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RECENT NEWS

• Inzvestia: Sale Moscow Style

• Prime-Tass: Lawyer for Largest KiN Plant Shareholder Reports Increased Pressure on Client
• Izvestia: The Cognac Takeover
• Novaya Gazeta: The Monolit. The law enforcement officers from the “Magnitsky list” are after the
co-owner of the Cognac plant.

• Petition to Philip Morris

INFORMATION

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IGOR KESAEV

Igor Kesaev was born on October 30, 1966, in Ordzhonikidze, North Ossetian Autonomous
Soviet Socialist Republic.

In 1993 he graduated from the Moscow State Institute of International Relations (MGIMO).

For his service to the Russian Orthodox Church, he was awarded the third-level Order of St.
Sergius of Radonezh.

Married. Has three children. Wife Stella Key owns the Stella Art Gallery.

ESTABLISHING BUSINESS

From 1988 to 1992, Kesaev worked at the Absolut Moscow insurance company, first as
manager of the banking insurance department, and then as director of Absolut Moscow; he
subsequently took the post of general director of the Jupiter insurance company. In 1992, he
founded and became general director of the joint-stock company Mercury Trade House,
which operated primarily in the tobacco and alcohol markets. In the mid-90s the Mercury
Group became Philip Morris's main distributor in the Central and Northwest districts of
Russia.
Kesaev participated in the creation of Transrail, one of the first private rail carriers. Working
with the vice-president of Transrail AG, he organized the company Olympia Investment,
whose directors were accused of money laundering by the Italian prosecutor’s office.

In 2005, the Mercury Group bought a controlling stake in the open joint-stock company
Degtyarev Plant under an agreement with Rosoboronexport (owner through its subsidiaries of
a 42.8% stake in the plant), as well as with a large customer: the Ministry for Atomic Energy
of the Russian Federation.

On December 9, 2005, Sibir Energy announced that its largest shareholder—the

Chichirinsky-owned Bennfield firm—had acquired a co-owner. Orton Oil, a subsidiary of the
commercial and industrial Mercury Group, had signed an agreement to acquire existing
Bennfield shares for 215.7 million dollars and to buy out an additional issue for 404.6 million
dollars. Chichirinsky knew Kesaev from his time in real estate projects—for instance, the
Balchug.

In October 2007 Igor Kesaev acquired a 51% share in the open joint-stock company KiN
Moscow Wine and Cognac Plant, a leader on the Russian cognac market. Its assets are the
KiN Moscow Wine and Cognac Plant, the Usovsky Plant (greater Moscow area), and the
Domaine des Broix winery (France).

BRANDS: Stary Gorod, Kinovsky, and Moskovsky cognacs (the latter under license of the
federal state-owned enterprise Soyuzplodoimport); Samorodok and Khrenovukha liqueurs;
and Matryoshka and Katyusha vodkas, among others.

In February 2008 it was announced that Oleg Leonov had sold a 100% share in Dixy Retail—
which is 100% held by Dixy Holding, and which for its part is owned 50.96% by the Dixy
Group—to the Mercury Group. The day the deal was announced, the market value of the
controlling stake in Dixy was around 450 million dollars. As of December 1, 2007, the Dixy
Group controlled 372 stores. Revenue for the first nine months of 2007 was 990 million
dollars, with an EBITDA margin of 4.5% and a net profit of 5.4 million dollars. The first
vice-president of Mercury and president of Megapolis, Sergei Katsiyev, stated: “Investing in
the Russian retail sector presents a strategic interest for the Mercury Group.” “We intend to
use our resources to build atop the public company Dixy Group one of the largest players in
Russian food retail.”
CURRENT STATE OF BUSINESS

Assets: Orton Oil (the largest shareholder in Sibir Energy), Mercury Development, the V.A.
Degtyarev Plant, and the KiN Wine and Cognac Plant. Additionally, Igor Kesaev’s entities
are building Mercury City Tower (158,000 square meters) in Moscow City, and own 50% in
the New Holland project in St. Petersburg.

