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FOCUS: Russia-Ukraine War

How Crimea Was Carved Up And Sold At Auction To Putin's Oligarch Pals

After the annexation of Crimea, the peninsula's prized resources were identified and distributed among Russian oligarchs with connections to the Russian President, handing out everything from wine vineyards to hockey clubs to steelworks.

How Crimea Was Carved Up And Sold At Auction To Putin's Oligarch Pals

December 2019, at the opening ceremony for the Crimean Bridge rail link, Russian Transport Minister Yevgeny Ditrikh andPresident Vladimir Putin.

Aleksey Nikolskyi/Kremlin Pool / Planet Pix via ZUMA Wire
Important Stories

After Russia's annexation of Crimea in 2014, Russia didn't just add land and people to its population. It also paved the way for oligarchs to dismantle the peninsula's state and private enterprises.

Russian independent news Vazhnyye Istorii (Important Stories) has conducted an in-depth investigation into the identities of Vladimir Putin’s friends who now own virtually the entire peninsula.

Stay up-to-date with the latest on the Russia-Ukraine war, with our exclusive international coverage.

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Nationalization began in Crimea immediately after the annexation. Ukrainian state property became Russian, or rather Crimean, according to a resolution entitled “On the issues of managing the property of the Republic of Crimea.”

The list of what was taken over was long, and it is still growing. It includes thousands of businesses, apartments and land plots. The actual owners received no compensation, and any attempts to file lawsuits in Russia were in vain.

"In Crimea, the courts did not accept a single document on the right of ownership from people,” says Crimean lawyer Zhan Zapruta. “The law was placed in a compromised position, and they [the Russians] did with it what they wanted.”

Part of the seized property was put up for privatization. Between 2014 and 2022, there were 967 tenders in Crimea. More than €350 million worth of property (the total starting value) was sold there.

Yuri Kovlachuk — Vineyards

Yuri Kovalchuk, a friend of Vladimir Putin from St. Petersburg, was interested in Crimean winemaking. First, a company called Yuzhny Proekt (“Southern Project”) owned by his Rossiya Bank, purchased the Novy Svet champagne factory. It then bought the oldest and most famous enterprise in Crimea, the Massandra Winery.

The value of its vineyards alone was estimated at billions of euros.

In addition to production facilities, Massandra owns about 10,000 hectares of land and the world's largest collection of wines, listed in the Guinness Book of Records. The Crimean authorities put Massandra up for auction for only €64 million, while the value of its vineyards alone was estimated at billions of euros.

Entities associated with Yuri Kovalchuk also purchased dacha no.1, also known as Wisteria, a complex that was once a top summer destination for Kremlin officials.

Rossiya Bank also took control of Simferopol International Airport. in 2016, the Crimean authorities signed an investment agreement, transferring it to the Simferopol International Airport company with the promise of building a new terminal. The beneficiaries of the company are Yuri Kovalchuk and his partner Oleg Zhestkov. In addition, the Belbek airport in Sevastopol, the largest city in Crimea, was transferred to their control.

Opening of the Crimean Bridge on May 15, 2018, President Vladimir Putin stands alongside oligarch Arkady Rotenberg, in the blue polo shirt.


Arkady Rotenberg - Resorts

Another of Putin’s friend from St. Petersburg, Arkady Rotenberg, focused on tourism. At auctions, he received the four largest resorts complexes in Crimea, all of which were sold for knock-down prices. A couple of years after the tenders, Rotenberg admitted that the complexes were under his control, and promised to invest about 15 billion rubles ($211 million) in their reconstruction.

Rotenberg also acquired the communications operator Krymtelecom. He was probably interested not so much in the operator's business but in the 105,000 square meters of its premises and 22 hectares of land. Another Crimean state-owned company, Krymtekhnologii, was also taken over by a company close to Rotenberg. It owned 20 hectares of land and 78,000 square meters of premises at the time of privatization.

Gazprom - Dachas and hockey clubs

Russian state-owned energy company Gazprom acquired Yakov Zhukovsky's dacha (a country home) “New Kuchuk-Koy." The estate had previously belonged to the Ukrainian oligarch Rinat Akhmetov.

In 2016, the Foros sanatorium was also "sold" to the Federation of Trade Unions of Tatarstan. There was a row between the new owners of Foros and local residents because of building development of the Forossky Park, where the complex's buildings are located.

In the park, the construction of a children's sports base for the Ak Bars hockey club began after centuries-old trees were felled. The main sponsor of the project is the oil company Tatneft, which belongs to the government of Tatarstan.

Vladimir Vikhlyantsev - Metallurgy and railroad switches

The Ukrainian oligarch Rinat Akhmetov owned two factories in Crimea — the Kerch Switch Plant (that produced railroad switches) and the Kerch Metallurgical Plant (that produced enamelware).

The Crimean authorities decided to “save the factories from bankruptcy” and nationalized them by merging them into the state-owned enterprise Kerch Metallurgical Plant, which was sold to the Moscow Company Promstrelkom in 2020. It belongs to Vladimir Vikhlyantsev, who has worked in both the prosecutor's office and in the private sector, including insurance companies.

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FOCUS: Russia-Ukraine War

What Zelensky Won't Say Out Loud: Ukraine Is Running Short On Troops

Ukraine has a recruitment problem, with some units at only 70% of their intended strength. But President Zelensky is unwilling to talk about mass mobilization. The result is a parallel reality, with more recruitment coming from rural areas and lower classes, and some urbanites feeling victory is not too far, and their sacrifice is not needed.

photo of Zelensky and a Ukrainian soldier

Zelensky and a Ukrainian soldier.

Rustem Khalilov, Mykhailo Krygel & Olga Kyrylenko

KYIV — Walking through the center of Kyiv in the fall of 2023 can make you feel like you’ve gone back in time. The atmosphere in the city seems to transport you to either a carefree past or a promising future.

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You'll find bustling cafes filled with people enjoying oat milk lattes, business lunches, and people zipping around on scooters.

Amongst these images of ‘normal life’, the "Field of Memory" on Maidan Square, adorned with thousands of flags bearing the names or call signs of fallen soldiers, serves as a poignant reminder of the ongoing war. Lights and billboards of the Armed Forces of Ukraine beckon citizens to "join their ranks." But these often go ignored.

Military chaplain Andriy Zelinskyi has diagnosed this situation as "discursive incompatibility."

“An entirely self-contained and substantial illusion of an alternative reality has emerged,” he says. “A reality that acts as an escape from the pain, wounds, and losses of war. This alternative reality poses a significant threat to the unity needed to effectively resist Russia.”

One segment of society has been in the trenches for a year and a half, witnessing the daily horrors of destruction, injury, and the loss of comrades. Meanwhile, another segment lives on in cities like Kyiv, Lviv, or Odesa, offering donations, or just thinking about contributing, while attempting to distance themselves from the war as much as possible.

The government has also played a role in creating and maintaining this alternative reality. In its public communication, full-scale mobilization is a taboo. An honest conversation about mobilization as a guarantee for survival and eventual victory seems "out of place" when elections are looming.

Periodically, cracks in this alternative reality emerge. For instance, a publication in TIME magazine highlighted that in some military branches, personnel shortages were more critical than those of weapons and ammunition. The article was dismissed by Ukrainian authorities as nonsense.

In the meantime, without waiting for the transition to full-scale mobilization, some military units are taking matters into their own hands, actively seeking and motivating individuals who are willing to don a military uniform and bear arms.

Following the challenging defense of Bakhmut and Zaporizhzhia, it became clear that the Ukrainian military was in dire need of reinforcements.

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