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Real Kremlin agents in Riga. How criminal Russian oligarchs with contracts from Defense Ministry do business in Latvia

The Insider has learned that the Kremlin-linked oligarchs Iskandar Makhmudov and Andrei Bokarev are still active doing business in Latvia. They control companies in Riga both personally and through nominees. Latvian authorities do not consider Bokarev and Makhmudov a threat to national security, despite the fact that they are suppliers to the Russian army. Moreover, the oligarchs still receive funding in the form of European Union grants that are distributed by the Latvian authorities.

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The Riga Electromechanical Engineering Plant suffered the fate of many large enterprises in the post-Soviet space. In the 1990s the plant went through a decline and was transformed into a joint-stock company. However, it managed to survive, and today Rīgas elektromašīnbūves rūpnīca (RER) is a rather large plant producing electrical equipment for trains, subway cars and urban public transport.

According to the Latvian commercial register, as of 2021 36 % of RER shares were controlled by the Russian legal entity TransComponent Holding, LLC. The Latvian registry data shows that the Moscow company’s previous place of business was in Bolshaya Lubyanka Street, but last year it moved to Tver.

Iskandar Makhmudov and Andrey Bokarev each own 20% in TransComponent Holding through a chain of legal entities (Violan LLC and Elarium LLC). The remaining shares are owned by their partners who are less known to the general public.

Bokarev and Makhmudov are longtime friends of the Kremlin. Through their companies UGMK, Kuzbassrazrezugol, Transmashholding, etc. they became one of the largest government contractors in Russia. The oligarchs are also suppliers to the Russian Ministry of Defense. One of their business partners in the Kalashnikov arms concern was Alexei Krivoruchko, now Deputy Defense Minister of Russia. Bokarev and Makhmudov quit Kalashnikov, but continued to supply diesel engines for Russian warships through their factory in Kolomna.

Bokarev at a meeting with Putin
Bokarev at a meeting with Putin

Makhmudov and Bokarev were implicated in several criminal cases as businessmen through whom criminal money was laundered. In a 2007 German criminal case, they appear as the holders of the Izmailovo organized crime group’s slush fund, while a 2008 Spanish criminal case alleges that the Tambov-Malyshev organized crime group also laundered money through their company UGMK.


However, the majority stake of 46% in the Latvian company RER was held by the Moscow-based Krona Grup. As The Insider found out, Bokarev and Makhmudov are also behind it.

The list of JSC Krona Grup beneficiaries via Cypriot offshore companies as of 2020 includes Igor Lozovoy, a Russian citizen, and Sergeyus (or, spelled alternatively, Sergiyus) Grechukas, a Lithuanian citizen. However, then 80% of Krona Grup JSC was acquired by TransComponent Holding. After which it consolidated its ownership of RER. As The Insider found out, Bokarev and Makhmudov “bought” the company from themselves: for years they controlled it through their nominees.

Lozovoy, 62, is a hired employee of Bokarev’s and Makhmudov's entities. At least in 2012-2015, he worked as deputy general director at Mosmetrostroy, a company then owned by the oligarchs. In the late 1990s, according to the Ministry of Internal Affairs' archives, Lozovoy was implicated in a criminal case in connection with bankruptcy misconduct in Khakassia, evaded arrest and was put on the wanted list.

Grechukas is the former head of Bokarev and Makhmudov's Transmashholding representative office in Lithuania. At various times, the holding company owned by the criminal oligarchs closely connected with the Russian Defense Ministry supplied locomotive-hauled passenger rail cars, freight cars, rail buses, locomotive diesels, shunting locomotives and passenger diesel locomotives to Lithuania.


Krona Grup's affiliation with Bokarev and Makhmudov is also evidenced by the phone number, which coincides with that of MPK. MPK LLC, whose assets include suburban railway carriers, is controlled by the oligarchs themselves.

Russia's Krona Grup is the exclusive distributor for Latvia's RER. And, in turn, it acts as a contractor for Bokarev’s and Makhmudov's Central Suburban Passenger Company (TsPPK). And the oligarchs’ Transmashholding is listed among RER's partners on the company's official website.

Moreover, the general director of Latvia's RER, Stanislav Vodolazsky, is both the general director of the Krona Grup and an employee of Bokarev’s and Makhmudov's Central Suburban Passenger Company. At any rate, according to The Insider, he received from TsPPK a digital pass in 2020 to move around Moscow during quarantine restrictions. By the way, Vodolazsky was also implicated in an old criminal case. In 2015, he was suspected of bankruptcy misconduct and non-payment of salaries to employees of the Simbirsk Machine Tool Plant that he headed.


Bokarev’s and Makhmudov's business ties encompassed all Baltic countries. In addition to Lithuania and Latvia, they have long been partners with one of Estonia's richest women, Tatiana Liksutova, ex-wife of Moscow Vice-Mayor Maxim Liksutov, through TsPPK.

The Insider pointed out that in 2021 Tatyana Liksutova was Bokarev’s and Makhmudov's partner in Fredlake Holdings. Liksutova had a 22% stake in the Cypriot offshore company (the list of beneficiaries is disclosed in the auditor's report of MPK LLC, at the time a Russian subsidiary of Fredlake Holdings). At the same time, Bokarev and Makhmudov made hundreds of billions of rubles on contracts with the Moscow Metro, i.e. under the supervision of the government official Liksutov.

Latvia’s RER also has a subsidiary, LATVO, which is engaged in bulk sales of machinery and equipment. Its equity is 5.5 million euros. The parent company RER has a bigger equity of 8.1 million euros, and its annual turnover reached nearly 33 million euros in 2021.

Geography of RER deliveries
Geography of RER deliveries

The Latvian company, controlled by the Russian oligarchs, operates across Europe. For example, in May, RER presented a new electric motor for trolleybuses and electric buses in the Czech Republic. On top of that, RER receives funding from the European Union. The company absorbs money allocated by the EU business support funds through the Latvian Investment and Development Agency and the Ministry of Economics. For instance, the European Regional Development Fund is currently sponsoring the project «Smart thermal control of integrated electric vehicle drive with on-board motors, power electronics converters, power sources and thermal circuits». At the expense of European taxpayers, EUR 527,000 has been allocated to Russian oligarchs.

Despite appeals of the Anti-Corruption Foundation and Alexei Navalny personally, the European Union has not yet imposed sanctions against Bokarev and Makhmudov. So far, they appear only on the UK sanctions list.

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