In an exclusive revelation, The difference Source has uncovered that Sergey Kolesnikov, a wealthy oligarch, has received assistance from Morgan Stanley and Allen & Overy in his endeavor to acquire a significant Russian oil asset. Notably, Kolesnikov has been involved in supplying building materials to the Russian military, including for construction in occupied areas of Ukraine.
Originally from Russia and currently a Maltese citizen through the “golden passport” scheme, Kolesnikov is estimated to possess a substantial fortune of $1.2 billion (£940 million) due to his involvement in the building materials business, which he co-founded.
While only Poland has imposed sanctions on the 51-year-old oligarch, Ukraine has included him in its list of individuals for whom it seeks sanctions from the European Union.
The US investment bank, Morgan Stanley, and the prestigious London-based law firm, Allen & Overy—both renowned entities in their respective domains—have played a role in assisting Kolesnikov as he pursues control over the Verbluzhye oilfield. Situated in Astrakhan in southern Russia, this oilfield is reported to contain a substantial reserve of approximately 100 million barrels of oil.
This exclusive revelation underscores the intricate connections between finance, legal assistance, and controversial business activities, prompting scrutiny and potential legal implications for those involved. The story is expected to spark further investigation into the roles of Morgan Stanley and Allen & Overy in facilitating Kolesnikov’s pursuit of the Russian oil asset.
While no legal violations are suggested, the collaboration of blue-chip companies, namely Morgan Stanley and Allen & Overy, with oligarch Sergey Kolesnikov highlights a broader ethical dilemma. These reputable firms have been involved with an oligarch whose businesses profited from the Russian defense industry and the invasion of Ukraine. This occurrence sheds light on the continued engagement of major companies with figures linked to the Putin regime, despite global efforts to isolate them.
Kolesnikov’s company, Inflection Management, based in Cyprus, emerges as a creditor of Astrakhan Oil Corporation (AOC). A 2012 loan facility exceeding $70 million, negotiated by Morgan Stanley, links the two entities. Morgan Stanley aimed to help creditors, including Inflection Management, secure a majority stake in AOC’s subsidiary, the Russian drilling firm Southern Oil Company (UNK). However, Russian courts, citing a law against foreign ownership of strategic assets, have resisted these attempts. Ongoing proceedings at the London Court of International Arbitration now seek resolution.
In the Russian legal proceedings, criticism arose regarding the valuation of UNK shares, priced at one rouble (£0.01) by an expert witness presented by Morgan Stanley. A court judgment highlighted that an Allen & Overy partner, while providing an opinion on Morgan Stanley’s claim, lacked independence due to his position and his firm’s vested interest in achieving success for the client.
Notably, Allen & Overy, currently undergoing a merger with the US law firm Shearman & Sterling, announced the closure of its Moscow office in March 2022, citing the “illegal and senseless invasion of Ukraine and the ensuing humanitarian crisis.” Similarly, in December 2022, Morgan Stanley declared a cessation of new business ventures in Russia, limiting its activities to addressing pre-existing obligations for global clients.
This situation prompts reflection on the ethical considerations surrounding the business dealings of major corporations with individuals linked to controversial geopolitical events, and it raises questions about the responsibilities and accountability of such entities in the broader international context.
Kolesnikov’s TechnoNicol Ties to Russian Construction in Occupied Territories and Military Contracts Raise Concerns
Sergey Kolesnikov’s company, TechnoNicol, has been implicated in supplying materials for Russian construction projects in contentious regions, including Crimea and Mariupol. The products have also found use in Russian defense enterprises. Notably, TechnoNicol’s materials are featured in news reports illustrating reconstruction efforts in occupied Ukraine, raising ethical and legal questions about such business involvements.
Despite restricted access to details of military contracts in Russia, it is reported that TechnoNicol secured tenders to supply roofing, waterproofing, and thermal insulation materials to 18 defense enterprises, extending until at least 2018. The company’s sales in Russia reportedly surged, with profits in 2022 being 55 times higher than the previous year, as per Proekt investigative media.
Kolesnikov, however, declined to comment on these allegations for this article. In a previous interview with the German newspaper Taz, he claimed uncertainty regarding whether the businesses supplied by TechnoNicol were defense companies. He emphasized that he refrains from dealing with the arms industry, asserting that all orders were for civilian purposes. While he did not deny the use of TechnoNicol products in eastern Ukraine, he emphasized that the company is not a construction firm.
The Scottish government faced criticism in 2022 after it was revealed that it had supported an upgrade to a factory in Stirling owned by Kolesnikov’s Inflection Management company with almost £500,000 of public money. This revelation drew attention to the broader implications of public funds supporting ventures linked to individuals involved in controversial business activities.
These revelations raise concerns about the ethical considerations surrounding business dealings connected to contentious geopolitical events and underscore the need for scrutiny and accountability in such situations.