Andrey Melnichenko

Early life

Melnichenko was born on March 8, 1972 in Gomel, Byelorussian SSR to a Belarusian father and a Ukrainian mother, both of whom were teachers. He attended the Advanced Education and Science Centre of the Lomonosov Moscow State University, and in 1989, became a student of the Faculty of Physics at Moscow State University. He then transferred to the Plekhanov Russian University of Economics, from which he graduated in finance.

The fortune

While at university, Melnichenko began his entrepreneurial ventures by opening a currency exchange booth on the campus. Having made their first US$50,000 in this way, Melnichenko and his partners, two fellow students, received a banking license from the Bank of Russia. In 1993, at the age of 21, Melnichenko co-founded the MDM Bank. The bank moved on buying currency at the Interbank foreign exchange, developing a derivatives market and debt instruments. From 1993 to 1997, Melnichenko chaired the board of directors of MDM Bank. From the late 1990s to the early 2000s, MDM Bank expanded through acquisition, integrating seven regional banks. MDM Bank did not participate in any post-Soviet privatization programs or the loans-for-shares auctions of the 1990s. In 1997, Melnichenko bought out MDM Bank shares from his partners and became the sole shareholder of the bank and the chairman of the management board. Bloomberg reported that "unlike many bigger rivals, MDM came through the 1998 Russian financial crisis nearly unscathed, thanks to a conservative credit policy, the lack of illiquid assets, and no exposure to government bonds. As competitors went under, the lender snagged some of the biggest Russian companies as clients." From 2001 to 2005, he chaired MDM Bank's board of directors. MDM Bank was named the "Bank of the Year" by The Banker in 2002 and 2003. In 2003, Euromoney and, in 2004, Global Finance, named it the "Best Russian Bank". In 2000, Melnichenko and Sergei Popov, a former metals trader from Ural, co-founded the MDM Group for industrial investments. Their focus was in three areas: pipeline manufacturing, coal production and processing, and the production and processing of fertilizers. This was done through the acquisition of more than 50 independently run and owned businesses: joint-stock companies, plants and mines, which enabled him to form three separate companies: SUEK, EuroChem and TMK (which he exited in 2006 through an IPO at the London Stock Exchange). These industries were derelict, risky, and not subject to the political influence that dominated other sectors. With the process of post-Soviet era privatizations having concluded five years earlier, no more than 5% of the assets purchased were acquired from the state. From 2001 to 2004, Melnichenko was the President of the MDM Group. From 2004 to 2007, Melnichenko sold shares of MDM Bank to his MDM Group partner Sergei Popov, and focused on the development of the industrial assets in fertilizers and coal. Following Melnichenko's decision to step down from MDM Bank in 2007, the International Finance Corporation (IFC) purchased 5% of MDM Bank shares for US$185 million, valuing the bank at US$3.7 billion. Having served its consolidating purpose, MDM Group ceased to exist.

Personal life

In 2005, Melnichenko married Serbian former pop singer and model Aleksandra Nikolić in the South of France. They have two children. Two high-tech yachts were built for Andrey Melnichenko: Sailing Yacht A (2017) and Motor Yacht A (2008). Both were designed by French architect and industrial designer Philippe Starck. Andrey Melnichenko's representatives repeatedly said that he has no connection with both yachts neither in terms of ownership, nor in any other way since 2022. S/Y A was handed over to him in May 2017 in Monaco. Boat International called it "the boundary pushing superyacht" and "a monument to invention". In 2016, Bloomberg reported that "the swanky boat reflects the same eye for innovation and high-tech detail that Melnichenko, 44, is now focusing on the fertilizer business that’s helped make him one of Russia’s youngest billionaires." In March 2022, following the EU sanctions imposed on the number of Russian businessmen, Italian authorities seized Sailing Yacht A in the port city of Trieste. According to Reuters, Melnichenko responded that he "will be disputing these baseless and unjustified sanctions" and that "the rule of law and common sense will prevail." The Lazio Regional Administrative Court in Rome, hearing the case , submitted a request with the Court of Justice of the European Union in May 2024 to take up a preliminary ruling to questions as to whether, under EU sanctions, the concepts of “belonging to” and “control” extend to trust beneficiaries, even when those beneficiaries can’t dispose of the assets. According to the higher court, those concepts encompass all forms of power or influence over the assets. Meanwhile the annual maintenance costs of around 10 million Euros yearly continues to be paid by local authorities, provided by the Italian treasury. Andrey Melnichenko reportedly lives with his family in Moscow.

Career

According to media reports, in the last fifteen years, Melnichenko's companies have invested more than $23 billion into the Russian economy and industrial sector. In total, his companies reportedly employ over 100,000 people. 20% of all investments by non-oil and gas companies made in Russia in 2012–2017 were made by Andrey Melnichenko's companies. Melnichenko's companies reportedly spent over $500 million on social and charitable projects. Melnichenko's key assets included:

EuroChem Group AG: a fertilizer producer. Melnichenko was the effective beneficiary of 100% of the company's shares until 9 March 2022. SUEK (Siberian Coal Energy Company) JSC: a coal producer. Andrey Melnichenko was the beneficiary of 92.2% of the company's shares (Siberian Generating Company LLC (SGC) is directly owned by SUEK) until 9 March 2022. Melnichenko was a Member of the Board of Directors (Non-executive Director) at both EuroChem Group AG and SUEK JSC until March 9, 2022. Since 2007, Melnichenko has been Member of the Bureau of the Board of Directors of the Russian Union of Industrialists and Entrepreneurs (RSPP), serving as Chairman of the Mining Commission and Chairman of the Committee on Climate Policy and Carbon Regulation. In the 2000s, Melnichenko was part of the EU-Russia Industrialists' Roundtable (IRT), a platform composed of business leaders from the EU and Russia, which sought to improve EU-Russia economic relations. In 2019, Andrey Melnichenko was awarded the title of Commendatore of the Order of the Star of Italy for "encouraging dialogue and economic cooperation between Italy and Russia".

Sanctions & controversy

On March 9, 2022 Melnichenko was placed on the EU sanctions list on the basis of being "one of the leading businesspersons involved in economic sectors providing a substantial source of revenue to the Government of Russia". In response, Melnichenko stated that he had no relation to or prior knowledge of the invasion, nor did he have any political affiliations, calling the EU's decision "absurd and nonsensical". It was reported that Melnichenko stepped down from his positions at Eurochem and SUEK and withdrew as a beneficiary upon being sanctioned. Reuters reported that he would be disputing the sanctions listing. Following the outbreak of the Russo-Ukrainian War, Melnichenko was sanctioned by several individual governments, including the United Kingdom in 2022, Japan in January 2023, and by Canada under the Special Economic Measures Act (S.C. 1992, c. 17) for Grave Breach of International Peace and Security. In July 2024, Melnichenko sat down for an interview with Tucker Carlson in El Salvador; he told Carlson that because of the sanctions against him, he cannot travel to the European Union or the United States. On December 17 the European Court of Justice repelled a petition of Melnichenko against the sanctions and confirmed them.

In August 2023, Russia's Prosecutor General's Office filed a suit against Melnichenko with the aim to nationalize his former company Sibeco, which owns several thermal power plants. Both parties settled the suit in October 2023. Kuzbassenergo, which currently owns Sibeco, agreed to a deal in which an undisclosed amount of money would be diverted to a social charity engaged in educating children.