Anton Cherepennikov

The syndrome of sometimes superficially disguised, sometimes simply mysterious deaths of Russian top managers leaves its traces not only in Russia but also in England, Spain, France, Dubai, India, and Argentina.

The intensity of the deaths of Russian top managers over the past three years is striking, as if there is a return to the “wild” 1990s.

“In Russia, the owner of a company that developed systems for wiretapping phones by law enforcement agencies died,” – “In Moscow, the main Kremlin special agent for wiretapping mysteriously died,” – “Entrepreneur Anton Cherepennikov broke his shoulder before his death” – screaming headlines of media resources accompanied the departure to the otherworldly realm of the creator of one of Russia’s largest IT holdings.

On the night of July 22nd, 2023, the body of 40-year-old Cherepennikov was found in his office on Michurinsky Prospekt.

In the company IKS Holding, founded by a top manager sanctioned by the US, they stated that the cause of death was cardiac arrest.

Initially, the bodyguard of Cherepennikov, who was present in the office on Michurinsky Prospekt at the time of the boss’s death, said that the doctor missed the moment when the patient began to suffocate during xenon therapy.

After the sale of IKS Holding in 2020, Cherepennikov became a candidate for the list of the richest Russians.

At the time of the deal, the value of his shares in the enterprises was 30 billion rubles; Forbes then estimated his fortune at $540 million.

The businessman was included in the Forbes ranking of the Top 30 Russians with the highest dividends in 2022 – during this period, they amounted to 13.3 billion rubles.

Esports and IT Security

The career of the top manager was closely linked to a simple love for video games. He began frequenting computer clubs at the age of 15, with e-sports then being more than a hobby for Cherepennikov.

Over time, his passion evolved into one of his businesses, albeit one that eventually proved to be unprofitable.

In the 2000s, he organised a team of gamers called Virtus.pro. Several years later, in 2015, he created the esports holding company ESforce, which included the Virtus.pro club.

Even earlier, the project had attracted the interest of the USM Group holding, whose main shareholder is billionaire Alisher Usmanov, and in the same year, it invested $100 million in Virtus.pro.

In early 2018, Mail.ru Group (since 2021 – a subsidiary of the VK company), one of whose shareholders is the USM Group, acquired ESforce.

The esports holding comprised over ten business units, including teams, tournaments, a tournament operator, a stadium, broadcasting studios, production, merchandising, and a media agency.

Yota Arena, Moscow.

A year earlier, Cherepennikov opened the largest esports stadium in Europe – Yota Arena in Moscow. In 2020, it became known that the ESforce holding had depreciated more than threefold. Mail.ru Group reduced the valuation of this business from $100 million to $30 million.

Although Cherepennikov attempted to make money from video games and esports, the beginning of his business was related to security issues. He was involved in the development of operative-search measures (SORM) and in 2005 opened the company Za Telecom.

It not only imported BlackBerry mobile phones but also dealt with information security systems, simultaneously developing software to meet the requirements of government agencies. “For two years, we struggled with the technical solution to comply with the law,” said Cherepennikov.

“We went through the classic acceptance process, where an FSB operator verifies the solution for compliance with all technical requirements.”

In 2009, Za Telecom grew into Osnova Lab, which was engaged in software development. After a while, the top manager began buying up software developers in the field of information security and SORM. In 2015, he acquired Malvin Systems, based on which the Citadel corporation was created.

Its specialization is electronic devices and services related to wiretapping and surveillance. Of course, primarily, Citadel’s services were used by special services.

As if by magic in 2016, Cherepennikov created the company Forpost, which was engaged in systems integration, and also acquired the companies MFI Soft and Signatek, which will soon be included in the list of equipment suppliers for the implementation of the “Yarovaya Law” by the Ministry of Digital Development, Communications, and Mass Media. Contracts with mobile operators will bring these two “subsidiaries” of IKS Holding billions in revenue.

Alisher Usmanov

The deal for MFI Soft amounted to more than 10 billion rubles; the top manager borrowed money for it from structures of the USM Group.

The USM group of companies, whose main shareholder is billionaire Alisher Usmanov, included giant businesses: the Metalloinvest holding, the MegaFon telecom operator, VK, Disney Russia channels MUZ-TV and Yu.

The second largest shareholder of USM is the father of the notorious State Duma deputy, also a billionaire, Andrey Skoch, Vladimir.

