Oligarchs Also "Oppose War"... Political Influence Declines Due to Putin's Crackdown
[Asia Economy Reporter Park Byung-hee] "President Putin, please stop this war."
This was the headline on the front page of the British daily Evening Standard on the 28th of last month (local time). The Evening Standard placed a photo of a 6-year-old Ukrainian girl who lost her life due to Russian shelling on the front page and did not include any articles. Instead, beneath the full-page photo, it published only a letter from Evening Standard’s owner Yevgeny Lebedev addressed to Russian President Vladimir Putin. Lebedev is an oligarch born in Moscow in 1980. Oligarch refers to Russia’s emerging tycoons.
Lebedev wrote, "As a Russian citizen, I plead to stop killing our brothers and sisters in Ukraine. As a British citizen, I ask to save Europe from war. As a Russian patriot, I implore you to stop the senseless sacrifice of young Russian soldiers."
The Wall Street Journal reported on the 1st that the number of oligarchs opposing the war is increasing. In recent days, protests against the war have been held daily in major Russian cities, and voices criticizing Putin within Russia are growing louder.
Andrey Yakunin, founder of Russian private equity firm VIY, stated, "The Russian government and the Russian people are different," and added, "There are many Russians who strongly oppose Russia’s military actions now, and I am one of them."
Mikhail Fridman, chairman and founder of Russia’s Alfa Bank, criticized Russia’s invasion of Ukraine in an email sent to employees last week, saying it hurts both Russian and Ukrainian people. Oleg Deripaska, chairman of Rusal, Russia’s largest aluminum producer, wrote on social media on the 27th of last month that peace is very important. The foundation established by Oleg Tinkov, founder of Russia’s Tinkoff Bank, has gained new attention for opposing the war and helping children.
Roman Abramovich, owner of the English Premier League club Chelsea, is reportedly helping facilitate peace negotiations between Ukraine and Russia. Abramovich’s spokesperson said, "Abramovich is working hard to find a peaceful solution to the Ukraine war," without providing specific details, adding, "He has contacted Ukrainian officials and is assisting them." After Russia’s invasion of Ukraine, Abramovich transferred Chelsea’s operating rights to a public interest foundation. He has rarely appeared in the UK since 2018.
However, it is uncertain whether these oligarchs’ anti-war voices will influence Putin. Since coming to power, Putin has thoroughly suppressed opposition forces and consolidated his power. Most oligarchs who criticized Putin in the past are now either detained or have fled abroad. After coming to power, Putin helped only entrepreneurs who pledged loyalty and refrained from political involvement to increase their assets. Especially after the annexation of Crimea in 2014, Putin’s crackdown on oligarchs opposing him intensified.
As a result, wealth concentration among some Russian asset holders has deepened far more than when Putin first took office. According to a Boston Consulting Group survey last year, the top 500 Russian billionaires with net assets exceeding $100 million hold 40% of all household assets in Russia. This is more than three times the global average. Despite owning vast wealth, oligarchs have almost no political influence.
Last week, immediately after deciding to invade Ukraine, Putin summoned entrepreneurs and conveyed that there was no alternative to the invasion. Putin also stated that companies avoiding transactions with firms sanctioned by the West would face legal penalties, and the government would assist companies on the West’s sanction lists. It is known that none of the oligarchs invited to the Kremlin raised objections to Putin. The oligarchs believe they cannot change Putin’s mind at all.
One diplomat said that if an oligarch asked Putin whether he could change his mind even if he lost $4 billion out of his $5 billion fortune, Putin would respond by asking if he wanted to protect $1 billion.
Fridman, who sent an email criticizing the Ukraine invasion to his employees, also said he cannot directly criticize Putin. When asked if he would directly condemn President Putin, Fridman replied, "Doing so would put my employees at risk."
The European Union and the UK announced sanction lists one after another last week. Fridman was included on the EU sanction list but was excluded from the UK list. Fridman said he would appeal to the EU, stating that he has no political or financial ties to President Putin. He said, "The sanctions against me have no effect on Putin."
The UK is expected to announce additional sanction lists within days. Also, the UK Parliament plans to vote within weeks on a bill that mandates disclosure of the identities of foreign owners holding assets in the UK and allows freezing suspicious assets whose sources cannot be verified. This bill is clearly aimed at Russians owning assets in the UK. France also announced on the 1st that it has formed a special committee to investigate the assets of Russian oligarchs within the country. Bruno Le Maire, France’s Minister of Economy and Finance, said in a radio interview, "We will wage a full economic and financial war against Russia," adding, "We are considering not only freezing assets but also confiscation."
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