Yuri Milner

Obscured by a maze of offshore shell companies, the Twitter investment was backed by VTB, a Russian state-controlled bank often used for politically strategic deals.

And a big investor in Mr. Milner’s Facebook deal received financing from Gazprom Investholding, another government-controlled financial institution, according to the documents. They include a cache of records from the Bermuda law firm Appleby that were obtained by the German newspaper Süddeutsche Zeitung and reviewed by The Times in collaboration with the International Consortium of Investigative Journalists.

Mr. Milner eventually teamed with Alisher Usmanov — an Uzbek-Russian oligarch close to the Russian prime minister, Dmitri A. Medvedev — and a former Goldman Sachs executive to build a large stake in Mail.ru, a Russian internet company that now trades on the London Stock Exchange.

Mr. Milner’s initial American investments came as he served on an innovation commission set up in 2009 by Mr. Medvedev, who was Russia’s president at the time and is something of a tech enthusiast, famously touring Apple’s headquarters in Cupertino, Calif., with Steve Jobs.

In May 2009, Facebook announced an investment of roughly $200 million by Mr. Milner’s company, Digital Sky Technologies, and said the company planned to spend at least $100 million buying additional stock. Eventually, Mr. Milner’s new venture capital firm, DST Global, also amassed a significant stake in Facebook. Ultimately, Mr. Milner’s companies came to own more than 8 percent of Facebook and 5 percent of Twitter, helping earn him a place on various lists of the world’s most powerful business people. His companies sold those holdings several years ago, but he retains investments in several other large technology companies and continues to make new deals…

There is nothing illegal about foreign state-owned institutions investing in American companies. VTB and Gazprom said the transactions were both sound investments, not motivated by political considerations.

Over several years, Gazprom Investholding and a subsidiary made hundreds of millions of dollars in loans to a company called Kanton Services, according to records from the Panama Papers, the trove of leaked documents from the law firm Mossack Fonseca. Kanton, in turn, owned one of the DST investment vehicles used to buy shares of Facebook. While it is unclear precisely when Kanton first received its stake in the DST entity, Kanton received $197 million of the Gazprom Investholding loans three months before Facebook announced its first deal with Mr. Milner, the records show.

Kanton, based in the British Virgin Islands, had numerous ties to Mr. Milner’s backer, Mr. Usmanov.

Kanton was owned by a longtime Usmanov business associate, and was controlled by Matthias Bolliger, a director of numerous subsidiaries of Mr. Usmanov’s main holding company, USM Holdings, according to an Appleby memo and the Panama Papers.

The Kroll report — a “reputation audit” — had been commissioned by Mr. Usmanov as he set out to burnish his image a year before his deal with Mr. Milner to invest in Facebook.

To complete the Facebook deal, DST used a pair of lawyers based in Cyprus and Britain who have also set up offshore entities for Russian oligarchs close to Mr. Putin, according to the Panama Papers, United States securities filings and records from Appleby.

Mr. Milner’s roughly $380 million investment in Twitter was directly backed by another instrument of Kremlin power: Russia’s second-largest bank, VTB.

Sixty-one percent of the bank is owned by the Russian government. VTB’s president, Andrey L. Kostin, is a former Soviet diplomat; Matthias Warnig, on the bank’s supervisory council, is a former East German spy who served in Dresden while Mr. Putin was stationed there with the K.G.B.

In July 2011, VTB invested at least $191 million in exchange for shares of an Isle of Man company called DST Investments 3, corporate records show. That offshore vehicle was used to buy roughly half of DST Global’s stake in Twitter that month. DST Investments 3 also issued shares to Kanton, the company linked to Mr. Usmanov that was at the center of the Facebook deal.

The Twitter deal had a notable feature: VTB put virtually all of the cash into DST Investments 3, filings show. Kanton contributed almost none. It is highly unusual for investors in DST funds to get stakes without contributing cash, according to a person familiar with the matter.

