President and owner of Crocus Group – in the special TASS project “Business leaders”
About repertoire, first money, heredity, wiretapping, English tutor and ashtrays
— Araz Iskenderovich, you once compared yourself to a conductor, is that right?
— Yes, I did indeed.
— And what is your orchestra playing now?
— To put it figuratively, the task is not to learn the new repertoire, but to preserve the old one…
The situation in the economy is difficult, at this stage you have to think not so much about business development as about ways to preserve it. Everything just came at once – both the pandemic and the tax burden, which puts pressure on entrepreneurs … In my opinion, it does not correspond to the reality.
Criticising the government is not the most rewarding thing, but the fact is that businesses give 40 kopecks from each rouble received in the form of taxes to the budgets of all levels. It is a heavy burden for those who have set up enterprises themselves to operate in the domestic market. This is my opinion. Aggregate demand has decreased, salaries have dropped for many people, incomes have been declining for several years in a row…
It has long seemed to me that it is time to cut taxes. It is clear that they will not go for it now, but something needs to be changed at the conservatoire. There are two economies in the country. And they are totally different.
Someone built businesses using credit funds and their own resources, and this is one topic. Others became owners of large enterprises, which they did not raise themselves, but received in the process of privatisation. They are great, they were in the right place at a right time, today they are investing in production, but they do not have the credit burden that would correspond to the value of their assets. Obviously, these are completely different conditions. There is a certain injustice here, I believe.
Therefore, I say: we have to be happy with what we’ve got today; we would like to keep the repertoire, not to lose face. It is difficult, but we are trying.
– And what kind of orchestra do you have – symphonic or chamber?
For certain cases, we use different instrumental groups. It all depends on the tasks that we are solving at a particular moment. Sometimes there can be a quartet or even a trio. We carry out construction, operate buildings, trade, service, organise exhibitions, we have a chain of hypermarkets “Your House”, “Vegas”, Crocus City with a concert hall, Expo pavilions and a hotel …
A lot of things, all involve very different areas of activity! We can load ourselves, as they say now, with content. For every taste.
– Let me explain why I started the conversation with music: you said that you earned your first money through music.
– Yes, in Soviet times, recording studios were widespread in Baku. And their services were very expensive. Customers paid 10 roubles for a 60-minute compact cassette, and 15 roubles for an hour and a half. This was the official price!
There were many orders, state studios (others did not exist then) simply could not manage, and I agreed through my friends that I would record tapes at home, and then give them for sale. Sort of primitive outsourcing. They set me onerous conditions: they paid 2 roubles apiece and kept the rest for themselves.
– And how many have you run?
– Believe it or not, up to 1,000 roubles a month.
– Huge money for those times!
– Sure. Engineers with degrees had salaries that were several times less, and then I just started my first year of the institute. I quickly put the business on a commercial track: I bought master cassettes with recordings from vinyl records, and only then replicated them in parallel on ten tape recorders. For the “master” they asked 150, 200, 250 roubles. It was expensive! But in the end, the costs paid off with interest.
– Did you sacrifice quality?
– No, no, I did everything at the highest level. I didn’t run junk, I had good equipment, real decks.
– Where did you get them? It also cost a lot of money.
– It expanded gradually. At first, there were two tape recorders, then I saved up for one more, and then more …you know, I grew up early. I was not even 14 years old when my father passed away.
– What happened?
– Hereditary predisposition. All men on the paternal side have died of a heart attack or stroke as a result of vascular obstruction. This happened in 2000 with my older brother. He was an athletic person, he walked tens of kilometres every day, almost jogging up to the fifth floor. And suddenly an unexpected death at the age of 61 …
Then I went to the doctors, began to delve into the subject and found out that we have genetically high levels of cholesterol and triglycerides in our family, several times higher than normal. It turns out that this is the fate of many physically strong people. There are patients who can barely walk with a cane, but live up to 100 years. As in the joke: he was sick longer than the others lived. Strictly speaking, cholesterol, triglycerides are indicators of physical health. But in large doses, they interfere with blood circulation, are deposited in the vessels, which sooner or later leads to a stroke or heart attack.
I figured this out, realised that it was necessary to drink statins and niacin, found intelligent consultants in America and have been maintaining the required cholesterol level for 20 years …
By the way, an interesting fact: did you know that the average life expectancy of doctors in the world is 15–20 years shorter than their patients? Such is the paradox that is difficult to find a logical explanation to. Have you noticed that there are many single and divorced people among psychology consultants? Also a strange situation. So, they advise others how to improve their lives, improve family relations, but they can’t figure it out for themselves?
Same with the doctors. If I go to the optometrist and see glasses on his nose, it worries me. What kind of specialist is not able to help himself, but is going to cure me?
– You approach the question fundamentally.
– Yes, I am somewhat critical of this.
– Not only of this.
– There is such a trait, you’re right. Since my youth, I am very meticulous. I thought: if you want to do something well, first figure it out yourself.
– Why did you enrol in the Polytechnic Institute after school?
– Honestly, it was easier to enrol there. In those years, two universities were quoted in Baku – the Polytechnic Institute and the Azerbaijan Institute of Oil and Chemistry, but the competition there has always been crazy. It is also, of course, the law faculty of the university, but in Soviet times only children of secretaries of district committees, judges and prosecutors were admitted to it.
– You also have a difficult family.
– My father worked as deputy director of science at the Institute of Water Issues of the Academy of Sciences of Azerbaijan, he was considered a famous scientist in his sphere and was close friends with the rector of the Institute of Oil and Chemistry. When I turned 16, my mother came to his house. She wanted to consult which faculty would be good for me. She expressed herself allegorically, did not ask directly, but the hint was clear. And then a close friend of my father, whom he helped writing his doctoral dissertation, said that it would be better to discuss the issue not with him, but with my older brother. “Doesn’t he work as a senior lecturer at the Polytechnic?”
