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Sistema boss Evtushenkov faces money laundering charges

Vladimir Evtushenkov

Vladimir Evtushenkov

Vladimir Evtushenkov, the chairman and majority owner of Russian energy to media conglomerate Sistema has been arrested and charged with money laundering related to the acquisition of Bashneft, the major energy company in the Republic of Bashkorostan.

Sistema issued a statement saying that the company’s management believed the acquisition of the Bashkorostan group was legal and transparent and that it was cooperating with the investigation. It said it would use all legal means to defend its position.

Under Russian law Evtushenkov could face up to 10 years in prison and a fine of RUB1 million (€20,000) if convicted.

Sistema’s shares lost over a third of their value on the news, while shares in telecom subsidiary MTS fell by about 8%.

Sistema is Russia’s largest publicly traded diversified holding company, operating across the telecoms, technology, energy, aerospace, banking, retail, media, tourism and healthcare sectors, with reported revenues of US$8.8 billion (€6.8 billion) for the second quarter and total assets of US$45.2 billion.

Sistema Mass Media, in which the holding company has a 85.7% stake, owns and manages pay TV channels provider Stream, Russian World Studios, Maxima and TsTV.

Sistema also holds an effective majority stake in telecom and pay TV provider MTS, the country’s largest service provider by revenue. Stream is 55% owned by Sistema and 45% owned by MTS. Evtushenkov owns a 64.2% stake in Sistema and his personal fortune is estimated at around US$9 billion.