Abramovich, Roman

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Roman Abramovich

Written by Loz in October 2007 - last updated September 2010.

Roman Abramovich …. Hmmmmmmmm. What can I say about Roman Abramovich? More to the point what can I say that doesn’t run the risk of me appearing in court. As much as I appreciate the contributions made toward the running costs of the forum I somehow doubt they would cover a legal battle against the Roman army. On the flipside it means I have bugger all that can be taken off me in punitive damages so what the hell, I can say what I like. Oh I may also need a bit of personal security if anyone fancies volunteering!

Roman was born on October 24th, 1966 in Saratov which sits on the Volga River and is generally thought to be a nice enough gaff however as most of us will never go there we can move on. His full name is Roman Arkadyevich Abramovich and to be strictly correct his surname should be pronounced with an emphasis on the ‘o’ rather than the ‘a’ which is the way it tends to get pronounced in English. I wouldn’t worry too much about that Roman, you want to hear how we pronounced that Canadian footballer ‘Paul Pesky Solly Dough’s’ name.

It has been well documented that Roman’s lifestyle now is a far cry from that of his youth so I will avoid going into great detail and just touch upon the key facts. As a direct consequence of a back street abortion his mother died of toxaemia (blood poisoning) when he was only one, and within two years of that he lost his father in an accident on the building site he worked on. He, along with his sister, was then cared for by his Uncle who lived in Ukhta (which significantly lies in the Pechora River basin, significant because this is a major oil and gas producing region) and by their grandmother who lived in Moscow.

During his younger years he spent some time in the Soviet Army fulfilling the mandatory military service after which he tickled the toes of academia for only a short period of time at the Moscow State Auto Transport Institute. He clearly decided that life was for soap dodgers like Gullit4 and he left to pursue his own business ambitions (he did return to the world of cheap watered down beer later when he obtained a correspondence degree from the Moscow State Law Academy).

In 1987 Mikhail Gorbachev relaxed the laws governing business in Russia and these reforms were sufficient to allow Roman to set up his own small businesses (as you do). To you or I setting up a business would probably be a fairly daunting exercise and one we would tackle carefully and possibly in a piecemeal fashion. Well that is probably one of many reasons why you or I are not worth somewhere in the region of £11 billion. By 1992, the 25-year-old Abramovich was buying cheap Russian oil for a few roubles a barrel and selling it abroad for a kick arse profit. Between 1992 and 1995 Roman set up five such ‘small’ businesses involved in the trading of oil and oil related products.

By the end of this three year period he, in conjunction with Boris Berezovsky, bought a controlling share of major oil company Sibneft. Berezovsky is another man who made a fortune partially off the back of Gorbachev’s perestroika reforms and is probably as wealthy as Roman however he has become more of a target with an alleged foiled assassination attempt. He was also one of the people classified as close associate of Alexander Litvinenko who was fatally poisoned in November 2006 and it was actually Litvinenko who uncovered the plotted assassination of Berezovsky in 2003 and reported it to the British police).

Anyway I digress, back to our entirely squeaky clean and delightful dinner party guest, owner. This deal for Sibneft was made within the remit of the ‘loans for shares program’ and this is where things started getting a little ‘shady’ although it should be pointed out that this scheme was not illegal, although some would certainly say it was immoral. In essence the ‘loans for shares’ program allowed key people (by key I mean rich and well connected) to obtain considerable amounts of state property in return for cash loans. Often the value placed upon the acquired property was considerably less than its actual value. In the case of Sibneft the deal was struck for half of the firm to be sold for about £60m when its stock market value was actually about £90m and with subsequent speculation that the company should really have been into the billions due to the rapidly rising market. When Berezovsky fled Russia in 2000 to escape fraud charges, he sold his share to Abramovich.

It is probably fair to say that Roman has had more partners than Jodie Marsh so there is no time to go into all of them however one of the more significant ones in the tale of Roman’s phenomenal tale of wealth is Eugene Shvidler (later to become a board member of Chelsea Village). Although not in the same wealth league as Abramovich he is still qualifies for the official title of ‘bloody loaded’ and he teamed up with Roman to buy up shares in Aeroflot and a number of aluminium plants whilst bringing on board yet another loaded bugger called Oleg Deripaska (of all the oligarchs he is the one alleged to have the strongest connections with Russian President Vladimir Putin) who owned vast assets that had something to do with metal (technical stuff eh). Deripaska is one of the few oligarchs who can credibly challenge Roman’s bank balance and you may remember back in September 2006 it was rumoured that he was interested in buying a stake in Arsenal.