– Blew her off.
– You could say that. I remembered that answer well …
As a result, I applied to the Polytechnic University, studied and at the same time earned a living by rewriting cassettes. In 1976 I graduated from the institute, received a diploma in communications engineering and was sent to the intercity telephone exchange in Baku. Frankly, I was not eager to work in my speciality. That’s for sure!
– It seemed boring to me. I was an active young man, I wanted to grow and develop, and there it was some kind of routine, all that was not very interesting. True, I was quickly, only two years later, nominated for the post of the vacated chairman of the trade union committee of communications workers, although I did not strive for this position.
– Was it prestigious?
– In a way, yes. Now, in the era of mobile communications, it’s hard to believe, but at the end of the 70s, telephonists had a certain power and resources. Remember Vysotsky? “I dial the eternal 07 …” The possibilities of the long-distance telephone exchange were limited, people waited for hours for a connection, and I solved the problem in seconds. Of course, I was often approached with requests, and I did not refuse.
– I wonder if the KGB agents were listening to the conversations?
– Officially not, but they could easily connect to any communication line. No problem! In addition, the line engineers were sure to listen if the first persons of the republic spoke. Suppose Heydar Aliyev called Moscow to his son Ilham, who studied at MGIMO, and we had to ensure uninterrupted communication – the mainline and two backup ones. Of course, we all signed an official nondisclosure agreement, but the interlocutors did not talk about anything serious anyway, realising that these were open communication channels. Normal, everyday conversations.
We had several people with admissions. Zoom, Skype and other videoconferencing platforms had not yet been invented, so from time to time, we provided conference calls. A special meeting room was equipped at the station, where, for example, the Minister of Agriculture of Azerbaijan came with all his deputies, and the head of the union department held an absentee conference with them. I was amazed every time at how the leaders from Moscow were in control of the situation in the country. They knew exactly what was happening on the ground! Imagine, in the USSR there were 15 republics, a huge economy, and the minister asked each of them precise questions, almost to the specific collective and state farms. And if someone couldn’t answer, he would have immediately verbally destroyed him! Back then, they knew how to select and raise personnel. There were no people, but monsters, real professionals.
I listened to these conversations and studied … But after a few years, I felt that I was sitting still, not developing at all, and wanted a change. Suddenly there was an opportunity to enrol in the Higher School of the Trade Union Movement under the All-Union Central Council of Trade Unions. I went in search of information, found out that I needed a direction from the republic, returned to Baku, collected the necessary documents and again went to Moscow in full confidence that there would be no problems with the enrolment. But it turned out that the competition among applicants was crazy, with some unrealistic numbers. Those interested came from all over the country, and each had the same direction as mine.
It is clear that trade union science has never existed. In fact, it was an ordinary economic university with full-time postgraduate studies and salary retention. The implication was that after graduation, highly qualified personnel would return to their former duty station, but already to managerial work. Therefore many sought to get into Higher School. Including me. Although I understood that my chances of getting enrolled are very low. It was necessary either to look for some kind of cronyism, “long hairy hands”, or to try to pass the exams with decent grades. With the main subjects, I would have coped with more or less, could have prepared in the remaining three months, but with the English language, I was not very good, to be honest. At one time, while studying in a Russian school in Baku, I did the following trick: I indicated … Azerbaijani as a foreign language for myself. For a couple of years, the teachers did not pay attention to this, then they suddenly came to their senses: an Azerbaijani who is learning his native language as a foreign one … In general, for some time I wasn’t very serious which resulted in problems with English.
The head of the postgraduate studies department at the Higher School of the All-Union Central Council of Trade Unions honestly said: “Araz, Vadim Zherebkov will be at the exam, he is a polyglot, knows 17 languages, he cannot be deceived.” Galina Ivanovna treated me well, so she didn’t give me hope, she explained how it was.
– Couldn’t you come to an agreement with this Zherebkov?
– That’s why I asked for the teacher’s home address. At that point, there was nothing to lose, I really wanted to enrol in that university. I arrived. An ordinary nine-story brick building in the Kursk railway station area. I went up to the floor and rang the doorbell. A Jewish woman opened the door, looked me over from head to toe: “Who are you looking for?” I said: “Is Vadim Alexandrovich home?” She turned around: “Vadik, it’s for you.” Zherebkov came out wearing a robe, holding a mouthpiece with a cigarette in his hand. He looked in my direction even more critically: “What do you want?” I began to explain that I came to Moscow, and now in a hopeless situation: I have to enrol to graduate school, but I have problems with English … I saw that he already wanted to close the door so I continued: “Would you recommend a tutor?” Vadim Alexandrovich just chuckled: “Do you expect to learn a language in three months? What is your last name?” I said: “Agalarov”. “Do you even know what that word means?” Then I came to life a little: “My ancestors were from Shamakhi, it was the centre of trade routes, and “agha” was a title that emphasised a respectful address to a superior. Like, for example, Pasha, Bek or Bey.”
Zherebkov softened a little and said: “Okay, come in, I’ll check your level …” And what was there to check? Knowledge was almost a zero. Indifference and emptiness quickly appeared in Vadim Aleksandrovich’s eyes: “Everyone wants to enrol, but the exam is accepted by the commission, so I think you have no chance.” I understood that I would be kicked out now, and I was looking for a way to stay. Suddenly I noticed a lot of ashtrays on the table. Various sizes, shapes and colours. I asked at random: “Are you collecting?” The professor perked up: “Someone collects stamps, badges or labels, and I collect ashtrays.”
