Who is Maxim Demin and where did he make his money?

Nothing to do with Max Demin per se, but a story to illustrate the chaotic nature of Russia post the fall of Communism.

Back in the early nineties I did some consultancy work with ABB motors, which was based in Helsinki. They designed and built motors and similar kit for factories, power stations etc. One of their senior product managers told me a story over a vodka or two about a transaction that had taken place a few years earlier.

ABB had built two gas turbines destined for a power plant near St Petersburg. However they couldn’t deliver because their counterparty, which was some kind of multi industry conglomerate, had no money and no means of acquiring money. Instead, they resorted to bartering. The Russians did have two large super trawlers which were capable of generating considerable dollar revenue. But there was a catch, they didn’t have any fuel. So ABB advanced the money to buy fuel and then accepted the proceeds from several months’ fishing as eventual payment for the gas turbines.

So you can see how Max’s ability to negotiate Western finance would have played out with Taftnet, in an economy that had only just emerged from trading fish for power plants.
 
wallmth said:
So are we sticking to the story that we have the one and only non dodgy Russian Oligarch in the world ?
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It's an interesting question.

I don't know whether he is a good or bad oligarch. Is he an oligarch at all?

How bad does someone have to be before they are truly 'bad'. Saudi Arabian bad? Alan Sugar bad?

On the surface and from reading kirsikka's research he seems to only have been doing what traders in the City of London have been doing for years.

He's also a great owner as he has refused to stick his nose in and doesn't start gobbing off in papers every five minutes. He also puts his money firmly behind the club.

I suppose the only answer is that he may be an oligarch but he's our oligarch.
 
Max has always been a private person since he came onboard at our club and there has been some information about his background and businesses out in the media in this country, but very little.

Max since he has been at our club has spoken more by his actions behind the scenes which led us eventually up into the Premier League.

Quite happy for that to continue, if Max wants to continue to stay in the background and come out with the occasional statement like getting us back into the top league so be it.

He did get us back up as he said he would.
 
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It's a tough one, many Chelsea fans think Abramovich was a great owner, put 100s million into the club. But he clearly had connections to Putin and dubious sources for his money.
How would we feel if Max did have some connections?
I'm sure most multi millionaires have some dubious deals in their history. Everyone knew Abramovich's background for years, but only when Putin invaded Ukraine was something done about it.
So if Saudi invade one of their neighbours, what happens at Newcastle?
 
wallmth said:
So are we sticking to the story that we have the one and only non dodgy Russian Oligarch in the world ?
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I'm not sure I've answered the question where the money came from in full but it does uncover some of his journey to wealth.

The oligarchs got their wealth through buying state assets at knock down prices which he doesn't appear to have done.

However, a lot of his deals and wealth generation do appear in on way or another closely related to Tatneft or someone connected with them, a place where he previously held a senior position.

It isn't unusual for business people to stick to the area they know and use their business contacts so that doesn't mean there is anything untoward there.

What the above doesn't show is how he generated the stake for his first investment success.
 
dragonm8 said:
Well researched. Dare say he may look to sell the club in the near future as he apparently has more nearly a third of his personal wealth tied up in the club.

Moving, and making money will be much more difficult for him (seeing as he does much of his business in Russia), given the increased scrutiny the conflict has placed on anything Russian.
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I think you're right about the Russian money but he has been building his overseas investment portfolio since 2005 and did seem to sell up a lot of the Russian side about ten years ago.

Where he may face a challenge in generating new wealth via Wintel since that seemed to have a sweet deal in place with Tatneft and the Swiss company. I'd assume that will be on hold.

Thinking alternatively, no doubt there will still be a market for Russian oil in Africa or elsewhere so it could end up being a bigger opportunity for him. At the moment Tatneft are selling a lot direct to that Swiss firm but they may need Wintel's help in shifting that to new buyers. So you could argue he may end up profiting out of it if he can cut the deal. Please note, I'm not making and comment there on the morality of that or an saying Wintel are doing that. Merely painting potential situations.

Also the 1/3 of his wealth thing is based on huge guesswork from me. His wealth could easily be massively more than that. I'd be pretty confident he has plenty of investments where there is no newspaper article paper trail that mentions his name.
 
New Forest Cherry said:
does this mean he's only worth $400m and likely to want his money back sooner rather than later, and explains why we haven't signed anyone?
sorry, I'm a bit thick
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Not really. The £400m is a big guess and could be out but a wide margin.

I don't think his wealth will be impacting our signings this season. The club has spent two years trying to make the spending more sustainable and I think that's more of the issue. He he wanted to underwrite more borrowing I'm sure he could. I suspect he's more reluctant to do so now, hence us playing the waiting game to get better prices.

