Temerko and Ms Love—an odd pair
PART 1 of an in-depth investigation into AQUIND's ownership origins
This is the first part in the series
Tracing AQUIND’s ownership origins:
SLP Engineering: laying the foundations
SLP Engineering (SLPE) was a construction company based in Lowestoft, which built offshore oil platforms for more than 40 years. Much of its trade related to the North Sea industry, though by the end it was doing business on five continents.1
Its independent journey began on 5 August 1999, following a management buyout from its previous owners: the giant Brazilian conglomerate Odebrecht (recently renamed Novonor).2 However its origins can be traced back further to Sea & Land Pipe Lines Ltd, which was first founded in London in 1967.3
As will become clear in this series, SLPE gave birth to the OGN group of companies from which AQUIND descends.
As far as this investigation is concerned, the story begins in June 2004, when the London-based accounting firm Hazlems Fenton (HF) acquired the only share in Rockpoint Investments—a holding company created just a week earlier.
HF had gradually acquired a 46.5% stake in SLPE in the two years prior, at a total cost of £2.7 million. Later that June it transferred all those shares to the new holding company, Rockpoint.
In the same month, Singaporean company Keppel FELS acquired 5% of SLPE for £700,000. The following year the two firms would enter into a joint venture, forming a company registered in the US state of Texas—Keppel SLP—which still exists to this day (as Keppel FloaTEC).4
The 48.5% controlling stake in SLPE remained in the hands of the managerial group who had bought it five years earlier. The trio of David Edwards, Dennis Clark and Cristopher Blyth, all held their shares through an intermediary company: SLP Holdings (SLPH). Edwards owned half of SLPH, while Clark and Blyth each owned a quarter.
This ownership structure remained intact until 2007, when Alexander Temerko first became involved with the company.
Alexander Temerko: political exile?
Temerko arrived in London in October 2004, having fled Russia after being questioned by investigators in Moscow. A year earlier his close friend and boss, Mikhail Khodorkovsky, had been arrested by Russian authorities and charged with fraud. Temerko was elected as a vice-president of Yukos following Khodorkovsky’s detention in October 2003.
While the charges against Khodorkovsky were not entirely unfounded, they could equally have been levelled at almost any other of Russia’s oligarchs at the time. The attack on Russia’s then wealthiest man—and his oil company Yukos—was clearly motivated by his public challenges to the country’s President, Vladimir Putin.
In March 2005, half a year after his abscondment to London, Temerko was removed from the Yukos board at his own request. In May he was charged in absentia with embezzling 19.7% of Yeniseineftegaz’s shares.
The Russian state attempted to have him extradited to face the charges in person, but in December the extradition request was denied at Bow Street magistrates’ court. District Judge Timothy Workman stated in his ruling:
I have come to the conclusion that the motivation for the charges against Mr Temerko are inextricably entwined with the motivation for the prosecution of Mr Khodorkovsky. I therefore find that the prosecution of Mr Temerko is politically motivated and the request for his extradition is made for the purpose of prosecuting or punishing him on account of his political opinions.
In the fifteen years since, Temerko has gone on to become an active campaigner for and generous financial backer of the Conservative party.
Catherine Belton is a former Moscow-based FT correspondent and the author of a recent book, Putin's People (for which she and her publisher HarperCollins are being sued by Roman Abramovich and other oligarchs).5 Belton wrote an extraordinary investigative profile of Temerko in the run up to the 2019 general election, in which she makes a vital observation about the importance of the blocked extradition request:6
The case bolstered his standing as a Russian dissident who’d suffered at the hands of the Russian state, helping secure his footing as a donor who could be trusted.
With Love from Russia
There’s a peculiarity about the history of this group of companies that has never been adequately dealt with by colleagues in the press: the brief involvement of Lubov Chernukhin (née Golubeva). While I don’t intend to achieve that here, I will include some details to be built upon at a later date.
In July 2006, Lubov Golubeva (whose first name is Russian for ‘Love’) became a director of both Rockpoint and SLPE. At that time Rockpoint owned 46.5% of SLPE.
Then in December—a year after he was effectively granted political asylum—Temerko hosted a drinks party at Kensington Palace, aided by Prince Michael of Kent.7 A recent investigation by the Times’ Insight team has described Prince Michael as the Queen’s “unofficial ambassador” to Russia.8
Having been in the country for less than two years, Temerko’s local network of social and business connections was still in its infancy. Luckily he had a friend with a more refined circle of acquaintances: Inna Vainshtok.
Inna, who lived in London with her husband Boris Lokshin, is the daughter of Semyon Vainshtok: the then president of Russian state-owned pipeline monopoly, Transneft. She organised an evening attended by “a mixture of art historians and Russian businessmen” for whom no expense was spared, with drinks at the Palace followed by a lavish dinner at the private members’ Mark’s Club.9
Temerko’s fellow attendees included: Inna’s father Semyon Vainshtok; the former general director of the Caspian Pipeline Consortium, Viktor Fedotov; and Richard Glasspool, an English accountant and former Partner at KPMG Russia. All four of these men would go on to simultaneously serve on the board of directors of SLPE.