And then it dawned on me! I remembered that Muslim Magomayev, with whom I was friends, always had at least two ashtrays on the piano at home. He smoked like a locomotive, three or four packs a day, and he had ashtrays everywhere, which his friends gave. I asked Zherebkov: “Can I replenish your collection? I have what you do not have.” Vadim Alexandrovich could not refuse such an offer, this is not money, not even alcohol.
– And Magomayev easily agreed to share stocks?
– No questions at all! He said, “Take as much as you need. I have nowhere to put them.”
The next day I returned to the professor with a large box … He could not believe his eyes. And when he heard that it was a gift from Magomayev …
Imagine, Zherebkov tutored me for three months and managed to improve my pronunciation, forcing me to repeat the phrases over and over again until they worked out perfectly. I perceived the language by ear, this method was chosen by the teacher. I came twice a week for two hours, and for all the time Vadim Aleksandrovich did not take a dime from me, he taught completely disinterestedly. The most unique person!
He recommended an Oxford self-study book to me, where there was not a word of Russian. I constantly listened to cassettes in the car and in the end, I was able to pass the exam, went to graduate school.
– Where did you get the car in Moscow?
– I bought it. “Zhiguli” – either “seven”, or “five”, I don’t remember.
– That’s not bad at all.
– I do not argue, not bad … By that time, I had already switched from audiocassettes to video, and this was generally a bonanza. An empty cassette cost 120 roubles, and a recorded one – 300. A pure profit of 180 roubles. Can you imagine?
– And why did you need this graduate school with such income?
– Do not forget, I am talking about the Soviet era, where it was customary to build a career. The status was of great importance. Cultural workers, party and economic leaders, and plant directors were held in high esteem. Money alone did not guarantee respect. My father’s cousin, my uncle, worked as a manager of a consumer services factory. Everyone laughed at him, and he replied that his salary is several times more than that of academicians and writers, while emphasising that he had read one book in his life – “Washee-Washee”. And even that he didn’t read till the end …
They treated my uncle condescendingly, in the table of ranks he was below many, although he rowed money with a shovel, he also had a photo studio, and sewing workshops, and the same recording studios subordinate to him …
– How did you and Magomayev become friends?
– We started communicating in Baku when I was still working at a communications station. Shortly before that, Muslim married Sinyavskaya, they had a romantic period of a relationship. Tamara was in Moscow, then in Milan. Magomayev called me and said in an apologetic voice: “Araz, forgive me for bothering, but we just can’t get in touch … Can you help me out?” It was wildly uncomfortable for him to ask, he was shy, but I happily connected lovers and made sure that curious telephone operators did not overhear what they were talking about …
Muslim is 13 years older than me, out friendship took off when we were already in Moscow when he left the stage and suddenly found himself alone. No, the audience still adored him, but the so-called friends who hung around while Magomayev was at the zenith of fame instantly disappeared, and I felt that he needed moral support. That’s when we got really close.
He stopped performing at the age of 50, left quietly, without saying goodbye, did not arrange any tours before that, although he was in demand until his last days. No one could compare with his voice.
– You paid for the monument, which now stands not far from the Azerbaijani embassy?
Yes, I found the sculptor Rukavishnikov and ordered a project. He even advised how best to portray Muslim. He always took a characteristic pose on stage … Rukavishnikov made an inscription on the monument: “To Magomayev from his friend Agalarov.” I insisted that this sign be removed out of sight. Discreetly. It’s not about me …
– Was the series “Magomayev”, where Milos Bikovich starred, also filmed with your help?
– No, without me. Frankly speaking, I didn’t like the film very much, it doesn’t correspond to the image. Muslim had an outstanding personality and he was also an unusually touching, sincere person, vulnerable and tender, like a child. He missed Azerbaijan very much. One of the last songs, which he recorded in 2007, shortly before his death, was called “Farewell, Baku!” based on poems by Sergei Yesenin.
We have been holding the Magomayev International Vocal Competition for many years. The sixth final took place on April 24 at Crocus Hall. By tradition, the chairman of the jury was Tamara Sinyavskaya …
About mentality, citizenship, children, neighbours, the Jewish question and nonexistent co-founders
– Araz Iskenderovich, why didn’t you return to your homeland after graduating from a trade union school and defending your dissertation?
– I was directed to Baku. I arrived and realised that I could not stay. I was already living a Moscow life, and I saw that I had nothing to do at home. The city has become somehow small, the scale is different. The year was 1986, the beginning of perestroika, about which Gorbachev tirelessly told tales. And people believed him.
– You don’t like Mikhail Sergeevich?
– I think if at that time we followed the so-called Chinese path, we would have saved the country. It was necessary to give into private hands, privatise the food and manufacturing, agriculture; as for the industry, mechanical engineering, metallurgy, mining of coal, oil, gas, and other minerals should have been left under the control of the state and, accordingly, the Communist Party. Then the USSR would not have failed in such a short time, and this is exactly what happened under the “wise” leadership of Gorbachev. This is my firm conviction. He was an economically illiterate person. It seemed to him that it was possible to achieve changes in the country using beautiful slogans, but, you know, one cannot change the ideology without reforming the economic system. Mikhail Sergeevich raised a wave that carried him away. Lost a huge power. It only got worse for everyone. For all.
– Are you mentally Soviet?
– Absolutely! And according to the passport – a citizen of the Russian Federation.
– And Azerbaijan, perhaps?
– No, I have one passport. My son, by the way, too. Although at one time Emin was even awarded the title of People’s Artist of Azerbaijan. He also has a residence permit in the United States, in the 90s he spent seven or eight years there. Studied, received a bachelor’s degree.
I was also persistently offered a green card as … an extraordinary person. The Americans have such a status. A funny story, actually. I was already actively involved in exhibitions, worked a lot with companies in the USA, opened an office in New Jersey for 80 employees, calling in salesman from other large firms, salespeople who came with their clients …
– Is that allowed?
