In December 2018 Atanas Bostandjiev stepped aboard a Bombardier Global 5000 personal jet at Moscow’s Vnukovo airport and flew to London.
The following afternoon the shaven-headed Bulgarian financier gathered the executives at his funding fund of their glass-fronted places of work near Savile Row.
Ahead of the assembly, certainly one of his workers had drafted a memo on a delicate concern: the way to purchase affect in politics.
Gemcorp, the rising markets funding group Bostandjiev had based 4 years earlier, was searching for to construct “informal channels of communication at a senior level of government” in a variety of nations, together with a few of the most corrupt on the planet.
“Which individuals we target for this role will vary from country to country, and will depend on our range of contacts and the nature of the regime,” the memo mentioned, in line with a replica seen by the FT.
But British politicians have been a particular case.
“While there is certainly a deep pool of ex-ministers and officials ready to take our money in return for some vague ‘access’ to government, in most cases they add little value . . . Of course”, the be aware concluded, “if money is no object we can easily buy access via contributions to Conservative/Labour funds”.
Six years later Gemcorp is certainly one of Europe’s most daring rising markets funds, having made $6bn of bets on a few of the world’s riskiest frontier economies. And because it has grown it has discovered there isn’t any scarcity of UK politicians and ex-government officers prepared to hitch its payroll.
As senior members of the Conservative authorities search shelter within the personal sector forward of an anticipated landslide defeat within the coming election, over the previous 12 months Gemcorp has employed a number of former senior Tory politicians and officers — together with some who till lately had entry to the internal workings of Downing Street.
These embrace former UK prime minister Boris Johnson’s chief of employees, Lord Edward Lister, ex-investment minister and City grandee Lord Gerry Grimstone, and Gaj Wallooppillai, a former chief of employees to successive Conservative occasion chairmen.
These alumni of the Conservative occasion now work for an organization that engaged in exercise seemingly aligned with Vladimir Putin’s diplomatic and business push into Africa, because the Kremlin sought to minimise the affect of western sanctions.
Gemcorp launched with a fund backed by two Russian oligarchs with hyperlinks to Sergei Chemezov, the highly effective boss of Rostec, Russia’s state weapons big. He is an in depth good friend of Putin and served with the Russian president within the KGB.
One of those two founding buyers was final 12 months sanctioned by the US authorities for being “a financier to Russian President Vladimir Putin and Rostec State Corporation head Sergei Chemezov”.
Bostandjiev met the top of Russia’s sanctioned state weapons export company in Africa in 2018 as Moscow sought to ramp up arms gross sales to the continent, and cultivated relationships with highly effective Angolan generals.
This investigation by the Financial Times, in co-operation with the Dossier Centre, a London-based Russian opposition analysis organisation, is predicated on leaked paperwork, monetary and authorized filings, Russian flight data, and interviews.
In 2022 Gemcorp introduced it had reduce its ties with Russia the earlier 12 months and closed down its workplace in Moscow. But the origins of its success present how cash from businessmen who are actually alleged to be linked to the Kremlin was used to ascertain a foothold in Britain’s monetary sector.
It additionally raises contemporary questions in regards to the willingness of officers from Britain’s ruling occasion to simply accept paid roles in corporations which, till the 12 months earlier than Putin’s full-scale invasion of Ukraine, had shut ties to Russia.
Gemcorp mentioned that neither it nor Bostandjiev have ever acted in assist of the Russian state, damaged sanctions, or engaged in offers for navy gear or with Kremlin-backed corporations. It mentioned the lobbying technique memo drafted by its worker in 2018 was by no means mentioned or applied, and was not consultant of its or Bostandjiev’s views.
The early lifetime of Bostandjiev, who was born in Communist Bulgaria in 1975, is a narrative of how the post-Soviet world opened as much as western finance after the chilly conflict. US-educated, Russian-speaking and extremely bold, Bostandjiev rose up the ranks of emerging-market funding banking at Merrill Lynch after which Goldman Sachs, the place he made accomplice in his early 30s.
