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Embezz-tech: how Rostec chief’s children make millions off the defense corporation
Sergei Ezhov
Investigative reporter, The Insider
As IStories found out the other day from the Pandora Papers archive of leaked documents, offshore firms linked to the family of Sergey Chemezov, the head of Russian state-owned defense corporation Rostec, own assets totaling $254 million. The origins of these riches in the accounts of Chemezov’s relatives remain unclear. However, The Insider managed to establish a few facts concerning Chemezov’s sons, shedding light on their ties to a private company fulfilling major contracts for Rostec. One of the Chemezov brothers was employed by the contractor, and the other uses an expensive corporate car listed among its assets. Meanwhile, Chemezov’s children lead a life of luxury, buying elite properties.
“The execution level — the interior, everything under the bonnet, and the design — is top-notch. The engine is great, and the car drives smoothly, on par with foreign vehicles of the same class,” Sergey Chemezov bragged, extolling his new Russian-made Aurus Senat. The head of Rostec proudly reported that his conglomerate’s entities contributed to the creation of this car. “I don't plan to trade it for a Mercedes,” Chemezov gushed.
However, the executive's elder son does not share his father's passion for Russian cars. As The Insider found out, Stanislav Chemezov drives a Mercedes-AMG G 63. He indicated this vehicle, with license plates В777АХ199, in his digital pass application during the COVID-19 lockdowns in Moscow.
Interestingly, the G-Wagen is not his: traffic police records list OOO Insurance Company Independent Insurance Group as its owner. Sergey Chemezov’s younger son is also linked to this company. According to leaked tax data for 2018, Alexander Chemezov is on its payroll while at the same time working at the Faculty of Biology of Moscow State University.
Alexander Chemezov
The Independent Insurance Group is a major contractor of Rostec's. The company secured contracts for voluntary healthcare insurance for Rostec's subsidiary, RT-Techservis, freight insurance for the Ekran Research Institute, and aircraft insurance for Vertolety Rossii (Russian Helicopters).
The aggregate worth of the Independent Insurance Group’s government contracts exceeds $11.5 million — and that’s just according to open-source data, which does not cover classified defense contracts. The company is among the leading insurers of Russia’s military enterprises, with revenue of $52 million and insurance payouts totaling $19.7 million in 2023, according to the SPARK database.
The official owners of the Independent Insurance Group are businessmen Vitaly Gerasimov, Vyacheslav Mazurenko, and Vladimir Mayshev. Mayshev and Chemezov’s elder son appear to go way back, to the time when they ran OOO Gelendzhik Resort Complex “Meridian,” an entity that owned a range of assets in Krasnodar Krai.
The Chemezov clan is known to own multiple elite properties: $46 million worth of villas and land plots on Rublevskoye Highway outside Moscow. Alexei Navalny also exposed Sergey Chemezov’s apartment, worth $57.7 million. The Insider has identified new premium-class apartments Chemezov’s son purchased recently.
According to excerpts from Russia’s real estate register (Rosreestr) available to The Insider, in April 2021, Stanislav Chemezov acquired as many as three apartments with a total floor area of 261 square meters at 117 Rublevo-Uspenskoye Highway — in Level Barvikha Residence, a premium-class residential compound in a coniferous forest some seven kilometers from the Moscow Ring Road.
Ilya Shumanov, CEO of Transparency International Russia, points out that the Independent Insurance Group has a weak market presence and low-profile executives and mostly caters to Rostec’s entities. Essentially, this firm serves the interests of a single customer. “A situation when the owner of a state-owned corporation’s contractor is the business partner of the corporation head's son, even in a different business, constitutes a conflict of interest. In-kind and financial benefits for Chemezov’s sons — the corporate car and the salary — provide additional evidence that this conflict has not been resolved for Rostec’s CEO,” Shumanov concludes.
Making governance decisions in the interests of relatives and business partners is a trademark feature of Russian corruption. According to Shumanov, such corrupt practices do a lot more damage to the country's economy and national security than direct embezzlement of public funds or bribery.
Neither the Independent Insurance Group nor the Rostec press service replied to The Insider’s inquiries. The Chemezov brothers also ignored requests for comment.