Rich Rinat says to world: I’m No.1 in Europe

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July 9, 2008, 8:33 p.m. |
The “New Richest Man in Europe” is not shying away from the crown, given to him by Korrespondent magazine’s most recent ranking of Ukraine’s 50 richest people iven to him by Korrespondent magazine’s most recent ranking of Ukraine’s 50 richest people.

Far from a denial, Akhmetov’s public relations gurus are apparently embracing the title and, with it, the figure of $31.1 billion as his net worth.

There is no word on whether Akhmetov, 41, is planning to take his publicity a step further, perhaps by writing an autobiography. Such a book could be titled: “How I became Europe’s richest man in one of Europe’s poorest countries” or “I’m just a heavy-metal guy from the Soviet era.”

A PR Newswire press release, issued in New York and Kyiv on July 1, touts how Akhmetov displaced the previous richest European title holder, Ingvar Kamprad, founder of IKEA furniture giant, by more than $100 million. It cites the rankings from Korrespondent, the Kyiv Post’s Russian­language sister publication, based on asset valuations by Ukraine­based investment bank Dragon Capital.

The press release came from Ronn Torossian of 5W Public Relations, a New York­based agency, on behalf of one of Akhmetov’s charitable arms, the Foundation for Effective Governance.

The increasing visibility of Ukraine’s kingpin – he scheduled a July 10 press conference to announce he’s giving money to fight cancer – moves the Regions Party parliamentarian further from his previous persona as a publicity­shy guy.

Akhmetov’s financial empire consolidates companies from various industries, including mining, oil, energy, finances, engineering and mass media. Akhmetov’s System Capital Management manages a portfolio of more than 90 companies he controls.

A look at his assets shows he started making it big with acquisitions rooted in the violent, crony capitalism of the 1990s.

The Azovstal metallurgical company he owns alone generated some $3.2 billion in net sales last year, and a net income of $420 million. Azovstal is the most lucrative asset in Akhmetov’s Metinvest steel holding.

The news release traces Akhmetov’s rise since graduation from Donetsk National University. He went on to become head of Donetsk City Bank and eventually the president of the city’s Shakhtar soccer team. The release does not mention his business mentor, Akhat Bragin, killed in a 1995 explosion at Shakhtar stadium in Donetsk.

The release lauds Akhmetov’s philanthropic side, including his gift of $150 million to start the Foundation for the Development of Ukraine, and another $50 million for the Foundation for Effective Governance. The donations amount to less than 1 percent of his estimated net worth.

So what’s behind the publicity drive from a guy whose lawyers have filed and won lawsuits against journalists for getting their facts wrong about him?

Many business analysts say that favorable publicity and transparency are simply good for business, especially for a company that wants to attract foreign investment.

Andriy Bespyatov, an analyst at Dragon Capital, said Akhmetov’s companies actively raise funding from foreign lenders, issue Eurobonds and could go public through an initial public offering. So, “they must be open to investors,” he said.
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