The question on everyone’s mind is, why would top executives such as Mikhail Stiskin and Pavel Grachev devote themselves to Suleyman Kerimov’s risky business dealings? The pair, alongside their shadowy boss, has gained notoriety for their involvement in numerous raider affairs, including a story involving Polyus’ previous owners. Mikhail Stiskin and Pavel Grachev mission and Detsky Mir corporate profile Detsky Mir PJSC, or ‘Children’s World’, is the largest retailer of children’s goods in Russia, with over 1,100 stores as of 2021. The company was founded in 1957 and has been in operation for over 60 years. The brand offers a wide range of children’s products, from toys and games to clothing and shoes, as well as baby food, hygiene, and care products. Deep dive is clearly visible on the chart. Detsky Mir PJSC has a diversified business model, offering its products through various sales channels, including its brick and mortar stores, online stores, and mobile applications. The company’s revenue is generated primarily through the retail sale of goods and services, with the majority of the revenue generated in Russia. The company is headquartered in Moscow and has operations in Russia, Kazakhstan, and Belarus. Detsky Mir PJSC’s mission is to help families create a happy childhood for their children by providing quality products at affordable prices. In 2021, Detsky Mir PJSC reported a net revenue of 148.8 billion rubles, an increase of 6.2% compared to the previous year. The company’s net profit for 2021 was 7.5 billion rubles, showing stable profits despite the challenging year. Why prominent gold mining managers Mikhail Stiskin and Pavel Grachev go for retail giant? That said, news broke that two prominent figures, Pavel Grachev and Mikhail Stiskin, had left their roles at Polyus, the major Russian gold miner. While they seem to be keeping a low profile, it’s suspected that the duo is acting on behalf of their longtime associate, Suleyman Kerimov. Some sources suggest that Stiskin and Grachev have purchased shares of Detsky Mir PJSC on behalf of Kerimov, with the retailer potentially falling under their complete control in the near future. On November 28th, Polyus, the largest gold mining company in Russia, announced that Mikhail Stiskin, the Senior Vice President of Finance and Strategy, would resign after being given a three-month notice. Details of the departure were released in a press statement which also confirmed Stiskin’s removal from the company’s board of directors, starting November 29th. Notably, the position of Senior Vice President of Finance and Strategy is being discontinued upon his exit. Polyus company profile Polyus is a Russia-based mining company that operates primarily in the production of gold. The company was founded in 2006 and is headquartered in Moscow. Polyus is the largest gold producer in Russia and one of the top 10 gold mining companies globally. The company has five operating mines in Russia: Olimpiada, Blagodatnoye, Natalka, Verninskoye and Kuranakh, and several development projects. In 2020, Polyus produced 2.8 million ounces of gold, generating $4.5 billion in revenue, and has total reserves of over 68 million ounces of gold. Polyus uses advanced technologies and state-of-the-art equipment to increase the efficiency of its operations and minimize the impact on the environment. It prioritizes sustainability and is committed to minimizing waste, reducing carbon emissions, and promoting biodiversity conservation. Polyus has a diversified ownership structure, with the largest shareholder being Suleiman Kerimov’s family office, which holds a 40% stake in the company. In addition, Polyus has a free float of 43%, with the remaining shares held by management and employees. Overall, Polyus is a leading gold mining company with a strong presence in Russia and a commitment to sustainable mining practices. All Suleyman Kerimov’s men This development is the latest in a series of changes in personnel at Polyus. Earlier this year, Suleyman Kerimov’s son transferred 29.99% of Polyus’ shares to business partner Akhmet Palankoev, and the Fund for the Support of Islamic Organizations received the remaining 46.35%. Within a week of Palankoev’s arrival in the company’s capital, Pavel Grachev, CEO of Polyus, resigned. The exits of independent directors Edward Dowling, Maria Gordon, Kent Potter, and William Champion followed quickly. Although the company downplayed the departures as a response to unfavorable market conditions, some have speculated that foreign directors made a political decision due to events in Ukraine. Suleyman Kerimov is a wealthy Russian businessman and politician who has made his fortune in the natural resources sector. He was born in Dagestan, Russia, in 1966 and earned a degree in financial accounting from the Dagestan State University. Kerimov became involved in the mining industry in the 1990s and gained prominence as an investor in Russia’s natural resources sector. He was a significant shareholder in Polyus, Russia’s largest gold