In September 2009, the Megapolis distribution company, a subsidiary of the Mercury Group,
signed an agreement with the U.S.-based Independent Grocers Alliance (IGA). Under the
terms of the agreement, as early as the end of this year Megapolis will begin selling
franchises to open stores under the IGA brand in Russia. The terms also stipulate that retail
chains joining the alliance would not be required to change their names—they could simply
add the IGA logo next to their own name. Founded in 1926 by Frank Grimes, the IGA is an
alliance of wholesalers, retailers, and manufacturers. Currently IGA is considered the largest
supermarket franchise in the world—at the end of 2007, IGA encompassed 4,000 stores, 36
distribution companies, and more than 55 manufacturers. Annual turnover for 2007 was more
than 21 billion dollars.

PARTNERS

Shalva Chigirinsky: “Kesaev and I have known each other for 15 years,” Chigirinsky
recounts. “He is a very sensible, respectable person. Some time ago, he was an investor in
our real estate projects—the Balchug, for example.”

Vladimir Anisimov
Kesaev has been linked with former deputy director of the FSB Vladimir Anisimov.
Anisimov began his service in Karelia—the same place where the republic’s Security
Ministry was headed by Nikolai Patrushev. When Patrushev moved to Moscow, Anisimov
was not far behind, and once Patrushev had become director of the Federal Security Service,
he was promoted to deputy director of the service. He headed up the inspection division of
the FSB, which gave him the opportunity to travel frequently throughout the country,
acquiring good regional connections—for he was received, naturally, at the highest levels. He
also frequented the North Caucasus (Kesaev’s birthplace), meeting with presidents of
republics, solving serious issues. Anisimov held very strong positions in the Northwest
federal district. And that is where Kesaev managed to gain a foothold, too. The Arkhangelsk
Pulp and Paper Plant, which was originally located in this region, established the Monolit
national charitable fund, which Kesaev became the president of. Few know anything about
the fund’s activities, and hardly anyone is aware that it has a direct relationship to the FSB. In
2004, Kesaev transferred half a million dollars to the fund from Mercury. A portion of these
funds went to a prestigious charity—in 2003, for example, to the construction of a church in
the village of Podomo in the Vilegodsky district of the Arkhangelsk region. For this, Kesaev
as president of Monolit and his benefactor, Anisimov, as deputy director of the FSB, were
awarded the Order of the Russian Orthodox church of St. Sergius of Radonezh.

CORPORATE CONFLICTS

In April 2009, Ruslan Baisarov sued Chichirinsky, his company Gradison Consultants, Igor
Kesaev’s Orton Oil, and Bennfield. He was determined to win from Chichirinsky the 23.5%
stake in Sibir Energy that was “swiped from him under false pretences.” The lawsuit was
filed on the Isle of Man. The court’s records state that the lawsuit was filed on April 24,
2009. The plaintiff was Rossini Trade (which, according to Baisarov, belongs in equal
amounts to him and Chichirinsky); the defendants included Chichirinsky, his company
Gradison Consultants, Orton Oil, and Bennfield.

In 2003, Baisarov recalls, he and Chichirinsky created Rossini. The latter signed an
agreement to purchase Bennfield, which owned a 47% share in Sibir Energy. They paid the
money right away. But, says Baisarov, Rossini never received the share in Bennfield. “When
Kesaev’s Orton Oil became a shareholder [in Bennfield], Chichirinsky assured me that he’d
sold him his own share, and that mine was still in Rossini,” Baisarov says. “But it recently
came to light that the entire 47% share in Sibir Energy was placed in Sberbank, and there is a
chance that it will be completely lost.” All of the documents confirming the right to half of
the shares, Baisarov says, were presented in court. “As an interim measure, we have
demanded that a ban be placed on all transactions involving this company’s securities,” he
concludes. The case is still open.

At the end of the transaction, the Tela di ragno ( “Spiderweb”) that had been organized all
across Western Europe by the Italian legal authorities and police was found guilty by the
Italian prosecutor’s office of engaging in money laundering through Olympia Investment,
which was headed by Igor Kesaev, Vladimir Rosenshein, and Nikolai Makurin from
Transrail. Kesaev had already had to provide an explanation to the prosecutor’s office in
Geneva, since a suspicious transfer from his offshore company had figured in the case of
Pavel Borodin.
TIMELINE

1992 – present Mercury Trade House General Director

2005 – present Mercury Trade House Owner
1988 – 1992 Absolut Moscow insurance company Managing Director of the banking
insurance department, Director
1988 – 1992 Jupiter insurance company General Director
1988 – 1992 Monolit national charitable fund President

Igor Kesaev is the principal owner of one of the main players on the Russian FMCG market:
the Mercury Group, which includes Megapolis (the exclusive distributor for JTI, Philip
Morris, and Imperial Tobacco), which controls around 70% of the Russian tobacco market.
There are rumors that former deputy chairman of the FSB Vladimir Anisimov helped develop
Mercury’s business.

