Leaked transcript links youngest billionaire ever to Forbes bid aligned with Putin (UPDATED)
Why is a self-driving car tech entrepreneur linked to a global media company purchase? Follow the money; it's Russian.
A leaked discussion transcript links a once-ascendant auto sensor company founder as the frontman for a bid to buy America’s iconic Forbes media empire, despite his utter lack of media experience.
It’s a story of intrigue surrounding the control of a media company reminiscent of the drama “Succession”—complete with same-named players—but the ramifications are real and stretch from Hong Kong to Moscow to Washington DC with a real-world significance far in excess of the hit HBO drama. The hit show even shot an episode released this spring in its concluding season at the tech founder’s $83 million mansion in Los Angeles’ tony Pacific Palisades enclave.
Two weeks ago, Axios reported that India’s largest media company Sun Group, and San Francisco-based venture firm Global Silicon Valley’s (GSV) bid for Forbes failed because of fear about federal scrutiny and that the group would try again with a high-net-worth American “like tech billionaires,” using primarily American capital.
Their links to Vladimir Putin’s Russian government led to a bipartisan uproar in Washington, DC, where such unanimity of thought is a rare commodity. A senior former intelligence official spoke on the record for this story to express concern that the federal board which reviews foreign investment in America must regulate the deal.
The leaked discussion transcript obtained by this author points to Austin Russell as the new point person seeking to buy Forbes Global Holdings with the Sun/GSV consortium’s backing.
Russell is the CEO of Luminar Technologies, a formerly high-flying self-driving auto sensor startup that went public through a Special Purpose Acquisition Company (SPAC) deal. He dropped out of Stanford after receiving a $100,000 fellowship from billionaire venture capitalist Peter Thiel before that deal made him the youngest billionaire ever.
Two sources familiar with the thinking of seniormost management at Forbes believe Russell is financially backed in a play to purchase Forbes by the previously failed bidders Sun Group and GSV.
They say Austin Russell’s expected role is to be the general partner in the new Forbes buying group and that he could have to liquidate shares in his public company just to hold a minority stake in the global media conglomerate.
Shockingly, the sources indicated that despite his attempts to be the boss of Forbes, Russell has “no experience in the media,” leading other execs at the company to question why he’s involved but for the need to satisfy stricter regulatory requirements about foreign investments into the United States that raise national security concerns.
Even more unusually, the insiders noted that despite the auto parts entrepreneur’s pivotal role in the transaction, he has yet to converse with critical figures in Forbes’s upper management, an indication of either his inexperience or an uncommon disconnection from the purchase process.
They indicated that nobody knows where Russell would be able to raise the significant amount of funds needed to participate in the general partnership since selling a large number of his company’s shares could be difficult.
Notably, GSV’s partners in the Forbes deal alongside Sun Group also run another venture fund named Global Venture Alliance (GVA) which gave Luminar a stunningly large $20 million angel investment over six years ago. In addition, records leaked by a senior Capitol Hill official for this story point to GVA being linked to another one of the recently failed bidders to purchase Forbes. (shown below the story)
As the media deal moves, the Florida-based tech entrepreneur who is its new face is facing a raft of troubles at home as he expands his business abroad. His company’s valuation is sagging, down 80% from its highs, despite still trading today at 50 times revenues.
The former youngest billionaire even fell off the 2023 Forbes billionaire list.
His company Luminar is currently navigating a new plant opening in Mexico and a deal to bring in Taiwanese touch screen manufacturer TPK as an investor/partner, both positive developments.
However, a new $24 million lawsuit just landed in Florida’s Middle District federal court against him last week over the stock sale he used to buy his palatial home in LA, the very residence featured in “Succession.”
The fallout from a recent investor’s road show is ongoing. A YouTube video the company posted of his presentation showed competitors’ technology in his company’s investor roadshow, leading lawyers to advertise for class action litigants against the self-driving company.
Luminar deleted the video after Forbes reported it.
International media empire for sale, Russia-linked buyers eventually emerge
The fortunes of the venerable Forbes publishing empire changed nine years ago when the Forbes family sold a majority of its shares to a Hong Kong-based group Integrated Whale Media Investment.
By 2021 the company was looking for new capital via its own SPAC deal, which fell apart in the summer of 2022 as rising interest rates.
A few months after that, Sun Group and San Francisco-based venture capital firm GVA emerged as the leading bidders for Forbes with an $800 million bid, along with another related investment fund named GSV.
Despite being an Indian company, the origins of Sun Group’s fortune emerged from business dealings in Russia.
Sun’s bid is led by Vice Chairman Shiv Khemka, whose ties to Russian President Vladimir Putin are not even slightly obscured. After the Russian Federation’s first invasion of Ukraine, a chorus of international financial sanctions reigned down on the country. That didn’t stop Khemka from appearing at RosCongress literally alongside Vladimir Putin later that spring, a video still on the Kremlin’s public website.
