Dividends flowing in to Russian tycoons

Russian tycoons received billions of dollars in dividends as their companies resumed or boosted payouts amid easing economic uncertainty over the Kremlin’s war in Ukraine.

At least a dozen business people gained more than 1 trillion rubles, or $11.3 billion, for 2023 and the first quarter of this year, according to data on dividends compiled by Bloomberg from publicly disclosed information. Many have close links to Russian President Vladimir Putin and include some who’ve been sanctioned over the war, which is now in its third year.

Vagit Alekperov, a key shareholder and former president of oil giant Lukoil, topped the list with about 186 billion rubles in dividends. He is sanctioned by the United Kingdom and Australia but has so far avoided U.S. and European Union penalties.

Billionaires Alexey Mordashov of Severstal, and Vladimir Lisin of Novolipetsk Steel were next with 148 billion and 121 billion rubles respectively of dividend income. Mordashov is under U.S., U.K. and EU sanctions, while Lisin isn’t under any major restrictions.

The list also includes Putin’s billionaire ally Gennady Timchenko and Tatyana Litvinenko, who received a stake in Phos-Agro before her husband, Vladimir, was sanctioned by the U.S. in 2023. Vladimir Litvinenko is rector of St. Petersburg Mining University, where Putin received a doctoral degree in 1997, and was the president’s campaign manager in the city during three elections.

The U.S. and its allies imposed sweeping sanctions on Russia in response to the February 2022 invasion of Ukraine, prompting many companies to pause dividend payouts on the back of uncertainty over a potential economic collapse. Those fears haven’t been borne out as Russia’s economy gradually adjusted to the new conditions and exporters found alternative markets.

After contracting in the year that followed the start of the war, Russia’s economy rebounded sharply as the government spent massively to expand the defense industry, shield domestic businesses from the effects of sanctions and provide social support for families.

Gross domestic product grew 5.4% in the first quarter when compared with the same period last year. Many commodities exporters have resumed payment of dividends after reshaping their businesses and rerouting sales toward markets in China, India and other Global South nations that haven’t implemented sanctions over the war in Ukraine.

Ori Aviram/Tribune News Service Crews clear rubble Monday at a children’s hospital in Kyiv, Ukraine, after a missile strike. Russia’s economy has been on the rebound sharply as the government has spent massively.