– Everyone is buying partner bases from each other on different terms. You cannot prohibit a person from changing jobs if they are offered a better contract. And I could offer. At that time, we started holding a computer exhibition Comtek in Moscow, which at some point became the third-largest in the world.
Basically, one fine day I come to the US Embassy and I am denied a visa. And a meeting with representatives of IBM and Hewlett-Packard has already been scheduled for the next Comtek. I call New York and say that I will not come, explaining that I’m not allowed. There is a shock on the other end of the line. In the early 90s, everyone was very interested in Russia; in the West, they thought that there would be a huge market here …
Literally, a day later, the secretary of the US Embassy in Moscow contacted me, saying: “Araz Iskenderovich, apologies, there was a misunderstanding. We are waiting for you.” I came. They said: “We advise you to find a competent migration lawyer and apply for a green card so that you do not have to apply for a visa before each trip. You have every chance of getting a residence permit.” Frankly, I was taken aback. I asked: “And on what basis?” They explained: “You are an extraordinary person.” It was the first time I’ve heard this expression.
It turns out that in exceptional cases this status is granted to outstanding athletes, artists, scientists who are of interest to the United States. And it is extremely rare for businessmen to fall under the program. Like, this is very honourable. But I had no intention of living in the States, and I was worried that because of the green card I would have to pay American taxes. The lawyers assured that this would not be necessary.
I visit the United States a month a year, at most. I go on business trips and to visit my daughter.
– You sent Sheila overseas as a child?
– Yes, she was six years old. She went with Irina, her mother and my wife. They left and stayed there.
– How many years have passed?
– If my daughter is already 31 years old – a quarter of a century has flown by …
Unlike Emin and me, who returned to Russia at the beginning of the 2000s, our daughter and Ira became American long ago and received passports. True, the Russian language is not forgotten. It’s good. And I do not lose hope that I will be able to invite Sheila to Russia and find an interesting business for her here.
Emin left first for Switzerland, then for the US, when he was less than 13 years old, and mentally he did not turn into a foreigner. Apparently, the character, the feeling of homeland is formed around this age. And when a child from the first grade lives and grows in another country, it changes the person. No matter how many times I tried to bring Sheila to Moscow, after a couple of weeks she says: “Dad, I can’t, I have to leave. No friends here, no one …”
– And what does she have there?
– Real estate agency. She got a job at Neiman Marcus, a well-known chain of boutique department stores, and even became the main purchaser of Chanel there. Then she decided she didn’t want to work for anyone but herself. She went to the courses of realtors. Now, together with her mother, they buy inexpensive, semi-abandoned houses in New Jersey, in fact, they pay only for the plot and build new housing for sale. Naturally, the income is not fantastic. If you manage to make 100 thousand dollars from a house, it is considered good luck. Something else is rented out.
– Do you help with money?
– How else? They are my dear people … And, of course, I gave the starting capital.
– You know Irina Iosifovna since the fifth grade?
It so happened. We started being friends closer to graduation, then enrolled in different institutes. Ira went to the pedagogical, I to the polytechnic, the relationship cooled a little, and in the last years, we got back together and decided to get married. This was 1978. Since then, we almost never parted until Ira and our daughter left for America. Of course, living as a family in two countries is difficult …
– Why did you send them there then?
– This is the beginning of the 90s. Those times are called dashing for a reason…
– Caught in a criminal showdown?
– Nothing of the kind happened to me personally, but you must remember that time. It was dangerous everywhere, it could have come from anywhere, from any direction, from the most unexpected.
We were already living on Malaya Bronnaya, when something was blown up at our entrance, local bandits were sorting out relations with the Chechens. The situation was very hectic, so I decided to take my family out of harm’s way …
By the way, the communal apartment on Bronnaya also turned out to be a funny story. I had a nice apartment in Baku, I exchanged it for a small two-bedroom apartment on Leninsky Prospekt – literally 28 square meters above the then-famous Furniture House. And then a man appeared who offered to settle a communal apartment on the Patriarch’s Ponds: “Araz, a person like you should live there” I came, looked and agreed. Huge apartment and the price is ridiculous. Roubles have already depreciated, it turned out to be about 10 thousand dollars.
A broker came and said: you move into two rooms, one neighbour moves out, we give the other one in cash, for the third, we buy an apartment for resettlement.
We moved in. I, my wife, two children … In a five-room communal apartment of 157 meters, two large rooms were occupied. And then the problems with the neighbours began. The broker assured me that they would soon move out, but they were in no hurry. As a result, I was forced to additionally buy an apartment for a woman with a daughter and a young grandson, who loved to ride on a full potty along the common corridor, spilling its contents onto the floor … At the same time, the neighbour indicated a specific house where she needed housing. Then I made repairs in the apartment I bought for her …
This dragged on for a long time, in the end, the cheerful family left. Before we had time to breathe calmly, the doorbell rang. I looked through the peephole and saw the ID of a criminal investigation officer. Two young men entered, showed a search warrant. It turned out that the last alcoholic neighbour, who, according to the broker, had never lived in this apartment, but was only registered in it, was found dead. He drank some nasty stuff with his buddies. And the police had suspicions that I had poisoned this neighbour in order to take possession of the living space.
Unfortunately, I kept money in that empty nine-meter room. In the early 90s, everyone paid in cash, no one really trusted banks. I think that now the comrades from the Moscow Criminal Investigation Department will see the boxes with the cache, and then what should I tell them? The amount is decent since 1988 I have been engaged in cooperative activities …
So I said to them: “Guys, maybe we’ll have a bite first, and then get to work?” On the table I had some bottles of alcohol, I quickly organised sandwiches. The Murovites glanced sideways in my direction but did not refuse. We sat down: a little beer, brandy, back and forth. I went away for a minute, hid the boxes. Then I opened the door for them and say: “Well, look for what you wanted.” They asked: “Does such and such live here?” I honestly replied that I had not seen him but was warned that he was a drunkard, who had been bought an apartment somewhere, but he had not been discharged from here. The militiamen still sat with me and left, realising that I had nothing to do with his death. And so the story ended. We lived on Patricks until 1997 when I built Agalarov House on Gruzinka.
