While Russian criminal oligarchs Iskandar Makhmudov and Andrei Bokarev are making money on Defense Ministry contracts and doing business in the occupied territories of Ukraine, their families have settled in the West and acquired European passports. Despite their proximity to the powers that be and corruption scandals, Bokarev and Makhmudov have not fallen under EU sanctions. They may have avoided this lot thanks to their extensive business ties in Europe, particularly France. Moreover, one of their French partners de facto co-owns a business in the occupied territories of Ukraine.
In the summer of 2023, a new entity appeared in the Russian commercial register: AO Luganskteplovoz (a joint-stock company). That same summer, the 14-year-old Russian singer ELSEA, who often shares the stage with pro-war old-timer Grigory Leps, sailed on a yacht around Europe and partied in the restaurants of Saint-Tropez. These two events only seem unrelated: in reality, the oligarchs, who joined the beneficiaries of Russia's war with Ukraine, have used their income to send their children to luxury villas far away from the Russian borders. Fearful of sanctions, they registered foreign properties in the name of their minor sons and daughters.
Billionaires Iskandar Makhmudov and Andrei Bokarev co-own Transmashholding (TMH), Russia's leading manufacturer of railroad equipment, with several other partners. According to Transmashholding's official statements, the company owns 76% of Luganskteplovoz, which produces diesel locomotives, electric locomotives, and diesel and electric trains.
Despite operating in the occupied territory of the Luhansk Region, Luganskteplovoz was a Ukrainian entity until 2023, with a registered address in Sievierodonetsk. After the so-called Luhansk People's Republic “acceded” to Russia, the owners of Luganskteplovoz decided to follow suit.
On June 15, 2023, the company's shareholders met in occupied Luhansk to discuss corporate procedures “necessary to preserve the Company's legal capacity in the jurisdiction of the Russian Federation.” The background information on the meeting noted that “on September 30, 2022, the Luhansk People's Republic (LPR) was accepted as part of the Russian Federation, whereby the legislation of the Russian Federation became applicable on its territory.”
The enterprise kept its CEO, Dmytro (Dmitry) Kostyuchenko, a Ukrainian national wanted in his home country for “assault on territorial integrity.”
In the “LPR”, Kostyuchenko was a regular at the occupation administration as a representative of the local business community. At the same time, he also acted as deputy director at OOO Lugamash (a limited liability company). As The Insider found, this Luhansk-based company was created based on Luganskteplovoz and registered to frontmen working for oligarchs Bokarev and Makhmudov. Lugamash's CEO and co-founder is Alexander Martynenko, an employee of the Novocherkassk Electric Locomotive Plant in the Rostov Region – an entity within Transmashholding.
Lugamash officially employs more than 1,000 people and produces parts and locomotives for Russian Railways. The company receives regular support from the local occupation authorities and Moscow, including subsidies from the budget. The United Russia faction in the State Duma also pledged support for Lugamash, and in September, the enterprise joined the “Free Economic Zone” established by Vladimir Putin's decree in the occupied territory.
Twenty percent of Transmashholding's shares belong to French engineering company Alstom. As it turns out, Alstom also co-owns a business in the occupied territory, holding a stake in Luganskteplovoz through Transmashholding.
Alstom and Transmashholding go way back as partners. They jointly manufactured electric locomotives and other products, and the French were reluctant to withdraw from Transmashholding even after the outbreak of full-scale war. Here is how Andrei Bokarev explained it at last year's St. Petersburg Economic Forum:
–What's the situation with Alstom being a Transmashholding shareholder?
–There's no situation. They are shareholders. We're working.
–Have they expressed the desire to get out?
–None at all.
–Are you considering the future possibility of buying out their Transmashholding stake?
–We don't want to, and neither do they.
–Has Alstom continued the deliveries?
–To the extent that we bought anything from them, our arrangements are in place.
However, the French may decide to withdraw from Transmashholding after the Russian company gets hit by U.S. sanctions.
Like Transmashholding, Alstom operates in the railway transportation market. Nine years ago, the French company was implicated in a corruption scandal surrounding Emmanuel Macron, who was the economy minister at the time. The future president was accused of lobbying for the sale of Alstom's power assets to General Electric. Labor unions and many politicians were against the deal, but Macron personally strong-armed its signing.
