father and a favourite son; when rumours began about the latter's relationship with Zhukova, Putin reportedly told him "to clean up his act".[27] Reports of such a conversation are hearsay and have never been verified. Abramovich himself has stated that his relationship with Putin is professional, as signified by his use of the Russian language's formal "вы" in addressing Putin, as opposed to the informal "ты".[28] Family, other interests, and activitiesAbramovich has been married twice, to Olga (divorced 1990), and to Irina (née Malandina) in 1991 (divorced 2007). He and Irina have five children. On 15 October 2006, the News of the World reported that Irina had hired two top UK divorce lawyers, following reports of Abramovich's close relationship with a 26-year old beauty called Daria Zhukova, the former girlfriend of tennis player Marat Safin. It was speculated that a future divorce settlement (amounting to a conjectured £5.5 billion) might be the highest ever on record. The Abramoviches replied that neither had consulted attorneys at that point.[29] However, they later divorced in Russia in March 2007, with a settlement reported as being $300 million.[30] Roman Abramovich sponsored an exhibition of photographs of Uzbekistan by renowned Soviet photographer Max Penson (1893–1959) which opened on 29 November 2006 at the Gilbert Collection at Somerset House in London. He previously funded the exhibition "Quiet Resistance: Russian Pictorial Photography 1900s-1930s" at the same gallery in 2005.[31] Both exhibits were organized by the Moscow House of Photography. Boats and planesImage:YachtPelorusMooredInLubeck.jpg
MV Pelorus after her 2004 refit to Abramovich's own requirements by Blohm & Voss
Abramovich has become the world's greatest spender on luxury yachts, and had been linked to five boats in what the media have called "Abramovich's Navy":[32][33]
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