Oligarch Buys �Putin�s Palace�

By Roland Oliphant

Published: March 9, 2011 (Issue # 1646)

Ruleaks.net The unfinished mansion has been at the center of controversy following claims it is intended for the prime minister.

MOSCOW � If you�ve ever felt like picking up a�seaside palace for�a song, now might be the�time.

At least, that�s what reclusive oligarch Alexander Ponomarenko claims to�have done.

Acting on�the principle �buy on�a scandal, sell on�good news,� the�little-known billionaire claims to�have picked up nothing less than the�mysterious Italianate mansion dubbed �Putin�s Palace� by�the media.

�If you�re not afraid to�buy on�a scandal, you can make good money,� Ponomarenko told Kommersant on�Thursday.

Ponomarenko, who made his fortune controlling the�Black Sea port of�Novorossiisk, said he had acquired the�company Idokopas, which owns the�palace complex, from�Nikolai Shamalov and��two of�his partners� the week before last.

Idokopas, Ponomarenko told the�business daily, owns around 67 hectares of��recreational� land near the�settlement of�Praskoveyeka, including a��guesthouse� complex amounting to�26,000 square meters.

He also said he had bought a�second company, Yazurnaya Yagoda, which owns 60 hectares of�agricultural land near Divnomorsk, a�settlement 13 kilometers from�Praskoveyevka.

Ponomarenko, who seldom appears in�the media but is rumored to�be a�recluse who nurtures a passion for�hunting, said he hasn�t yet decided what to�do with the�vast property.

The unfinished mansion has been at�the center of�tabloid controversy since last December, when businessman Sergei Kolesnikov claimed that state funds were being diverted to�build a�personal palace for�the prime minister.

Photographs that appeared on�the whistleblowing site RuLeaks.org showed a�sumptuous mansion with copious amounts of�marble and�gold leaf, as well as extensive landscaped gardens.

Last month, Environment Watch North Caucasus, a�local green group that says the�complex was illegally built on�publicly owned forestland, got close enough to�the site to�take more photos before being detained by�the Federal Guard Service.

Shortly afterward, the�head of�the presidential property service, Vladimir Kozhin, was caught lying about his connection to�the building. He had denied having any knowledge of�it, but documents made public by�Novaya Gazeta last month show he had his deputy authorize the�construction, and�even personally signed relevant papers.

Ponomarenko refused to�discuss the�value of�the deal, but hinted that he had picked it up for�a song when Shamalov and�his friends ran out of�money to�finish the�building � and�perhaps got fed up with the�publicity it was attracting.

He conceded that an�estimate the�entire property would be worth $350 million when complete �is close to�the truth.� Previous rumors have valued the�helipad-equipped imitation Versailles at�$1 billion.

But skeptics say picking up bargains like that takes more than business acumen and�a stroke of�luck.

In 2008, Ponomarenko and�his long-time business partner Alexander Skorobogatko ceded a�20 percent stake in�Kadina, the�company through which they controlled Novorossiisk, to�Arkady Rotenberg, a�childhood friend and�former judo partner of�Prime Minister Vladimir Putin.

Kadina and�the rights to�the Novorossiisk port were bought by�a Transneft-led consortium in�September. Ponomarenko now says he wants to�go into�property.

But Sergei Kolesnikov, who started the�rumor mill rolling in�December, suggested that knowing a��friend of�the prime minister� like Rotenberg is enough to�explain the�pricing disparity.

The government position is that Putin himself has never had any connection to�the project.

Whatever the�truth about the�house�s ownership, its apparent sale is the�latest bizarre twist in�a growing �battle of�the dachas� that has seen environmentalists and�opposition groups clash with high-profile holiday home owners on�the Black Sea coast of�Krasnodar.

Environment Watch North Caucasus has targeted a�series of�grandiose dwellings on�the Krasnodar coast that they say have been built on�public land and�in violation of�numerous environmental regulations.

Shortly after inspecting the��palace� in�February, Environment Watch visited a�church property � listed officially as a�spiritual and�cultural center � which also turned out to�be built on�forestland.

Forestland in�Russia is publicly owned and�freedom of�access is guaranteed by�law � making attempts to�fence it off as private property illegal.