Sergei Polonsky

Polonsky was born 1 December 1972 in Leningrad, Soviet Union (now Saint Petersburg, Russia) Polonsky finished secondary school No. 99 of the Vyborg District of Leningrad. In 1989, he joined the Airborne Troops. He completed his military service in the 21st Separate Air Assault Brigade (1990–1992), which was stationed in the time of the armed conflict between South Ossetia and Georgia in the combat zone at Tskhinval.

In 2000, Polonsky graduated from the St. Petersburg State University of Architecture and Civil Engineering. He qualified as an economist and manager with a specialization in economics and management of building enterprises. In 2002, he defended his PhD thesis "Formation of Functional Procurement Strategies in Construction". In 2008 Polonsky attempted doctoral, but, considering the academic council biased, he withdrew the work and posted the text of the thesis for an open discussion on the Internet.

In 2008, Polonsky was the first developer who openly admitted that the Russian real estate market was hit by the global financial crisis. According to Anton Chernigovsky, who wrote the article "Polonsky Makes a Demarche"[11] published in the Business Magazine, "his competitors kept arguing zestfully that real estate was the last thing to be threatened by the crisis. But in as early as two months, they had to withdraw their words and start to urgently suspend their projects and patch up financial gaps".

The downturn hit Mirax Group hard; in August 2008, Polonsky published an open letter in his blog,[12] where he said that during the previous year, Mirax Group could not receive any credit to continue construction and had not sold any real estate over the past few months. Commissioning deadlines, therefore, needed to be reviewed and extended.

On 10 October 2008, Sergei Polonsky announced that he would eat his tie if the elite apartments' prices did not rise by over 25% in 1.5 years. The forecast came true with a half a year delay, and on 31 May 2011 Polonsky ate a piece of a true tie at Minaev LIVE, a TV show hosted by Sergey Minaev.[13]

In July 2009, Alpha Bank acquired all of Mirax Group's debt obligations to Credit Suisse and called in the company's debts in an effort to bring the company to bankruptcy and take control of it. Polonsky described the steps taken by Alpha Bank as ‘premeditated systematic actions aimed at divesting and acquiring’ the corporation's assets adding that Mirax Group had been 'completely unready for the sudden turn of events.'[14]

In February 2011, Sberbank of Russia (Savings Bank of the Russian Federation) decided to grant Mirax Group a $373 million credit for six years. On 3 March 2011, at a media conference, Sergey Polonskiy declared that the Mirax Group Board decided to liquidate the Mirax brand.[15] He also promised to fulfill all the obligations of the Group to complete the projects and repay the debts. In May 2011, the works at the unfinished projects were resumed.

On 1 December 2011, Polonsky renamed his company "Potok", and this company inherited all the structures and liabilities of the former Mirax Group. Mirax Group had suffered as a result of the global economic crisis and had been struggling to refinance its debt

On 6 July 2012, by virtue of the shareholders' agreement, Polonsky bought out the shares of the minority shareholders of the "Potok" (Flow) company and became the owner of Potok's 100% block of shares.

September 2011

One notable project to stall as a result of the economic crisis was the Kutuzovskaya Mile residential complex. Polonsky became involved in the project through Mirax in 2005 at the request of the Moscow Mayor Resin Rosltak. The project had been started in 2002 by FTsSR (Federal Centre for Social Development), a company with many political connections but little experience in developing real estate. Mirax took control of the project and agreed to give FTsSR 5% of the finished apartments. Mirax proceeded to invest 2.5 billion rubles in developing the project before work was forced to stop in 2009.[16]

FTsSR terminated the contract in January 2010. Polonsky claimed this was done unlawfully, leading to disputes between FTsSR and Mirax Group. However, according to FTsSR, funding from Mirax Group had stopped. In September 2011 FTsSR forcibly took control of the site using a private security firm. Polonsky has described FTsSR's actions as a raid in the media. "At this very moment the Project site, located at the construction site of the residential quarter Kutuzovskaya Mile, is being forcibly taken over", the company said in an official statement. To protest against the actions of the Moscow authorities, Polonsky declared a hunger strike and continued to provide his round-the-clock presence at the construction site. The Moscow Chief Directorate of the Ministry for the Internal Affairs of the Russian Federation stated at the time however that "the police stayed uninvolved in the conflict." and that the law enforcement officers present at the scene were there to "maintain public order".[17]

