Days before the party, nevertheless, Musaev had told associates that he was the Forbes buyer and had sealed the deal of a lifetime, in accordance with five audio recordings and one video recording obtained by The Washington Post through which he discussed the deal.
“I just bought global Forbes,” Musaev told considered one of his associates, in accordance with the fabric, referring to the Forbes Media Group, which incorporates the U.S. edition of the magazine. “You understand when you have in your hands the key to the most authoritative global brand, this key will give me access to anyone.”
Musaev repeated the claim time and again, in accordance with the tapes. In considered one of the recordings, the videotape reviewed by The Post, he called Russell “the face” of the deal and insisted his own involvement be kept quiet. “I am doing it more subtly,” he said, in accordance with the recording. “You understand,” he said at one point, “I am not working with a sledgehammer, nor with a scalpel, but with a laser.”
Musaev’s comments raise fresh questions on potential foreign influence in a significant media deal, which has been a source of controversy for greater than a yr, attracting criticism on Capitol Hill and scrutiny by the Committee on Foreign Investment within the United States.
In a press release to The Post, Russell denied any involvement by Musaev or any Russian individuals within the deal. “Musaev has no involvement whatsoever in the Forbes transaction. Any suggestion to the contrary is false,” said a spokesperson for Russell. “There is not a single dollar of capital from any Chinese or Russian citizen or entity, including Musaev.”
It’s unclear from the tapes whether Musaev was describing himself as a kingmaker, quite than an investor, who had helped bring the deal together and would garner future influence from his role; whether he was a secret investor putting money into the transaction through others; or whether he was simply making false or exaggerated claims.
Musaev told The Post in an initial interview that any suggestion he had control of the deal was “absolute nonsense” and a “monstrous myth” and that “in the [deal] documents, in any written form, my participation is not there.” He denied he could have told his associates he had bought Forbes, but he didn’t reply to subsequent requests for comment concerning the tapes. In a later emailed statement, he said: “I have no investment in this transaction and no plans to invest in any way in the future, whether directly or indirectly.”
Axios reported in May, citing two unnamed individuals, that Musaev had brought Russell into the method to amass Forbes, though it didn’t describe Musaev as an investor or buyer. Two executives accustomed to the situation repeated this claim in interviews with The Post. Both Russell and Musaev deny that the Russian had any involvement in catalyzing the deal, in accordance with Musaev and an individual near Russell. Russell courted potential investors in Silicon Valley and Hollywood over the summer — an attempt to usher in American ownership whilst he maintained ties to foreign funders, in accordance with 4 individuals who have worked with Russell on the deal, who, like others, spoke on the condition of anonymity to explain private business matters.
At the guts of the tangle of conflicting claims sits the connection between an American tech boy wonder and an older Russian tycoon. In 2016, Musaev had helped land a $20 million seed investment in Russell’s then-fledgling company Luminar, in accordance with court documents. That early stake was now the corporate’s second-largest outside shareholder, public financial filings from April show.
Best known for its business magazine, Forbes sports a sprawling series of online properties, together with a worldwide franchise of glitzy conferences equivalent to “30 under 30” and its rankings of rich business people.
Musaev holds the license to publish Forbes Russia, considered one of the handfuls of local language editions of Forbes magazine which can be a part of the general media group, and has close connections to among the individuals reported to be investors backing Russell, in accordance with a former Musaev business partner, Pavel Cherkashin, in addition to three additional people accustomed to the deal.
Russell’s bid for Forbes has attracted the eye of the Committee on Foreign Investment within the United States, or CFIUS, in accordance with two people accustomed to the matter.
“They are 100 percent looking at it,” considered one of these people said in recent weeks.
CFIUS, led by the Treasury Department and made up of several agencies, has the facility to probe certain U.S. business transactions for national security risks. It can push for changes or, in rare cases, ask the president to dam a deal. CFIUS doesn’t disclose its decisions and even which transactions it is examining. “CFIUS does not publicly comment on transactions it may or may not be reviewing,” said a Treasury spokesperson.
