Originally Syndicated on May 18, 2023 @ 6:34 am
The Sochi prosecutor’s office is investigating whether or not the “LSR Group” of St. Petersburg legally acquired the sanatoriums that have become its most recognizable landmarks.
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How is the company’s owner, Andrey Molchanov, faring?
Formerly known as a health resort for the entire Soviet Union, the city of Sochi is currently debating a request from the prosecutor’s office to the regional directors of the Federal State Registration Service in the Krasnodar Territory. Yevgeny Elin, the city prosecutor, has requested duplicate registration paperwork for several large sanatoriums. The city’s prosecutor’s office has compiled a list of 45 local boarding homes and health spas.
Sochi’s current owners, of which PJSC LSR Group stands out for its development of a single sanatorium complex in the Khostinsky district complete with a balneological department and landscaped beach strip, may face legal questions from the Prosecutor General’s Office of the Russian Federation, according to experts.
LSR Plans
LSR struck many big agreements with regional and city officials this summer during the 25th St. Petersburg International Economic Forum. The historic resorts “Volna” and “Crystal” and their accompanying facilities are included in the new $24.4 billion investment project. LSR plans to construct, on the site of Volna, a luxury hotel and spa.
The iconic Primorskaya Hotel was repurchased by the developer in 2020. This 1936 structure is an important historical and architectural landmark in Sochi. The business declined over time, and by 2015, the hotel had fallen into disrepair and had to close its doors. At the so-called golden triangle, at the centre of the city, just a few meters from the sea in the “Primorsky” park, “Primorskaya” seems to be valued more for its location than for its rich history. LSR plans to spend 21 billion rubles on the project, allowing them to greatly increase the number of available rooms by erecting new structures and renovating the existing one, the complex’s centrepiece.
There are whispers around town that the hotel is slated for complete demolition and that a residential skyscraper will be built in its place. The Open Sochi public movement has been petitioning several supervisory bodies since the fall of 2021, claiming LSR failed to adhere to legal standards and regulations while carrying out construction.
It’s not the only thing going wrong for the developer, though; Primorskaya LLC, the company that owns the land and the hotel’s property on it, has been showing signs of bankruptcy since the beginning of 2021, and since November of that year, the developer has pledged all of the company’s assets to the Russian Agricultural Bank.
Who buys Sochi’s health resorts?
Sochi’s Orchestra The Crystal Sochi Resort hotel was reportedly purchased by LSR Group in 2021, following the purchase of Primorskaya the same year. In 2021, the company lost more than 7 million rubles, making this another item on Molchanov’s list of troublesome possessions.
The Prosecutor General’s Office has been investigating the legitimacy of the purchases of Russian health spas and resorts. More than a thousand real estate items from 34 sanatorium-resort institutions in Caucasian Mineralnye Vody were returned to the state’s income in a case filed by the Prosecutor General’s Office at the Gagarinsky Court of Moscow in February 2022. Companies and private individuals are both named as defendants.
According to the Prosecutor General’s Office, the items belonged to the Federation of Independent Trade Unions of Russia but were purchased unlawfully from them. The court sided with the Attorney General’s Office and granted their request. If the ruling is implemented, the state will reclaim all resort properties.
The state of LSR knowledge
In 1993, Andrey Molchanov founded the Lenstroyrekonstruktsiya joint-stock business, the forerunner to the LSR Group of Companies, by registering the development company Vozrozhdenie St. Petersburg. Over the past three decades, the company has consolidated over thirty operations, including construction firms, brick manufacturers, and even a river port, to become one of the country’s preeminent construction holdings.
In addition to building houses and making construction supplies, the corporation is also expanding into the “profitable real estate” sector, which involves the operation of hotels, shopping malls, and health spas.
The ownership structure of LSR’s assets is intricate. There is a central organization with “daughters” that each has its divisions. Therefore, the company’s revenue and profit are calculated in different ways depending on the source.
The SPARK database shows that, as of right now, LSR Group is the founding organization for 49 separate businesses. Meanwhile, 51-year-old Andrei Molchanov reaps the benefits of the vast majority of them. The “daughters” of the construction juggernaut are often well-off, with some companies earning several billion rubles in the previous year.
