How a billionaire Armenian separatist leader, now on trial in Azerbaijan, made his fortune in Russia

Some 18 months after regaining control over the Nagorno-Karabakh region, Azerbaijan has begun putting the former leaders of the breakaway pro-Armenian republic on trial. The most high-profile among them is Ruben Vardanyan, an investment banker who managed the finances of the Russian elite before giving it all up in an effort to try to keep Karabakh under Armenian control.

• In total, 16 former leaders of Nagorno-Karabakh face trial in Azerbaijan, including three former presidents. Former prime minister Ruben Vardanyan is by far the most significant figure in this process, and Baku is keeping his trial separate from the others. He faces 42 charges — primarily of financing terrorism and organizing unlawful armed groups — several of which carry a life sentence.
• Vardanyan is one of the most renowned financiers in Russia — one of the people who built Russia’s market economy after the collapse of the Soviet Union. He was born in the Armenian capital of Yerevan, and studied first in Moscow, then the United States. In the 1990s, Vardanyan founded the Troika-Dialog investment company, which grew into one of the most successful Russian investment banks. It survived the two big crises in 1998 and 2008 and was sold to state-owned Sberbank in 2012 for $1.4 billion. Vardanyan received $560 million for his 36% stake in the company. In 2021, Forbes Russia estimated his fortune at $1 billion.
• Troika Dialog would never have been a leading Russian investment bank without providing valued services for Russia’s elite. Vardanyan helped Russian state corporations assume control over leading auto manufacturer AvtoVAZ and Kamaz, and Dmitry Medvedev headed the board of trustees at the Skolkovo business school, co-founded by Vardanyan. In 2019 an investigation by the OCCRP consortium foundthat Troika Dialog helped various members of the Russian elite to move their money abroad, including friends of Putin.
• After selling his business, Vardanyan spent less and less time on his Russian activities and devoted ever more efforts to Armenia, where he was a leading philanthropist and political figure. In the late 2010s, Vardanyan published a book about Armenia’s future and in early 2022 he published a proposed political program for the country’s development over the next two decades. In Aug. 2022, months after the Russian invasion of Ukraine, he unexpectedly renounced his Russian citizenship and went to Nagorno-Karabakh. Within three months, he was named prime minister of the breakaway republic. The Azeri authorities, who were already preparing to retake control of the region, believed “the hand of Moscow” was behind Vardanyan’s arrival. Azeri president Ilham Aliyev described the businessman as “Vardanyan, sent by Moscow, whose pockets are lined with billions stolen from the Russian people.” Judging from what followed, Vardanyan was no Russian agent and Putin has made no apparent attempt to free him.
• Vardanyan did all he could to irritate the Azeri authorities and back in Feb. 2023, under pressure from Baku’s blockade of the republic, the Karabakh authorities were forced to dismiss him as PM after just four months in the role. But he remained in Nagorno-Karabakh until Azerbaijan launched its lightning offensive in Sep, when he was arrested by Azeri soldiers. Last summer, Vardanyan’s lawyers allegedhe had been tortured in prison, where he was being held mostly in solitary confinement, and on the eve of his trial he claimed that the Azeri authorities would present a falsified statement before the court. It’s clear that Vardanyan will be sentenced to a long prison term. After that, we will see if Putin does anything to get him out of jail.

Why the world should care

In the first days after Russia’s invasion of Ukraine, one of the key questions was how Russia’s billionaires would react. In the overwhelming majority of cases, it was as expected: the oligarchs stayed silent, accepted sanctions, rallied round Putin and kept making money in Russia. Only two openly condemned the war, with Ruben Vardanyan following a unique third path — one that cost him his freedom, potentially for the rest of his life.