The strange case of the oligarch and the French vineyard

Fancy a dabble in the wine business, at a knock-down price? The Prieuré of Saint Jean de Bébian, a trophy asset owned by a sanctioned Russian oligarch, is set amidst 32 majestic hectares of artfully tended vines nestled in a beautiful corner of southern France.

A brand-new climate-controlled production hall has all the mod cons. There’s even a Michelin-starred restaurant on the premises where you might entertain clients. A château within a walled park in a nearby village may be available by separate negotiation. And it’s just 20 minutes away from Béziers airport where you can land your jet.

On the outskirts of Pézenas, a market town in the Hérault valley, Bébian has since 2008 been the property of the Russian oligarch, Dmitry Aleksandrovich Pumpyansky, although more recently it’s revealed apparently to also be owned by his son, Alexander, 35. But who really owns it now? It’s complicated.

A lot of oligarch-owned assets in France are in play and some investors are wondering whether now may be the time to strike. In theory, France looks like a happy hunting ground for distressed Russian assets. For many of the oligarchs now on the sanctions list, a smart apartment in Paris, and an opulent villa on the Côte d’Azur have been a sine qua non. For the richest of them all, there’s the Caribbean island of Saint Barthélemy. But who exactly owns these assets? It’s not immediately evident.

Is it not rather vulgar or even immoral, one might reasonably ask the circling sharks, to profit from the ghastly tragedy in Ukraine? Not at all, it is on the contrary a method of serving rough financial justice to people whose gains are at best unexplained and not infrequently ill gotten, they reply. But the complicated situation at Bébian undoubtedly reflects the opaque structures that make it hard to untangle the ownership of Russian assets here. This won’t be unique to France.

Bébian itself has been a gigantic boost to Pézenas ever since Pumpyansky arrived. He has been an enthusiastic, confident investor, throwing up new buildings, installing the latest digitally-controlled winemaking gear, hiring winemakers, all while running his principal business, OAO TMK, a manufacturer of steel pipes for the oil and gas industry.

Although not impoverished, he’s hardly an oligarch of the premier league. Pumpyansky’s net worth has been estimated at a modest $2 billion. He has one of the more compact ocean-going yachts, the $75 million Axioma. Wine seems to have been his passion, to the extent that he has spent many millions on Bébian, which appears to have never generated a centime of profit, in the estimation of authoritative sources.

He is furthermore, by all local accounts, a humane boss who pays well, is appreciative and considerate to his staff and is genuinely interested in wine.

At his new dining pavilion he’s installed the Michelin-starred chef Matthieu de Lauzun and created a small hotel with ten rooms decorated by the Marrakesh-based architect Raymond Morel. It’s tasteful, has created even more jobs, is a splendid effort to upgrade vititourism in a region that’s hardly wealthy, and completely unprofitable.

Recently, his 35-year-old son, Alexander, has been more involved in the business. Alexander had a local reputation as something of a playboy when the Pumpyanskys arrived, even managing to crash a light plane when running out of fuel on the final approach to the local grass airstrip. But for all the gossip about this family, which used to show up for their visits in a convoy of Mercedes G Wagons, there was never a lack of money to keep Bébian on the road. Now, it’s uncertain.

The dozen staff are anxious, their future unsettled. I’m told Pumpyansky may have used offshore vehicles to hurriedly transfer control of the domain earlier this month to its longtime French manager, as a ‘fiduciare’. Although whether there’s subsequently been a legally sound transfer is unclear. These steps are very recent and it’s unclear how they might be viewed by the French. A local winemaker tells me it’s simply impossible to sell a domain so quickly. It’s only a matter of time now until the inspectors show up, it’s speculated.

The trigger for the chaos at Bébian came on Wednesday 9 March when the European Union added the son, Alexander Pumpyansky, to the long list of sanctioned oligarchs. The family is accused of ‘providing material or financial support to and benefiting from the government of the Russian Federation, which is responsible for the annexation of Crimea and the destabilisation of Ukraine.’

But the Russians have their defenders.

‘Alexander Pumpyansky has let go of all his assets so as not to block the business,’ Benoit Pontenier, the French director of Bébian, told radio station France 3. Although without details this statement raises more questions than it answers. He adds that his former owner ‘is a great man.’

Alexander Pumpyansky intends to sell and if successful, he will be lucky to get a fraction of what’s been invested.

Moveable assets, like Abramovich’s five private jets and two yachts, are easier to hide from western sanctions than real estate, but as Bébian shows – and as predators are discovering from Courchevel to Cannes – it may not be so straightforward to buy them. Nor will all locals necessarily rejoice at the slaying of the geese that have laid so many golden eggs.