From the outside, the company appears to be a strong contender. Expert RA, a Russian rating agency, consistently gives LSR Group a “stable” outlook in the category of non-financial businesses’ credit ratings. The company’s sales in 2021 were over 11 billion rubles. Meanwhile, net profit was about $6 billion, or nearly half of the total. According to the company’s website, “Such success was made possible thanks to the leadership philosophy that is firmly rooted in the company’s DNA.”
The portfolio also includes investments in overseas corporations. Such companies include the Munich-based Aeroc Investment Deutschland GmbH and the Cyprus-based Comcele Limited, both of which were established in February 2020. Data from international equivalents of the Unified State Register of Legal Entities show that the latter has been actively pumping money all along, listing new shares on the stock market and expanding its permitted capital.
Examining the financial statements of all LSR Group companies reveals that roughly half of them are experiencing liquidity issues due to factors such as the lack of equity capital, the recent reduction in authorized capital, the lack of profitability, and the disclosure by the parent company that, despite decent earnings, the outflow of money from the company exceeds their receipt by almost a billion rubles in the last year.
Who is the holding owner of Andrey Molotov?
His birth surname is Morozov, after his father; at his mother’s urging, he adopted his stepfather’s last name. His biological parents and his stepparents got divorced in 2003. Among the wealthiest individuals in Russia, he has an estimated $1.3 billion to his name. They have six kids between him and his wife, Elizaveta Molchanova.
The media focused on the close relationship between the owner of LSR Group and Maxim Sokolov, the newly appointed president of AvtoVAZ and a former deputy governor of St. Petersburg. Sokolov oversaw the committees for transport, tourism development, investment, industrial policy, and trade as vice governor of St. Petersburg from December 2019 until December 2024. Before that, he served as the minister of transportation for the Russian Federation for six years (2012–2018).
The LSR Group includes many former members of Sergei Mironov’s Just Russia party. Known as the regional head of A Just Russia, this is Evgeny Petelin, who served in the Leningrad Region Administration. Sergei Bebenin, who is the regional assembly’s speaker, Since 2000, when Molchanov was a co-founder of the Will of Petersburg regional political public movement and Mironov served as its political council chairman, the two men have been friends.
Having served as an assistant to Russian Minister of Health and Social Development Mikhail Zurabov beginning in April 2007 and as a senator of the Federation Council representing the Government of the Leningrad Region from 2008 until 2013, Molchanov is no stranger to politics.
Andrey Molchanov’s Billionaire Real Estate
The Molchanovs’ main nest is in Barvikha, on the so-called Country-Pro region off the Rublevo-Uspenskoye highway. They have an authentic palace in the Empire style where it would not be out of place to host a monarch. The price of only one plot of land is about 700 million rubles (about 75 acres). The total cost of the building and grounds could reach three billion rubles.
Andrey Molchanov may own other properties in the Rublyovka area. Rosreestr records show that it covered a total of 43 acres in the same barvikha. There appear to be three buildings; two resemble glazed winter greenhouses, but it’s hard to tell from satellite imagery.
Andrey Molchanov’s primary residence in St. Petersburg is the distinctive mansion on Rublyovka, which features a rotunda and a turret. There is a garden with a bronze group called “Dancing Girls” in the courtyard, and only a little further away is Anikushinsky Square, making this an ideal site. Molchanov himself constructed this cutting-edge structure around the turn of the millennium. Few locals in Petersburg, Russia, are aware that this is a modern invention.
The building only contains ten units. Each unit features an open floor plan, wood-arched windows, and a semi-circular living room. The most expensive option is Andrei Molchanov’s 270-square-meter penthouse in the building’s penthouse. The price of such a home or property starts at 140 million rubles.
Even more stunning is Andrey Molchanov’s mansion in Moscow. According to the numbers, he is eligible to move into a 385-square-meter mansion on two levels in the Grand-Prix House development in the city’s trendiest neighbourhood, Ostozhenka. Each unit in the house features at least 15 panoramic windows facing one of the four cardinal directions and wide terraces for a winter garden.
The Zachatievsky Monastery, central Moscow, and the surrounding area may all be seen in all their historical glory. The inside landscape was designed by renowned landscape architects and designers. A magnificent Japanese garden complete with an artificial waterfall and stone walkways. About 630,000,000 rubles is the price tag for such a luxurious home.
Even Andrey Molchanov’s senior enjoys a lavish lifestyle. He stayed in a three-bedroom flat on Bolshoi Kislovsky Lane for the entirety of the previous year and sometime in the past. The “Kislovskoe” apartment complex, constructed in 1928–1929 for top Soviet party officials, is located in the city’s core. Semashko, Bonch-Bruevich, and Novikov-Priboy are just a few notable residents. A Molchanov three-ruble note may go for more than 60 million rubles.