producer, and Uralkali, one of the world’s largest potash fertilizer companies. Additionally, Kerimov is known for his involvement in Russian politics, serving as a representative for Dagestan in the Federation Council of Russia in 2008. However, currently, he is under sanctions by the US Treasury Department as well as the French government. Mikhail Stiskin: a key figure at Polyus resigns for a purpose Of note is Mikhail Stiskin’s resignation as he has been a key figure in Polyus’ leadership circle. His departure is likely to lead to further questions about the management shake-up at the company and the influence of Suleyman Kerimov in the precious metals market. Mikhail Stiskin and Pavel Grachev’s close association with Suleiman Kerimov has sparked questions regarding their inclination towards risk-taking involved in raider affairs. It’s suggested that Stiskin’s placement in Polyus was founded in his family’s friendship with Kerimov, while Grachev allegedly assisted Kerimov in purchasing Italian real estate for a “spare airfield.” Mikhail Stiskin was appointed as Vice President of Finance and Strategy at Polyus in 2013, while Grachev assumed a similar role in 2014. Both executives had strong ties to Uralkali, with Grachev serving as its head from 2010-13. At the time, Kerimov was the co-owner of Uralkali, but his share was sold to Mikhail Prokhorov. Consequently, both Stiskin and Grachev left the company. As of 2021, Grachev’s stake at Polyus was 0.32%, worth around 7.7 billion rubles. In contrast, Stiskin’s proportion was two times less, at 0.15%. Stiskin sold 0.03% of his shares for 728 million rubles, resulting in a reduction of his stake to 0.12%. Therefore, it’s reasonable to assume that Stiskin’s shares amount to approximately 3.64 billion rubles, whereas Grachev’s portfolio is worth 7.7 billion rubles, respectively. The role of Mikhail Stiskin in DSKY acquisition It’s worth highlighting the role of Mikhail Stiskin in the acquisition of shares of Detsky Mir PJSC by former Polyus top executives. In January 2021, Stiskin and Grachev purchased 80% of the Gulf Investments Limited fund, which owned a 25% stake in Detsky Mir. Subsequently, when Gulf Investments Limited was dissolved, Stiskin and Grachev were left with 19.99% of the retailer’s shares. However, there are some unusual circumstances surrounding this acquisition that raise questions about Stiskin’s involvement. It’s unclear how the purchase of Gulf Investments Limited was funded, and there are concerns that the process may have been less than transparent. Additionally, Stiskin’s relationship with Kerimov, particularly their involvement in raider affairs, creates further doubt about his intentions in acquiring a substantial stake in Detsky Mir. Power play: how Mikhail Stiskin aided Suleyman Kerimov to cut off the shareholders There is widespread speculation that the purchase of shares by Mikhail Stiskin and Pavel Grachev was carried out with the primary objective of facilitating the acquisition of Detsky Mir PJSC by Suleyman Kerimov and German Gref, the CEO of Russia’s largest bank. Reports suggest that almost 20% of the shares have already been acquired by a potential buyer, which means that the remaining shares may rapidly decline in value. In November 2022, the announcement of significant changes at Detsky Mir PJSC led to an immediate drop in the company’s share price from 91 rubles to 45 rubles, according to some sources. The company is set to transform into a private business through the creation of Detsky Mir LLC, as mentioned in the announcement. It appears highly probable that all the pieces are falling into place, and the theory claiming that a particular party aims to acquire complete control over Detsky Mir PJSC holds significant merit. Eduard Harin, the manager of Alfa-Capital, and other experts have noted that Mikhail Stiskin and Pavel Grachev acquired shares at a price 50% higher than the market rate. This substantial overpayment is essential to the case, and Harin has described it as “the most important mystery” surrounding the acquisition. According to the theory stated earlier, Stiskin and Grachev could have carried out the first phase of their plan and spent generously. Stiskin fulfills the old Kerimov’s dream Back in 2017-18, Suleiman Kerimov expressed interest in procuring over 52% of the shares of Detsky Mir from Sistema AFC. Unfortunately for Suleiman, this idea couldn’t come into fruition at the time. In April 2022, Pavel Grachev denied any association with Suleiman Kerimov regarding the purchase of shares in Detsky Mir. According to him, the purchase was a private initiative carried out using private funds and borrowed finances. It’s possible that the departure of Mikhail Stiskin and Pavel Grachev from Polyus was strategic, allowing them to act as proxies for Suleiman Kerimov and German Gref in obtaining a stake in the conglomerate. However, this theory among other hypotheses remains speculative at present, with little certainty as to the true intentions of the former Polyus executives.