Anyway between the three of them they formed an aluminium monster called Rusal (that is a corporate monster, not a life sized Godzilla Henry). Rusal grew and grew and moved into areas such as cars, pharmaceuticals, real estate etc etc etc. Basically from that point on it is a massive story of buying and selling businesses for the kinds of sums that would even persuade Frank Lampard to sign a new Chelsea contract. The entire conglomerate was renamed Millhouse LLC and then between 2002 and 2005 the stake in Sibneft was sold for £8 billion and the stake in Rusal for a further £1.2 billion with the proceeds reinvested in Russia’s largest steelmaking company (the Evraz Group) – you get the picture, lots of deals for lots of cash.

However none of this really clarifies how on earth a man went from the pits of poverty to being filthy rich in such a short space of time. That could be because of the shoddiness of my portrayal of the facts however I would argue that isn’t the case, mainly to preserve my ego. If the truth be known that is a question that far better financial analysts then I have failed miserably to answer. How did a single human being end up owning as much as £5.3bn worth of shares in Sibneft, a company that was, only a decade previously, bequeathed to Russia's citizens and predominantly the tens of thousands of Russian oil workers and managers who built the industry up from humble beginnings.

Well it would seem that one of the key secrets to Roman’s success came about courtesy of Boris Yeltsin’s dream to turn Russia into a stockholding society. Russian citizens were issued with a voucher worth 10,000 roubles (then approximately £30 which equated to about the average monthly wage) that they were entitled to exchange for shares in their employers or any enterprise which had previously been state owned; alternatively they could put them into a savings scheme.

Yeltsin’s vision was one of equal opportunity and he stated. "Everyone will have equal opportunities in this new undertaking and the rest will depend on ourselves... The privatisation voucher is a ticket for each of us to a free economy."

However the very idea of privatisation was alien to the vast majority of Russian people and only a small number saw the opportunity that this created. Roman was one of them. It is claimed that he and I dare say a few others, approached a plethora of oil workers and offered them money for their vouchers and in doing so built up massive share ownership in Siberian energy companies. As mentioned before none of this was illegal.

1994 saw the appearance of stalls offering cash in exchange for these vouchers with buying agents claiming the vouchers were practically worthless. People sold up in droves and the likes of Abramovich and Berezovsky were accused of creating companies to run the stalls, an allegation neither have ever passed comment on officially. A poll in July 1994 revealed that only 8% of Russian people had actually exchanged their vouchers for shares in the companies they worked for – when you consider how much oil there was to be harvested from the Russian soil you start to realise quite a big an opportunity was missed by those people most in need and how big an opportunity was seized by a select few.

So that is the business side dealt with albeit in a somewhat quick and dirty fashion (a technique I picked up in the bars of Amsterdam). Now the political angle (careful now, I realise the excitement is mounting but try not to fall off your seats). In Russia there is a lower and upper house with the upper one basically being the Russian parliament. The lower house is called the State Duma and a pretty damn authoritative bunch they are as well with a whole raft of powers. In 1999 Roman was elected to the State Duma to represent a region if the Far East of Russia called Chukotka Autonomous Okrug (Chukotka for short, Chuckie to its friends).

Since that time Roman has become something of a legend to the people of Chukotka. To say it was an impoverished region when it elected Roman is like saying Leeds have had a bit of a slump. Amongst other things Roman has done for the area are building school buildings, a college, hotels, a hospital, renovated the airport, all of which was funded from his personal wealth and ran into hundreds of millions of pounds. In addition he took advantage of the fact that he could use Chukotka as a tax haven for Sibneft however only on the condition that the company didn’t pocket the tax savings, rather they ploughed it back into the region and made a commitment to explore for oil there thus boosting the local economy.

The work he has done regenerating Chukotka resulted in Roman being awarded the Russian Order of Honour which is awarded to citizens who, amongst other things, excelling in some way toward improving the conditions of the lives of people.

SO!!!! After much prevaricating we finally get to the bit about Chelsea! June 2003 and Chelsea were in the Champions league and in debt! We will never really know quite how much trouble the club were in with rumours varying in from being on the verge of bankruptcy to the slightly less melodramatic, ‘will have to sell off their key players’. Ken Bates plans to turn Chelsea into a leisure complex had, in effect, pushed the club firmly into sh*t creek and was threatening to steal the paddles, hole the boat and run off with the life jackets. Then, almost out of the blue, came the announcement that was to change the face of Chelsea and English football.

