At the end of January 2017, Bloomberg reported the emergence of a new dollar billionaire in Russia. This is the owner of the fishing company Norebo Holding, Murmansk resident Vitaly Orlov, who previously wasn't included into any of the famous ratings of the largest businessmen. According to the Bloomberg Billionaires Index, the wealth of Orlov reached $1 billion.
A dark horse
Being a native of Murmansk and the richest person in the region, Orlov remains a non-public person: even in a small regional center where everyone seems to know each other, few have heard about Orlov, even fewer people know him personally. In the museum of the main university of the city - MSTU (in the Soviet time the Higher Naval School), the alma mater of the billionaire, there is not a single mention of a successful graduate, told the museum director Alexey Gurkin.
The main reason for Orlov's take-off, as Bloomberg noted, was the Russian food counter-sanctions: ostensibly, due to the ban on the import of European fish, Orlov increased shipments of mackerel and herring to Russia and made good money on it.
However, the market participants interviewed by RBC call such a version invalid. They draw attention to the fact that due to the specific nature of the fishing industry, it is impossible to increase sharply supplies to the market: the opportunities of extractive companies are limited by the quotas they have received for fishing. In addition, in conditions of devaluation of the ruble, it is not very profitable to supply fish to the domestic market, especially when there is a steady demand in foreign markets, where they pay for it in a stable currency.
In Orlov's Norebo Holding, too, there is talk about the absence of any kind of jerk due to counter-sanctions. "The production of fish by the enterprises of the holding in 2016 remained approximately at the level of 2015: 530 thousand tons against 520 thousand. In the Far East, production increased, and in the northern basin it fell. So somewhere the revenue has grown, and somewhere has decreased," as the holding representative told RBC.
The Ministry of Fisheries and Agriculture, the government of the Murmansk region are confident that the growth of Vitaly Orlov's welfare is in no way connected with import substitution.
In fact, in the field of vision of Bloomberg, the businessman got through the victory in the corporate conflict and the consolidation in his hands of a controlling stake in Norebo Holding in 2016.
What is "Norebo Holding"?
Today, the Norebo group includes 12 major fishing companies (north-west and the Far East of Russia), which carry out fishing by 39 fishing vessels (all owned by the holding companies). The Norebo Group also includes trading companies in Russia and abroad, a new modern fish processing enterprise in the Murmansk region, a cargo terminal Seroglazka (Petropavlovsk-Kamchatsky), as well as administrative and management companies. The holding employs about 3 thousand people, of which 2 thousand are crews of fishing vessels. The head office of the group "Norebo" is located in Murmansk. According to media reports, in 2015 the company's revenue was $600 million, Orlov said in an interview to Kommersant about profits of 25-35%.
In Soviet times, admission to the Higher Naval School was an enviable dream for Murmansk youth. The most prestigious in it was the navigational faculty. An enviable career of the captain of the deep sea was what back in the mid-1980s Vitaly Orlov and Alexander Tugushev could hope for. They studied at different courses - Tugushev was two years older, but became friends. The collapse of the Soviet Union made adjustments to the life plans of the sailors and opened to them fundamentally new perspectives.
Tugushev, having obtained a diploma, opened his own business - a fishing company, which owned several old freezing trawlers. Orlov went the other way - good knowledge of English helped him get a place in the Murmansk office of the Swedish company Scansea International. Scansea bought fish from Murmansk sailors, and then resold it with profit in Norway.
Alexander Tugushev became one of the suppliers of fish for Scansea. The business grew, and in 1997 the friends together with the co-owner of Scansea International Magnus Roth decided to create a new company - Ocean Trowlers. The business calculation was based on the fact that the fishing fleet of Russian companies was in a deplorable state - no new trawlers were built, and the old Soviet ones were inferior in terms of technical characteristics and equipment to Norwegian vessels. Registered in Norway, Ocean Trowlers began to supply Norwegian trawlers for bareboat charter agreements (renting a vessel without a crew) to Russia, receiving in return ready products - fish fillets.
"We have actively developed this type of activity, such as the search for good Norwegian vessels. We implemented complex schemes for financing and buying these vessels and selling them to our suppliers on terms of long-term installments," Orlov told Kommersant in 2015.
According to the former head of the Union of Fishing Producers of the North Gennady Stepakhno, such a scheme brought a new company super profits. "Orlov, taking advantage of the fact that Murmansk companies had neither connections nor experience, bought our fish for half the price and resold it around the world," he describes the situation of those years.