His large break was being headhunted to steer VTB Capital, the worldwide arm of VTB, the Russia state-owned lender.
Moving from Goldman to a Kremlin-linked lender was not the obvious selection for an bold younger banker. “As you can imagine, it is quite a change switching from one of the leading US investment banks to a government-owned financial institution,” Bostandjiev mentioned in an interview not lengthy after becoming a member of VTB.
The Russian financial institution for years had been used as a instrument for the Kremlin to extend its affect in rising markets by arranging financing with diplomatic strings connected, in line with individuals with information of the financial institution at the moment.
They mentioned it was frequent for Sergei Lavrov, Russia’s gruff, veteran overseas minister, to ring up senior executives to request offers for explicit international locations, some regarding the financing of gross sales of Russian navy gear. VTB has all the time denied the Russian state had any affect on its enterprise choices.
In the years Bostandjiev was in command of VTB Capital in London, the financial institution was notably targeted on enterprise in Africa, particularly with international locations with historic ties to Russia akin to Angola.
VTB Capital throughout this time additionally labored carefully with massive Russian corporations together with Chemezov’s Rostec, serving to the state arms conglomerate, with pursuits in promoting navy gear starting from Kalashnikovs to Sukhoi fighter jets, bid for investments in pure sources tasks in international locations like Uganda and the Democratic Republic of Congo.
Gemcorp mentioned that Bostandjiev’s actions at VTB have been by no means influenced by the Russian state, and he had by no means had any skilled contact with Rostec or Chemezov.
In February 2014, Vladimir Putin determined to annex Crimea, prompting a diplomatic disaster between Russia and the west. In response, the US Treasury imposed sanctions on VTB Capital’s guardian firm, VTB Bank, in addition to a few of its necessary state-owned purchasers akin to Rostec, severely curbing their potential to cope with worldwide buyers.
With his employer’s worldwide ambitions in tatters attributable to sanctions, Bostandjiev was fast to get out.
That similar month he introduced he was resigning from VTB, and later in 2014 he launched Gemcorp — a brand new rising markets funding fund primarily based in London with a deal with doing personal lending to governments in Sub-Saharan Africa.
Bostandjiev was backed with $250mn of seed cash from two Russian businessmen, Albert Avdolyan and Sergei Adoniev, each with long-standing ties to Chemezov and Rostec, which had backed a Russian telecoms firm they based.
Avdolyan later invested alongside Rostec in a number of tasks in Russia, and he has described himself to the FT as a household good friend of Chemezov who “respect[s] his human qualities and rich life experience”. Chemezov has chaired Avdolyan’s charitable basis, which has labored on tasks within the Rostec chief’s residence area of Irkutsk.
He mentioned his corporations had all the time acted in accordance with sanctions and had by no means acted for the Rostec CEO.
Adoniev, who was put beneath US sanctions final 12 months for being a financier for Putin and Chemezov, denies the allegations within the sanctions. He exited the businesses by way of which he and Avdolyan invested in Gemcorp in 2017.
Gemcorp informed the FT that it has by no means managed cash both instantly or not directly linked to Putin or Chemezov, and mentioned neither Avdolyan nor Adoniev ever had any affect over its enterprise.
With Gemcorp up and operating in London, Bostandjiev’s new fund started cultivating relationships in key markets, together with in Russia.
It was an opportune time for a fund like Gemcorp to reach in Moscow. With western markets much less accessible following Putin’s annexation of Crimea in 2014, the Russian chief declared it a strategic precedence for state-owned corporations to pivot in the direction of Africa.
Gemcorp opened an workplace within the Imperia Tower, a 60-floor constructing within the Moscow International Business Centre, and commenced to rent an area staff.
Gemcorp’s most senior govt there quickly demonstrated his potential to rub shoulders with Putin’s inner circle of siloviki, or strongmen cast in Russia’s intelligence companies.
In 2016 the then head of Gemcorp in Russia took half in a charity basketball event in Moscow. His staff’s coach that day was Sergei Ivanov, who on the time of the sport was Vladimir Putin’s chief of employees and a profession KGB spy who had labored in Africa.
