Royal Group, run by the brother of Abu Dhabi’s ruler, may invest several hundred million dollars in housing and agriculture projects in Chechnya, said Ramzan Kadyrov, the Russian region’s leader.
Royal Group, which invested in Al-Reem, a $60 billion island project in Abu Dhabi, recently sent a delegation to the region, Kadyrov said in an interview with Bloomberg News in Moscow on Feb. 19.
“We proposed some projects to them and they really liked them,” said Kadyrov, who has spearheaded Russian Prime Minister Vladimir Putin’s campaign to rebuild infrastructure devastated by two wars since 1994. “They said they are ready to participate in building homes and in the agricultural sector.”
Russia is trying to lure investment to the North Caucasus region, which has seen almost daily attacks on government officials and police. With the Winter Olympics taking place in the nearby resort of Sochi in 2014, Putin has tried to drum up investment in the mostly Muslim region.
“The federal government is trying to attract investments although Chechnya isn’t normally the kind of place where businesses would like to put their money,” said Nikolai Petrov, an analyst from the Moscow Carnegie Center.
Then-President Putin groomed Kadyrov to lead Chechnya after his father Akhmad was killed in a bomb attack on the regional capital Grozny’s main soccer stadium in 2004. Human Rights Watch, which tracks government abuse, has accused Kadyrov of ordering abductions and torture, which he has denied.
Royal Group will spend as much as $100 million in the first phase of a housing project, said Samia Bou Azza, a spokeswoman. The total value “may go up in different phases” and the company is considering investment in livestock, the dairy and power industries, she said by phone yesterday.
The plan is part of growing interest in Russian investment in the Gulf region. United Arab Emirates investors, including Gulftainer Company Ltd., a port operator in Sharjah, and Dubai-based Damac Properties last year agreed to spend $800 million in Russia. The deals were sealed during Putin’s investment forum in Sochi.
Verno Capital, a Moscow-based hedge fund, in November won a mandate to manage $100 million for Abu Dhabi sovereign wealth fund Mubadala Development. Roland Nash in December quit after 14 years as chief strategist of Renaissance Capital to join Verno in the same capacity.
The Chechen leader, 34, said he first discussed investment opportunities at a meeting in June last year with the crown prince of Abu Dhabi, Sheikh Mohammed bin Zayed Al Nahyan. He then met Sheikh Tahnoon bin Zayed al Nahyan, who is chairman of Royal Group and another son of Abu Dhabi ruler Sheikh Khalifa Bin Zayed Al Nahyan, last year.
Royal Group is active in media, trade, financing, real estate, manufacturing, construction and technology.
One of Kadyrov’s aides, Adam Delimkhanov, is wanted by Interpol for allegedly masterminding the March 2009 murder of a leading rival of the Chechen president in Dubai. Sulim Yamadayev was gunned down in an elite seafront housing complex, in a high-profile case for the main business and tourist hub in the Gulf, a popular destination for wealthy Russians and other foreigners.
Dubai authorities tried two men for the murder, including an Iranian who worked as a groom for Kadyrov’s horses in the city state. After they were convicted of the crime and sentenced to life imprisonment, a Dubai court in December reduced the prison term to 27 months; with time served, they are due for release in mid-2011.
The cases of other suspects in the murder are being reviewed by the court and decisions on whether to pursue suspects through Interpol depend on the judgments, Major-General Khamis al Mazinah, deputy commander of Dubai police, said by phone yesterday.
Kadyrov said accusations against Delimkhanov, whom he described as a “friend and a brother,” are “untrue” and “unfounded.” According to Dubai police, the Kadyrov aide arranged the delivery of the murder weapon, a gold-plated Makarov pistol.
The potential business ties between Abu Dhabi and Chechnya show the controversy surrounding the murder is being forgotten, said Petrov at the Carnegie Center.
Abu Dhabi and Dubai are the two biggest members of the United Arab Emirates, the second-largest Arab economy. In 2004, another Gulf state, Qatar, allowed two Russian agents to return home after sentencing them to life for the murder of a former president of breakaway Chechnya, Zelimkhan Yandarbiyev.