His own among strangers
In 1998, co-owners of Ocean Trawlers established the Russian holding company "Karat", which was to engage in fishing. According to Tugushev, 33% received Orlov and Roth, 34% got to him. When investigating a criminal case (its participants' testimony is at the disposal of RBC), Tugushev said that the parties had allegedly secured the agreement in English, the original of which in a single copy was kept by Orlov, whom he trusted as a friend.
Orlov was responsible for procurement, financing and general cooperation with contractors, Roth for sales, financing and management, Tugushev for providing quotas for his own fleet and partner companies.
Access to quotas has always been a key factor in the fishing business in Russia. Annually, the state bodies of countries engaged in fishing, on the basis of scientific research and other factors determine the maximum catch rates for specific fish species. Until 2003, 60% of quotas in Russia were distributed by local authorities, 40% came to federal auctions.
Such a scheme provoked corruption and involvement of criminal structures in business. In particular, it was with the allocation of fish quotas that the investigation linked the resonant killing of the governor of the Magadan Region, Valentina Tsvetkova, in Moscow in 2002. It accelerated the process of reviewing the distribution of fish quotas: from the beginning of 2003, the coming changes in the industry were actively discussed, the decisive role in which was assigned to the State Fisheries Committee. Under the new rules, it was this department that was supposed to distribute quotas for five years at once on a "historical basis" - based on the companies' production figures for the previous three years.
Alexander Tugushev believed that in the conditions of a radical change in the rules of the game it is worth keeping a grip on the pulse. In September 2003, he joined the civil service, becoming deputy head of the State Fisheries Committee.
How did the entrepreneur obtain this position? "At that time, the activities of the fishing department were accompanied by scandals. The leaders and the deputies changed quickly, and it was not a secret for anyone that it was possible to buy the post without any problems," says Valery Yarantsev, former captain of the trawler "Electron", famous after the pursuit of his vessel by Norwegian fish inspectors got into live TV.
Becoming an official, Tugushev was forced to leave the business and sell his stake in the holding. Now he claims that the withdrawal was formal: he issued his shares for nominal holders.
Orlov had another version, which he explained to the investigation. According to him, the partner went to the civil service, having received $30 million for his shareholding, so a third of Karat cost so much. This money was transferred to Tugushev's accounts, says Orlov.
Having worked in the State Fisheries Committee for less than a year, Tugushev turned out to be a figurant of the criminal case. The Far Eastern company Pollux appealed to law enforcement agencies, saying that the official promised to allocate quotas for catching 50 thousand tons of fish products, for which he received $3.7 million in cash. The quota was never received by Pollux. In June 2004, Tugushev was arrested, he was incriminated with fraud, and in February 2005 the Tverskoy Court of Moscow sentenced him to six years in prison.
Freed at the end of 2009, Tugushev immediately met with his partner and friend Vitaly Orlov, and he returned him to the business. Formally, the post of Tugushev was called an "adviser", but he claims that he actually supervised the work of the holding in Russia: Orlov and Roth were constantly living abroad.
After the return of Tugushev, "Karat" began to actively buy up assets, especially since there were enough offers on the market. At the same time, the most important factor in the choice of objects was not the size of its own fleet, but the existence of "historical" quotas.
"Owners of fishing enterprises have different reasons for selling a business. Basically they are purely economic. Amortization of vessels is approaching zero, repairs are not all wanted and capable of doing. So, one or two companies are sold every year," Vladimir Grigoriev, general director of a number of companies that are members of Norebo Holding, told RBC.
In the 2010s, the holding company began expansion in the Far East. In 2011, the partners purchased from the family of the former governor of the Primorsky Territory Sergey Darkin the company "Roliz" (according to Kommersant, for $50 million) and a controlling stake (53.24%) of the Kamchatka "Akros", the deal price was almost $100 million. In 2012-2013, they acquired the Far East companies Magadantralflot, Vostochny Bereg, Sakhalin Leasing Fleet, which had more than 160 thousand tons of pollock catch quotas (about 15% of the total Russian volume).
In the North basin, the quotas of "Karat" for cod doubled after the purchase of a controlling stake in Tralflot. This is the oldest enterprise in the industry in the Murmansk region, founded in March 1920. Shortly before this transaction, Tralflot bought out for 122 million rubles from the government of the Murmansk region a 26% stake in OAO Murmansk Provincial Fleet, established in the late 1990s. "I believe that the sale of these shares was a short-sighted policy of the governor Dmitry Dmitrienko," said former head of the Murmansk Provincial Fleet OJSC Stanislav Nikanorov. "Dmitrienko believed that money, albeit small, in the budget is better than to develop the company."
Finally, in 2016, Karate's assets in the North were replenished by the Karelian Seafood Company, which has about 6,800 tons of fishing quotas. For it about $60 million was paid, the director of the fishing company "Northern merchant" Roman Kulik knows.