Bostandjiev throughout this time was making common visits to Russia — typically travelling there for a day or much less.
Data from Russia’s Sirena-Travel flight reserving system, which was leaked in the course of the Russia-Ukraine conflict and shared with the FT by the Dossier Centre, exhibits that in 2016, the 12 months of the basketball match, the Gemcorp boss flew to Russia 9 instances.
The FT has cross-referenced Bostandjiev’s Russian journey data with information from Flightradar24 monitoring the motion of Gemcorp’s company jet, managed by way of a Maltese firm known as Sabazios Ltd, and owned by a Gemcorp entity within the Cayman Islands.
This exhibits that from the tip of 2018 up till the invasion of Ukraine in 2022, the Gemcorp-owned Bombardier Global 5000 travelled to Russia over 30 instances, to locations starting from Moscow and St Petersburg to Chulman, Khabarovsk, Sochi and Novosibirsk.
Soon Gemcorp’s Moscow workplace was rising quickly — a uncommon feat for a London-based fund.
Gemcorp in 2018 launched a Russian grain buying and selling operation, which the next 12 months posted revenues of Rbs7bn, earlier than greater than tripling gross sales in 2020 to Rbs24bn, in line with Russian company filings, vaulting it into the nation’s prime 20 largest grain merchants by gross sales.
Gemcorp’s ties to Russian cash additionally started to draw undesirable consideration. In 2017 Barclays financial institution in Jersey despatched a report back to the US Treasury’s FinCEN unit, which screens suspicious monetary exercise. Banks are obliged to routinely file such reviews confidentially to legislation enforcement to spotlight cash flows they deem suspicious.
The report, included in leaked paperwork which shaped a part of the International Consortium of Investigative Journalists’ FinCEN Files investigation, raised considerations about Gemcorp’s Russian connections. It mentioned the agency had, at the moment, a “vast organisational structure which has numerous management companies that do not appear to serve any legitimate business or economic purpose”.
Gemcorp mentioned it had by no means beforehand been made conscious of the report. It famous that FinCEN receives round 2mn reviews on monetary establishments yearly, and there had been no regulatory investigation of the agency in response to it. It additionally mentioned that its commodities enterprise by no means relied on any connections with Russian officers, and that it was finally closed down for not being worthwhile.
Gemcorp added that the jet utilized by Bostandjiev was primarily used for company functions, however was additionally from time to time flown for private use. It mentioned there have been no restrictions on flying to Russia on the time.
While Gemcorp was constructing its presence in Russia, the true engine of its development was in Angola, Africa’s second-biggest oil producer.
In June 2018 Bostandjiev flew from the UK to Moscow. One of the individuals he was assembly within the Russian capital was an necessary enterprise contact from Angola: Leopoldino Fragoso do Nascimento, an Angolan navy man and powerbroker generally referred to as “General Dino”.
Days later the Bulgarian and General Dino watched from a VIP field on the Luzhniki Stadium as France defeated Croatia 4-2 within the World Cup ultimate. Gemcorp informed the FT that Bostandjiev “did not accompany” the Angolan normal to the match, however “was sat in close proximity to him”.
Three years earlier than the 2 males loved the soccer collectively Angola had suffered a extreme monetary disaster after an oil value collapse and considerations about corruption, and all however misplaced entry to worldwide capital markets.
Gemcorp, backed partially with cash from Russian businessmen, was one of many few overseas buyers to not flee.
Its religion was shortly rewarded. Soon Gemcorp had established itself as one of many prime buyers in Angola. By 2018, it had equipped greater than $4bn to the Angolan state, and was already being paid again a whole lot of hundreds of thousands of {dollars} in curiosity on its loans.
Gemcorp’s affect in Angola grew to such an extent that later that 12 months, in line with paperwork seen by the FT, Bostandjiev was assured sufficient to pitch his funding fund as an unique adviser to the finance ministry to barter with the IMF. (Angola went on to safe a $3.7bn IMF bailout later that 12 months, however did so with out Gemcorp’s assist).