Russian billionaire Roman Abramovich was to buy the club in its entirety, not just a stake, he was going to own the lot and take the club off the stock market. He took on our £80m of debt, and bankrolled a spending spree that made Elton John’s hair fall out.

As expected a massive amount of money went on players but in addition Roman provided a clear indication that his commitment was longer term than many expected by financing the development of a state of the art training complex in Cobham (those of us who remember the old training ground will realise all too well how it lagged behind other top European clubs (although in all honesty we were not a top European club at that point).

There is even a rumour (and I stress rumour as I believe it came out of the lips of Mark Bosnich and god only knows what he might have been on at the time!) that Roman was flying over London in a helicopter when he spotted what he considered to be an ideal location for the new training ground and ordered his people to look into the possibility of purchasing it. That idea never took off, the location was Hyde Park and I don’t think the Queen was looking to invite offers!

This profile is specifically about Roman so I won’t go into the performance of the club whilst he has been our owner other than where it is necessary to provide background. Chelsea fans, and to a large extent English football, had fallen in love with then Chelsea manager Claudio Ranieri – fallen in love in that kind of ‘my gran would love him’ way however Roman hasn’t got to where he is in life by keeping our gran’s happy. The Tinkerman took the newly, and at great expense, assembled squad to a second place finish in the Premiership however there was always a doubt over his ability to be a winner, this illustrated no more clearly than when Chelsea were comprehensively beaten by 10 men Monaco in the Champions League whilst Claudio seemed to entirely lose the plot in terms of his tactics and substitutions.

Roman wanted success and he sent Peter Kenyon (who he had pinched from Manchester United and given strict orders to annoy the crap out of Glory55) out with strict orders to recruit Jose Mourinho (who had just won the Champions League with unfancied Porto to follow up the UEFA Cup he had won the year before). Money talks and ‘Special Ones’ walk and the next three seasons saw back to back Premiership titles, two league cups, an FA Cup and a Charity Shield.

All seemed good and surely Chelsea were set for an extended period of domestic dominance and although still elusive it seemed that a Champions League success was only a matter of time. We had a manager with a track record that was nothing short of stupendous. An owner who wasn’t just rich but also truly seemed to have a passion for the club, he was not one of those stay away owners, he attends nearly every game (and where he can’t he makes arrangements for the game to be beamed onto his yacht), he actually looks like the game matters to him when he is watching and he visits the players in the dressing room after games and also on the training ground when opportunity permits.

However the life and times of Chelsea Football Club have always been one of ‘own foot shooting’ and it would appear that those ghosts are still lurking in the corridors of Stamford Bridge. For a large part of the 2006/07 season (in which Chelsea were to finish second) there was speculation that the relationship between Mourinho and Roman was frosty. The signing of Andriy Shevchenko for a British record fee of £30m was seen by a lot of people as a Roman signing rather than a Jose one and in the January transfer window Jose was refused additional funding to improve a squad he believed to be short in quality due to an unprecedented injury crisis. To a lot of fans this refusal to release funds did seem odd as in comparison with the money spent in the past it was a relatively small amount.

It seemed a fairly logical conclusion that Roman had fallen out of love with Jose (and in particular it was speculated the style of football Jose had Chelsea playing) and the refusal of money was because it has been decided to replace Jose in the summer and thus it was wiser to save the money for the new man as they would have their own transfer targets.

However the summer of 2007 did not see Jose replaced and although the club did admit there had been tension between Jose and Roman it was stated that clear the air talks had been held and that all parties were focused on the common goal of turning Chelsea into a European footballing superpower. Which statement made the events of September 20th even more surprising for the football world. Chelsea had started the 2007/08 season in what can only be described as indifferent form. Although still getting results we were far from convincing and then came a pretty atrocious result when we drew 1-1 at the Bridge against Champions League outsiders Rosenborg. Within hours of that result there were massive rumours that Mourinho had left by ‘mutual consent’ and the next morning (Thursday September 20th) the club confirmed this.

