Russia's richest woman begs for a state handout

Construction magnate blamed for destroying historic city landscape

Miriam Elder
Tuesday 17 March 2009 01:00 GMT

She is Russia's richest woman, and one of its most despised. Now Yelena Baturina, who rose from life as a factory worker to become a construction magnate and wife of Moscow Mayor Yury Luzhkov, is seeking a state bailout – to the joy and consternation of many.

Some are happy to see her suffer. Since Ms Baturina built her firm, Inteko, into a construction and real estate powerhouse, Moscow's landscape has been transformed. Cranes and gaudy buildings line streets that used to house centuries-old buildings and relics of Soviet architecture.

"Anything that slows down the construction that has destroyed much of old Moscow is welcome," said Kevin O'Flynn, co-founder of the Moscow Architectural Preservation Society. "Baturina has undoubtedly been a part of that."

But many are up in arms that Ms Baturina, who has fallen off the Forbes list of billionaires after two years as Russia's first and only female billionaire, could be saved by the state as average Russians continue to see their quality of life deteriorate.

Her latest plan was the erection of Project Orange, a building designed by Lord Foster, on the banks of the Moskva River. The building, in the shape of a massive peeled orange, would replace the Soviet-era House of Artists, an ugly building but one that carries the heft of history. There is no word yet whether that project will be delayed as the financial crisis wreaks havoc on the Russian economy, turning the capital into something of a construction graveyard.

How Ms Baturina, 46, built her fortune is a twisted tale, and one best told carefully. She is fiercely protective of her image, and, in particular, her relationship with Mayor Luzhkov.

Ms Baturina took her first job at a Moscow factory upon graduating from high school in early 1980s, as the Soviet Union stood poised to enter a slump from which it would never recover. She soon switched tack, taking a degree from a management university and then holding advisory positions with the Moscow government. That is how she met her future husband, then an up-and-coming politician who would become the mayor of the capital in 1992, swept up in a wave of popularity that faded as rumours of corruption grew during his 16-year rule.

They married in 1991, the same year Ms Baturina and her brother Viktor founded Inteko. Viktor Baturin is no longer involved with the firm, after publicly falling out with his sister and suing her in 2007 for wrongful dismissal.

As Mr Luzhkov's power grew, there were suggestions that Ms Baturina's own corporate growth benefited. She has denied, however, that her relationship with Moscow's mayor has been the reason for her success – she sued (successfully) the Russian edition of Forbes, alleging it twisted a quote to imply that her links to power were key to her success.

As Mr Luzhkov undertook the task of remaking the Russian capital, Ms Baturina's fortunes grew. Her firm won contract after contract, including federal and municipal ones to build more housing as the capital's population exploded. By 2006, she became the first Russian woman to enter the Forbes ranking of world billionaires, with an estimated fortune of £1.6bn. That fortune rose to £3bn in 2008. In July of that year, she put down £50m for a 90-room, 18th-century mansion in Highgate, London.

She has managed to shrug off scandal. Media reports in the late 1990s questioned how she got a contract to fill Moscow's Luzhniki Stadium with 85,000 seats, but the deal was never investigated.

With her wealth now estimated to be hovering just below $1bn (£710,000), her fortunes have clearly changed. Last week, Ms Baturina appealed to the government for £1bn in loan guarantees. Her spokesman, Gennady Terebkov, says the guarantees will cover new loans for new projects. No current projects, he added, would be frozen or delayed. Analysts say that is hard to believe.

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