In 2016, the so-called “Yarovaya Law” was adopted, which, amongst other things, provided for an increase in the storage period by mobile operators of information about the receipt, transmission, and content of voice information and messages, as well as allowing investigators to obtain information from electronic correspondence.

Internet companies and services were required to store and provide special services with pseudonyms, date of birth, address, surname, name, patronymic, passport details, languages spoken by the user, a list of his relatives, message texts, audio and video recordings, email address, date and time of authorization and exit from the information service, the name of the client program.

When the “Yarovaya package” appeared from the podium of the State Duma, the Citadel corporation quickly occupied from 60% to 80% of the wiretapping market with several projects.

From 2016 to 2018, by the time the “Yarovaya Law” came into force, Citadel had brought together several SORM manufacturers: Osobaya Lab, MFI Soft, Malvin Systems, Signatek.

Citadel and other companies within the IKS Holding sold services and equipment to mobile and fixed-line operators – starting from the giants MTS, VimpelCom, Rostelecom.

It’s difficult to find alternative solutions on the market, as about 80% of the specialized equipment and software market belongs to IKS Holding. Citadel and IKS Holding sell solutions and equipment that are certified by the FSB, turnkey; operators are forced to coordinate purchases with the FSB.

In May 2018, the publication Delovoy Petersburg received a commercial proposal from the company MFI Soft: the hardware-software complex for storing Internet traffic of users from MFI Soft was then sold for a minimum of 37 million rubles.

The requirement of the “Yarovaya Law” was so expensive that small operators could not afford to buy it at all. Someone had to leave the business, and somewhere in the regions, as one of the surveyed experts said, they simply ignored SORM.

The financial indicators of Citadel and its affiliated companies soared against the backdrop of the entry into force of the “Yarovaya Law.”

Citadel’s profit in 2016 was 372 million rubles, in 2020 – 9.2 billion rubles. MFI Soft’s profit in 2017 was 503 million rubles, in 2020 – 5.3 billion rubles. Malvin Systems’ profit was 605 million in 2017 and 925 million in 2020. Osobaya Lab’s profit was 582 million in 2017 and 823 million in 2020.

From Esports Stadiums to a Giant Corporation

IKS

In 2018, Cherepennikov founded the diversified group IKS Holding, into which he transferred all existing and new assets in the IT field, server manufacturing, and data storage systems, consolidating 25 companies and sub-holdings, which fit perfectly into both the scenario of a sovereign Runet and measures to track citizens’ activity.

Among these business units were Citadel, a SORM developer, Forpost, a system integrator, Peter-Service (renamed Nexign in 2018), a developer of billing systems, One Factor, a developer of a “secure data monetization” platform for telecom operators, Kryptonite, a sub-holding engaged in developments in quantum computing, cryptography, and machine learning, as well as Garda Technologies, a developer of security solutions for large corporate businesses.

The holding also included Russia’s largest computer technology manufacturer, KNS Group (Yadro brand), which implements a number of import substitution projects: it produces Vesnin servers and Tatlin data storage systems, microprocessors, and owns a developer of cloud platforms.

The company built the Yadro FAB Dubna plant for the production of a full range of radio-electronic products in Dubna near Moscow, covering an area of 42 thousand square meters. Yadro also provided its own tablets based on a customized version of the Android OS.

In addition, IKS Holding acquired a number of IT assets related to MegaFon, including Comptika (solutions in the field of blockchain and the Internet of Things) and Corklass (solutions in the field of safe cities). According to expert estimates, in 2020, the total value of IKS Holding’s assets was estimated at 150 billion rubles.

Working in Cherepennikov’s structures was considered “prestigious.”

For example, in the company Corklass, which became part of IKS Holding, after graduating from university, Yana Grigoryan, the girlfriend of Ilya Medvedev, the son of former president and prime minister Dmitry Medvedev, worked. According to leaked tax database information, she had been an employee of LLC Corklass since 2019.

In 2020, the group of Usmanov and his partners USM acquired 100% of IKS Holding, and Cherepennikov received 10% of the shares of YuESM Telecom, the lion’s share of which, in turn, belonged to the USM Group.

However, in October 2021, the publication RBC published unexpected news: YuESM Telecom would sell the diversified IT group IKS Holding back to its founder Cherepennikov.

The date of appearance of this information does not allow us to assert that the USM group got rid of IKS Holding because of the imposition of sanctions against Usmanov, which were imposed against him at the end of February 2022.