Chelsea fans were stunned and there was no shortage of ill feeling directed at Abramovich with many fans thinking that he was interfering in areas he had no right to (i.e. the football side of things) and that in allowing Jose to leave (I say ‘allowing’ but I think there is little doubt he was sacked irrespective of what the party line is) he had not only just allowed the most talented manager in football walk out of the door he had done it when the season was only a handful of games old and thus destroyed any chance we had of winning the title.

Could the Chelsea fans have been in someway placated by the quick appointment of a high profile replacement. Maybe Hiddink, Lippi, Capello or even a return to the Bridge for Ruud Gullit, a manager many feel had unfinished business at Chelsea. Maybe some would have been placated however this was not to happen, instead came the surprise news that Chelsea’s Director of Football, and personal friend of Roman, Avram Grant was to be the new Chelsea manager. Fans were convinced that this was only a short term measure given that Grant’s only managerial experience was in Israel (albeit he was a success both domestically and, relatively speaking, as manager of the international side) however the noises coming out of the Bridge suggest Grant was not a short term solution further fanning the flames of accusation that Roman is looking to influence football matters more than an owner should be.

Under Grant’s guidance (although some Chelsea fans would say ‘despite Grant’s guidance) Chelsea finished second in the league and lost out in the Champions League when we lost the final on penalties to Manchester United. This was not deemed sufficient for Grant to hold onto his job and he was sacked in May. Roman then turned to Felipe Scolari, a man with a very impressive international pedigree but a largely nonexistent domestic one. This was to be an expensive mistake as in February 2009, just seven months after being appointed , with our season looking like falling apart at the seams, Scolari was sacked and Roman turned to his old friend Guus Hiddink to take over as caretaker manager. As masterstrokes go it was up there with the day I swapped my collection of Felicity Kendall memorabilia for some scabby glove Michael Jackson had once worn.

Hiddink turned our season round, won us the FA Cup, was only denied a Champions Final spot by one of the most, if not the most, appalling refereeing displays in football history and ensured we finished third in the league thus securing a Champions League spot in the 2009/10 season. Everyone, Roman included, was desperate for Hiddink to take on the job on a permanent basis but Guus had always stated he would be returning to his role as the Russian manager (a post funded by Roman) and he was good to his word. He left straight after lifting the FA Cup and two days later Roman appointed Carlo Ancelotti as his replacement. Ancelotti’s first season saw Chelsea, for the first time in their history, won a league and cup double.

However this is really a profile of Roman rather than Chelsea. The last section was added to provide some idea of how willing Roman is to hire and fire with little or no remorse should he feel the results are not as expected.

During this period Roman largely kept out of the news. In 2008 Boris Berezovsky claimed that, in August 2000, Roman had used intimidation, using his close links with the Kremlin, to make him sell his shares at far less than market value. During the court case it was reported that Roman had admitted to paying billions for political favours and protection fees to secure his share in Russia’s oil and aluminium assets. Roman was sued for £2 billion and as far as I know the case is still ongoing.

Meanwhile, just in case anyone caught him at a party in the same boat more than once (a dreadful social faux pas) he sold one, bought another with the new one rumoured to have cost around £1 billion and be the largest privately owned yacht in the world.

Which pretty much brings us bang up-to-date. In a nutshell our owner is worth an insane amount of money. His fortune is estimated as being somewhere between £10 billion and £15 billion. If you ever fancy a boys day out then feel free to pop round to his 440 acre Knightsbridge estate where you can choose between a shot on his go-kart track, or maybe a spot of clay pigeon shooting or a some target practice on his rifle range. He seems to be an intensely private man which is why I have not bothered mentioning any of the available information on his private life – if a person wants to remain private then he is entitled to be allowed to irrespective of his wealth, fame or public image.

[loz]

Just dug this old profile out - a little out of date now but thought I might as well resurrect it.

[wxwax]

Thanks for doing so.

[Scott]

It seems to me that Comrade Roman has been keeping a low profile lately.

[Spiller86]

Busy trying not to have to lose a court case that will cost him 3 billion dollars I'd say.

[AAF]

Very well written. Impressive!

[wxwax]

Most football fans don't really care too much about the moral character of the owner as long as he's willing to sign big cheques. But I must admit I struggle a bit with Roman. Clearly the man's a bit of a crook. The rationalization I use is that, to my knowledge, he's not been implicated in any deaths or the suppression of human rights.

Nevertheless, I understand that we're making a deal with the devil, here. He has those bodyguards for a reason.