– Beautiful house.
– Yes, it turned out well. Emin and I still have penthouses there on the upper floors. My son still happens to stay there often, but I do not, I stopped living in the city.
I was selling apartments in Agalarov House three times higher than the market. The price in Moscow was then 2 thousand dollars per square meter, I was selling for 6. People came and asked: “How will it be?” I explained: three-level underground parking, spa, hair salon, swimming pool, gym … They said: “Where is the guarantee that everything will work out?” Then, after all, there was only the foundation. I answered simply: “My name will be written on the house.”
And it worked, people made an advance payment, they believed me. It’s the same in the village where I now live. Why did you name it Agalarov Estate? I took money for construction under my own name. It works so right. If those who rivet houses in Moscow subscribed to each object, there would be less ugliness around them. Your surname is another responsibility.
– Is it true that you started out trading matryoshka dolls?
– We had a trade and purchasing cooperative, which dealt with absolutely everything that was in demand among foreigners. Palekh boxes, Pavlovo Posad shawls, matryoshka dolls … We delivered goods to duty-free shops at all Moscow airports. Those did not have the right to purchase products in the private sector, they could only purchase them from legal entities. We were quietly stocking up at the markets, then we ourselves began to take cardboard at the Balakhna Combine, make moulds, and make boxes. Great production! And they sold for a very decent amount. Then the currency was not available. And we bought computers with dollars and brought them to Moscow, created a joint Russian-American enterprise “Shafran”, in English – Crocus.
These were the first steps.
– Did your father-in-law Joseph Grill help you?
– He was a rich man, had great connections, at one time he could solve various issues in Baku and Moscow, but that remained in the past. In Crocus Group, Joseph Evgenievich was listed as vice president. An honorary position for a respected aksakal. He gladly came to our office, conducted some kind of legal advice, he had his own party around him …
Once he brought the Hasidim, you know, with long side-locks, he said that he wanted to publish the Russian Jewish Encyclopaedia. It was a little strange to me that I, a 100% Azerbaijani, should pay for it, but – okay, I gave the money, the books were printed.
By the way, a funny incident is also associated with them.
– You have a lot of them.
– Life is so …
In general, at the Pirogovskoye reservoir, I had a river tram “Moscow”. It was possible to have a beautiful banquet on it. Once they asked to receive a high Israeli delegation led by the legendary Prime Minister Yitzhak Rabin. Well, if we must, then we must. We met the guests. Naturally, everyone drank a little, after which there was a verbal conflict.
Ours offered a toast to the power of Russian weapons. With the obligatory three cheers at the end. An important Israeli got up and said that “he burned these tanks of yours like matchboxes.” Can you imagine what started?
I realised that a major international scandal was brewing, and got into the conversation. Fortunately, there were several copies of the Jewish Encyclopaedia on the ship. I said: “Would you like me to show you?” The book made a tremendous impression on Rabin. He started hugging, then announced that he would give me an Israeli passport. I thanked him and said that it was not necessary. Then for some reason, I added that my wife is Jewish. The guest clung to: “Does she know Hebrew? I want to talk.” I was ashamed to answer honestly that Ira does not speak the language, foolishly blurted out that she speaks Hebrew. I had to make up a story that she was in Hong Kong, where it was a very late night …
In any case, the topic of tanks was hushed up.
– As well as my question about your relationship with the criminal world.
– I will answer. I have nothing to hide.
Bandits always approached where they knew they could profit. And in any showdown, I said that for me to give my life and a rouble is the same.
– Decipher, please.
– I made it clear that no one would get anything from Agalarov. Not a penny. All Moscow knows this: I have never paid a single “roof”. No matter what type of scary bandits come. I met them like you: with tea, coffee. And explained: it’s pointless to scare me.
– And with whom did you have a chance to communicate?
– With everyone. Do you remember the book “Moscow Gangster”, so thick, the very first edition? I had personal meetings with everyone listed there.
– What did they offer you?
– Nothing. They are professional people, they never came and said that they’ll beat or break something if you don’t pay. The standard scheme was used: a problem was created, then a person appeared, to whom you were forced to turn for help … It didn’t work for me, I flatly refused to ask for anything.
– And how was such intractability explained?
– I said that I had nothing to decide with anyone.
Was it a bluff? I don’t think I took particular risks. How could the bandits hurt? Destroy the store? Well, to hell with it, I would build a second. I was not going to give anyone a share, never had any co-founders. Since 1988, there has been only one share, and it was written out for Araz Agalarov. Of course, over time, I plan to smoothly hand over everything to my son, but today this is the case.
– Do you have security?
– Nothing too extraordinary. Since 1993. Then it was as if it was indecent to ride alone, it was supposed to have an escort car, the so-called second. A limousine and a jeep in the back. Everyone rode in a similar tandem … You know, once I was in Australia, we tried to build a casino, prepared a project, and I studied the foreign experience. I flew to Las Vegas, saw Venice and wanted to open the Riviera complex on the site of the current Vegas – also with a river and boats. And so that the facades are like in the Hotel de Paris in Monte Carlo …
We found partners in Sydney. Parkers are the richest family in Australia, books have been written about them. They own the only casino on the continent. A meeting was arranged for me with the head of the family. He asked the question, “Do you have security?” I answered in the affirmative. Parker asked: “Why do you need it?” I said: That’s how it goes in Russia. Apparently, he liked what he heard, because he agreed to do business with us. However, a little later, the casinos in Moscow were banned and the project did not take place.