Macron was also suspected of having corrupt ties with none other than Russian oligarch Iskandar Makhmudov. The French publication Mediapart has released an investigation revealing that Makhmudov paid €294,000 to the former head of security for Macron's party. Vincent Crase, an ex-security chief, agreed to protect Makhmudov's relatives and his real estate in France. The money was transferred to the accounts of Mars, a company that was created just after Macron won the 2017 presidential election and has Crase as the sole shareholder.
It was in France that the Makhmudov and Bokarev families settled. The Insider explored their estates and stumbled across new relatives of the Russian oligarchs. According to the French commercial register, Makhmudov's son Jahangir Mahmudov is the beneficial owner of Les Tesnieres Property SCI, a company that owns land in Sologne.
Jahangir also owns hunting grounds through Menars Property SCI. Makhmudov Sr. used to own shares in this company, as well as in others. He started registering them to his relatives once the full-fledged war broke out, to prevent them from being frozen.
The Insider pointed out that Makhmudov Jr.'s partner in Les Tesnieres Property SCI is once-famous model Alexandra Sergienko – likely his wife.
In 2009, Sergienko was reported to have had triplets: two girls and a boy. The father's name was not disclosed. The Insider found the triplets in the French business register: the mother and the children are partners in the firm Les Pins Property Sci. The son and daughters carry the surname Makhmudov and hold Cypriot citizenship and Monegasque residence permits.
Les Pins Property used to be affiliated with Iskandar Makhmudov himself. Through this company, his family owns a 16th-century hunting castle, also in Sologne.
To date, underage Kamilla, Alexandra, and Vladimir own villas on the Côte d'Azur through Ecossaise Property SCI and Ecossaise Property II SCI, of which they are also listed as beneficiaries.
Andrei Bokarev's family has also settled in France. He owns properties in Paris, Saint-Tropez, and Ramatuelle through SCI Serenity Capital, Immobilier Albert 1er SCI, Casa Lea II Property SCI, and Bel'Ombre SCI, As The Insider discovered, since the start of the war, the oligarch has already found time to sign over some of his assets to his minor children: Elizaveta, 14, Andrei, 8, and Alexander, 15. They co-own the assets with their mother, the oligarch's ex-wife Olga Syrovatskaya.
14-year-old Elizaveta Bokareva is the singer ELSEA, who performs together with Grigory Leps. Moreover, Leps even became the girl's godfather.
Leps is such a close friend of Andrei Bokarev's that he even dedicated the song “Angel Went on a Bender” from his Gangster No. 1 album to the oligarch. Notably, Leps, Bokarev, and Makhmudov have all been accused of ties to organized crime.
For the two Russian oligarchs, Europe is not just a coveted place of residence but also the land of business opportunity. In Latvia, as The Insider previously found, they own the Riga Electric Machine Works. Until recently, they also owned a railcar manufacturing facility in Hungary, but Transmashholding transferred it to a local partner last year.
Transmashholding's head office abroad is located in Zug, Switzerland, where TMH International AG is registered. TMH also controls 50% of the Dutch entity TMH Alstom B.V., a locomotive manufacturer, and 50% of Railcomp B.V., which manufactures parts for railroad locomotives, streetcars, and other motor cars.
In 2021, Transmashholding also established the German engine manufacturing company Blue Engine Engineers GmbH – just a few months after the Norwegian authorities stopped TMH from acquiring Bergen Engines, a plant that ship engines. The Norwegian government made a reasonable assumption that the plant's products could be of military interest to Russia.
Bokarev and Makhmudov previously co-owned the Kalashnikov Concern with Deputy Defense Minister Alexei Krivoruchko until 2017. Today, Transmashholding has 71% control over AO Kolomna Plant, a joint-stock company manufacturing engines for warships.
Despite landing lucrative defense contracts, doing business in Ukraine's occupied territories, and being implicated in corruption scandals, Bokarev and Makhmudov have yet to be put on the EU sanctions list. Admittedly, they’ve been hit by American and British sanctions, but it is to Europe that the oligarchs are most closely linked. Transmashholding's operations in the EU also continue without any restrictions.