Russian tycoon claims he is behind Forbes purchase. Regulators are investigating the deal — Washington Post

In May 2023, it became known that Forbes Media Holding found a buyer. It was Austin Russell, the founder of Luminar, a company with a capitalization of more than $1.5 billion, which makes lidars. However, as AIN.Capital found out, the initiator of the deal and the person who actually bought Forbes is actually the Kremlin-connected Russian tycoon Magomed Musayev. Russell was needed to negotiate an agreement with the regulatory authorities.

This was also confirmed by Washing Post’s sources. AIN.Capital tells about the key points of the case.

New details

On October 20, The Washington Post published an article with new details confirming that the actual buyer of Forbes was not Russell, but rather Musayev.

The publication obtained five audio and one video recording in which Musayev discussed the agreement. There, he says that he was the buyer of Forbes, finishing the “deal of a lifetime.”

“I just bought global Forbes,” Musayev told one of his associates, referring to Forbes Media Group, which also includes the American publication. “You understand when you have in your hands the key to the most authoritative global brand, this key will give me access to anyone.”

Musayev repeated over and over that he had bought Forbes. In the video seen by The Post, he called Russell the “face” of the deal and insisted that his own involvement not be discussed. “I am not working with a sledgehammer, nor with a scalpel, but with a laser.”

This conversation took place a few days before Musayev’s 60th birthday party in New York, in June 2023. The Russian billionaire was joined at the head table by top executives from Forbes Media Group, including Russell, who recently announced that he was the lead investor in the $800 million deal to buy Forbes Media Group.

Musayev’s comments on the tapes cited by WP raise fresh questions about possible foreign influence over the media giant and the deal, which has been mired in controversy for more than a year. Criticism has been voiced within the US government, with the Committee on Foreign Investment in the United States taking a close interest.

Russel’s and Musayes’s comments

Both categorically deny any role Musayev played in the deal.

“There is not one dollar of capital from any Chinese or Russian citizen or entity, including Musayev,” Russell said in a WP comment. Musayev, in turn, replied: “I do not invest in this operation and do not plan to invest in any way in the future, directly or indirectly.”

However, Musaev did not comment on the recordings obtained by WP. He does, however, deny telling anyone that he had bought Forbes.

Ukrainian Forbes responded to the WP article with a statement stressing that the deal to acquire 82% of Forbes Global Media Holdings is not yet complete. It is subject to review by US regulators, in particular the Committee on Foreign Investment in the United States (CFIUS) under the US Treasury Department. The deal is expected to be completed in November.

Forbes Ukraine’s statement only gives the public details of the deal, including that Russell is the buyer. Musayev’s involvement is neither confirmed nor denied – there is no mention of it at all. Instead, the publication asserts that the only people whose interests Forbes Ukraine represents are its readers:

“Forbes Ukraine is published in accordance with a license agreement that provides for high standards of journalism and corporate governance. We serve a single interest group – our audience, and that will never change.”

Under the regulator’s watchful eye

CFIUS, which reports to the Treasury Department and is made up of several agencies, has the authority to investigate certain business transactions in the US for national security risks. It can demand changes or, in rare cases, ask the president to block the deal.

In an Aug. 9 letter quoted by WP, Senator Tom Cotton of Arkansas and Senator Marco Rubio of Florida called on Treasury Secretary Janet L. Yellen, who chairs CFIUS, to review the deal, arguing that Russell was “masquerading as a lead buyer” when “it is evident that Russell is merely a conduit for larger foreign investors.”

The senators, who both sit on the Senate Intelligence Committee, said in the letter that the bulk of the money came from investors with foreign connections, including Shiv Khemka, a close associate of Musayev who is vice chairman of an Indian conglomerate that has worked with the Kremlin. According to public records, Khemka lived in Russia for 25 years, working on projects such as the Russian government-funded Skolkovo business school (“Сколково”). He also served for more than four years on the board of directors of RosTech, a key company in the Russian state arms conglomerate, including after the US imposed sanctions on the company.

“It’s not in our country’s best interest to let a major U.S. media outlet be run by entities with ties (to countries such as Russia),”

Rubio told The Post.

CFIUS does not disclose its decisions or even what transactions it reviews.

Why does Musayev need Forbes?

Musayev previously worked for the Moscow government, managing a major exhibition centre before becoming the city’s top innovation official. According to Musayev’s former business partner Pavel Cherkashin, Musayev, through his father-in-law, was part of the close circle of Kremlin-connected billionaire Suleiman Kerimov, also from Dagestan.

As AIN.Capital has previously written, the acquisition of global Forbes is a long-standing plan of Musayev, who also owns the Forbes brand in Russia (the publication continues to operate there unchanged and is one of the few remaining in the country).

Owning a popular and world-famous mass media would make it possible to move from the status of a Russian entrepreneur with a dubious reputation to a cohort of people like DST’s Yuri Milner, a Russian who is actually, as it turns out, not quite Russian. For this reason, Musayev launched other projects aimed at impact investments and ESG.