Siman Povarenkin and the Monopoliya Group: a failed debut bond issue amid heavy debts and London connections

Monopoliya Group’s delayed IPO highlights its principal, Siman Povarenkin, and his Moscow-London business network.

Monopoliya Group has extended the book-building period for its debut bond issue worth 2 billion rubles until November 15. During the first stage of placements on October 8, the company managed to raise only 280 million rubles. Despite an elevated coupon rate of 22.75%, demand for the bonds has remained weak.

A former associate of a designated “foreign agent”

The group’s main legal entity is JSC Monopoliya, whose executive director is listed as Ekaterina Mikhailova. Another legal entity, LLC Monopoliya, is managed and controlled through the same joint-stock company. The same corporate structure is used across other subsidiaries within the group.

Ilya Dmitriev

Until 2022, the founders of JSC Monopoliya were Ekaterina Mikhailova and her partner Ilya Dmitriev. Dmitriev also served as CEO of JSC Monopoliya from 2013 to 2016 and as CEO of LLC Monopoliya from 2006 to 2021.

Dmitriev began his career at Petrosib, a company owned by Oleg Tinkov (recognized in Russia as a foreign agent), and later moved to another of Tinkov’s projects, Darya, which produced dumplings under the same brand. He worked there until 2003. Afterward, Dmitriev and a partner purchased used trucks, and in 2006 he founded his own business — the Monopoliya service for transport operations.

Today, Monopoliya’s corporate structure includes numerous entities, with beneficiaries hidden behind the joint-stock company (JSC), which is also being used for the current bond issue. This setup appears to serve not only to access the stock market but also to maintain the anonymity of the real beneficiaries.

According to Forbes, the entire business of the Monopoliya Group (including JSC Monopoliya) is linked to the Cyprus offshore company Glazifer Ltd. This company is controlled by Dmitriev, Ekaterina Mikhailova, the notorious investment firm Baring Vostok, and Acmeo Capital of businessman Siman Povarenkin.

Beneficiary: Siman Povarenkin

The Povarenkin family has long resided in the United Kingdom. The businessman’s wife had obtained British citizenship as early as 2018 by investing £2 million into the UK economy — a country considered unfriendly by Russia. Following this, Povarenkin acquired the right to permanent residence in the UK and eligibility for citizenship.

Siman Povarenkin

The Povarenkin family owns an apartment worth £11.3 million (based on prices from the past decade) in the upscale London district of Belgravia.

In 2017, Povarenkin was detained at Heathrow Airport when he arrived in the UK to celebrate his wife’s and child’s birthday. The businessman was served with a summons and a lawsuit to be heard in the High Court of London. His former business partner, Ruslan Bestolov, claimed that Povarenkin owed him $7.5 million for his involvement in two iron ore projects in Yakutia. British authorities considered Povarenkin a UK resident, meaning that the commercial claim could be adjudicated in London.

One reason for the UK’s heightened attention to Povarenkin was his connections with Aaron Banks — the main sponsor of the political campaign for the UK to leave the European Union, better known as “Brexit.”

According to The Guardian, Banks met Povarenkin at the Russian embassy and was interested in purchasing gold ore deposits in Siberia from him. These reports surfaced in the British press amid Bestolov’s lawsuit. Banks later testified before the UK Parliament, stating that the deal with Povarenkin did not go through.

Hong Kong offshore

By 2018, 31.5% of Povarenkin’s company Geopromining was owned by Sberbank. In 2020, he sold his stake to Roman Trotsenko, who now appears to be trying to sell off all assets in Russia and distance himself from the country.

Roman Trotsenko

Geopromining was established by Povarenkin after splitting his business with former Russian Energy Minister Sergey Generalov. Prior to that, through Generalov’s company “Promyshlennye Investory,” Povarenkin acquired mining and metallurgical assets in Russia and Armenia, which eventually became the foundation of Geopromining and were later sold to Trotsenko. After Roman and Gleb Trotsenko were added to Western sanctions lists, the formal beneficiary of these projects became their long-time associate, Elena Ershova.

