How A Private Jet Full Of Prostitutes Saved Mikhail Prokhorov $10 Billion

Random Celebrity Article By on June 16, 2013

If you ever meet a magic genie and are given the chance to switch lives with one other person on the planet, you probably won't regret picking Mikhail Prokhorov. Mikhail Prokhorov is a self-made, 48 year old, Russian billionaire playboy who is perhaps most famous in the western world for being the new owner of the NBA's Brooklyn Nets. Outside of the pro sports, Mikhail has used his massive bank account to build a dream life that includes super model girlfriends, mansions around the world, two mega-yachts, an ultra luxurious private jet and even a semi-successful political career. He is essentially, the ultimate billionaire playboy. And to think, none of it would have been possible without the help of a private jet full of prostitutes and a debaucherous New Years party that landed Prokhorov in a French jail back in 2007. Wait…what??!!

Mikhail Prokhorov prostitution scandal

Mikhail Prokhorov and Jay-Z

As of June 16th, 2013, Mikhail Prokhorov's $13.5 billion net worth is enough to make him the 9th richest person in Russia and the 70th richest person in the world . However, unlike most billionaires, the majority of Mikhails' net worth is made up of cash and other very liquid assets.

Prokhorov's business career dates back to to 1989 when he graduated from the Moscow Finance Institute. He spent the next three years rising to the top of a handful of Russian banks, ultimately peaking as the President of United Export-Import Bank (also known as Onexim Bank). While running Onexim Bank, Prokhorov was introduced to his future business partner Vladimir Potanin.

Vladimir Potanin had spent the previous 10 years working in the Soviet Union's Ministry of Foreign trade where he cultivated many close friendships within the Kremlin and around Moscow. As Communism fell apart, Potanin quickly gave up his position at the Ministry of Foreign Trade and became one of the first private citizens to earn the right to open a private bank. Together, with Potanin's government connections and Prokhorov's experience in finance, they were uniquely positioned to make a huge fortune.

In 1995, the Russian government announced that it was auctioning off one of their most valuable state-owned assets, a mining conglomerate called Norilsk Nickel. At the time Norilsk Nickel produced 25% of the world's nickel and was earning $400 million a year in revenues. Using a basic 10X revenue valuation method, the bare minimum value of Norilsk Nickel should have been $4 billion. Interestingly, the auction's starting price was set at just $170 million. Even more interestingly, Mikhail Prokhorov's own Onexim Bank was chosen to administer the auction and collect bids. The auction eventually received just two bids. The highest bid was a $355 million offer from a group called Rossiiski Kredit Bank. The lowest bid was a $170.1 million offer from the group controlled by Prokhorov and Potanin. Amazingly, Onexim Bank disqualified the higher bid right out of the gate, claiming that Rossiiski Kredit Bank's offer exceeded their credit. That left Prokhorov and Potnanin as the lucky winners of one of the most valuable state owned Russian companies in the world with a bid that was just $100,000 higher than the reserve price.

Vladimir Potanin & Mikhail Prokhorov

Vladimir Potanin & Mikhail Prokhorov

Over the next 10 years, Norilsk Nickel expanded at a furious pace. Under Prokhorov's direction, the company sold off all non-core assets, modernized equipment and aggressively sought out new regions with natural resources to exploit. Annual revenues at Norilsk Nickel grew from $400 million in 1995 to over $10 billion in 2007. Profits rose from $60 million per year to over $1.5 billion. When the company went public, Mikhail and Vladimir instantly became multi-billionaires. As the price of commodities around the world sky rocketed, so did the value of Norilsk Nickel thrusting Mikhail and Vladimir into the upper echelons of Russian wealth and power. So why did Mikhail Prokhorov sell all of his shares just as the company was surging? That's where the private jet full of Russian prostitutes comes in….

In January 2007, Mikhail Prokhorov and a group of close friends hopped aboard his private jet and flew to the upscale French resort town of Courchevel, high up in the Alps to celebrate the Russian Orthodox New Year. Also on board that flight: Eight 20 year old sexy Russian prostitutes. Technically the women were never proven to be anything more than "models" who were brought for "entertainment", but any reasonable person would agree that this is a very grey area.

After a debaucherous three day party that has been described as a massive orgy, 50 French police officers swooped in and arrested Mikhail and all of the "models". The women were immediately released, but Mikhail was held in a jail cell for four days on charges that he was importing prostitutes. He was eventually released and all charges were dropped, but the incident sent shock waves all across Russia. The scandal was parodied on dozens of television shows, commercials, magazines and radio stations.

Private Jet Girl

Private Jet Girl

With Norilsk Nickel's stock price at an all time high, Vladimir Potanin saw the scandal as the perfect opportunity to push his old business partner out to pasture. Over the next 12 months, both parties fought bitterly over the future of Norilsk Nickel. In the end, the pressure was just too much for Prokhorov and he was forced to liquidate 100% of his holdings in the company. He ended up selling his stake to Oleg Deripaska, who at the time the richest person in Russia with a net worth of $28 billion. The final sale price for Mikhail's stake was $7 billion in cash and $3 billion worth of stock in one of Oleg's aluminum mining companies.

As it turns out, the timing of his sale could not have been any better. In October 2008, just a few months after Mikhail cashed out, the world economy collapsed. As stocks plummeted, the global commodities market was eviscerated. Oleg Deripaska's net worth plunged 85% from $28 billion to an all time low of $4 billion (it has since risen back up to $9 billion). All of a sudden, Mikhail Prokhorov found himself sitting alone atop the list of the richest people in Russia and within a few years, as the economy recovered, his net worth grew to over $13.5 billion. Mikhail is no longer the richest person in Russia, but he may be the happiest! After all, if it weren't for a plane full of high end Russian prostitutes, today he probably wouldn't be sitting on a mountain of cash as the owner of Brooklyn Nets and Jay-Z's best friend.

Mikhail Prokhorov laughing

I'd be laughing too…

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Articles Written by Brian Warner
Prior to launching Celebrity Net Worth, Brian spent seven years as the Managing Editor of one of the largest entertainment portals on the internet. Before that, Brian attended Georgetown University where he double majored in finance and marketing. A native of Northern California, Brian currently resides in Los Angeles. Follow him on Google+.
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