Soon a unique alternative would current itself for a fund like Gemcorp that straddled Russia and Angola: Putin’s pivot to Africa.
The centrepiece of Putin’s new imaginative and prescient for Africa as a development marketplace for Russian funding, navy gross sales and diplomatic weight could be the inaugural Russia-Africa summit held within the Black Sea resort of Sochi in October 2019.
A vital a part of the Sochi convention’s success could be wooing Angola, a rustic with deep historic ties to the Soviet Union and an necessary buyer for Russian arms. In the 12 months main as much as the occasion Russia’s diplomats engaged in a burst of exercise targeted on Angola.
The provide of weapons could be certainly one of Putin’s strongest instruments in his efforts to woo African leaders. And the person the Kremlin relied on to market Rostec’s fighter jets, helicopters and assault rifles to the continent was Alexander Mikheev, the director-general of the state arms export company Rosoboronexport.
The US put Rosoboronexport — which is totally owned by Rostec — on its sanctions blacklist in September 2015, in an try and restrict its potential to promote arms abroad.
In December 2018 Mikheev travelled to Angola, in line with Russian flight data supplied by the Dossier Centre. Gemcorp’s personal jet flew to Angola on 4 December, with Bostandijev’s keep overlapping with Mikheev’s go to, public flight monitoring information confirms.
The following day, Russia’s prime state arms vendor visited Gemcorp’s workplace within the Angolan capital the place he met with Bostandjiev, three individuals with information of the assembly mentioned. Gemcorp employees additionally met with Russian officers in preparation for the assembly, they added.
Gemcorp informed the FT that Bostandjiev had been “briefly introduced” to Mikheev as soon as “in the presence of other people” in Angola at the moment, however mentioned it may discover no proof that the Russian arms vendor ever visited the corporate’s places of work.
The fund mentioned the Angolan authorities had requested it to finance “the supply of non-lethal military equipment from Rosoboronexport” utilizing a $1bn credit score facility supplied by the fund.
It added that “it declined on the basis that Rosoboronexport was subject to US sanctions,” and that Gemcorp had by no means been “involved in any transaction in Angola that involved Rosoboronexport and illegality”.
Gemcorp mentioned that if every other “meetings or facilitations” had taken place between Russian officers and Gemcorp workers, then Bostandjiev had no information of them they usually may solely have been authorised by its native employees performing on their very own account.
Mikheev was not personally beneath western sanctions on the time. In 2022 he was sanctioned by the US, EU and UK. Gemcorp mentioned Bostandjiev’s assembly with the Rosoboronexport boss broke no legal guidelines or guidelines, and he has “no recollection of any other meetings with representatives of Rosoboronexport”.
A number of months after the assembly, in April 2019, Angola’s president João Lourenço, a former defence minister who within the Soviet period had studied on the Lenin Military-Political Academy, made his first state go to to Moscow, the place he was warmly welcomed by Putin.
During Lourenço’s go to, the Angolan president introduced that his nation wished “Russian weapons and other hardware crucial for the protection of our territory”, declaring that “this is a field where we would like to build up co-operation with Moscow.”
On the identical day that Lourenço arrived in Russia, Gemcorp’s personal jet landed in Moscow, in line with flight monitoring information. Gemcorp confirmed to the FT that Bostandjiev did fly to Russia the place he met the Angolan president and different Angolan officers “to discuss transactions contemplated with Angola but unconnected with Russia”.
That October, greater than 40 African heads of state, together with Angolan president Lourenço, travelled to Sochi to listen to Putin define his imaginative and prescient for a brand new period of collaboration with Moscow. On the eve of the summit Angola introduced it had obtained a number of Su-30K fighter jets from Rosoboronexport.
Also in attendance on the convention was Bostandjiev, who had been invited to talk on the occasion. There Gemcorp introduced a cope with the Russian state-owned banks VEB and Sberbank to supply commerce financing to African international locations.