In June 2022, news feeds reported that the USM holding had completed legal procedures for the sale of IKS Holding and a number of assets to Cherepennikov.

The value of the transaction was not disclosed, which raised doubts about its completion. It was only clarified that YuESM, a unit of USM, retained some assets directly related to telecommunications services: Forpost, Nexign, and One Factor.

In turn, IKS Holding, re-consolidated by Cherepennikov, took over MegaFon 1440 from YuESM Telecom, which was renamed Bureau 1440.

This business unit is engaged in creating a low-orbit satellite group of more than 900 satellites, which are intended to provide broadband internet access services in Russia and other countries.

It was evident that strange things were happening within IKS Holding, partly explained by the fact that in February 2023, both IKS Holding and the company Yadro fell under US sanctions.

Media reports indicated that compared to 2020, the value of Cherepennikov’s assets had plummeted so significantly by 2022 that it was theoretically possible to speak of his loss of control over the majority of companies. The mass departure of Cherepennikov and funds from the assets raised many questions.

Citadel Corporation enters a phase of reorganization.

In one of its firstborns, the company Base Lab, the top manager was a founder until 2019 but then decided to transfer his shares into management. In 2022, Base Lab earned 3.3 billion rubles, with a net profit of 1.6 billion.

Despite Base Lab consistently bringing in high profits and no signs of trouble, it was decided in March 2023 to liquidate it as a separate legal entity and transfer all Base Lab affairs to Citadel Corporation. A similar situation unfolded in other structures, whose ideologist and founder was initially Cherepennikov.

In 2022, IKS Holding withdrew from being a co-founder of Citadel LLC, Unified Factor LLC, KNS Group LLC, Picta LLC, Yadro GC LLC, Kryptonite LLC, and Bureau 1440 LLC. In 2023, it ceased to be a shareholder of Garda Technologies LLC and Bastion LLC.

The story of Bureau 1440 resembles an extraordinary success story – in 2021, Bureau 1440 employed 43 people with an average salary of 480 thousand rubles.

However, the official financial results for 2022 were astonishing: the company’s revenue was only 0.83 million rubles, with a negative profit of 544.6 million rubles.

This resembled a roller coaster ride – dozens of changes were officially registered in the “biography” of the holding within just 2022.

For instance, on June 7, a new founder, HK IKS, appeared, with a charter capital of 999,999 rubles, accompanied by a change of legal address; on June 15, the company’s address moved to Michurinsky Prospekt in Moscow.

The next day, as well as on July 20, a change of registration number occurred; on July 22, another founder, X Management (contribution to the charter capital – 1 ruble), was added, simultaneously removing Alexey Khrenov from the list of founders.

On October 17, there was another change in the founder, with no detailed information available; on November 7, a surprising change was registered – the names “Holding ‘Intellectual Computer Systems'” and IKS Holding swapped places, along with a change in the main type of activity and the addition of several new types.

Anton Cherepennikov had a grand plan for the revival of the holding, and it looked promising.

Database records indicated that as of June 2022 – a year before his death – Cherepennikov was the founder and CEO of HK IKS, with a charter capital of 19.5 billion rubles, and the legal address was Michurinsky Prospekt, Moscow. It was also indicated that the legal predecessor of HK IKS was YuESM Telecom.

As a result of the asset transfer: IKS Holding, where Cherepennikov was the CEO, owned 98% of HK IKS and 2% belonged to the companies IKS Management. Cherepennikov was also the head of IKS Management until April 2022, and the founder until November 2022.

After his death, it was revealed that the former IKS Holding indeed came into the hands of Cherepennikov’s heirs – the asset transfer operation, which required the consent of many stakeholders, was successfully carried out.

Company Profile Determines Employee Selection

A former FSB employee lamented to one journalist that many of his former colleagues took jobs in companies owned by Cherepennikov, which are involved in the production of SORM (System for Operative Investigative Activities).

There are also highly influential former FSB employees within the holding.

Boris Miroshnikov

RBK reported that General Colonel Boris Miroshnikov works at Citadel.

In the 1990s he headed the Department of Computer and Information Security at the FSB, and later was the head of the “K” department at the Ministry of Internal Affairs.

This department deals with crimes in the field of information technology.

Boris Miroshnikov gained wide recognition due to a conflict with the founder of Euroset, Evgeny Chichvarkin.

