The companies and individuals linked to the owners of now-defunct Bonza Airlines are part of a complex global web used to whitewash billions of dollars. Matt Prescott with the investigation.

Bonza Aviation is in administration after its owner 777 Partners, a Miami-based private equity company that owns a curious mix of airlines and leasing companies, as well as stakes in several football clubs in Europe, South America and Australia.

MWM understands that 777 Partners’ inability to continue supporting Bonza’s floundering cash flow was partly due to a failed bid for English Premier League (EPL) team Everton FC.

Bonza’s demise. Playing football on the edge of Putin’s business matrix

The failed bid for Everton FC means it’s still owned by British-Iranian businessman Farhad Moshiri (no relation to the recently deceased Iranian artist with the same name). Moshiri was previously the chairman of USM Holdings, a Russian company with significant interests in the metals and mining, telecoms, technology, and internet sectors.

Alisher Usmanov

USM Holdings is 49% owned by an Uzbek-Russian billionaire, Alisher Usmanov, who is reportedly one of the 100 wealthiest people in the world due to his publishing house Kommersant, mobile phone carrier (Megafon), tech company (Digital Sky Technologies (DST), later renamed Mail.ru Group, and metal interests (Udokan; copper).

(Kommersant was formerly owned by Russian oligarch Boris Berezovsky. Originally close to Vladimir Putin, they fell out, and Berezovsky lost most of his assets, was exiled to London, and was found dead in his home in 2013 “with a ligature around his neck.”)

On 28 February 2022, the European Union (EU) blacklisted Usmanov in response to Russia’s invasion of Ukraine. Resulting in an EU-wide travel ban for him and the freezing of all his assets. On 3 March 2022, the United States imposed similar sanctions on him, with exemptions being given to some of his businesses, which authorities worried might otherwise disrupt the global economy and supply chain.

The Official Journal of the European Union described Usmanov as a “pro-Kremlin oligarch with particularly close ties to Russian President Vladimir Putin [who is] one of Vladimir Putin’s favourite oligarchs.” Usmanov lodged an appeal in the European Court of Justice (ECJ) attempting to lift the sanctions, but the appeal was dismissed on 7 February 2024.

In 1992, Usmanov married Uzbek-born Russian rhythmic gymnastics coach Irina Alexandrovna Viner, head of the Russian national gymnastics team and President of the Russian Rhythmic Gymnastics Federation. Viner is considered to be close to Vladimir Putin, having introduced him to former rhythmic gymnast Alina Kabaeva, who is reportedly Putin’s long-time romantic partner. On 4 May 2022, Usmanov filed for divorce from Viner.

Usamov’s holding of 49% of Russia’s second-largest mobile telephone operator, MegaFon, gives him significant influence in Putin’s Russia.

Mail.Ru Group (now VKontakte)

In 2007, VKontakte – a social media company – or VK as it is commonly known, was founded by Pavel Durov (20% shareholder) and a trio of Russian-Israeli investors, Yitzchak Mirilashvili (60%), Mikhael Mirilashvili (father of Yitzchak, 10%) and Lev Leviev (10%).26 VK is the Russian equivalent of Facebook.

Later the same year, Digital Sky Technologies (DST), an investment company run by Yuri Milner (a co-founder of the Breakthrough Prizes in the US with Facebook’s / Meta’s Mark Zuckerberg), acquired 24.99% of VK shares from the initial shareholders for $US16.3m. In 2010, ahead of the Initial Public Offering (IPO), the international and Russian assets of DST were separated, and the international assets became part of the DST Global fund, while the Russian assets were merged into the Mail.ru Group. By mid-2011, Mail.ru had acquired a 39.99% stake in VK, with aspirations of acquiring 100%.

In March 2012, Durov heard about negotiations involving Yitzchak Mirilashvili and Lev Leviev selling their shares in VK to Mail.ru Group’s main investor, Alisher Usmanov. At this point, Durov deleted webpages referring to the initial investors in VK and shortly afterwards postponed its IPO.

