Russian oligarchs remain in the Ukrainian tobacco market even after the war, according to an investigation.

The "Megapolis" group, led by Russian billionaires Igor Kesaev and Sergey Kacieva, who profit from the sale of alcohol and tobacco, has likely maintained control over the Ukrainian cigarette market. They are connected to Ukraine through Odessa businessman Boris Kaufman and own a network of well-known tobacco shops. This information is detailed in an investigation by the publication "Project".

The companies owned by Russian oligarchs Igor Kesaev and Sergey Kacieva began their operations in Ukraine in 2010 under the brand "Megapolis-Ukraine". Within a few years, they managed to secure 99% of the cigarette market in the country, as reported by the Antimonopoly Committee of Ukraine.

Boris Kaufman, an Odessa businessman close to the family of President Viktor Yanukovych, became the junior partner of Kesaev and Kacieva in this venture. Following Yanukovych's flight from the country and the seizure of parts of Ukraine by Russian troops, "Megapolis-Ukraine" faced challenges. In 2015, the stake of the Russian "Megapolis" in the Ukrainian company was transferred to a chain of structures linked not only to Kaufman but also to two British nationals — Richard Fenhalls and Richard Taylor-Duxbury. The company was also renamed to "Tedis Ukraine".

Before "Megapolis", the British had never been involved in the tobacco business. Richard Mark Taylor-Duxbury is a lawyer representing clients in civil disputes and previously owned a dog-walking company. The 81-year-old Richard Dorian Fenhalls had previously managed banks but was acquainted with Kesaev. In 2009, the British consultant advised Sibir Energy, a company in which Kesaev held a stake, before selling it to Gazprom. For two months of consulting, he received $11.7 million. This information was confirmed to journalists by an unnamed source at "Tedis".

In recent years, "Tedis" has been involved in several antimonopoly and subsequently criminal cases. In 2022 and 2023, a Ukrainian court twice sent Kaufman to pre-trial detention, and both times he was released on bail. A new distributor, DL Solution, emerged in the market, securing contracts with Western corporations and quickly capturing second place (after "Tedis-Ukraine") in the market. Forbes Ukraine discovered that the director and chief accountant of the new company had recently worked at "Tedis-Ukraine".

It is claimed that Kesaev is connected to a Ukrainian retail chain selling tobacco products - "Cigar House 'Fortuna'".

"This company is formally controlled by Odessa businessmen previously associated with the "Party of Regions". However, the fact is that the same Ukrainians, together with Kesaev and Kacieva's "Megapolis", owned in Russia a legal entity of the same name — "Cigar House 'Fortuna'" — until July 2024," investigators assert.

Who are Igor Kesaev and Sergey Kacieva

Both businessmen started in the 1990s with the smuggling of cigarettes and alcohol. Now British company Imperial Brands has sold its assets to their company "Megapolis" after exiting the market following the onset of full-scale war. Currently, "Megapolis" controls around 70% of the cigarette market in the Russian Federation.

Kesaev and Kacieva also own a chain of alcohol markets — "Krasnoe&Beloye" and "Bristol", as well as "Dixy" supermarkets.

Igor Kesaev and Sergey Kacieva's connections to the FSB and arms production

Kesaev and Kacieva have been linked for many years to Nikolai Patrushev, a close associate of Russian President Vladimir Putin and head of the FSB until 2008.

An anonymous source revealed to journalists that Kesaev and Kacieva became monopolists in the tobacco market by buying contracts from Western companies from competitors. When the latter refused, tax and law enforcement agencies would come to them for inspections, forcing them to finalize the deal.

In 2024, Forbes magazine ranked Kesaev 29th in the national billionaire ranking with assets of $5.5 billion, while Kacieva was ranked 72nd with $1.9 billion.

They are also connected to Vladimir Anisimov, a general of the FSB and Patrushev's associate, who once "gained fame" for the failed operation in Beslan, which resulted in the deaths of 300 hostages during the storming.

Since 2005, businessmen Kesaev and Kacieva have become significant players in the Russian defense industry, traditionally associated with special services. They took control of the Kovrov Military Plant named after Degtyarev. The chairman of the board became Vladimir Anisimov, a former aide to Patrushev, and other important security officials joined the plant's board.

On its website, the enterprise lists only civilian products — motorcycles and motor-cultivators. However, it also manufactures the large-caliber machine gun "Kord", the Pecheneg machine gun, the tank machine gun of Vladimir, the anti-tank complex "Kornet", and the surface-to-air missile system "Strela", along with a whole range of other MANPADS and grenade launchers. All these products are actively used by the Russian army during its aggression against Ukraine. Over the military years of 2022 and 2023, the plant increased its revenue by 30% (now — 30 billion rubles).

In April 2022 — shortly after the war began in Ukraine — Kesaev was placed under sanctions by the European Union. He also attracted the attention of Finnish intelligence services when he purchased the entire island of Kotasaari using a Cypriot passport and secretly built a helicopter pad there. The deal is now frozen, and the passport has been annulled.

He even had to rename his luxury yachts Sky and MySky to Totem and Pearl, respectively.

Sergey Kacieva spends more time in the USA. He owns an old mansion in Portland, and his wife and children are citizens of that country.