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Russian tycoon claims he is behind Forbes purchase, audiotapes show

Russian tycoon claims he is behind Forbes purchase, audiotapes show

When Magomed Musaev, a Kremlin-connected tycoon, gathered friends in New York to celebrate his 60th birthday, he was joined at the head table by top executives from the Forbes Media Group. According to people who attended the June event, the revelers also included American tech founder Austin Russell, 28, who had recently announced that he was leading an $800 million deal to buy the storied media business.

Days before the party, however, Musaev had told associates that he was the Forbes buyer and had sealed the deal of a lifetime, according to five audio recordings and one video recording obtained by The Washington Post in which he discussed the deal.

“I just bought global Forbes,” Musaev told one of his associates, according to the material, referring to the Forbes Media Group, which includes 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 again and again, according to the tapes. In 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, according to 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 about potential foreign influence in a major media deal, which has been a source of controversy for more than a year, attracting criticism on Capitol Hill and scrutiny by the Committee on Foreign Investment in the United States.

In a statement to The Post, Russell denied any involvement by Musaev or any Russian individuals in 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, rather 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 did not respond to subsequent requests for comment about 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 process to acquire Forbes, though it didn’t describe Musaev as an investor or buyer. Two executives familiar with 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, according to Musaev and a person close to Russell. Russell courted potential investors in Silicon Valley and Hollywood over the summer — an attempt to bring in American ownership even as he maintained ties to foreign funders, according to four people who have worked with Russell on the deal, who, like others, spoke on the condition of anonymity to describe private business matters.

At the heart of the tangle of conflicting claims sits the relationship 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, according to court documents. That early stake was now the company’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, along with a global franchise of glitzy conferences such as “30 under 30” and its rankings of wealthy business people.

Musaev holds the license to publish Forbes Russia, one of the dozens of local language editions of Forbes magazine that are part of the overall media group, and has close connections to some of the individuals reported to be investors backing Russell, according to a former Musaev business partner, Pavel Cherkashin, as well as three additional people familiar with the deal.

Russell’s bid for Forbes has attracted the attention of the Committee on Foreign Investment in the United States, or CFIUS, according to two people familiar with the matter.

“They are 100 percent looking at it,” one of these people said in recent weeks.

CFIUS, led by the Treasury Department and made up of several agencies, has the power to probe certain U.S. business transactions for national security risks. It can push for changes or, in rare cases, ask the president to block a deal. CFIUS doesn’t disclose its decisions or 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 both serve on the Senate Intelligence Committee, asserted in the letter that the bulk of the money appeared to be coming from investors with foreign ties, including Shiv Khemka, a close 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 total $800 million purchase price, while Russell would be investing only a small fraction of that amount. “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 such as Russia, Rubio said in a statement to The Post.

One person close to 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 year in a different iteration of a deal to acquire 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 wanted 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 four U.S. senators had asked Yellen to investigate.

Forbes said at 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 statement 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 buy Forbes was widely viewed as a surprise. So was the offer valuing Forbes at $800 million, which was $200 million more than the failed SPAC deal’s expected price. Some media analysts also balked at the price tag, noting it was more than the combined sale price of The Washington Post, Fortune and Time.

Russell declined to give The Post a precise breakdown of investment in the Forbes deal, saying he was legally bound not to disclose exact terms before the deal is signed, which is expected in November.

In a statement 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 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 were no Chinese or Russian investors in the deal.

But how much money they or anyone else, including Russell, would be investing was still undecided, according to the release, which noted “final investor allocations” would be decided “in the coming weeks.” And written communications, seen by The Post, appeared to show that in the days after the press release Russell’s team was still seeking to raise 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 in the proposed deal.

Sun Group, the Indian conglomerate where Khemka serves as vice chairman, had originally been slated as the lead investor in an earlier version of the sale, according to 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 head of the deal. Sun Group had initially agreed to provide about half the financing for the purchase, according to two of the people familiar with the deal.

In their August letter to Yellen, Cotton and Rubio alleged outright that Musaev had partnered with Khemka to acquire the publication. “Sun Group … has partnered with a Magomed Musaev, a former Kremlin propagandist, to acquire Forbes,” the senators said. The senators did not provide any evidence for that assertion.

Khemka lived in Russia for 25 years, according to public records, working with the Kremlin on pet projects such as the Skolkovo business school just outside Moscow, and serving for more than four years on the board of a key company within Russia’s state arms conglomerate RosTech, including after the United States imposed sanctions on it. He also developed a close relationship with Musaev, according to Cherkashin and three of the people familiar with the deal, and the two men were often seen together at social events and business gatherings.

Russell’s representatives disputed assertions by several people familiar with the deal that Khemka’s daughters, who are U.S. residents, had been forwarded as investors in an attempt to bypass concerns over foreign involvement in the deal. They insisted there was no connection in this deal between Musaev and Khemka.

Khemka did not respond to a request for comment, while one of Khemka’s daughters, Gayatri, 23, reached by The Post, said she was “not allowed to comment” on the sale.

Ever since 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 final say in major corporate decisions.

In the audio recordings, however, Musaev described the Forbes acquisition as a chance to grow his — and Russia’s — global standing, but did not want any attention to his role. “The main aim is silence and results,” he said in one recording.

Musaev insisted in the interview that he had not discussed the deal with any Russian officials, claiming he has not visited Russia for two or three years. Nor, he said, had he spoken to any Russian officials during that time.

But Musaev forged his career with the help of the connections of his father-in-law, a powerful 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 in the Moscow city government, running a major exhibition center before becoming the senior city official for innovation. According to Cherkashin, Musaev had entered the close circle of a powerful 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 a company 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 because of U.S. sanctions later imposed against Kerimov, according to 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,” according to Cherkashin, noting it was the first 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 employee noted that Musaev could not 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,” according to this former employee 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 current owner of Forbes Media Group, TC Yam, eyeing the possibility of acquiring the global brand, according to Cherkashin, as well as 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.

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Catherine Belton, Todd Frankel, Elizabeth Dwoskin

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