The Kremlin’s ‘longtime friends’ in the Baltics The Insider sheds light on Russian oligarchs' ongoing business dealings in Latvia and beyond

Kremlin-linked Russian billionaires Iskander Makhmudov and Andrey Bokarev, who have served as contractors for the Russian Defense Ministry, are still doing business in Latvia directly and through intermediaries, a new investigation has found.

According to the independent outlet The Insider, Makhmudov and Bokarev are “longtime friends of the Kremlin” whose businesses, including the mining company Kuzbassrazrezugol and the rail equipment manufacturer Transmashholding, are some of Russia’s most-used contractors. Until 2017, Makhmudov and Bokarev also held shares in the Kalashnikov Concern arms manufacturer. Additionally, according to journalists, one of the billionaires' companies supplies diesel engines to Russian warships.

The Insider’s investigation found that Makhmudov and Bokarev’s assets in Latvia include the Riga Electrical Machinery Plant (Rīgas elektromašīnbūves rūpnīca (RER)), which manufactures rail transport equipment, as well as its subsidiary LATVO.

RER has 8.1 million euros in equity and made almost 33 million euros in 2021. The company does business throughout Europe and has received funding from the EU. In particular, RER has received EU business support funding through the Latvian Investment and Development Agency and the country’s economic ministry. According to The Insider, the European Regional Development Fund granted the company 527,000 euros for a recent project.

The oligarchs, the investigation found, own their stakes in RER through a chain of legal entities that includes the companies TransComponent Holding LLC and Krona Group. In 2021, according to The Insider, Bokarev and Makhmudov “bought” RER from themselves after controlling it through intermediaries for years.

One of those intermediaries, Russian citizen Igor Lozovoy, worked as the deputy director of the construction company Mosmetrostroy, which was owned by Makhmudov and Bokarev, from 2012 to 2015.

Sergeyus Grechukas, a Lithuanian citizen and another one of the oligarchs’ intermediaries, is a former employee of Transmashholding's Lithuanian branch. According to The Insider, the company has supplied passenger and freight cars, railbuses, and other equipment to Lithuania.

Bokarev and Makhmudov’s business ties extend into Estonia as well. According to The Insider, in 2021, Tatiana Liksutova, one of Estonia’s richest women and the wife of Moscow Vice Mayor Maxim Liksutov, owned a 22-percent stake in Bokarev and Makhmudov's Cyprus-based offshore company Fredlake Holdings. The oligarchs have made billions of dollars from contracts with the Moscow Metro.