In March 2020, the Moscow City Court extended the pre-trial detention period for Summa Group owner Ziyavudin Magomedov — a longtime Russian MMA patron — and his brother Magomed, who allegedly embezzled more than $35 million.
The Magomedov brothers was detained in late March 2018 while preparing to travel to the United States and were charged with racketeering, embezzlement, and establishing an organized crime group. Magomedov had reportedly been under investigation prior to his arrest to determine whether he embezzled money during the construction of a World Cup stadium in Kaliningrad, which his Summa Group company won the rights to build in 2014.
The Magomedov brothers have both pleaded not guilty to the charges. If found guilty, they could face up to 20 years in prison.
While the Magomedov brothers’ arrest is one of the highest-profile criminal cases of a Russian tycoon in many years, it also happens to be a significant case for the mixed martial arts landscape in the Russian Federation. Ziyavudin is a combat sports enthusiast who invested large sums into Russian MMA. He owned a controlling share of Fight Nights Global, one of the most successful promotions in the country, and has financially supported several fighters, including current UFC lightweight champion Khabib Nurmagomedov.
The Rise & Fall of an Oligarch
Born and raised in Dagestan, Ziyavudin emerged from a troubled childhood on the streets of Makhachkala to become one of the republic’s most prosperous businessmen. According to Forbes, he is the chairman of Summa Group, a “conglomerate invested in port logistics, engineering, construction, telecommunications, and oil and gas.” His estimated wealth fluctuates, but was estimated at 1.2 bn prior to his arrest in 2018.
Summa Group, which employs over 10,000 people in approximately 40 regions in Russia, prospered during Dmitry Medvedev’s presidency. During that time, Magomedov’s net worth rose to $2.1 billion and peaked at $3 billion in 2011. Medvedev, who was interested in establishing new oligarchs and contacts loyal to him instead of Putin, offered Summa Group hefty state contracts that helped the company flourish. In a matter of years, Magomedov was elevated from a local Dagestani merchant to Russia’s oligarch class.
However, once Putin regained the Russian presidency in 2012, much of Magomedov’s influence began to wane and his fortune dropped back to $800 million by 2013. Putin began by removing three of Medvedev’s ministers from their positions in a move that was believed to be an attempt to weaken Medvedev’s political resources should he seek re-election once Putin’s third term as president was complete in 2018. Bloomberg reported that Putin stripped Magomedov of his position as a representative on the 21-nation Asia-Pacific Economic Cooperation group’s business advisory council - a position Medvedev had appointed him to in 2010.
Over the next few years, Magomedov reinvented himself as a venture capitalist and invested hundreds of millions in high-tech start ups, as well as transportation, robotics, agricultural, industrial and consumer projects. He became the co-executive chairman of Los Angeles-based tech firm Virgin Hyperloop One, which is chaired by Richard Branson, and even fashioned himself as a combat sports enthusiast and invested in various mixed martial arts related projects.
Magomedov was clearly emulating some of the most successful businessmen under Putin’s administration, such as Arkady and Boris Rotenberg, the billionaire brothers who have a host of sports-related investments throughout their extensive portfolios. They were once the Russian president’s judo teammates, and later purchased the SKA St. Petersburg hockey club. Boris is now co-owner of the Stroygazmantazh group, the largest construction company for gas pipelines and electrical power supply lines in the Russian Federation.
Then in March 2018, Magomedov was detained and charged with racketeering, embezzlement, and establishing an organized crime group. He allegedly embezzled over 2 billion rubles ($35 million +) during the construction of a World Cup stadium in Kaliningrad.
Apart from his alleged criminality during the World Cup, Magomedov has also been accused of stealing 300 million rubles ($4.5 million) during the construction of a highway in South Siberia in 2014, embezzling from the Federal Grid Company, the Chusky tract (truck road) in the Novosibirsk region, and of questionable business practices with the United Grain Company project (part of Summa Group). This included allegedly ordering the assault of a former employee– one of Magomedov’s private security guards – after he refused to follow orders.
Since his arrest, several more charges have piled up, along with ongoing investigations. Ziyavudin was accused of two more cases of fraud amounting to 11 billion rubles, while his older brother, Magomed, was accused of illegal weapon possession. French authorities have also opened a tax evasion case against Ziyavudin’s wife, Olga, who owns several restaurants in France.
Two years removed from his arrest, Magomedov has been forced to sell the vast majority of his assets and remains in pre-trial detention awaiting his fate.
Dagestan’s MMA Patron
In the two years prior to his arrest in 2018, Magomedov started to take an interest in mixed martial arts. He invested in Russian MMA promotion, Fight Nights Global, and embarked on a wide-scale project that involved building new fight clubs and expanding the promotion’s reach and market share.
As part of his revitalization process with Fight Nights, Magomedov paid legendary Russian heavyweight Fedor Emelianenko’s exorbitant fight purse to compete last June at Fight Nights 50. Magomedov also financially supports several fighters, including Khabib Nurmagomedov. Magomedov paid for the UFC fighter’s back surgery in 2017, which was done in Germany, and funded the majority of Khabib’s expenses during training camps.
Magomedov expanded into gyms and fight clubs to expand his ever-growing MMA network. He recently established ‘Eagles MMA,’ a fight club and training facility now home to some of the top Russian talents. Indeed, UFC contender Khabib Nurmagomedov serves as the entity’s president. The concept is similar to that applied at Prince Khalid bin Hamad Al Khalifa’s KHK MMA facility in Bahrain, and the Akhmat MMA team sponsored by Ramzan Kadyrov in Grozny, Chechnya.
The gym recently came under fire after it was reported that one its executives, Denis Klopnev, was arrested in absentia for the attempted murder of sambo fighter Shamil Kuramagomedov, a bronze medalist in the 2017 Russian Combat Sambo Championship.
The accusations against Klopnev come several months after a group of fighters affiliated to Eagles MMA and Summa Group attacked Kuramagomedov and beat him within an inch of his life. The fighter was hospitalized with a concussion, a traumatic brain injury, and a broken nose but opted not to report his assault to the police. According to the report, Kuramagomedov and the suspects all trained at the same gym, which was also owned by Summa Group.
While it remains unclear whether there were any political motivation for Magomedov’s arrest, his high-profile case could be viewed as yet another example of an ongoing power struggle within the Kremlin. According to The Financial Times, the Magomedov appears to be caught in a Kremlin power struggle that involves Igor Sechin, the CEO of the Russian state oil conglomerate Rosneft and a man reputed to be “the scariest man on earth.”
Sechin, who has earned himself the reputation as Russia’s “Darth Vader” for his ruthless approach to business, is believed to have been the architect behind the demise of oil giant Yukos in 2003, as well as the arrest of Mikhail Khodorkovsky, considered the wealthiest man in Russia at the time. Reports suggest that Sechin was interested in some of Magomedov’s assets, mainly the Novorossiysk Port so he can he expand his influence in the oil industry.
The ongoing Kremlin power struggle involving Russia’s elite will likely have a major effect on combat sports, including mixed martial arts.