At the end of May 2012, Milner and Usmanov’s Mail.ru yielded control of VK by offering Durov the voting rights to their shares. Combined with Durov’s 12% personal stake, this gave Durov 52% of the voting rights.

Subsequently, in April 2013, the Mirilashvilis sold their 40% stake in VK to United Capital Partners (UCP), and Lev Leviev simultaneously sold his 8% to UCP, giving UCP 48% ownership of VK.

Pavel Durov then sold his 12% personal stake in VK in January 2014 to Ivan Tavrin, the CEO of Megafon, a company owned by Alisher Usmanov (see above).

The end result of these complex financial dealings was that Usmanov and his allies now controlled 52% of the company. The CEO of Megafon then sold his 12% personal stake to Mail.ru, enabling Mail.ru to take operational control of VK.

April Fools Day

On April Fool’s Day, 1 April 2014, Durov submitted his resignation from the board of VK. Later, claiming this was an April Fool’s joke, he was dismissed as CEO on 21 April, claiming that VK had been taken over by Vladimir Putin’s political faction. He then fled the country and focused his efforts on the encrypted messaging service Telegram.

Additionally, it is worth mentioning that before all of the above shuffling of VK shares and voting rights, Usmanov became associated with Yuri Milner in 2008 and soon became a shareholder of DST and VK (Mail.ru Group).

Usmanov had 25.3% of the shares in VK but 60.6% of voting rights until he sold a $US530m stake in 2013, reducing his shares and voting rights to 17.9% and 58.1%, respectively. The plot thickened when, in 2013, Usmanov acquired Pavel Durov’s shares in VK.ru, to help Durov retain control of the Telegram app when UCP claimed that Telegram belonged to VK.

On September 16, 2014, the Mail.ru group bought the remaining 48% of VK from the UCP for $US1.5B, thus becoming the sole proprietor of the social network.

In December 2021, Usmanov’s USM Holding shares were sold to the Russian insurance company Sogaz and combined with a stake held by Russian state-owned Gazprombank to give a controlling interest in the company.26 Usmanov said that VK involvement has largely determined the development of USM.5

We don’t know everything that went on during the complex takeover of VK, but it is worth noting that during this period, Alisher Usmanov was involved in the takeover of VK with Kremlin loyalists via both Megafon and Mail.ru.

VKontakte has since been accused of becoming a tool for repressing opposition activists.

Social media investments

Alisher Usmanov’s importance in the world of social media, Silicon Valley, and the Big Tech industry does not end there.

In 2009, Mark Zuckerberg, the founder and CEO of Facebook / Meta, turned to Russian investors at a meeting brokered by Goldman Sachs. Usmanov invested in Facebook in 2009 via Mail.ru, investing $US200m for a 1.96% stake, valuing Facebook at $US10B. One of Mark Zuckerberg’s conditions was that Usmanov give Zuckerberg his voting rights on these shares.

By the time of Facebook’s IPO, in 2012, Usmanov’s stake in Facebook was worth at least $US1.4B, a three-year return of 600%.

Digital Sky Technology (DST), which Usmanov was involved with via Yuri Milner, made an $US800m investment in Twitter in 2011.

Through Yuri Milner’s Mail.Ru Group, formerly Digital Sky Technology (DST), Usmanov also made sizeable investments in Groupon, Zynga, Airbnb, ZocDoc, Alibaba and 360buy.5,31

Usmanov also invested $US100m in Apple in 2013 before selling an unknown number of his shares in early 2014. His investment in China’s Alibaba marketplace was thought to have gone up in value by 500% by late 2014.

In September 2018, a $US2B joint venture was reportedly agreed between Mail.ru and Alibaba Group Holding Ltd, which would merge the online marketplaces of Mail.ru and Alibaba in the Russian market. This deal was backed by the Kremlin via the Russian Direct Investment Fund (RDIF), Russia’s sovereign wealth fund.

Arsenal Football Club

Between 2007 and 2018, Alisher Usmanov was a major shareholder of the English football team Arsenal, having acquired a 14.58% stake. Usmanov and his business partner Farhad Moshiri (remember him?) bought their £75m stake from the club’s former vice-chairman David Dein. Dein was later appointed head of their investment vehicle, Red and White Holdings, which became the largest shareholder in the club outside of members of the board of directors.