Of course, protection is needed more for visibility. The main thing is confidence in oneself, in his strengths. I’m not afraid of an airplane, or heights, nothing at all. There was a case when a ligament in my leg was severely torn. This was in 2011. I flew to Germany for an operation. We did everything right, but after three days I suddenly felt bad. And it was getting worse and worse.
Doctors came running, measured the pressure and rushed about, grabbed a stretcher, carried me to the intensive care unit. Then an ambulance was called, I was loaded into a car and, with a police escort, taken to another hospital. I had friends with me. Something like a support group. We saw that they were being taken away, jumped into the salon. They did not tell me the diagnosis, but to them, they whispered about thromboembolism, they said, we can lose the patient on the road.
I was looking at them, sitting and almost crying. They suggested calling Emin to talk.
– To say goodbye?
– Although I was in a semi-faint state, I said: Are you out of your mind? The son is in Baku, he will have an important concert soon. What’s the point of making him worry now? Even if you give him a call to let him know his dad is dying, Emin will not fly here in a minute, and he will disrupt the performance.
Everything will be fine. I lived well, my son won’t have to blush for me …
And then in the hospital, when I was brought to cardiology, it turned out that the diagnosis was wrong, there were no blood clots.
– But the will was written after that, Araz Iskenderovich?
– What is there to share? Daughter and son. There are no other heirs. They will figure it out among themselves.
– What if they don’t share it?
– No, no, this cannot be in our family. Emin and Sheila have a great relationship, they love each other very much. And people are good by nature.
About debts, government contracts, a covid hospital, an airfield on Vostochny, Trump and Putin
– Have you set an age limit for yourself when you are ready to retire?
– It’s too early to think about it. I feel fine and my motivation is still there. There is a lot of work to be done. After all, we have a large credit load, we need to reduce it so that it would be easier for children to cope with everything else. You cannot leave the company in such a state, you will have to work harder.
– How did you get into debt?
– We took it in dollars, but the rate flew away. Do you understand, yes? If they had stayed in roubles, today everything would have been normal, but who knew then that it would be like this?
– What year was this?
– We completed the bulk of work in Crocus Mall before 2008. The first major collapse of the rouble exchange rate happened in that year, the second – in 2014, and each time the amount of debt increased. Today we owe 120 billion roubles …
– How much did you take initially?
– $2 billion. At the exchange rate of that time, I remember, it turned out to be 58 billion rubles. And now they have become 120 … Miracles of arithmetic and the exchange rate. Of course, we paid interest, repaid the main body of the loan, but the amount still doubled.
– But today you get government contracts without competition. A profitable story.
– Firstly, we do not receive, but we are entrusted with them. Feel the difference. Secondly, it is not as profitable as it seems.
Look at the geography of the projects. Russky Island is a campus for the Far Eastern Federal University. Kamchatka is a regional hospital. Kaliningrad is a stadium for the FIFA World Cup. Vostochny Cosmodrome is a new airport. Can you imagine distances and logistics? In fact, the furthest points of Russia.
Believe me, if everything was not so difficult, there would be other people willing to take on these projects. And in the end, they were entrusted to us. And you can’t fail.
The government has now obliged us to complete the hospital in Kamchatka, but do you know that it has been under construction for 11 years? Couldn’t they finish it?
– You were given a rather big amount …
– 8.5 billion roubles.
-… and the deadline is until December next year.
– In fact, there is another decree of the Cabinet of Ministers: the contract has been extended until November 2023. The deadlines are tight, but we will try to do everything as quickly as possible. It is important to supply heavy equipment. We were obliged to hand over absolutely everything, on a turnkey basis.
– How much do you expect to earn on this contract?
– If God permits, to finalise it successfully, and not embarrass myself… For example, on the Russian island, I lost money.
– How much?
– 3 billion roubles. True, then they returned to us one billion 100 million from the budget.
There was a 250-meter zone from the university to the water; according to the conclusion of the environmental expertise, it was not included in the project. And when President Putin arrived, the question arose of what would happen there. I answered, that we will put the territory in order.
But these works, I repeat, were not in the estimate. Naturally, we built the embankment and carried out the landscaping. Additional 228 thousand square meters of housing were commissioned. Due to the fact that the ceilings on the attic and basement floors of buildings were made higher, they also became habitable. There was a meter and 75 centimetres, and now it is 3 meters. This also led to a rise in price.
I was hoping to get additional funding, but we couldn’t get any. As a result, the then-First Deputy Prime Minister Igor Shuvalov called German Gref, asking him to buy something from me so that I could finish the project. Sberbank acquired a part of Agalarov Estate – eight houses with 12 apartments each.
Then we were compensated from the budget for a billion 100 million roubles for the arrangement of the embankment. In my opinion, a beautiful project has turned out on Russky Island. And most importantly, the facility is completed and commissioned. In Russia, a lot is not being completed. Therefore, in the country, there are 7 trillion roubles of unfinished construction, and organisations that are ready not only to take state money but also to hand over everything on a turnkey basis can be counted on one hand.
Imagine what it would be like to build stadiums in a swamp in two years? Both in Kaliningrad and in Rostov, quite specific swamps turned out to be in the place of the future arenas. We did not choose the sites, we had to eliminate other people’s technical errors.
– At a high price?
– The estimated cost for everything is about 36 billion roubles. At that time, the exchange rate was approaching 70 roubles per euro. It turns out, for two stadiums – 500 million euro. In the West, they build one arena for that kind of money. In the Emirates or Qatar, a billion dollars is immediately included in the estimate. They have a lot of money … Sergei Galitsky built the Krasnodar arena, spent his money on it, and it still took 22 or 23 billion rubles. Moreover, he has a stadium not for 45 thousand fans, but 15 thousand less. And Leonid Fedun spent $500 million on the Spartak arena. In Kazan, the stadium was built before the devaluation for 15 billion roubles.
