MOSCOW: Russian tycoons received billions of dollars in dividends as their companies resumed or boosted payouts amid easing economic uncertainty over the Kremlin’s war in Ukraine.
At least a dozen business people gained over one trillion rubles in 2023 and in the first quarter of this year, according to data on dividends compiled by Bloomberg from publicly disclosed information. Many have close links to President Vladimir Putin and include some who’ve been sanctioned over the war that’s now in its third year.
Vagit Alekperov, a key shareholder and former president of oil giant Lukoil PJSC, topped the list with about 186 billion rubles in dividends. The United Kingdom and Australia sanction him, but he has so far avoided the United States and European Union (EU) penalties.
Billionaires Alexey Mordashov, of Severstal PJSC, and Vladimir Lisin, of Novolipetsk Steel PJSC, were next with 148 billion and 121 billion rubles, respectively.
Mordashov is under United States, United Kingdom and EU sanctions, while Lisin isn’t under any major restrictions.
The list also includes Putin’s billionaire ally Gennady Timchenko and Tatyana Litvinenko, who received a stake in PhosAgro PJSC before her husband Vladimir was sanctioned by the United States in 2023. Vladimir Litvinenko is rector of St. Petersburg Mining University, where Putin received a doctoral degree in 1997 and was the president’s campaign manager in the city during three elections.
The United States and its allies imposed sweeping sanctions on Russia in response to the February 2022 invasion, prompting many companies to pause dividend payouts on the back of uncertainty over a potential economic collapse.
Those fears haven’t been borne out as Russia’s economy gradually adjusted to the new conditions and exporters found alternative markets.
After contracting in the year that followed the start of the war, Russia’s economy rebounded sharply as the government spent massively to expand the defence industry, shield domestic businesses from the impact of sanctions, and provide social support for families.
Gross domestic product (GDP) grew 5.4% in the first quarter compared to the same period last year. Many commodities exporters have resumed payment of dividends after reshaping their businesses and re-routing sales towards markets in China, India and other Global South nations that haven’t implemented sanctions over the war in Ukraine.
Many state-controlled corporations like Gazprom Neft PJSC and Russia’s largest bank, Sberbank PJSC, never stopped making dividend payments as they racked up record profits during the war.
Sberbank’s shareholders last month approved a record 752 billion rubles in dividends for 2023.
Still, Russia’s economy may face significant problems in the second half of the year and in 2025 that may prompt the government to raise taxes, according to Chris Weafer, chief executive officer of Macro-Advisory Ltd. — Bloomberg