It began just two months later when Temerko joined Golubeva on the board. The following month, March 2007, a shell company registered in the offshore territory of the British Virgin Islands (BVI)—OGN Investment Partners—acquired Rockpoint from HF.
In turn, OGN Investment Partners now controlled Rockpoint’s 46.5% stake in SLPE. It’s unclear what payment (if any) HF received for the sale of assets it had spent more than £2.4 million acquiring.
(N.B. To this day, we still don’t know who owns or controls OGN.)
In the following week Golubeva resigned from her directorships with both Rockpoint and, a few days later, SLPE. In both instances, on the exact same day, Richard Glasspool was appointed to the selfsame role.
This was Golubeva’s last apparent involvement with the group and in November she married the former Russian deputy finance minister, Vladimir Chernukhin, in Chelsea Old Town Hall.
In the decade-plus since, Lubov Chernukhin has donated more than £1.8 million to the Conservative party,10 making her “the biggest female Tory donor in British history”.11
While they only shared the SLPE boardroom for a month, Golubeva’s collaboration with Temerko is curious.
She had previously been the bank director of the London branch of ABN Amro—contemporaneous reports indicate she was in the role in May12 and October13 of 2004, but it’s unclear when she began or ended her tenure.
Nevertheless, representatives of ABN Amro—including Golubeva’s colleague, Frank Kuijlaars, who was managing director of the London branch—were directly involved in financing the Russian state’s seizure of Yukos’s assets.
On 31 October 2003, days after the arrest of Mikhail Khodorkovsky, prosecutors froze 44% of Yukos shares—worth some $15 billion (£8.8 billion) at the time—to prevent Khodorkovsky from selling his controlling stake.14 Putin immediately went on the charm offensive to allay the fears of Western banks; as Belton wrote in Putin’s People:15
On the same day the Yukos shares were seized and Medvedev was appointed Kremlin chief of staff, Putin held an intimate meeting with the heads of some of the largest financial institutions in the world, including CitiGroup, Morgan Stanley and ABN Amro.
Two years later, in September 2005, ABN Amro was one of four banks that agreed to grant a $7.5 billion (£4.1 billion) syndicated loan to Rosneft and its parent company, state-controlled Rosneftegaz. That loan would directly finance its purchase of a 10.74% stake in Gazprom, which brought the Russian government's total stake in the gas monopoly to just over 50%—crucially—restoring its majority.
It’s important to understand that Rosneft, which was 100% state-owned, played a starring role in the war against Yukos. It acquired Yuganskneftegaz—Yukos’s main production unit (it literally put the “Yu” in Yukos)—in a December 2004 auction, held by the Russian state to recover some of the company’s alleged tax debts.
The winning bid—the only bid—of $9.4 billion (£4.8 billion) was about 60% below market value, according to JPMorgan.16 Afterwards Rosneft put out a statement on its website describing the purchase as “the most monumental bargain in Russian history”.17 Putin’s subversive economic adviser Andrei Illarionov described it as as “the scam of the year”.18 (Illarionov resigned a year later.)
Temerko landed a column in the Wall Street Journal in May 2006, with the help of PR firm Bell Pottinger who he had hired on a “substantial retainer”.19 He wrote a hit piece titled ‘Rosneft Buyer Beware’, ahead of its Initial Public Offering on the London Stock Exchange the following month.20 In it, he made specific reference to the above loan:
The lenders were ABN Amro, JP Morgan, Morgan Stanley and Desdner Kleinworth Wasserstein, which happen to be the four lead banks in Rosneft's coming IPO.
Another year later, and just 2 months after Golubeva departed the boards of Rockpoint and SLPE, her former ABN Amro colleague Frank Kuijlaars—who had since been promoted—spoke to the FT just as Yukos met its end:21
Some believe Mr Khodorkovsky did indeed stick his neck out too far in minimising taxes. “Khodorkovsky was extremely aggressive on the tax front,” says Frank Kujilaars, head of global oil and gas at ABN Amro, which has led in financing Rosneft’s takeover of Yukos’s remains.
“He was trying to maximise the return in terms of using every loophole,” said Mr Kujilaars. “It wasn’t illegal but it was very much on the edge.”
It’s unclear whether Golubeva herself had any involvement in the loans that helped to finance the state’s raid on Yukos’s assets. Nevertheless, given her former employer’s direct hand in that campaign—something Temerko himself highlighted only a year earlier—their brief union at SLPE strikes me as odd.
That oddness notwithstanding, it would be easy to dismiss their paths crossing fleetingly in the SLPE boardroom as trivial. Indeed, much media coverage to date has done precisely that. I suspect the matter is no mere coincidence, which I intend to explore in more depth at a later date.
Part 2: Three oilmen and an accountant
SLP Engineering Limited, 2009. Full accounts made up to 30 June 2008. Available at: <https://find-and-update.company-information.service.gov.uk/company/03820643> [Accessed 7 June 2021].