In an Aug. 9 letter, Sen. Tom Cotton (R-Ark.) and Sen. Marco Rubio (R-Fla.) called on Treasury Secretary Janet L. Yellen — who chairs CFIUS — to review the deal, claiming that Russell was “masquerading as the lead buyer” while “it is evident that Russell is merely a conduit for larger foreign investors.”
The senators, who each serve on the Senate Intelligence Committee, asserted within the letter that the majority of the cash seemed to be coming from investors with foreign ties, including Shiv Khemka, an in depth Musaev associate who serves as vice chairman of an Indian conglomerate that has worked with the Kremlin. A Republican Senate staffer told The Post the senators’ letter was guided by research conducted on the sale by an Obama-era National Intelligence Council chairman, Greg Treverton.
In a memo circulated to policymakers on Capitol Hill in July and seen by The Post, Treverton cited information showing the deal’s foreign investors, including, he claimed, Khemka’s daughters, would contribute nearly 50 percent of the whole $800 million purchase price, while Russell can be investing only a small fraction of that quantity. “It appears there is a strong national security argument for the US Government to block the … buyout,” Treverton wrote. Treverton declined to comment further when reached by The Post.
“It’s not in our country’s best interest to let a major U.S. media outlet be run by entities with ties” to countries equivalent to Russia, Rubio said in a press release to The Post.
One person near Russell’s team said “some of the accusations, arguably all of the accusations, produced in [the senators’] letter are false.”
Similar concerns about foreign influence were raised last yr in a unique iteration of a deal to amass Forbes — which quickly collapsed.
That plan had been spearheaded by the Hong Kong-based Integrated Whale Media Investments (IWM), which bought Forbes Media from the Forbes family in 2014 and whose owner TC Yam is a Canadian citizen. IWM desired to take Forbes public through a merger with a Hong Kong-based special purpose acquisition company or SPAC, Magnum Opus. But the deal was axed following concerns over Chinese government influence, when 4 U.S. senators had asked Yellen to research.
Forbes said on the time it was terminating the Magnum Opus takeover amid strong growth that “significantly outperformed the financial targets provided at the start of the SPAC transaction.”
In a press release to The Post, IWM said: “Having conducted extensive due diligence on the buyer group being led by Austin Russell, we have uncovered no reason for concern with any investors involved in this deal.”
Russell’s announcement in May that he planned to purchase Forbes was widely viewed as a surprise. So was the offer valuing Forbes at $800 million, which was $200 million greater than the failed SPAC deal’s expected price. Some media analysts also balked at the worth tag, noting it was greater than the combined sale price of The Washington Post, Fortune and Time.
Russell declined to provide The Post a precise breakdown of investment within the Forbes deal, saying he was legally certain not to reveal exact terms before the deal is signed, which is expected in November.
In a press release to The Post, Russell said he was “looking forward to seeing Forbes realize a new vision for capitalism, where companies create both economic value and value for the world at the same time.”
Last month, as The Post talked with Russell’s representatives, a brand new company created by Russell to make the Forbes purchase sent out a press release saying the $800 million transaction already had attracted “over $2 billion of demand” mostly from American investors. The release named eight of the investors, including the celebrities Tony Robbins and Kevin Hart. It noted that there have been no Chinese or Russian investors within the deal.
But how much money they or anyone else, including Russell, can be investing was still undecided, in accordance with the discharge, which noted “final investor allocations” can be decided “in the coming weeks.” And written communications, seen by The Post, appeared to show that in the times after the press release Russell’s team was still searching for to boost substantial amounts of financing.
A spokesperson for Russell told The Post that although “all capital required to complete the Forbes acquisition was contractually committed” when the deal was signed in May, Russell’s team had “continued to attract and engage with interested top-tier investors to expand the investor base.”
Representatives for Russell declined to comment on whether Khemka, the close Musaev associate, is an investor within the proposed deal.