Red and White Holdings increased its shareholding to 23% in September 2007. This made Red and White Holdings the second-largest shareholder in the club behind a non-executive director at Arsenal, Danny Fiszman. In February 2008, this stake was increased to over 24%, just short of Fiszman’s 24.11%, and to 25% a year later.

At this stage, Red and White Holdings confirmed that it was the club’s largest shareholder, with the company saying it “has the necessary funding to increase its stake further (but) it has no current intention to make a full takeover bid for Arsenal for six months.” This was significant because once a stake reached 30%, an investor such as Red and White Holdings would have to launch a formal takeover.

As a result of Usmanov’s interest in Arsenal, a “lock-down” agreement was initiated by the Arsenal board, with the chairman, Peter Hill-Wood, announcing directors at the club could only sell their stakes to “permitted persons” prior to April 2009, and should give other board members the “first option” to buy shares until October 2012. Arsenal’s managing director, Keith Edelman, said that “The lockdown … makes us bullet-proof” (from a hostile takeover).

In April 2011, American billionaire businessman Stan Kroenke (husband of Ann Walton, a Walmart heiress), who was already a significant Arsenal shareholder, increased his stake in Arsenal to just over 62% after buying out the stakes owned by Danny Fiszman and Lady Bracewell-Smith. whose family had held Arsenal shares for several generations. This made Kroenke the majority shareholder. As a result of Kroenke’s crossing the 30% stake threshold, he was now obliged to offer to buy out the remainder of Arsenal shares. Usmanov refused to sell to Kroenke and instead held on to his stake.

Usmanov increased his Arsenal shares beyond 29% in June 2011. He then purchased shares held by the Scottish football club Rangers in February 2012. As of October 2013, he owned over 30% of the club. In August 2018, Usmanov sold his shares to Kroenke for £550m.

Everton FC

Returning to the Everton part of the narrative, in January 2017, Usamanov’s USM Holding signed a five-year deal with Everton FC for more than £15m for the naming rights of Everton’s training ground, Finch Farm.

Usmanov’s accountant and partner in USM Holdings is Farhad Moshiri, the current majority shareholder of Everton FC and former co-owner of Usmanov’s Arsenal shares via Red and White Holdings. Moshiri owns 94% of the club.

In 2019, Megafon, the Russian mobile phone company 49% owned by, became the sleeve sponsor for the men’s training wear of Everton FC and its official matchday presenting partner. They then expanded their commercial agreement with Everton in 2020 to become the main sponsor of the women’s team. Usmanov continued to provide funding for the club despite the fact that he was barred from entering the UK in 2021.

Everton suspended its sponsorship ties with USM and MegaFon in March 2022 following the Russian invasion of Ukraine.

Money laundering risk

So why does any of this matter to anyone in Australia?

The wealth generated by Russia’s immense fossil fuel exports acts as a gigantic slush fund, which then gets diversified and laundered around the world. Anyone who comes into contact, directly or indirectly, with this Russian wealth and the influence it buys is vulnerable to being sucked into a dark and dangerous world of murky deals.

Russian wealth and influence may corrupt popular culture via sport, betting, or politics, shift energy, industrial, climate, tax, and competition policies in other fossil fuel-producing countries, and even influence transport options and economic development in countries like Australia, operating independently, outside the protection of large trade blocs.

We are not suggesting that 777 Partners or Bonza Airlines have been involved in anything illegal, but we question the wisdom of Australian aviation flying so close to Vladimir Putin and his oligarchs.

Aviation and sport are significant drivers of economic development and opportunities and should be viewed as strategic industries. They deserve far more national investment and regulation, as well as insulation from malign interests seeking to shift Western popular culture and politics.

* Spot the oligarch: Top row, from left to right: Fahrad Moshiri, Alisher Usmanov, Pavel Durov and Yuri Milner. Bottom row, from left to right: Boris Berezovsky, Vladimir Putin, Mark Zuckerberg and Stan Kroenke.

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This post was originally published on Michael West.