On May 7, 2014 — six months after Twitter’s initial public offering, when insiders were first permitted to sell their shares — VTB transferred the bulk of its stake in DST Investments 3 to Kanton. DST also cashed out its Twitter investment.

DST had one other investment from VTB, which Mr. Milner compared to a sovereign wealth fund. VTB was an investor in the Chinese internet company JD.com as recently as February 2015, when it transferred its stake to Kanton, Isle of Man records show.”

---

Trump, Putin and the mob. Part 8: Yandex, Tiger Global Management & the connection to Donald Trump byJay McKenzie June 24, 2018

“Knowing that Yandex was founded in Russia and remains based in Moscow, it was somewhat peculiar to find that one of the initial investors in Yandex wasn’t Russian. He was an American named Chase Coleman III, who runs a hedge fund known as Tiger Global Management. This information can’t be found on Coleman’s Wikipedia page, but as of 2011, Tiger Global was the largest shareholder of Yandex, with nearly a $2 billion investment in the company.

In particular, it’s worth focusing again on Yuri Milner. In 2005, Milner founded Digital Sky Technologies (DST, which became Mail.ru Group in 2010). By 2006, Milner had rejected Yahoo’s offer to buy a stake in the company. Instead, he brought in a different set of investors, among them Renaissance Capital with a 5% stake, and Tiger Global Management initially bought a 12% stake in DST.

In 2008, Milner’s DST became the majority shareholder of Mail.ru in preparation for Mail.ru’s IPO, in part by purchasing a 15% stake in the company from Tiger Global Management, though Tiger Global retained a 13.4% stake after the sale.

Since the company was founded in April 2001, Tiger Global has been the lead investor 125 times out of the company’s 238 total investments.

Remember, in addition to being business associates with Mark Zuckerberg, Milner was an early investor in Facebook and Twitter. It was recently revealed that Milner and his business partner, Russian oligarch Alisher Usmanov, were investing Kremlin money in Facebook and Twitter through DST. We also know that Milner was an investor in Cadre, a New York real estate technology company co-founded by Jared and Joshua Kushner.

Chase Coleman’s Tiger Global Management was also an early investor in Facebook. In addition to Facebook, Milner and Coleman’s companies have both invested in Spotify, JD.com, Zynga, Flipkart, OlaCabs, Airbnb, 17Zuoye.Com, NuBank and Grofers. In late 2017, Milner’s private investment company Apoletto Managers invested alongside Tiger Global in a “payments gateway provider for online merchants” based in India called Razorpay.

Vkontakte, which is Russia’s equivalent of Facebook, is 100% owned by Mail.ru Group. When Yuri Milner resigned as CEO, he was replaced by his protégé and company co-founder, Dmitry Grishin. In addition to sanctions against their companies, Ukrainian President Petro Poroshenko blocked access to these sites for three years.

Kushner met with the head of the Vnesheconombank or VEB, and Prince met with the head of the RDIF, a former subsidiary of VEB. I bring this up because another initial investor to Yandex was Baring Vostok Capital Partners. In 2012, a $100 million investment in Karo Film, a Russian cinema chain, was led by Baring Vostok alongside the Russian Direct Investment Fund (RDIF). At the time, the RDIF was a fully owned subsidiary of Putin’s personal piggy bank, VEB.

Baring Vostok itself was founded in 1994 by an American named Michael Calvey. Since 1997, a Russian man named Vadim Bakatin has been an adviser to Calvey’s private equity firm. Who is Vadim Bakatin? He is, like Putin, another “former” KGB man.

In February 2009, Alfa Bank and Yandex.money became partners in a joint program they called ‘Money: From A to Ya’. According to the press release at the time, Yandex.Money users with an account at Alfa-Bank can now instantly transfer funds from their account to the Yandex.Money e-wallet and back. Neither user’s personal information, nor account details are transmitted over the internet.” Read More