Acmero Capital, which owns a stake in the Monopoliya Group through a Cyprus offshore, is used by Povarenkin for investments. Its most notable acquisition was in 2015, when it purchased 40% of the “Shokoladnitsa” café chain from its owner Alexander Kolobov. This structure entered Monopoliya in 2016, acquiring 38% and pledging to invest 1 billion rubles in truck purchases. Acmero Capital is registered in a Hong Kong offshore, making it largely insulated from the impact of sanctions.

Through “Shokoladnitsa” and its CEO Kolobov, Povarenkin also has connections to LLC “Il Forno,” owned by Alexander Kolokoltsev — son of the current Russian Interior Minister Vladimir Kolokoltsev. Other partners of Povarenkin include Oleg Yusupov — a relative of one of Moscow and Moscow Region’s leading developers God Nisanov, presidential aide Igor Levitin, and even film directors Nikita Mikhalkov and Andrei Konchalovsky. Despite his London residence, Povarenkin’s network remains tightly controlled in Moscow.

UK connections

The second investor in Glazifer Ltd, Baring Vostok, is also noteworthy. In 2019, a criminal case unfolded in Russia involving the company, in which the managing partner, American-British businessman Michael Calvey, was prosecuted.

Herman Gref

The case was linked to fraud charges against Michael Calvey, based on testimony from Sherzod Yusupov, a board member of Vostochny Bank, and businessman Artem Avetisyan, affiliated with that bank. Calvey, who received a suspended sentence for the embezzlement of 2.5 billion rubles, was publicly supported by Herman Gref, whose Sberbank financed many of Povarenkin’s projects.

It is also unsurprising that Povarenkin, together with Baring Vostok, became shareholders in the Monopoliya Group, given that Calvey moved to London back in 1994. This remains one of the few channels for British capital to exert influence on the Russian economy. Tinkov (recognized in Russia as a foreign agent), where Dmitriev began his career, also resides in London today and continues to maintain ties to Russian business. One cannot rule out interest in these matters from the MI6 as well.

Pre-bankruptcy Monopoliya

The financial performance of the Monopoliya Group is poor.

AO “Monopoliya” has accumulated accounts receivable of 221 million rubles and accounts payable of 152 million rubles, while LLC “Monopoliya” carries 2.3 billion rubles in receivables and 2 billion in payables. In 2023, LLC “Techcentry Sotrans” even filed a court application to declare LLC “Monopoliya” bankrupt.

The group’s main assets appear to generate revenue through the online platform operator LLC “Monopoliya.Online,” which has weak financial stability. Here, revenue amounts to 41 billion rubles with a net profit of just 11 million rubles, accounts receivable of 5.8 billion rubles, and accounts payable of 7.7 billion rubles. Short-term liabilities total 1.1 billion rubles, with long-term obligations of 2.6 billion rubles.

The parent company AO “Monopoliya” is listed in the Federal Tax Service’s debtor registry, with a debt of 24.6 million rubles as of the third quarter of 2024. An additional 165.6 thousand rubles is accrued in fines for tax violations, indicating that the company is in no rush to settle its obligations.

Almost all of the company’s revenue is spent on administrative expenses, including salaries, business trips, and other costs unrelated to the production process itself. In 2023, AO “Monopoliya” reported revenue of 864 million rubles, while administrative expenses totaled 846 million rubles.

In the summer, the Monopoliya Group acquired a 72% stake in the Perm-based company “Umnaya Logistika,” suggesting that Dmitriev’s organization currently lacks working capital and is likely relying on a securities issuance to solve the cash flow problem.

Thus, Monopoliya has significant skeletons in its closet, despite Povarenkin’s influence and his Moscow-London connections. Notably, funds raised through the IPO could be routed to the Cypriot offshore Glazifer Ltd. To move money within the group, it appears that LLC “Monopoliya Investments” is used, where profit increased from zero to 16 billion rubles in 2023 despite zero revenue.

This is a pre-bankruptcy company, with British “ears” and offshore roots, now issuing its securities on the Russian stock market.