Sun Group, the Indian conglomerate where Khemka serves as vice chairman, had originally been slated because the lead investor in an earlier version of the sale, in accordance with a January financial document seen by The Post. But after U.S. lawmakers voiced concerns over Khemka’s perceived ties to the Kremlin, Russell took over as the top of the deal. Sun Group had initially agreed to offer about half the financing for the acquisition, in accordance with two of the people accustomed to the deal.
In their August letter to Yellen, Cotton and Rubio alleged outright that Musaev had partnered with Khemka to amass the publication. “Sun Group … has partnered with a Magomed Musaev, a former Kremlin propagandist, to acquire Forbes,” the senators said. The senators didn’t provide any evidence for that assertion.
Khemka lived in Russia for 25 years, in accordance with public records, working with the Kremlin on pet projects equivalent to the Skolkovo business school just outside Moscow, and serving for greater than 4 years on the board of a key company inside Russia’s state arms conglomerate RosTech, including after the United States imposed sanctions on it. He also developed an in depth relationship with Musaev, in accordance with Cherkashin and three of the people accustomed to the deal, and the 2 men were often seen together at social events and business gatherings.
Russell’s representatives disputed assertions by several people accustomed to the deal that Khemka’s daughters, who’re U.S. residents, had been forwarded as investors in an try and bypass concerns over foreign involvement within the deal. They insisted there was no connection on this deal between Musaev and Khemka.
Khemka didn’t reply to a request for comment, while considered one of Khemka’s daughters, Gayatri, 23, reached by The Post, said she was “not allowed to comment” on the sale.
Ever because the deal was announced in May, Russell has touted the acquisition as returning Forbes from its Hong Kong ownership to the United States, asserting that he would have 82 percent control of the media group’s voting rights, meaning that he would have the ultimate say in major corporate decisions.
In the audio recordings, nevertheless, Musaev described the Forbes acquisition as a probability to grow his — and Russia’s — global standing, but didn’t want any attention to his role. “The main aim is silence and results,” he said in a single recording.
Musaev insisted within the interview that he had not discussed the cope with any Russian officials, claiming he has not visited Russia for 2 or three years. Nor, he said, had he spoken to any Russian officials during that point.
But Musaev forged his profession with the assistance of the connections of his father-in-law, a robust former leader of Dagestan, a Russian republic, who was appointed by Russian President Vladimir Putin. Musaev’s father-in-law until recently served as a special Russian envoy to the Organization of Islamic Cooperation.
Musaev had previously served within the Moscow city government, running a significant exhibition center before becoming the senior city official for innovation. According to Cherkashin, Musaev had entered the close circle of a robust Kremlin-connected billionaire, Suleiman Kerimov, also from Dagestan, through his father-in-law.
When Musaev’s company Global Venture Alliance made the $20 million seed investment in 2016 in Russell’s Luminar, it did so on behalf of an organization controlled by Kerimov, Delaware court documents show. The stake in Luminar still held by Musaev’s GVA is now frozen by the U.S. Treasury due to U.S. sanctions later imposed against Kerimov, in accordance with court documents from July 2023.
While that deal became a springboard to other investments in Silicon Valley, it was also the moment when Musaev and Russell became “friends,” in accordance with Cherkashin, noting it was the primary big injection of capital that Russell, then 21, had received.
Two years later in 2018, Musaev acquired the rights to publish Forbes Russia. A former senior worker noted that Musaev couldn’t operate Forbes Russia without the Kremlin’s approval. “It is impossible nowadays for there to be a situation where the media does not communicate with Kremlin structures,” in accordance with this former worker who spoke on the condition of anonymity for fear of retribution. “Otherwise, the ownership of the media has to be changed.”
Ever since Musaev acquired Forbes Russia, he began cultivating a relationship with the present owner of Forbes Media Group, TC Yam, eyeing the potential of acquiring the worldwide brand, in accordance with Cherkashin, in addition to an associate of Yam and an associate of Musaev. Musaev “had this dream to buy Forbes for a long time,” Cherkashin said.
Sarah Ellison contributed to this report.
Credit : www.washingtonpost.com
