New Zealand's richest Russian investor in the spotlight after invasion

Friday, 4 March 2022

Work is well underway on a development at Finch St, Morningside part-funded by a Russian billionaire.

As the situation in Ukraine deteriorates, Aucklanders will soon be living in apartments built by a company which is part financed by Russian oligarch Alexander Abramov.

Abramov, whose main asset in New Zealand is a $50 million palatial estate at Helena Bay on Northland’s east coast, has also invested in residential developments in New Zealand through a vehicle called Targa Capital.

The investments were approved by the Overseas Investment Office (OIO) in 2020 and 2021.

One of these developments, by Auckland apartment builders Ockham Group, is a 39-apartment complex in Finch St, Morningside, which includes a “resident’s ranch for quite contemplation” and a separate work from home office. The one and two-bedroom apartments, which were on the market for between $550,000 and $900,000, have all been sold. The company sponsors the NZ Book Awards.

Russian investment in New Zealand has come under increased scrutiny after Russia’s invasion of Ukraine last week.

Prime Minister Jacinda Ardern told Parliament on Tuesday that New Zealand had not 'yet reached the extent of the measures [it] would take to condemn this act'.

'We are pursuing new measures to target Russian investment, including measures to target financial institutions in New Zealand, including separate, but Russian targeted, specific legislation.'

University of Waikato professor Alexander Gillespie says sanctions needs to be lock-step with New Zealand’s allies.

The government would move as quickly as possible, including discussions with other political parties, she said.

Professor of international law at Waikato University Alex Gillespie said New Zealand had to treat every Russian person and entity fairly and with due process. It would be no surprise if the Government looked closely at Abramov.

“But just because you are an oligarch doesn't mean you have a relationship with Putin [or the Russian military]. We want an evidentiary process so we can say this person is linked to Putin so therefore they are subject to sanction. This is why we have the Five Eyes (intelligence sharing network with Britain, Canada, the United States and Australia).

“We don't want Kiwis working out who is a good Russian or a bad Russian. You want to be working with our friends who have evidence which hopefully will be in the public domain.”

Targa’s directors have acknowledged most of Targa’s funding comes from Abramov and say the funding has helped build 1000 homes, mainly apartments, in Auckland, Wellington and Queenstown.

Targa obtained approval from the Overseas Investment Office in January 2020 to buy 20ha of residential land in seven transactions in one or more of Whangarei, Auckland, Tauranga, Waikato, Wellington, Christchurch, Dunedin and Queenstown, up to January 2023.

All the shares in Targa Capital are owned by Endurance Capital, the directors of which are Moscow-based businessman Ian Cochrane, Auckland businessman Chris Seel and Auckland lawyer Geoffrey Hosking of Anthony Harper. Seel, who worked with Abramov in Moscow, owns all the shares in Endurance.

Abramov ploughed millions into the 215-hectare seaside property at Helena Bay in 2009 and transformed it into a country estate with a gated luxury resort complete with a 25-metre swimming pool.

Ockham, the directors of which are Benjamin Preston and Mark Todd, responded to questions through its head of content Peter Malcouronne, who said in a statement that the Morningside development was progressing well.

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Targa was a New Zealand company but required OIO permission to invest in residential property because Abramov held an indirect beneficial interest in Targa Capital of an amount greater than 25 per cent, he said.

“Targa Capital's funds total 11 per cent of current funds under management in Ockham Residential. Ockham is backed by a number of NZ-based funders including its own directors.

“Ockham Group remains prepared to consider managing equity investments on behalf of any appropriately certified foreign investors to improve housing outcomes for New Zealanders. We are watching the global situation closely and will continue to talk to our funders.”

According to overseas rich lists including Forbes, Abramov is one of Russia’s wealthiest men with a net worth of around $US6 billion. He is also a citizen of Cyprus but it’s not known whether he has been granted NZ citizenship or residency.

Russian Billionaire Alexander Abramov owns this palatial property in Helena Bay, Northland.

It’s unclear how close Abramov is to Russian president Vladamir Putin who tends to regularly drop Russian billionaires from his favoured list. However, in 2017, Putin awarded him the Decoration For Beneficence for his public work and charity activity.

The Prime Minister’s office referred Stuff questions about Abramov to the Minister of Foreign Affairs’ office which said it was unable to provide details “on individuals that may come under the sanctions of other countries”.

“Aotearoa New Zealand does not have an autonomous sanctions regime, which means we do not have the same ability to freeze assets or restrict the provision of financial services to individuals who are subject to the sanctions of our partners,” a Ministry of Foreign Affairs spokesperson said.

Abramov does not appear to be on the sanctions list of any overseas government at present.

The invasion of Ukraine has caused the share price of his international steel and mining giant Evras to plummet.

He owns about 19 per cent of the company. About another 30 per cent is owned by oligarch Roman Abramovich, the owner of Chelsea Football Club, who relinquished control of the club to its charitable foundation after Russia invaded Ukraine.

The steel group had more than tripled its profits in 2021 due to “soaring” prices but on Tuesday the company’s share price plunged to about $NZ2 from a yearly high of about $NZ14.

In a statement last week the company said revenues had risen to $US14.2 billion as net profits went to $US3.1b in 2021 from $US858m in 2020.

Chief executive Aleksey Ivanov said the company was conscious of “current geopolitical circumstances” and “we continue to monitor the situation”.

Reuters reported this week that Abramov’s 80m super yacht Titan arrived in the Maldives on Monday.

Gillespie said it was important New Zealand took the lead from its allies.

“We need to be learning from the example of our allies rather than say they are Russian therefore they are bad. And we’re not just talking about oligarchs but things like fishing crews that come into the country. Anything with the word Russian is going to create question marks over how we respond to this.'