Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
The sanctioned Russian mercenary leader Yevgeny Prigozhin generated revenues of more than a quarter of a billion dollars from his global natural resources empire in the four years before Moscow’s invasion of Ukraine, according to corporate records.
A Financial Times investigation has found that years of western sanctions against the Wagner mercenary group’s founder failed to stop hundreds of millions flowing to Prigozhin from oil, gas, diamond and gold extraction. Wagner has been accused of human rights abuses including murder, torture and rape in almost every country it has operated in.
Revenues made from Prigozhin’s mercenary-backed businesses in countries such as Sudan and Syria since 2018 have helped the Kremlin-backed catering magnate emerge as a powerful warlord in President Vladimir Putin’s full-scale invasion of Ukraine.
The FT analysed the accounts of Wagner-backed companies already sanctioned by the US, EU and UK for being controlled by Prigozhin, as well as still unsanctioned companies revealed in leaked legal documents. The results for the first time show the financial scale of what has been described by Washington as a “transnational criminal organisation”.
The analysis excludes Prigozhin’s domestic Russian catering and real estate businesses, which have received large state contracts and account for a significant part of his fortune.
The US Treasury last month said that Wagner, which has recruited tens of thousands of Russian convicts to fight in Ukraine, had engaged in “serious criminal activity, including mass executions, rape, child abductions, and physical abuse in the Central African Republic and Mali”.
The overseas mercenary and propaganda operations of the Wagner Group in support of dictators and military strongmen have provided the Kremlin with a deniable foreign policy tool while at the same time helping enrich its founder.
Prigozhin for years denied any connection to the Wagner group and its international mercenary operations until last year, when he admitted founding it in 2014 and appeared in a video recruiting fighters in a Russian penal colony.
Yet while Prigozhin, who was first sanctioned by the US in December 2016 and put on the FBI’s most wanted list in 2021, came under growing scrutiny from western governments, a barrage of sanctions did little to halt Wagner’s natural resources businesses in Africa and the Middle East.
In 2018 the US government sanctioned Evro Polis, a Prigozhin-controlled company that was awarded energy concessions by the Syrian president Bashar al-Assad in return for Wagner mercenaries liberating oilfields from Isis during the country’s civil war.
Evro Polis’s accounts show that the sanctions had limited effect on its operations, with the company going on in 2020 to generate sales of $134mn, and net profits of $90mn that year.
That represented a return on its shareholders’ equity of 180 per cent, which was repatriated to Russia. In December 2021, two months before the invasion, the company reported a contract-related collapse in revenues to just over $400,000 but still boasted $92mn of cash on its balance sheet.
Other Prigozhin mercenary operations are far smaller but have continued to trade in spite of being sanctioned. M Invest, a company operating in gold mining in Sudan, which was sanctioned by the US government in July 2020, still generated sales of $2.6mn the following year.
Two companies that export records show have shipped large quantities of industrial equipment to Wagner-backed companies in Sudan and Central African Republic generated more than $6mn in revenues up to the end of 2021.
The accounts also show how some Prigozhin-controlled companies appeared to switch their operations into other entities before western moves to shut them down. Mercury LLC, a company operating in the Syrian oil sector and sanctioned by the EU in 2021, generated sales of $67mn in the three years before the designation but declared zero revenues afterwards.
The analysis of Wagner-backed natural resources companies is based on their most recently available accounts up to December 2021. The revenues and profits declared by these companies in Russia have been converted back to dollars from the rouble at current exchange rates.
Prigozhin, in response to a recent FT article about his business activities and sanctions evasion, wrote on his Concord catering group’s Telegram channel: “I consider any sanctions against me, PMC Wagner, as well as any legal entities and individuals of the Russian Federation, to be absolutely illegal . . . I spit and I will spit on any sanctions.”
In response to another FT article about Wagner activities in Africa, including killings and propaganda, he said the article was correct but claimed he was not making large profits. “The Financial Times, if you don’t know, this is a British publication, published an article about the Wagner PMC, where much seems to be true,” he wrote. “Except for the last part, where they talk about my financial enrichment.”