Subsequently, in September 2012, the Russian Ministry of Internal Affairs (MVD) began investigating Polonsky in relation to the Kutuzovskaya Mile project. Prosecutors claimed that between 2007 and 2008, Polonsky, through Mirax Group subsidiaries Avanta and Concordia Asset Management, took 5.78 billion rubles in down payments from 80 individuals hoping to buy apartments. They claimed that contractual obligations were not fulfilled and the funds were illegally diverted by Polonsky to other Mirax Group entities. In June 2013, the MDV charged Polonsky in absentia with embezzlement.[18] Polonsky strongly denies any accusations of wrongdoing and has expressed his willingness to be investigated as he believes that "no legal offense has been committed."[19]

According to the Russian publication Novaya Gazeta, the Kutuzovskaya Mile issue has become a "bottomless pit of internet folklore".[20] Polonsky maintains that he transferred 2.5 billion rubles to FTsSR prior to the termination of their contract, which would have been more than sufficient to meet the contractual obligations entered into by his companies. He added that the remaining funds had not been diverted out of the project and had stayed within Mirax Group.[21] In an open letter dated 2 October 2013 Polonsky admitted to "incompetent management" and expressed his willingness to pay $12 million in compensation to his creditors. He also sought to assure all investors that their apartments would be completed.[22]

The embezzlement charges, Polonsky believes, are part of an attempt by FTsSR and the Moscow government to take the Kutuzovskaya project away from him and hand control to Arkady Rotenberg, a rival property developer with close ties to the Russian president Vladimir Putin[16]

In late 2012, Sergei Polonsky and two other Russians – Konstantin Baglay and Alexander Karachinsky – were arrested by the Cambodian police. They were suspected of unlawfully depriving several Cambodian seamen of their liberty.

Polonsky protested at the arrest and the conditions of his incarceration, writing on his blog "After being detained, none of the detainees, including myself, was allowed to make a telephone call, we were denied our right to a counsel for legal assistance and to an interpreter, although the law of Cambodia provides for these rights. At present, they are holding me in a cell without an air conditioner at a temperature exceeding +35 degrees Celsius in the shade and with horrible sanitary conditions. According to the Cambodian counsels and interpreters, they regularly receive threats and warnings not to work with me from unknown people." He also made several petitions to the Russian Ministry of Foreign Affairs; however, they failed to take any steps to help.

On 7 January 2013, Polonsky wrote a letter to the king of Cambodia to apologize to the Cambodian people for the trouble caused while pleading innocent in the crimes he was charged with. He added that after his release from jail, he intended to file a petition to be granted Cambodian citizenship and planned to develop a business in the country.[23]

K. Baglay and A. Karachinsky were released from custody uncharged on 11 March 2013 and Polonsky was released on bail on 3 April 2013.

On 15 May 2015, Polonsky was arrested again in Sihanoukville, where authorities said he had been living for two years with an expired visa. Cambodian Authorities has deported this fugitive Russian tycoon living illegally after he was accused of embezzling $175 million in his homeland. He was put on a flight to Moscow via Vietnam on Sunday morning.[24]

On 14 October 2013, at the request of the Russian authorities, Polonsky was issued with a "red notice" by Interpol and on 7 November 2013 the Russian Prosecutor's Office sent Cambodia an official request for Polonsky's extradition.[25] Polonsky was subsequently detained. However, on 14 January 2014, the Phnom Penh Appeal Court ruled that the grounds given by Russia for Polonsky's extradition were insufficient.

New charges were brought against Polonsky in February 2014 and sent to Cambodia. However, on 16 April 2014, the Supreme Court of Cambodia ruled that Cambodia does not have an extradition treaty with Russia, and so Polonsky could not be extradited on any grounds.[26]

Polonsky was eventually deported from Cambodia and sent back to Moscow on 17 May 2015.[27]

A Moscow court had scheduled his trial date for 11 October 2015.[28]

On 12 July 2017, the court found Polonsky guilty on two cases of major fraud and embezzlement, deciding he should face five years in prison. However, the court ruled the crime constituted a business dispute and Polonsky would only face punishment for the "non-fulfillment of contractual obligations". The judge ruled that too much time had passed since the crime was committed for the court's decision to be implemented.