The entrepreneur repeatedly accused Miroshnikov of organizing an attack on Euroset, as a result of which he was forced to sell his stake in the company and leave the country.

In 2019, the BBC reported that Citadel invested in a startup founded by Korolev, then a 23-year-old programmer – the son of the former head of the FSB’s Economic Security Service, now the First Deputy Director of the FSB, Sergey Korolev, who is behind high-profile anti-corruption cases.

The younger Korolev’s company, Bastion, specializes in so-called “white” or ethical hacking, i.e., testing vulnerabilities in the information systems of companies.

In simple terms, the business of Citadel Corporation revolves around unhindered and unpunished wiretapping of conversations, monitoring of correspondence, social media activity, and tracking of individuals’ movements.

Developing such a company requires individuals who have contacts with the leaders of most law enforcement agencies, individuals who would be part of a circle of people who are often admitted without a call. One of them has been heavily targeted by the press.

Perhaps, for pushing forward Cherepennikov’s products and controlling Citadel Corporation, Valery Bitaev found himself in this structure.

The Center Dossier website wrote that he “has access to high offices of the FSB, Ministry of Internal Affairs, and the Prosecutor General’s Office, where he is received as the most esteemed guest.”

Among Bitaev’s clients, the Center Dossier also mentioned Vladimir Yevtushenkov and AFK Sistema.

Bitaev is referred to as a “solver.”

In Russian slang, this word denotes a person who works or has connections in a government institution and acts as an intermediary between high-ranking employees of this institution and bribe-givers, helping to solve the latter’s problems.

Bitaev is an extremely enigmatic figure with a very convoluted biography. From 1975 to 1993, he served in the army, participating in the little-known war in Angola; the next seven years of his biography remained in the shadows.

From 2010 to 2014, Bitaev held the position of deputy head of the administration of the Volgograd region. In 2016, he was appointed as an advisor to the CEO of the USM Group holding, and later became a co-owner of Citadel Corporation.

Bitaev spares no expense, enjoying his vacations in the most luxurious hotels in the UAE, with only the best cars at his disposal – Mercedes Maybach, Bentley Bentayga, and others. The picture is so sunny that the clouds simply invite themselves.

In early 2023, rumours circulated that Bitaev was having problems with law enforcement agencies – he was allegedly accused of working for Western special services.

It turned out that the Citadel’s equipment, which allows wiretapping of conversations and monitoring of correspondence, is almost unprotected from external interference: the “boxes” from the Citadel’s MFI Soft division, which supply information for SORM to providers, can be opened, and the data will go to interested parties.

Even a database of more than 9,000 addresses in Russia’s nuclear center – Sarov – was leaked to the internet. It was Bitaev who purchased imported software for these devices. He immediately ran into problems.

Simultaneously with the change of the occupant of the chair on Bolshaya Dimitrovka, where Yuri Chaika was replaced by Igor Krasnov from the Investigative Committee, episodes characterising Bitaev’s activities, as well as his client-patrons from among billionaires and FSB executives, began to pour out of the archives of the Investigative Committee.

As a result, several criminal cases involving Bitaev were initiated; dark clouds began to gather over his head.

Citadel is a huge corporation, its profit for 2022 alone amounted to 8.2 billion rubles.

In 2017, 75.85% of Citadel belonged to its founder Cherepennikov, and another 23% belonged to Bitaev.

However, on May 28, 2023, the structure of shares was clearly different, and a new legal entity was visible: LLC IKS Holding owned 62.63%, the closed-end mutual investment fund “Technological Reality” owned 25.1%, and Bitaev’s share decreased by more than half – to 10.77%.

Remarkably, as Bitaev’s share decreased, compromising material on him, as if by magic, began to disappear, and criminal cases either closed, or his name ceased to appear there.

The press interest in his personality sharply declined. Did someone start solving his problems for him?

From June 15 to July 15, 2021, exercises were conducted in Russia to isolate the Runet, i.e., disconnecting the Russian Internet from the global one.

Several months earlier, using the same equipment, Roskomnadzor began to slow down access to the social network Twitter. The company “Data – Center for Processing and Automation (DTSOA),” associated with Cherepennikov’s structures, participated in slowing down social networks and creating a “sovereign” version of the Runet.

This company was created for the implementation and integration of DPI solutions for the “sovereign Runet.”

