Minister of Agriculture Aleksander Tkachev lobbies family business
Aleksander Tkachev, the Minister of Agriculture, generates ‘brilliant’ initiatives. Initially he had suggested to crush banned foreign products by bulldozers; now he wants to support the domestic winemakers – according to him, this would raise the birth rate. What are the true reasons behind the ideas and jokes of the minister?
Chateau de Tkachev
Upon being appointed in charge of the Ministry of Agriculture, Aleksander Tkachev, the ex-Governor of the Krasnodar Krai, has also taken a special niche in the media world. He started generating ideas that could earlier be heard only from Gennady Onishenko, the Head of the Federal Service for Supervision of Consumer Rights Protection and Human Welfare (Rospotrebnadzor). The first thing proposed by Tkachev upon becoming the minister was to destroy products illegally imported to Russia from Europe. The proposal was accepted enthusiastically, and the banned foods crushed by bulldozers became the main theme of jokes for a long time. Recently Tkachev made another – equally anecdotal – statement that the support of the domestic winemakers would raise the birth rate in the country. Joking apart, Aleksander Tkachev knows very well what he is talking about.
His wife Olga Tkacheva had owned until recently Chateau de Talyu company. Now she has officially quit this business, but the company still has close ties with the minister’s family. Andrei Skok owning a share in Yug–Biznespartner (South–Business Partner) Limited Liability Company is still in charge of it. Yug–Biznespartner had repeatedly acted as an intermediary in the acquisitions of new enterprises by N.Tkachev Agricultural Complex (a family business of clan Tkachev). Chateau de Talyu owns 120 ha of vineyards near Gelendzhik and is currently preparing to launch the production of its own premium class wines.
Aleksander Tkachev with his wife Olga
It is necessary to keep in mind that the planting of vineyards does not bring instant revenues – so Aleksander Tkachev had started taking care of his wife’s business while being the Governor of the Krasnodar Krai. First references to Chateau de Talyu in the press go back to 2008, while in 2012, Tkachev had advocated for the recognition of wines an agricultural product at a session of the Russian Champagne House. He has stated that this “would eliminate limitations for the industry development and open for us new perspectives: subsidies and tax preferences”. Apparently, by “us”, the Governor had meant his spouse. At that time, the total area of vineyards belonging to Chateau de Talyu was slightly more than 70 ha. A year later, wine has been recognized an agricultural product – but only wine made from the winemaker’s own (local) grape.
Chateau de Talyu vineyards
Another year later, Tkachev managed to increase subsidies for companies planting vineyards in the Kuban River basin – although, according to then-Prime Minister Dmitry Medvedev, the winemakers had already received governmental assistance in the amount of 1.5 billion rubles ($25.4 million) shortly before this. Of course, the lion’s share of these budget funds has ended up in the Krasnodar krai. By that time, the area of vineyards belonging to Chateau de Talyu has increased to 120 ha, and the company was about to start building its own winery worth at least $12 million. After being appointed the Minister of Agriculture, Tkachev has insisted to reduce the excise duty for winemakers producing wine from their own grapes. The tax has been reduced by more than 10 times: from 800 to 65 thousand rubles ($13.5–1.1 thousand). It is necessary to note that concurrently with dropping the excise duty in 2016, Aleksander Tkachev has promised to double the area of vineyards in the country from 87 to 140 thousand ha. It would be logical to assume that the area of vineyards belonging to Chateau de Talyu is expected to grow exponentially – similarly with the expansion of N.Tkachev Agricultural Complex in the recent years.
Factories to the Governor, lands to the Minister
N.Tkachev Agricultural Complex, the main creation of the Tkachev family, has recently become the leader on the Russian agrarian market. Prior to 2014, the holding had some 122.5 thousand ha of lands and over 30 enterprises, including poultry plants, meat and diary processing plants, two grain stores, etc. The story of Kristall (Crystal) sugar plant illustrates the acquisition mechanism used by the Tkachev family to appropriate these assets. In fall 2005, the plant operations were effectively blocked by court verdicts in cases related to administrative offences. Mikhail Lipsky, Chairman of the Board of Directors of Kristall, had frankly stated at that time that he is selling the plant because its work is hindered on purpose.