Take Tavernier. A few weeks ago Boro fans were hoping for £20m and expecting £15m plus add ones. In the past we'd likely have paid it to get it over the line early. We waited and now Boro have caved to £10m plus add-ons.

The signings will come. Just be patient.
 
Notmarcjackson said:
That's really interesting and thank you for putting in the work.

Just to answer one question re traders.

If you speak with a commodity trader they will say that they provide a worthwhile job, giving producers certainty over their future income and giving buyers access to parcels of goods.

However, the majority of traders are in fact speculators, adding little to the value chain. The main aim is to bet on the future price of a good, in the hope that you get it right.

much of the work is analysis, like fund managers, much of it is mathematics, like bookmakers.

The main mistake people make when thinking about trading is to think that what they look for is certainty in the market, in fact, they make much more money when times and markets are volatile. Like now. If Max does still have shares in a Russian trading company then he'll be making money hand over fist. The Chinese, Indians and even the EU are still buying Russian energy.

Traders thrive based on their access to information and the software they use is something to behold. I've seen a couple of these guys working and they are as far from Wall Street as you can imagine. Serious, hard-working and some might say a tiny bit boring. One friend of mine was a serious mathemetician, made an absolute shed load by the time he was 25 then retired from trading (that seems like the shelf-life) then went back to uni to get a pure maths doctorate.
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Thanks, interesting stuff. Whilst I get what Wintel may offer for the other oil deals mentioned ( smaller oil companies, plus other bits) I'm still struggling to understand the Tatneft deal.

Tatneft are already selling directly, through a Tatneft subsidiary, directly to Vitol. So why is some of the oil going through Wintel if it's still then being sold on to Vitol? Why doesn't it also go directly? If the Wintel purchase from Tatneft was being sold on to a potential number of customers of which Vitol was one I could understand it. However, if there's only one destination for it then I'm a touch confused.

Maybe Wintel helped structure/broker the original deal in return for a guaranteed cut on a % of the oil of something? That's a pure guess though. Not based on any factual knowledge.
 
redskins said:
Thanks Kirsikka, very interesting.
The bit that sticks out the most for me is that Max got involved because the club was basically mortgaged for a loan (not that unusual in itself) so potentialy never really considered the long term project. I bet he is as amazed as most as to the outcome. :utc:
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Agreed 100%. The way EM portrayed it was he used his building company to spruce up the stadium as part of a long term plan to land Max. This doesn't agree with that narrative.

Looks like EM and us both got very lucky.
 
Notmarcjackson said:
It's an interesting question.

I don't know whether he is a good or bad oligarch. Is he an oligarch at all?

How bad does someone have to be before they are truly 'bad'. Saudi Arabian bad? Alan Sugar bad?

On the surface and from reading kirsikka's research he seems to only have been doing what traders in the City of London have been doing for years.

He's also a great owner as he has refused to stick his nose in and doesn't start gobbing off in papers every five minutes. He also puts his money firmly behind the club.

I suppose the only answer is that he may be an oligarch but he's our oligarch.
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Agreed. I'm not sure the term oligarch is correct in his case.

He doesn't seem to have big political connections or have bought up huge amount of state assets in a corrupt auction. Therefore it feels like lazy journalism to use the term in his case.

Does it mean he's completely squeaky clean? I can't answer that question with complete confidence but he doesn't have a history anything like that of, say, Ambramovic.

One thing that did jump out at me is he's clearly am incredibly astute businessman with a background progression to wealth that would make sense in a Western country

Management Consultant --> Senior position at large firm where he cuts big international deals --> Successful personal investor --> Very wealthy individual buying and selling diverse investments

Exactly as you said, not so different to a route that could be plotted for some City of London workers.
 
yesyescherry said:
What links does he have to the Russian government? If none, then he's not an oligarch.
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To be objective, you could ask questions about his links to Tatneft and a number of other companies that are in some way related to Tatneft given they are a state firm. I doubt we'll ever get clarity on that. However, what is clear is he made some genuinely revolutionary international business deals for Tatneft whilst he worked there so you can argue that he's hugely respected at the company and a first port of call for international deals for them, or companies related to the, as someone they can trust and rely on. So I think it would be unfair to whisper corruption in the same way it's done about certain other Russians.

I'm actually pretty impressed by some of his business dealings prior to him setting up on their own. It wouldn't hurt for him to talk about that more openly and maybe shut down some of those insinuations.
 
LewSwimmin said:
Where did Goldsands fit into this narrative?
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From what I remember, Goldsands appeared to be a company that appeared to have been set up to drop sponsorship money into AFCB in a way that may now fall foul of the rules but was perfectly ok back then. Happy to be corrected on that. IIRC, their website featured quoted from Demouge on how they helped him move house or something ridiculous like that.
 
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