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Asia Today ISSN 1861-4604 Tuesday, January 23, 2018

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'Russian billionaire invested Kremlin money in social media

Paradise Papers

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WASHINGTON, U.S. - In a series of documents revealed in a fresh leak dubbed as the Paradise Papers, it has been found that investments in two of the biggest technology and social media giants Facebook and Twitter were directed from Russian government controlled institutions.

According to reports, Russia's biggest tech investment firm DST global owned by Yuri Milner is believed to have received funds from Kremlin to invest in Facebook and Twitter.

The Paradise Papers expose revealed that Milner's biggest investment deals received funding from Gazrprom Investholding, a government-controlled institution and VTB bank, which is a Kremlin-owned firm.

Milner's DST owned 8 percent in Facebook and 5 percent in Twitter.

DST sold their holding years ago but continues to hold shared in several other tech companies. 

In his current holding, Milner has shares in a real estate project which is jointly managed by United States President Donald Trump's son-in-law Jared Kushner.

Twitter and Facebook have come into focus as part of a federal investigation into Kremlin's interference in the 2016 U.S. elections.

Reports stated that though no evidence has been found against Milner or his companies having any connections to the propaganda operations, his use of state-funds shows Kremlin's interest in technology and social media firms in U.S.

Gazrprom is a vital component of Putin government. 

Gazrprom investment holding had directed hundreds of millions of dollars in loan to a Kanton services, a company which is owned by billionaire Alisher Usmanov, an Uzbek-Russian oligarch close to the Russian prime minister. 

Funds were reportedly directed to DST USA II which was used to buy shares in Facebook. 

In 2009, Milner had invested $200 million in Facebook, becoming one of the biggest investors in the company.

In a similar move, Russia's second largest bank, VTB bank, which is a tool of significant political interest, had given $191 million to DST to buy stakes in Twitter.

VTB said in a statement it had “sold its stake in the company with a profit, making it a successful transaction for us,” and that its involvement with Twitter was “solely a financial investment,” sold for a profit, one of several successful deals in the high-tech industry in that period. 

The bank added, “VTB is a solely commercial bank, we have never had any politically motivated deals.”

Sergey Aleksashenko, a Russian banking expert with the Brookings Institution told ICIJ, “On the one hand it’s a bank, on the other it’s an instrument of the Kremlin. Whatever the Kremlin wants, VTB is ready to do.”

VTB and Gazprom said the transactions were both sound investments, not motivated by political considerations.

Milner told the New York Times that it was “nothing more than business.”

He added, “We are getting money, and we are putting them in Facebook and Twitter. We are making money for our limited partners and we are giving money back to them. For me, it’s a commercial arrangement.”

 

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