On 7 May 2014, Polonsky filed a lawsuit at the UK High Court against his former lawyer, Alexander Dobrovinsky. Polonsky claimed that Dobrovinsky, along with his colleague Natalia Levinzon, the London-based law firm Dobrovinsky, and Partners LLP helped steal £300 million from him by pretending that he was negotiating a sale of his company, Potok, to Roman Abramovich whilst Polonsky was detained in Cambodia. Dobrovinsky, a known advocate of numerous Russian oligarchs, was in fact, it transpired, selling the business to Roman Trotsenko, an existing shareholder in Potok, with whom Polonsky had previously refused to do business. Polonsky claimed he had received only a few million dollars of the hundreds of millions he says he is owed, and alleged that the lawyers were acting for Mr. Trotsenko all along.[29][30]

Polonsky has been involved in a long-running dispute with oligarch and newspaper magnate Alexander Lebedev. The dispute first entered the public domain in 2006 when Lebedev, then a member of the Russian parliament, openly criticized the construction of the Federation Tower project that was being undertaken by Polonsky stating that "cracks" had been found in the building's foundation.[31] The next day, Polonsky responded by inviting journalists to the Federation Tower promising to pay anyone one million rubles if they found crack. The journalists were allowed to access all underground floors but the long search brought no result.[32]

On 16 September 2011, Polonsky and Lebedev were guests on the panel discussion program NTVshiki to discuss the Russian economic crisis. During the broadcast, Lebedev again made mention of the cracks and Polonsky responded angrily that the rumors had been quashed three years earlier. Tensions between the two increased throughout the show until Lebedev stood up from his chair and punched Polonsky three times in the face, knocking him out of his chair. Polonsky took no retaliatory action against Lebedev, who appeared poised, ready to continue the fight.[33][34]

On 3 October 2011, a criminal case was initiated against Lebedev under Article 213, Part 1, Clause B of the Criminal Code of the Russian Federation (Hooliganism).[35] The decision was made by the Investigative Committee of Russia based on pre-investigation check results. On 3 July 2013, Lebedev was found guilty and was sentenced to 150 hours of community service.[36]

In March 2015, Polonsky announced plans for a $1 billion lawsuit against U.S. filmmaker 20th Century Fox because of similarities between himself and a villain in one of the studio's films. Neulovimiye ("Elusive"), a Russian-language movie released in 2015 by 20th Century Fox, has a primary character named Sergei Polyansky who kills a young woman with his car and displays many negative character traits. In addition to having a similar name, film critics have acknowledged similarities in physical appearance between the real-life Polonsky and the fictional Polyansky. The lawsuit has yet to be filed.[37][38]

• Merit badge of Honorary Russian Builder
• The Construction Olympus – 2002 award in the personal category "Manager of Complete-Cycle Construction Company"
• Personal golden medal, diploma and personal badge of honor of the French National Association for National Industry Support (Societe d’Encouragement pour L’Industrie Nationale, SPI)

• In March 2008, Polonsky refused to defend his doctorate thesis in the State Commission for Academic Degrees and Titles and organized a public defense in his blog.
• Polonsky arranges regular master classes for university students (MSU, MGIMO, HSE, MFPA, and others) and lectures for the Nazvanie.NET personnel. The most popular topics of his master classes and lectures are enterprising, personal development and success strategies in business.
• Starting from the 2009–10 academic year, Polonsky is the chairman of the Management in Development Business Department set up under the agreement with the Moscow Finance and Industry Academy for training young specialists for the benefit of construction companies.
• In 2002 Polonsky was elected Senator and president of the International Chamber of Youth.

In certain periods, Polonsky was a member of various voluntary associations: in 2001–2005, he was a member of the Council of Entrepreneurs under the Mayor and Government of Moscow, and in 2001–2010 he was a member of the "Business Russia" organization of entrepreneurs. In 2003, Polonsky was elected vice president of the Russian Academy of Business and Enterprising, in 2004, he became Vice President of the public association of professional managers, the International Club of the Best Managers of the New Era. In 2005, Polonsky was one of those who established the Russian Builders’ Association, and until now remains its first vice president.

In 2004 Polonsky prepared for a spaceflight to the International Space Station,[43] completing a full cosmonaut training course. The flight did not take place, however; because of his height, there was not enough room for his legs under the console, which could have led to injury as the spacecraft landed.

• Official website