More than $600 million was spent on the purchase of all assets. These are mainly loans from Sberbank. Since 2005, about 15 joint large-scale projects with "Norrebo Holding" have been implemented, Anatoly Popov, senior vice-president of Sberbank, said. The net debt of the holding was estimated at $450 million by the end of 2015.
End of friendship
In Norebo Holding, so the head structure of the group began to be called from 2013, Vitaly Orlov already had 67%, 33% owned by Roth. Tugushev claims that Orlov repeatedly promised to return to him a third of the company that he "transferred to storage" while he was working for the State Fisheries Committee, and then was in prison, but the matter did not move from the dead end.
The conflict was inevitable. In February 2013, Orlov dismissed Tugushev from the management of the holding company, and he began to insistently demand the return of shares. As follows from the materials of the investigative bodies, Orlov offered the partner some compromise solution. Tugushev during the investigation set out the terms of the compromise: the partner supposedly offered him $60 million. However, Tugushev himself estimated it much higher, at $350 million. In case of refusal, he was ready to buy Orlov's stake in the company for the same amount.
These conditions were also proposed in November 2015 by representatives of Tugushev at a meeting with lawyers Orlov from the lawyers' bureau "Egorov, Puginsky, Afanasiev & Partners" (EPAM). In case of disagreement Tugushev's representatives promised to transfer the corporate dispute to the criminal plane, and also to attract influential people to their side. In particular, the names of businessman Ilya Traber, also known as Antikvar (responsible for control of seaports from Tambov's crime gang of St. Petersburg), as well as a deputy of the State Duma, a friend of Chechen President Adam Delimkhanov, were heard.
"Representatives of Tugushev at our meeting said that he turned to an unidentified wealthy person who asked Delimkhanov and Traber to settle the conflict," lawyer Yury Savvin told investigators. Another representative of EPAM, Arkady Krasnikhin, retelling to the investigator a conversation with Tugushev's representatives, claims that they described Delimkhanov's people as "using weapons in solving problems and remaining unpunished."
Again the arrest
However, Orlov did not accept the offer. Then Tugushev filed a complaint with the law enforcement agencies of the Murmansk region about the theft of his shares, attaching audio recordings of his conversations with Orlov, at which he allegedly confirmed the right of the former partner to claim a third of the assets.
The facts stated in the application of Tugushev, were not confirmed, but, according to his lawyers, OBEPiPK in the Murmansk region was still investigatin the details.
Vitaly Orlov also appealed to law enforcement agencies. He applied to the Investigative Committee, accusing the ex-partner of extortion. In April 2016, the UK refused to prosecute Orlov, but at the end of the year Tugushev was arrested.
The reason for the detention were Orlov's calls with threats coming to his mobile phone. According to the investigation, at the request of Tugushev, Orlov was called by an unemployed resident of Chechnya, Mualadi Jamaldayev. The caller appeared to be "Sasha Tugushev's friend" and promised to "tear out his legs" and "cut into pieces" Orlov and his family if he wouldn't give up the shares. Jamaldaev was placed in jail, and Tugushev - under house arrest in his Moscow apartment. On March 25, the court dismissed him on his own recognizance.
"Our client was not even questioned, the accusation is based solely on Jamaldayev's testimony, there is no other evidence of his guilt," said Darya Konstantinova, Tugushev's lawyer.
"I'm very sorry that the history of relations between the two representatives of the fishing community has been publicized, it's a very sad fact," Yury Zadvorny, the head of the Murmansk company Murmanseldy-2, told RBC.
After the removal of Tugushev from the management of Russian business "Norebo" Vitaly Orlov moved to his homeland in Murmansk. With the beginning of the "sanction war" he renounced Norwegian citizenship and, according to his representatives, personally appealed to the FAS and the tax office with a request to check the purity of all the transactions of the holding to buy up assets. "All the transactions were eventually approved as legitimate," said Vladimir Grigoriev, CEO of several companies that are members of the Norrebo Holding.
In 2016, Orlov also bought out the share of Magnus Roth in the holding, becoming the sole owner of "Norrebo Holding". According to the leaders of the holding's enterprises, he is now actively involved in the management of the company, they agree on their strategy on a weekly basis, and determine the tactics themselves. However, the period of active expansion is over, now there are no plans to acquire new fishing companies by the holding.
However, Orlov still has time for leisure activities. "Vitaly Petrovich from childhood was engaged in skiing in Murmansk and Kirov, which grew into a hobby. Now, permanently living in Murmansk, he has a good opportunity to engage in active winter sports," said Sergey Sennikov, Vitaly Orlov's deputy in the management company of the holding.