Energy, Oil & Gas magazine. 2010. SLP Engineering. [online] Available at: <http://energy-oil-gas.com/profiles/slp-engineering/> [Accessed 26 May 2021].
Companies House. n.d. Sea & Land Pipe Lines Ltd. [online] Available at: <https://find-and-update.company-information.service.gov.uk/company/00900114> [Accessed 26 May 2021].
Energy, Oil & Gas magazine. 2010. SLP Engineering. [online] Available at: <http://energy-oil-gas.com/profiles/slp-engineering/> [Accessed 26 May 2021].
Shubber, K., Barker, A., Foy, H. and Seddon, M., 2021. Russian billionaires file lawsuits over book on Putin’s rise. [online] FT. Available at: <https://www.ft.com/content/a355a200-4b90-4d73-b193-b73650ab8b77> [Accessed 3 June 2021].
Belton, C., 2019. In British PM race, a former Russian arms tycoon wields influence. [online] Reuters. Available at: <https://www.reuters.com/investigates/special-report/britain-eu-johnson-russian/> [Accessed 3 June 2021].
Elliot, P. and Wild, F., 2021. Owner of Tory donor company chaired firm linked to Russian corruption allegations. [online] The Bureau of Investigative Journalism. Available at: <https://www.thebureauinvestigates.com/stories/2021-01-12/owner-of-tory-donor-company-chaired-firm-linked-to-russian-corruption-allegations> [Accessed 21 May 2021].
Calvert, J., Arbuthnott, G., Calver, T. and Butt, Y., 2021. Prince Michael of Kent ‘selling access’ to the Putinistas. [online] The Times. Available at: <https://www.thetimes.co.uk/article/prince-michael-of-kent-selling-access-to-the-putinistas-gbb99pcx6> [Accessed 2 June 2021].
Hollingsworth, M. and Lansley, S., 2010. Londongrad. London: Fourth Estate, pp.248-251.
The Electoral Commission, n.d. [online] Available at: <http://search.electoralcommission.org.uk/> [Accessed 2 June 2021].
Sampson, A., 2020. Meet Lubov Chernukhin, whose £1.7m makes her the biggest female Tory donor in British history. [online] Tatler. Available at: <https://www.tatler.com/article/who-is-lubov-chernukhin-biggest-ever-female-tory-party-donor> [Accessed 2 June 2021].
Naftogaz. 2004. НАК “Нафтогаз України" та ABN AMRO Bank N.V. обговорили питання випуску єврооблігацій. [online] Available at: <https://www.naftogaz.com/www/3/nakweb.nsf/0/5F6D1B38263C50DEC225710A00471D92?OpenDocument&year=2004&month=05&nt=%D0%9D%D0%BE%D0%B2%D0%B8%D0%BD%D0%B8&> [Accessed 3 June 2021].
Люта, Г., 2004. 500 миллионов долларов — на пять лет… В «Нафтогазі України» уверены, что удачно разместили свои еврооблигации. [online] Зеркало недели | Дзеркало тижня | Mirror Weekly. Available at: <https://zn.ua/energy_market/500_millionov_dollarov__na_pyat_let_v_naftogazi_ukrayini_uvereny,_chto_udachno_razmestili_svoi_evroo.html> [Accessed 3 June 2021].
Korchagina, V., Belton, C. and Nicholson, A., 2003. Yukos Shares Frozen, Voloshin Is Out. [online] The Moscow Times. Available at: <http://oldtmt.vedomosti.ru/sitemap/free/2003/10/article/yukos-shares-frozen-voloshin-is-out/234918.html> [Accessed 3 June 2021].
Belton, C., 2020. Putin's people. 1st ed. London: William Collins, p.250.
Marszałkowski, M., 2020. Years ago Rosneft tore out Yukos's heart. Today Russia may pay dearly for that.. [online] BiznesAlert EN. Available at: <https://biznesalert.com/marszalkowski-rosneft-yukos-russia-energy-oil/> [Accessed 7 June 2021].
Belton, C., 2007. Rosneft acquires Yukos assets in auction. [online] FT. Available at: <https://www.ft.com/content/099e6604-f976-11db-9b6b-000b5df10621> [Accessed 7 June 2021].
BBC News. 2004. Putin aide slams Yukos sell-off. [online] Available at: <http://news.bbc.co.uk/1/hi/world/europe/4129875.stm> [Accessed 7 June 2021].
Hollingsworth, M. and Lansley, S., 2010. Londongrad. London: Fourth Estate, pp.248-251.
Temerko, A., 2006. Rosneft Buyer Beware. [online] WSJ. Available at: <https://www.wsj.com/articles/SB114841946639861025> [Accessed 3 June 2021].
Belton, C., 2007. Yukos finally expires, victim of its battle with the Kremlin. [online] FT. Available at: <https://royaldutchshellgroup.com/2007/05/10/financial-times-yukos-finally-expires-victim-of-its-battle-with-the-kremlin/> [Accessed 3 June 2021].