Thanks to DPI technology, it became possible in Russia to slow down individual web pages and block media sites “MBKh Media” and “smart voting” (a strategy put forward by Alexei Navalny’s team) hiding from blocks using the Google appspot address loophole.

The Final Weeks Before Cherepennikov’s Death

Units of business disappeared one after another from IKS Holding. Cherepennikov was considering a backup airfield – HK IKS.

This is evidenced by the authorized capital of the company – the entrepreneur invested almost 20 billion rubles in the business.

The international expansion of the holding continued. On March 18, 2023, it was reported that its structure – the developer and manufacturer of computer equipment Yadro – was opening a new development center – the first in the company’s history outside of Russia – in Minsk. To service the Belarusian office, the company opened over 1000 vacancies throughout Russia and the CIS.

According to a representative of Yadro, the company was “forming a unified engineering community on the territory of Russia and the CIS countries.”

Some experts speculated that now there is also the possibility of transferring part of HK IKS Holding’s assets under the Minsk-based Yadro.

June 27, 2023, became a day of stunning success – the first satellites of Bureau 1440 were launched from the Vostochny cosmodrome, providing a data transmission speed of 12 Mbit/s.

On this day, Cherepennikov might have experienced not only joy but also feelings akin to those of Dr. Frankenstein, who created a monster stronger than himself.

He built around himself an empire that provided legal wiretapping and reading of emails, tracking citizens’ whereabouts, cared about disconnecting the Russian-speaking internet from the global one, produced import-substituting electronic devices, became a successful part of the Russian space industry and software manufacturing segment.

Along with this, his own interests of individual people, companies, and groups were concentrated around him.

There were plenty of those willing to wrest HK IKS or its parts from Cherepennikov’s hands. Moreover, the top manager was affected by a scandal six months ago involving leaks from Citadel’s equipment.

According to its own data, IKS Holding’s consolidated revenue in 2022 amounted to 93.4 billion rubles, EBITDA – 34.1 billion rubles, net profit – 20.4 billion rubles. 60% of the revenue came from the data storage system.

Five days before Cherepennikov’s death, a number of media resources published almost the same information. Forbes wrote that the holding was discussing the debut placement of bonds and the possible initial public offering (IPO) in 2024.

As one of the sources of RBK reported, analysts from Technologies of Trust (formerly the Russian division of PwC) estimated the investment value of the holding at approximately 300 billion rubles.

The holding confirmed the possibility of issuing bonds in the amount of up to 1 billion rubles for a period of one year, the final decision on which should be made by the end of the year.

A representative of the holding claimed that meetings with banks and investment analysts were currently being held on this matter and noted “high” external interest.

Vedomosti, citing its sources, claimed that the funds raised through the IPO are expected to be used to repay bank debt, launch new productions, and develop large-scale projects, including Bureau 1440.

A Broken Clavicle and Xenon Gas

It is reported that four days before his death, on July 18, while vacationing in Turkey, the top manager unsuccessfully dived into the water and broke his shoulder joint.

According to other information, the fracture occurred on July 21, and it’s unlikely to have happened in Turkey. It is known that Cherepennikov visited a private clinic, where he underwent an X-ray examination revealing the fracture.

On July 20, Cherepennikov unexpectedly informed his wife that he urgently needed to fly from Turkey to Moscow because a “very important meeting” had “come up.”

It is unknown with whom this meeting was supposed to take place and whether it actually happened.

According to the official version, Cherepennikov died in his office on Michurinsky Prospekt from a heart attack. Allegedly, he used xenon gas for relaxation.

As days passed, more detailed information emerged publicly, claiming that until 3 a.m. on July 22, Cherepennikov was in his office, where he summoned an old friend, referring to him as his “personal doctor.”

However, as the media found out, this person was never a doctor and did not have medical education. He was simply an acquaintance who had access to xenon and helped Cherepennikov use this gas as a remedy for all ailments.

Possibly the billionaire became dependent on xenon.

It is reported that Cherepennikov’s personal bodyguard was also present in the office at the time of his death.

The arriving police officers noted that everything around was clean. There were no signs of torture or a noisy party in the office, only a few cigarette butts lay lonely in the ashtray – Cherepennikov was a heavy smoker.

A reusable gas cylinder with the marking “Oxygen” was seized from the scene, visually different from the standard black cylinders for xenon.

The version was considered that during the fracture Cherepennikov developed a thrombus, and during the procedure, it detached, leading to asphyxiation…