Whatever one may say, this is the standard price. Plus or minus. A seat on the podium costs approximately 10-12 thousand euros. The stadium is a complex technical structure. Highly! An overhanging roof, a foundation firmly standing on a pile foundation …
– But did you earn money at the 2018 World Cup?
– 2.5 billion roubles at two stadiums. Then sent this money to pay off the debt to Sberbank.
– And at the covid hospital, which was started in your Crocus last year, were you able to make a profit?
– We did, but they let us down a little. After all, at first one Expo pavilion was occupied for the sick, and they promised to pay us 900 million roubles …
– Governor Vorobyov. Again, no competition.
– And what kind of competition could there be? With whom? Between me and the director of my pavilion? The decision to build the hospital was made by the regional government. We had to complete everything within ten days.
And we did. Moreover, unlike other temporary hospitals, we had a bathroom in each ward. I figured out how to arrange it. The floors did not have to be hammered, everything turned out elegantly. Then we were asked to re-equip the second pavilion for 900 people. When we prepared it (and this is another 18 thousand square meters), the first building immediately became operational, the sick went there. The second building was held on reserve. It was not profitable for us because of the cancellation of already paid exhibitions. The funds allocated by the regional government for the hospital, as it were, compensated Crocus Group for the losses due to the downtime of two pavilions. But at exhibitions, we earn up to 6 billion roubles a year, and here we were talking about a billion 400 million. Do you understand the difference?
Further. Instead of a month, we marinated the hulls for a quarter. Events were scheduled for August 2020 that could not be cancelled, otherwise, Crocus would have been fined. We dismantled both hospitals, placed the equipment in our warehouse – beds, bathrooms, ventilators, MRI, resuscitation equipment, oxygen tubes … To be honest, at some point, I lost control of the situation, and this equipment gradually disassembled to other covid hospitals – in the Patriot Park, where the Ministry of Defense deployed its infirmary, somewhere else …
Strictly speaking, everything is fair: the equipment was stored with us but was not the property of the Crocus Group. Last October, Andrei Vorobyov called me and said that the hospital had to be expanded again. Another 400 million roubles were allocated for this. I thought that everything needed was in the warehouse, I was sure that we would fit into the budget, there would be enough money.
Not suspecting that we had nothing, he gave the command to subordinates to assemble the hospital. They said to me: assemble from what? Then I sat down … As a result, I had to buy everything again – partitions, bathrooms, beds …
We disassembled the hospital only at the end of February 2021. It worked for another four months, people were treated there. By the way, we had practically no deaths. Do you know what I associate this with? With good air recirculation. We have installed microwave lamps in the air conditioning system. I think it played a decisive role.
– So how much did you earn as a result?
– So, for the first time a billion 400 million roubles were paid to us and then another 400 million, and in the bottom line we received … If you want, I can ask the accounting department for the exact figure.
– I will call now… Here you go, 100 million roubles. For some reason, I thought it was more. Very little. About nothing!
You see, we have an exhibition centre and it generates rent. The Tvoy Dom hypermarkets have an annual trade turnover of 35 billion, while the profit reaches 20%. A huge number of employees work there, a thousand people in each hypermarket …
6 billion roubles Crocus Expo – net rent payments. Now imagine: instead of this amount, we received a covid hospital for 2,700 people. Plus a living space for doctors. We gave the hotel for this. And all this – for almost a year. And the profit, you heard, is 100 million roubles …
– At some point, Emin was almost going to sell his cars?
– Together with my son, we took out a personal loan for 700 million roubles. He – 100, and I – 600. We wanted to take it, but then decided we could do without it.
– And what about the airport on Vostochny?
– When the state entrusts us with something, we expect to earn some money every time. But first, you need to hand over the project, and then think about a profit. If, in the end, a penny remains – good, if not – at least we will save our face.
– You have been allocated 28 billion roubles.
– Yes, that’s true. We subtract 20% VAT from this amount. Immediately minus 5.6 billion. But it’s not even about the amount.
People say: Agalarov is the king of state orders. All is given to him … To that I say, if you can, go and do it! Build an airport in the taiga for all types of aircraft. There is almost a three-meter depth of freezing, swampy terrain, disgusting communications and logistics, there are no workers of the proper qualifications … Do you understand? Everything will be sent from here, from Moscow. People have to live somewhere, eat, receive medical care. Who will figure out these issues? Everyone thinks: yeah, he took the contract, now he will transfer it to subcontractors … But if you delegate, the work will stop, and then you will have to answer.
– Did you agree with Rogozin on the cosmodrome?
– I am not negotiating backstage, these are government decisions. Vostochny, Russky Island, Kamchatka hospital … Everything was discussed for a long time, and as a result, our company was chosen.
There is also the Central Ring Road around Moscow, they forgot to mention it. They also call it a tidbit, and this is the hardest project … According to the official conclusion of the state examination, the estimated cost of building the Central Ring Road with the costs of the customer is 67 billion roubles, and we have a contract for 52 billion.
– Somehow you are not working properly. With a loos for yourself.
– Well, government contracts are not very profitable.
– What then is their charm?
If tomorrow they tell you that you need to fly to Syria and interview President Assad, would you really refuse and answer: “No, I will not go”? You will agree. Although it is dangerous, it is not clear how the business trip will end, but you have been chosen. Of all the journalists, it is you. Same here, I get into this story every time. While everything that was entrusted to me, I carried out successfully.
– The photo with Putin that hangs over your table, where was it taken?
