My Story: How I Became a Victim of 'Reiderstvo' in the Heart of Moscow
In January 2019, seven years after I started the Moscow-focused property developer SDI Group, I teamed up with God Nisanov, another successful Azerbaijan-born real estate and retailing entrepreneur in the Moscow area.
In 2017, he lined up the land and permits that I needed for three combination residential and commercial high-rise projects on the outskirts of the Russian capital. I began building them in 2018 with $50 million of my own resources.
Although my partner put no money into the developments, he had arranged the land acquisitions and government sign-offs on them, so we worked out a profit-sharing agreement.
As the work proceeded, we disagreed over the amount of residential versus commercial space the projects should contain. My partner wanted more commercial space than I had planned, arguing that it would generate a larger return.
At the time, SDI Group had pre-sold most of the condominiums in the developments were were building. In order to increase the commercial space in the projects, I would have had to back out of the agreements I had struck with hundreds of clients who were thrilled about the prospect of moving into prestigious new homes.
The dispute became so rancorous that in early 2019 my partner sent armed men into my developments to seize them without compensation. Meanwhile, I began receiving so many death threats that I left for another place where I was doing business — Germany.
Thinking I could obtain more leverage toward resolving the dispute in my favor by having a foreign-company presence in Russia, I suggested that my longtime friend and colleague in Germany, Ziya Gaziyev, and his enterprise, Alcon Development, acquire a controlling stake in SDI. He agreed, and Alcon bought 80 percent.
Another reason I wanted Alcon to absorb SDI was that I thought an established German company would have a better chance of finding international investors who could help me finish the Moscow projects.
I also believed German ownership would increase SDI’s chance of recovering its losses in Russian or international courts. Another thought was that German ownership would increase the chance that the Foreign Ministry in Berlin would use diplomacy to resolve the situation in my favor.
A year after the dispute started, no resolution is in sight. But I am not giving up.
Reiderstvo is a despicable practice, robbing people overnight of enterprises they have taken lifetimes to build. This theft on a grade scale needs to be stopped. In addition to trying to resolve the dispute in a way that returns my Russian property to me, or that compensates me for my losses, I will be doing as much as I can to let the world know about this egregious tool for theft and trying to create pressure inside and outside of Russia to end it.
Big Russian cities like Moscow, St. Petersburg and Yekaterinburg continue to be some of the world’s most exciting property markets. I’d love to jump back into them, helping both businesses seeking gleaming-new facilities and homeowners wanting the best living space that modern technology can offer.
I thank you for your time, and would welcome your support to help bring the world’s attention to the problem of reiderstvo in Russia.
Ilgar Hajiyev, Founder, SDI Group & Founder, Center for Business Transparency and Countering Corporate Raids in Russia