Gemcorp mentioned the Sochi convention had been attended by “a great number of senior government officials from all over Africa”, in addition to different enterprise leaders and buyers, and that “as an emerging markets investor, this was a good opportunity to meet such officials and discuss with them a number of ongoing projects.” The settlement introduced between the Russian banks and Gemcorp was by no means consummated.
Several months after the Sochi convention, in early 2020, Gemcorp was awarded its most important deal ever in Angola — a participation in creating a refinery within the oil-rich area of Cabinda, a vital infrastructure challenge which might slash reliance on costly gas imports. Gemcorp mentioned this deal had no reference to Bostandjiev’s presence on the Sochi convention.
Things have been much less beneficial for General Dino, the highly effective Angolan with whom Bostandjiev had watched the World Cup ultimate in Moscow in 2018.
In 2021 the US authorities imposed sanctions on the overall for being a “former government official that stole billions of dollars through embezzlement”.
Gemcorp mentioned that Bostandjiev had met General Dino a number of instances however they weren’t shut, and that Gemcorp had by no means engaged in any transactions with him. Nascimento didn’t reply to a request for remark.
By 2020 Avdolyan, the shut ally of Rostec’s Chemezov, introduced his relationship with Gemcorp to an in depth by redeeming his capital. This marked the tip of the Mayfair-based fund’s reference to its seed buyers, and by mid-2021 it had closed its Moscow workplace. But its relationship to Russia took longer to interrupt off.
On January 12 2022, Nato’s secretary-general, Jens Stoltenberg, warned that there was “a real risk for a new armed conflict in Europe” as Putin amassed his troops on Russia’s border with Ukraine.
That night Gemcorp’s company jet took off from Edinburgh airport and landed in Luxembourg, the place it waited for simply over half an hour earlier than taking off once more in the direction of Russia. By early subsequent morning, Bostandjiev was in Novosibirsk, within the midst of Siberia. He stayed in Russia for 3 nights, stopping over in St Petersburg.
Gemcorp mentioned that Bostandjiev determined to journey to Russia as a result of he was visiting an organization the fund had invested during which had a facility in Siberia. That firm, Gemcorp mentioned, not has operations in Russia.
After conflict broke out just a few weeks later, Gemcorp issued a press release in March 2022 saying it was “appalled by the tragedy taking place in Ukraine following Russia’s invasion, which we condemn wholeheartedly”.
Gemcorp says it not has any buyers from Russia. It mentioned its Russian buyers totally redeemed their cash in 2020 and their funding “went through stringent [Know Your Customer] and enhanced compliance checks”.
With Gemcorp having renounced its ties with Russia it has begun to pivot in the direction of a brand new alternative: the Middle East.
In doing so, it has employed a slew of former British officers and advisers tied to the Conservative occasion, some with deep connections in Saudi Arabia and the UAE.
These embrace Lister as a non-executive director, Grimstone as its chair, and Wallooppillai as its head of technique. It additionally employed Simon Penney, Gemcorp’s new head of Middle East, who till 2023 was the UK’s diplomatic commerce envoy to the area.
Contacted by the FT, every of the 4 mentioned that they had not engaged in lobbying on behalf of Gemcorp, and that that they had performed due diligence forward of accepting their roles and have been glad Gemcorp had no ties to Russia or people beneath sanctions.
Gemcorp mentioned the previous UK officers have been employed to assist strengthen its board, and to not foyer the federal government on its behalf.
Lister, it mentioned, “has considerable experience in the Middle East and was employed by Gemcorp to use his extensive business contacts to assist the Company establish a regulated entity in the UAE”.
Gemcorp mentioned its appointment of Grimstone, who’s a member of Saudi Arabia’s Investment Council, was authorised by the UK’s watchdog that screens personal sector jobs taken by former public servants.
It seems that the agency’s new technique is bearing fruit. Last 12 months Gemcorp introduced that it had signed an settlement with the Saudi ministry of funding with the goal of elevating a brand new $1bn fund to deploy within the nation.
In January the British authorities held a networking reception in Saudi Arabia. In attendance for Gemcorp was Penney, previously the UK’s diplomatic commerce envoy to the Middle East.