– At the Far Eastern University. I was building it, and Vladimir Vladimirovich came to see how the work is going … We first met in 2009.
– “An oligarch who solves the problems of the president of Russia, but does not create them.” Flattered by such an assessment?
– Is it about me? A strange definition. I do business, I don’t get into politics.
– Quote from the Daily Mail. An article where your name is firmly associated with Trump.
– Well, yes, then they were looking for contacts between the newly elected President of the United States and Russia and I was appointed almost a messenger from the Kremlin.
And the reason is the Miss Universe contest, which Trump held in Moscow in 2013. Do you know how it came about? Emin wanted to shoot a video in America. Negotiated with some studio. He was offered to meet with the management of Miss Universe. The models were needed for filming, and that company was involved with it. In the process of communication, an idea arose: why not hold a competition in Moscow? A very popular show, every year it is watched by 2 billion viewers worldwide. The Americans did not yet know that Emin was related to Crocus City Hall, where everything could be arranged.
By the way, Trump later said that this is the best concert venue he has seen in his life …
The story spun up quickly. I was invited to a meeting in Las Vegas. We met with Trump and discussed everything. The conversation lasted three days in a row. Even the attendants were surprised: “This is the first time we see Donald sitting in a restaurant until three o’clock in the morning.”
– Did you drink?
– No, he doesn’t drink alcohol at all. And I don’t drink too much either.
– How do you like Trump?
– A witty, sparkling person. A real showman. Doesn’t get lost in any audience. Immediately after we met, he took me to a press conference, I didn’t even understand as a who. He just took me with him, saying “Let’s go.” It turns out that it was a selection for Miss USA. He announced to the whole audience: “This is the best man from Russia. I studied his biography …”
And in Moscow, he performed something similar. At a meeting with Russian business, he was relaxed, grasped everything on the go, deftly translated the topic if he did not want or did not know the answer to the question.
Such a master of the tribune. People treated him with sympathy, although Trump made a bunch of all kinds of adventures. He gave me his books on business … In general, an interesting person.
Naturally, before his election as president, people urgently started looking for ways to bind our names. At first, they thought that we had paid Trump $16 million or, I don’t remember, $18 million for the show in Moscow. Supposedly we gave a bribe. In all seriousness, they were investigating!
Then they promoted a story about the painting, which in 1961 was at an exhibition in America and won some award there. In fact, nothing outstanding. Socialist realism in the style of a poster. “Peace Labor May”. Trump’s birthday, I think, is June 14th. I promised him this painting during his visit to Moscow, and then I decided to present it. We sent a parcel to America, but it got stuck somewhere, something didn’t work out.
By that time, Donald had already been nominated as a single Republican candidate, he was guarded by the FBI. Intelligence agencies began to investigate what kind of picture, from whom. The information, of course, got into the local media. They dragged along with that supposedly Putin personally donated some unique work of art. And the price is 10 thousand dollars …
– Did you still communicate after the competition?
– We corresponded, but then we stopped. I realised that if I continue to maintain contacts, I will raise new problems. The old ones are enough for me. Suffice it to say that even Emin was advised to refrain from touring the States. As they say, in order to avoid … He still went to the USA with concerts, but later …
It turns out that there is only harm from meeting the President of the United States.
– And with the heads of Russia and Azerbaijan – there is no harm?
– I have not learned to extract self-interest from this. I do not know how. I don’t even understand why. You need to have a different kind of character or something. And I can’t ask for myself. Believe me, I have never fought for a single state contract.
For example, how it happened with football? At the end of 2015, I was invited to a meeting of the State Council. We discussed for a long time the construction of stadiums in different cities, problems with projects and contractors. Suddenly Putin says: “Is Agalarov here?” I answer: “Here, Vladimir Vladimirovich.” I sat ninth from the president. He leaned forward, looked at me and asked: “Well, can we build stadiums?” I nod: “Instruct – and we will do it.” – “Alright, go ahead and start.”
In two years, two arenas were erected in the swamp. We harnessed and did not retreat until we finished.
– Have you been awarded for any large-scale projects?
– For the university – the Order of Honour. For the stadiums, they gave the president’s diploma …
We keep on working.
In fact, I am an ordinary foreman. I don’t see myself in any other capacity. If we are instructed to do something – that means we have to do it. That’s it, no ambition.
According to my zodiac sign, I am Scorpio, very critical of myself; I am constantly unhappy with everything, even with what others praise.
– What’s the solution?
– Maybe you need to be tougher to the staff. Cut someone’s salary, fire some part of the staff. But Scorpio has this duality. I understand that the problem exists, but I really don’t want to deal with it.
I got used to one, I became friends with the other, I feel sorry for the third. I think: people should feed their families, somehow survive … As a result, during this crisis, we practically didn’t cut anyone.
– How do you feel if someone is out of tune in your orchestra?
– I try to correct, move to other instruments. As a last resort, I switch them to the timpani. It’s hard to screw up there. Of course, the coherence of the team and teamwork are important. Then the melody will sound.
– And now?
– Currently, intermission. It is necessary to comprehend what has happened recently, to understand where to move on. Man is so made that he always waits for tomorrow. It seems to him that the main thing will happen the next day and now is only a rehearsal. So life goes on waiting until it gets better.
There is no need to hope for the future, you need to live today. I have had this knowledge since childhood. From my grandmother. Every morning she got up and prayed first. I was small, I didn’t understand much. Once he asked: “Why are you muttering the same thing?” And my grandmother replied: “When you grow up, you will understand. This is a prayer. I woke up, I’m alive and well, nothing hurts – it is already happiness.” Her words, spoken then, are engraved in my memory and help me to live.
I’ve learned to appreciate today and to enjoy every day.
This article originally appeared in TACC.