The clubhouse “Bakst” near the Patriarch’s Ponds is where Andrey Molchanov’s eldest son registers. Artist Lev Bakst is honoured with this structure’s naming. The outside is adorned primarily with his artwork. Apartments contain wood-burning stoves, seven-meter windows, and “smart home” systems, and a 24-hour concierge takes care of residents’ every need. The interior gardens are well maintained, and brooks trickle through them. Andrey Molchanov’s son owns a 230-square-meter duplex in Bakst. The price range is $100,000,000 and more.
Molchanov’s eldest son reportedly maintains a residence in the St. Petersburg suburb of Ugolny Ostrov, which is located in the watershed of the Sestroretsk reservoir. His Alpine-style residence there reportedly cost between 150 and 275 million rubles to construct.
The Molchanovs spend New Year’s Eve in Pidma, a small village in the Podporozhsky area. A gorgeous wilderness, this is the final town before a marsh and no road on the way to Petrozavodsk in the Leningrad Region. This could be the dacha that Andrei Molchanov inherited from his great-grandfather.
Life suddenly surrounded her. We appear to be discussing the entire estate, which includes a dock on the Svir River, a children’s pirate ship for play, and several other structures serving various functions beneath the towering mansion’s three stories. It’s hard to fathom the cost of a property when there’s nothing else quite like it in the area. Many millions of rubles, likely tens of millions.
The Molchanov family also owned some more modest property, as seen in satellite photographs. For instance, a four-bedroom apartment in a brand-new building on Moscow’s Marxistskaya Street would set you back around 50 million rubles, while a kopeck piece in a Stalinist structure on St. Petersburg’s Kartashikhina Street would set you back around 15 million rubles.
The eldest Molchanov son attended NYU. At the time, he could have rented an apartment on the eighth floor of the 76-story Lower Manhattan building at Spruce Street, according to an American directory. A monthly lease might cost anything from $4,600 to $25,000.
The eldest son now works for his dad’s business, but he claims to be based out of Geneva, according to his online profiles. It is common knowledge that Molchanov’s middle child was issued a Russian passport at birth by the Russian Consulate in Switzerland.
Andrey Molchanov’s Legacy in the Real Estate Industry
Business publications claim that Andrei Molchanov owns two Italian residences with a combined area of 899 square feet, as well as lots of land totalling over 5.2 hectares.
Forbes.ru, 06/27/2022, “Billionaire Andrey Molchanov is selling a boat for €130 million.” Andrey Molchanov, No. 104 on the Forbes Billionaires List with an estimated $1.2 billion, has listed the megayacht Aurora for sale. Yacht broker Burgess announced the sale of the vessel on their website. Two yacht market insiders who spoke with Forbes are aware that the boat is Molchanov’s. We attempted to reach out to LSR for comment, but they declined.
The website states that the businessman is seeking to raise €130,000,000. Due to her recent construction at one of the world’s finest and most expensive shipyards — Germany’s Lurssen in 2017 — the asking price is quite high for a boat of her size. The Aurora’s steel hull and aluminum superstructure were designed by the famed British firm Winch Design with Art, as were the vessel’s art deco interiors. The market now refers to the yacht as “Project Gatsby” because of them.
The boat includes four separate sleeping quarters for guests, with a total interior volume of 2113 gross tons. The upper deck observation lounge is furnished with a couch and bar stools. The fitness centre has sliding glass doors that open out onto the aft terrace and two enormous skylights for natural light and expansive views. On the aft deck, you’ll find a jacuzzi and a couple of bars. T
he boat’s rear deck is set up for fun and games. Inside, you’ll find a sit-down bar decorated in the manner of 1920s motor racing and numerous cosy lounges, as well as a dining area with seating for 12 diners and a buffet. There is space for up to 22 crew members and 16 passengers, including the owner, in the boat’s upper-deck cabin.
The ship is currently docked in Gocek, a Turkish port. The vessel sailed there from the Spanish shore. In March 2022, the yachting press reported that the vessel had narrowly avoided being impounded in Barcelona. The yacht was having a “secret” repair at the MB92 shipyard in the port of Barcelona when the “special operation” began. K.ru Insertion
