They bought country houses, super-yachts and football clubs, but the era of the Russian oligarch may be drawing to a close.
Details of the financial bailout being offered by the Kremlin to Russia’s richest men have revealed that many could be stripped of power by next Christmas. The loans will last for one year only and will be collateralised against shares owned by the oligarchs.
Most are expected to struggle to repay the loans within a year, raising the possibility that the Kremlin is trying to engineer the renationalisation of the Russian economy.
The bailout could be a double-edged sword: it may save the oligarchs’ companies in the short-term but could reduce their power and wealth in the long run. According to Zina Psiola, a Russian fund manager at Clariden Leu in Zurich: “Some oligarchs will no longer be oligarchs. It’s extremely unlikely they’ll all be able to repay in a year.”
Figures such as Roman Abramovich, the owner of Chelsea Football Club, have seen the value of their companies collapse, forcing them to seek government aid or risk defaulting on loans to foreign banks. Evraz, a steel company part-owned by Mr Abramovich, has reportedly already received $1.8 billion (£1.2 billion) from the Kremlin.