“Chain that connects us”: Telecom and Mass Communications Minister Nikolay Nikiforov’s “innovative” business model
Telecom and Mass Communications Minister Nikolay Nikiforov stands out among other ministers. Not only he is quite young, but private, too. There is not much news regarding his time in office. Meanwhile, his protégé is dealing damage outside of the IT field; it could even result in cancelation of certain 2018 FIFA World Cup matches.
The Moscow Court of Arbitration will begin hearing a case brought by the Ministry of Sport against PSO KAZAN building the Samara-Arena and Mordoviya-Arena stadiums (lawsuit No. 1, lawsuit No. 2). It is touching and laudable the Ministry of Sport is trying to settle this down in a civilized manner. However, Minister of Sport Pavel Kolobkov could sort the issue out much faster and more efficiently. All Kolobkov had to do to boost the construction was to talk to his colleague Telecom and Mass Communications Minister Nikolay Nikiforov. Nikiforov is a very influential man, and he has a lot of power over PSO KAZAN owner Ravil Ziganshin.
PSO KAZAN owner and Tatarstan State Council deputy Ravil Ziganshin is truly a servant of two masters. The first master is Tatarstan President Rustam Minnikhanov, whose favoritism helped PSO KAZAN become one of the largest Tatarstan real estate developers. The second master is Nikiforov who made Ziganshin the largest real estate developer and even a co-owner of Nikiforov’s Innopolis. It is worth mentioning that Ziganshin was not really worth mentioning business-wise prior to meeting these two. The Accounts Chamber launched an inspection following Nikiforov’s grand gesture. Rumor had it that Ziganshin is but his masters’ money keeper. This appears to be the case when talking about Nikiforov who has been subject to numerous state audits
The unusually young minister began his career in Tatarstan. There, Nikiforov was responsible for integrating the Electronic Government System. It was a lucky coincidence that Nikiforov was interested in IT, while President Medvedev was fond of various innovations. Being somewhat familiar with the President helped 28-year-old Nikiforov become the Tatarstan IT and Communications Minister. By the time he turned 30, Nikiforov had already become a federal minister.
Nikiforov went to Moscow with a long-term initiative to create a Russian equivalent of the Silicon Valley called Innopolis. Nikiforov’s project seemed appropriate and well-timed considering Skolkovo creators’ promises. Five years and more than 20b rubles ($333.7m) of public money later, Innopolis is nothing more than an unfinished project of a scientific cluster, where the Minister’s wife Svetlana Nikiforova is trying to pass for Russian Steve Jobs while the Ziganshins are trying to pass for Innopolis owners.
Nikiforov began discussing funding for Innopolis as soon as he moved to Moscow. Rustam Minnikhanov suddenly grew interested in modern technologies and supported Nikiforov from Tatarstan. Medvedev – who had become the PM again – kept true to his passion and greenlighted the project without thinking twice about it.
In profitable “polis”
OAO Innopolis was created on August 23, 2012. The Tatarstan Land and Property Relations Ministry, Tatarstan Central Depository, and Svetlana Ziganshina’s UK Prominvest became its owner. UK Prominvest was involved since the project was based on cooperation between the state and the private sector. It became apparent exactly what type of cooperation it was during creation of UK Prominvest authorized capital (1.5b rubles or $24.4m; plus owners’ shares were equal). The Tatarstan Land and Property Relations Ministry and the Tatarstan Central Depository paid in 500m rubles ($8.1m) each.
The Government allocated Telecom and Mass Communications Ministry 4.7b rubles ($76.5m). The Federal Agency for State Property Management was to buy 76% of Innopolis shares before 2013 was out. OAO Innopolis was to issue additional shares. This plan reeked of corruption. However, it got even worse than that. The newly appointed Minister got innovative and improved old-fashioned corrupt practices.
However, Russian innovations were obstructed by the fact that OAO Innopolis could not issue additional shares until all three shareholders fully paid in; the Tatarstan Central Depositary did not buy out its shares for some reason. The Ziganshins’ UK Prominvest owned 50% of the multibillion federal project for a while. Innopolis was hastily cloned in order to implement the budget; the 4.7b rubles were handed to the new company.
The Federal Agency for State Property Management and the first Innopolis became the owners of the new Innopolis that was soon renamed to Innopolis-City. The whole procedure is described in great detail in the Accounts Chamber’s report. However, why not repeat a trick if you got away with it before? Innopolis-City initially owned 1.5% of Innopolis’s authorized capital. However, the number soon grew to 2.54%. Soon, Innopolis-City handed a portion of UK Prominvest’s land to Innopolis; the land went up in price the day before because of Nikiforov’s shady practices.
2.54% does not seems to be much. However, it means the Ziganshins get to manage the entire land of the IT-city; Innopolis-City owns the better part of the land. The land has begun to yield dividends, too. For example, Khayman Development rented 3.4 hectares for 1.7m rubles ($27 600) per year. Innopolis-City owns the total of 650 hectares. PSO KAZAN got its slice of the pie, too. PSO KAZAN built a number of facilities worth 5b rubles ($81.3m).
Not by innovation alone
There is not enough space for all of Nikiforov’s cronies in Innopolis. Nikiforov turned into a business toy for his wife Svetlana. She uses Innopolis to find business geniuses and has poached many Kazan IT-park residents (she had managed the park prior to getting married). It is worth mentioning that Nikiforov figured out how to make use of his wife’s business savviness. She now owns the Startobaza Venture Company. OOO Avtodoriya is another company affiliated with Nikiforov; its systems for traffic violations detection are being integrated across Russia and have already brought in 1.5b rubles ($24.4m).
The Tatarstan IT Center is responsible for allocating public money allocated to Innopolis. Former geography teacher Tatiana Kamaletdinova is its Executive Director. Her most noticeable educational feat is having been Nikiforov’s class teacher back in the day.
Being neutral is the most important quality of the serving Telecom and Mass Communications Minister. He balances out shameless embezzlement by not paying any attention to violations of his agency. It was as if Nikiforov did not notice yet another inspection by the Accounts Chamber that discovered that Telecom and Mass Communications Ministry’s Rostelekom overstates prices for governmental contracts it implements. He even called the former Russian Post head who once paid himself a 95m ruble ($1.5m) bonus “an effective manager”.
He is just as loyal when it comes to politics. Nikiforov began his career promising development of the IT infrastructure. However, today he is totally in favor of the idea of developing Russia’s very own Golden Shield Project. He does not say a word regarding carpet blocking of web-sites by the Federal Service for Supervision of Communications, Information Technology and Mass Media. Nikiforov also promised to implement the Yarovaya law before the deadline and save trillions of rubles of public money while doing so. He may even keep this promise if he has yet another ingenious idea of how to steal even more money. Nikiforov did not say anything about those trillions going back to the state, after all.