Among the people the United States sanctioned on Thursday as part of
its drive to put pressure on Russia for its intervention in Ukraine
was businessman Gennady Timchenko, a long-time acquaintance of Putin
and, until this week, co-owner of Geneva-based Gunvor, which trades
nearly 3 percent of the world's oil.
In announcing the sanctions, the Treasury Department went a step
further, adding a single sentence that hits squarely at one of the
most controversial topics that Putin has faced in 13 years as the
Kremlin ruler and head of the government.
"Timchenko activities in the energy sector have been directly linked
to Putin. Putin has investments in Gunvor and may have access to
Gunvor funds," the statement said. (Treasury announcement: http://r.reuters.com/baq77v)
The U.S. Treasury Department declined further comment on what
information it has about Putin's investments in Gunvor and how
exactly he could have access to Gunvor's funds.
It provoked a quick and furious response. Gunvor said the statement
was "outrageous" and "blatantly false."
"Gunvor categorically denies that Vladimir Putin has or has ever had
any ownership or that he is a beneficiary of our business directly
or indirectly," Gunvor said.
Gunvor has repeatedly said that Timchenko and Chief Executive
Officer Torbjorn Tornqvist had equal stakes each of around 45
percent and the remaining 10 percent was owned by the staff.
Timchenko has repeatedly denied that Putin helped him create his
vast business empire, yet because of his long and close relationship
with Putin speculation has persisted.
Putin's spokesman Dmitry Peskov called the sanctions "unacceptable"
and said the Kremlin was studying the impact of the inclusion of
Timchenko on the list.
He did not comment on the allegations that Putin has investments in
Later in the day a Treasury official clarified that Timchenko's
designation would not affect Gunvor since Timchenko owned less than
At the same time, Gunvor announced that Timchenko had sold his share
to Tornqvist on Wednesday, a day earlier. Tornqvist now owns 87
percent, while 13 percent belongs to the employees.
Still, the growing concern among analysts is that the accusation,
and the direct blow at Putin's closest allies, may provoke an even
more dramatic response from Moscow — potentially even using its vast
energy supplies as a weapon against the West.
Putin said this month he believed the West "crossed the line" in
Ukraine after leaked audio recordings have shown U.S. diplomats
discussing how to oust Kremlin-backed Ukrainian President Viktor
Yanukovich and which pro-Western politicians should form the new
Russia responded on Thursday by sanctioning several U.S. politicians
but analysts said more will likely follow after U.S. accusations
about Putin's personal enrichment.
"We expect asymmetrical moves by Moscow in coming days," said
think-tank and risk consultants Eurasia group. "These could be in
the security area (suspending an arms control agreement) or they
could involve measures against U.S. business."
Russia supplies a third of Europe's gas and between a fifth and a
fourth of its oil.
It has previously twice suspended gas supplies to Ukraine and Europe
following pricing spats with Kiev.
[to top of second column]
The wording of the statement goes far beyond anything that has been
said previously about Putin. He has faced accusations for years,
typically from political opponents, that he helped Timchenko create
the Gunvor empire.
None have ever provided any evidence, and no media outlets have ever
reported any proof of ownership interests in Gunvor.
Putin worked in the mayor's office in the early 1990s when Timchenko
and his friends, Putin said, spun off an oil trading unit of the
Kirishi oil refinery.
Gunvor grew spectacularly since then with a turnover of $93 billion
in 2012 compared with $5 billion in 2004. It traded large volumes of
oil of Russian state companies such as Rosneft at the end of last
decade but since then ceded its leading positions and now focuses on
trading in Europe and Asia.
According to WikiLeaks cables, released in 2010, John Beyrle, the
former U.S. ambassador to Moscow, reported that Gunvor's "secretive
ownership is rumoured to include prime minister Putin."
A call made by Reuters to Eurasia Foundation, where Beyrle works now
after leaving the foreign service, was not answered late on Thursday
The first time Putin addressed the issue directly was in 2011.
"I assure you, I know that a lot is being written about it, without
any participation on my part... I have known the citizen Timchenko
for a very long time, since my work in St. Petersburg," Putin told a
group of Russian writers.
"I never interfered with anything related to his business interests.
I hope he will not stick his nose into my business either," Putin
Putin has repeatedly said that he has read in the press reports
about his immense wealth and that he was even the world's richest
man but denied those reports as nonsense.
"Yes it is true. I'm not only the richest man in Europe but in the
whole world. I'm collecting emotions," he told reporters in 2008.
Talk of vast personal riches "is all rubbish."
KILLING THE RUMOR?
In response to the statement from Washington, Gunvor said its
ownership structure was confirmed during its 2013 $500 million bond
issue, co-led by Goldman Sachs.
"They can attest to the fact that, although not required, Gunvor
undertook an enhanced level of due diligence in our prospectus,
normally only required in the U.S. to demonstrate confidence in our
business and in acknowledgement of the high level of scrutiny we
withstand," a Gunvor's spokesman said.
Goldman said it could not immediately comment on the issue.
(Reporting by Dmitry Zhdannikov; editing by Jonathan Leff and
[© 2014 Thomson Reuters. All rights
Copyright 2014 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed.