Russian oligarch turns out to be one of Elon Musk's SpaceX investors
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Economics
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Russian oligarch turns out to be one of Elon Musk's SpaceX investors

Suleiman Kerimov
Source:  Bloomberg

Russian oligarch and billionaire Suleiman Kerimov owned a stake in Elon Musk's SpaceX companies, even while under sanctions imposed on him during Donald Trump's first presidential term.

Points of attention

  • Russian oligarch Suleiman Kerimov, owning a stake in SpaceX, sheds light on the intricate financial networks and challenges faced by American companies amidst sanctions and global politics.
  • The investment in SpaceX, facilitated through the Heritage Trust and involving Citigroup's administration, raises questions about due diligence and the effectiveness of sanctions enforcement.
  • Kerimov's vast fortune, accumulated through investments in various industries, comes under scrutiny amidst sanctions imposed by the US and the EU, highlighting his controversial background and involvement.
  • The complexities surrounding Kerimov's investments and the US investigation into Citigroup's handling of the Heritage Trust reflect the ongoing battle to regulate financial activities and uphold international sanctions.
  • The revelation of Kerimov's involvement as an investor in SpaceX underscores the challenges of monitoring complex financial structures and the implications for global defense and communications sectors.

What is known about the Russian oligarch's investment in SpaceX

According to the publication's sources, Kerimov has owned a stake in SpaceX through the Heritage Trust since 2017.

Initially, this trust owned 1% of SpaceX shares.

The SpaceX holding company began operations a year before the US Treasury imposed sanctions against Kerimov and other Russian oligarchs in 2018.

The US Treasury Department blocked Kerimov's assets and banned the Russian oligarch from cooperating with American companies.

The Heritage Trust was administered by Citigroup, which decided that there was no need to block the trust and its related entities after Kerimov was sanctioned, and the trust continued to operate.

Russian oligarch Suleiman Kerimov owned a stake in Elon Musk's SpaceX
Suleiman Kerimov

Already in June 2022, the US Treasury Department blocked a $1 billion trust that was created in 2017 for Kerimov's assets in the US.

This happened after investigators uncovered a complex structure of legal companies and front individuals created to conceal Kerimov's influence over Heritage Trust.

The publication's journalists note that this demonstrates the obstacles that intricate financial networks create for US attempts to uphold sanctions, and the problems faced by companies like SpaceX, which is now valued at around $350 billion and is becoming an increasingly influential player in global defense and communications.

They also raise questions about due diligence at Citigroup, the international banking giant currently under investigation by the US Department of Justice over its handling of the Heritage Trust.

What is known about the fortune of Russian oligarch Kerimov?

According to Bloomberg, Kerimov is in 17th place among the richest Russian oligarchs.

He ranks 282nd in the overall ranking with a net worth of about $9.9 billion.

Kerimov made his fortune by buying stakes in Russian companies, particularly in the banking, energy, and mining industries, sometimes using loans from state-owned banks.

The EU imposed sanctions on Kerimov in 2022, calling him a member of the inner circle of oligarchs close to Putin.

In April 2018, the US imposed sanctions on Kerimov, freezing his assets and banning US transactions with him as part of the Trump administration's broad-based efforts to hold Russian officials and oligarchs accountable for profiting from corruption and foreign aggression.

In April 2022, the US seized the 100-meter superyacht Amadea in Fiji, which Kerimov controls through a number of shell companies.

In September 2022, the US Treasury Department imposed sanctions on the entire Russian Senate, including Kerimov, for approving Putin's request to send troops into Ukraine and providing an "unjustified pretext" for a full-scale invasion.

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