The holding was a major player on the agricultural market of the Krasnodar krai – but not at the national level. Despite the rumors about ties between the Governor’s family and the agricultural complex, no official information was available about it. Only upon becoming the Minister, Tkachev has admitted that the agricultural complex is his family business. Shareholders of N.Tkachev Agricultural Complex are still unknown. The Russian Government did not see any conflict of interest between the Minister of Agriculture and his relatives running the agricultural business. At that time, the holding was at the height of success.
The true ‘golden age’ has begun for N.Tkachev Agricultural Complex in 2014. The last two years of the Tkachev’s governorship in the Krasnodar krai were a complete failure. In two years, the region was shocked by the flood in Krymsk and massacre in Kushevskaya village. Not only hasn’t the bloody slaughter in Kushevskaya deprived Tkachev of the Governor’s chair, but even helped his relatives to make some money. The agricultural complex has acquired Sever Kubani (North of Kuban) Group of Companies earlier belonging to Sergei Tsapok and members of his gang. The law enforcement authorities have suddenly noticed the financial crimes committed by the Tsapok family, including multibillion loans fraudulently received from Rosselkhozbank. N.Tkachev Agricultural Complex has appropriated all the assets (40 thousand ha of land) of Sever Kubani Group of Companies by paying out its loans to Rosselkhozbank.
Territorial expansion: growth of N.Tkachev Agricultural Complex
The triumph of the Sochi Olympics, another source of income for the Governor’s family, was a redemption for Aleksander Tkachev. The Government of the Krasnodar Krai has established in 2009 Sochi-Park Open Joint Stock Company to build an entertainment park of the same name in the Imeretinskaya Valley. Roman Batalov, a son-in-law of Tkachev, was a Deputy General Director of Sochi-Park. A year later, the government has sold 90% of Sochi-Park shares to Nodaway Ltd. offshore company – the owner of above-mentioned Yug–Biznespartner company affiliated with the Tkachev family. Later Yug–Biznespartner has bought the remaining 10% of shares. The cost of the entertainment park was 9.14 billion rubles ($154.7 million).
In the same year of 2009, the regional government has established Tsentr Omega (Omega Center) company that participated in the construction of Adler-Arena, Formula 1 racing track, and the Main Sochi Media Center in Sochi. Officials close to Tkachev, including the Vice Governor of the Krasnodar Krai, were in charge of the company. The projects implemented by it had artificially inflated budgets; no open tenders were conducted; and the loans provided to Tsentr Omega by Vnesheconombank still remain outstanding. According to Petr Sokolenko, the Deputy of the Legislative Assembly of the Krasnodar Krai representing the Communist Party of the Russian Federation, the company has received 54 billion rubles ($913.7 million) from the budget; according to the Anti-Corruption Foundation, this amount is even higher – 69 billion rubles ($1.2 billion).Sokolenko claims that an attempt to initiate an audit of Tsentr Omega by the Chamber of Audit was blocked by Edinaya Rossia (the United Russia) Party.
Therefore, it is not surprising that after the Sochi Olympics, N.Tkachev Agricultural Complex has doubled its assets. In 2014, the holding has acquired Wimm-Bill-Dann diary production facilities in the Krasnodar krai and Leningrad region (five enterprises in total), thus, adding 30 thousand ha of land to its assets. The initial purchaser was Yug–Biznespartner that has later resold the assets to N.Tkachev Agricultural Complex. After that acquisition, Minister Tkachev has suggested to crush cheese with bulldozers. “We support our producers,” – Tkachev said without specifying what producers were meant. Finally, in 2015, N.Tkachev Agricultural Complex has acquired Valinor holding owing $600 million to Sberbank. Valinor had incorporated 14 agricultural enterprises with the land bank of 170 thousand ha located in the Krasnodar krai, Rostov region, and Stavropol krai. Now N.Tkachev Agricultural Complex is the largest landowner in Europe, its grain crop exceeds that in Bulgaria. By supporting the domestic producers with bulldozers, the Minister of Agriculture assists his closest kin. No conflict of interest at all, just excellent mutual understanding.