Kesaev also owns shares in the oil companies Sibir Energy and Mercury Development. On
the basis of last year’s results, Kesaev placed 92nd in the Forbes rating. His net worth was
valued at 400 million dollars (based on the 2007 year-end results he is worth 1.3 billion
dollars).

CAREER

1988 – 1992. Absolut Moscow insurance company: head of the banking insurance
department, director. Jupiter insurance company: general director.

1992 – present. Mercury Trade House, general director, and since 2005, principal owner.

— The National Charitable Fund (formerly the National Military Fund) was created in
1999 on the initiative of Vladimir Putin. He subsequently stated that the fund
was “a leader within social organizations working for the social protection of
people in uniform.” The fund's president is Colonel General Alexei Molyakov,
 former deputy director of the FSB. The fund has significantly expanded its
activity, now providing charitable assistance to more than just servicemen. The
fund’s web site details how money is distributed and how much is given to
charity, while also showing the structures that donate and receive money, and
disclosing the amounts it allocates among organizations. Last year the fund
distributed 376 million rubles in grants, while total charitable contributions from
1999 through April 2009 exceeded 2 billion rubles. The fund’s board of trustees
includes Russia’s head Buddhist, Russia’s chief rabbi, and the supreme mufti, as
well as Viktor Vekslberg (Renova), Oleg Deripaska (BasEl) and president of the
Russian Union of Industrialists and Entrepreneurs Alexander Shokhin. The list
of donors includes the state-controlled companies Transneft, Rosneft,
Vneshtorgbank, Mosenergo (Gazprom), and Sberbank, as well as almost all of
the business leaders of Russia: LUKOIL, Interros, Alfa-Bank, Evraz Holding,
Surgutneftegaz, TNK-BP, RUSAL, BasEl, Baltika, and Wimm-Bill-Dann,
among others. Alfa-Bank’s chairman of the board Mikhail Fridman allocated 2
million dollars to the fund, and in 2007 LUKOIL provided assistance in the form
of 60 million rubles. According to a report in the Novaya Gazeta newspaper, the
companies affiliated with the fund previously had encompassed at least two
recent founders of the Moscow company Quorum Invest and the owner of the
Lubyansky restaurant, which was located in the former FSB cafeteria in the
Dinamo building (see Novaya Gazeta No. 36, 2008). Quorum Invest had five
million dollars in a joint commercial exhibition complex with Alexei
Patrushev’s Petersburg firm. Patrushev is the nephew of former FSB director
and secretary of the Russian Security Council Nikolai Patrushev. Commenting
on the situation, fund director Anatoly Zhuravlev explained that the fund is not
engaged in commerce and long ago broke its ties with the former founders of
Quorum Invest.

— The Monolit fund was created by several companies affiliated with Igor Kesaev’s
Mercury Group. Kesaev became the fund’s honorary president. The vice president is former
officer of the third directorate of the FSB Yury Khalturin. In 2003, Kesaev, Khalturin and
Vladimir Anisimov (deputy director of the FSB at that time) were simultaneously awarded
orders of the Orthodox church for aiding in the construction of a church. One of the former
officers of the service noted on condition of anonymity that the Monolit fund provided real
assistance to the families of employees who were killed and injured. A source close to the
Mercury Group reported that the fund had received money, from Gazprom and Rosneft in
particular, but was unable to report the exact sums in question. Gazprom and Rosneft
declined to specify who exactly provided the charitable assistance. Kesaev did not respond to
our request for comment on the situation, and would not speculate on the degree to which the
help provided to law enforcement officers promoted business.

“Even allowing that Igor Kesaev has photographs showing him with several FSB directors,”
a former officer reflects, “and these photos may be impressive and may protect him in certain
situations, by Russian standards there is nothing terrible about this.”

According to a corporate action report, in 2006 the Degtyarev Plant, which is a part of the
Mercury Group, sent 184,165,738 rubles to the Monolit fund. The general director’s actions
were approved, although the company decided not to pay shareholders dividends on the 2006
year-end results due to a loss of 119 million rubles.

This site is maintained by the office of Dobrovinsky and Partners, a Russian law firm representing KiN Plant.