“Vladimir Putin took part in the plenary session of the 18th St Petersburg International Economic Forum,” reads the Kremlin’s even description. “The Forum is taking place this year under the theme of Sustaining Confidence in a World Undergoing Transformation.”
Earlier this year, he told Fox’s Maria Bartiromo that he owns Sun Group.
Khemka’s social media profile on LinkedIn still lists his membership in the “Foreign Investment Advisory Council (Chaired by the Russian Prime Minister),” whose website indicates that Sun Group was still a member as recently as 2020.
Update: After publication, Khemka edited his LinkedIn profile to remove the reference to Russia’s FIAC. Here is a PDF copy of his profile.
GVA’s ties to the Russian oligarchy are well-established since its funds for the fund run by Pavel Cherkashin come from Suleyman Kerimov, the single man considered closest to Vladimir Putin. His partner in GVA is Magomed Musaev.
The Panama Papers revealed Kerimov’s dealings on behalf of Putin, including Kerimov’s transfer of hundreds of millions of dollars to the cellist Sergei Roldugin. Currently, Kerimov is serving in the Russian Federation Council as a representative of Dagestan. His term runs through 2026.
Likely not coincidentally, the largest investment into an American business that GVA has made was into a self-driving startup.
Yes, GVA backed Luminar Technologies with Kerimov’s money, the very same company Austin Russell founded, owns, and runs today.
In fact, Russell personally knows that his startup funds came directly from Kerimov, as The San Francisco Standard reports:
Luminar Technologies, a self-driving car company that launched with the help of $20 million of Kerimov’s wealth, actually did know whom they were dealing with, according to Gadzhiev, the oligarch’s nephew and money manager. He said Luminar’s founder Austin Russell met personally with Kerimov, and those meeting plans were corroborated by emails reviewed by The Standard.
That was totally legal at the time, but after both GVA and Luminar received its funding, Kerimov landed on the U.S. Treasury Department’s sanctions list in 2018 for his involvement in Russia’s first invasion of Ukraine as an official of the Government of Russia.
Last June, the Office of Foreign Assets Control (OFAC) expanded those sanctions by blocking Kerimov’s billion-dollar U.S. trust last summer and further growing them to encompass sanctions on the entire Kerimov family and a “global network of financial facilitators, enablers, and others associated with” them in November 2022.
Here is a video of GVA’s Cherkashin acknowledging that his source of funds is Kerimov and declaring that it is the “sacred right” of anyone to invest in Silicon Valley in an October 2022 interview he gave to the Standard:
But why is a group of Russian-linked funders so interested in a business news website and magazine founded by an American family?
It’s not just about the iconic brand.
The same senior Capitol Hill official who shared a copy of the Forbes bid documents also provided a copy of documents circulating in the halls of Congress which shows why it is an especially attractive media property to any suitor.
Congress gets involved
The toxic combination of Russian money, Kremlin influence, and one of America’s most respected media brands led to an uproar on Capitol Hill in Washington, one that isn’t going away.
Members of Congress from both sides of the aisle were in unusual accord that the federal government must review the sale of Forbes.
“We would never in a million years during the cold war have allowed "Pravda" to get a foothold in America's media environment.” - Sen. Tom Cotton (R-AK) on Fox News describing the Sun Group’s bid to purchase Forbes.
A Republican sitting on the U.S. Senate Select Committee on Intelligence and the number three House Republican have both expressed open misgivings about a group linked to Putin buying Forbes.
Both members of Congress cited this Real Clear Policy story about the prior bid.
Congressman Eric Swalwell (D-CA) sits on the House Homeland Security Committee, and he told Politico that he wants to learn more about the transaction but “opposes any efforts by entities linked to the Chinese or Russian government attempting to acquire U.S. media companies.”
“We cannot have our foreign adversaries having massive platforms to reach the American people,” House Intel Committee member Rep. Mike Waltz (R-FL) told Fox as the result of an official briefing on Sun’s ties to Russia’s military, “and to begin propagandizing. I mean, this is a war of ideas before it's a war of any type of conflict.”
“This is something the Committee on Foreign Investment in the United States (CFIUS) ought to take a look at,” says former U.S. National Intelligence Council Chairman Gregory Treverton to this author. He served under President Obama from 2014-2017.
The members of CFIUS consist mostly of America’s highest-ranked Senate-confirmed officials, including the Secretaries of Treasury, State, Defense, Energy, Justice, and Commerce, as well as the head of the Office of Science & Technology and the US Trade Representative.
“When I was running it,” says Treverton about the council, “we’d just look at Mergers, but they’ve expanded the charter since then.”
Indeed, on September 15th, 2022, President Joe Biden issued Executive Order 14083 to make it mandatory for CFIUS to provide oversight of any transaction involving large amounts of data of American citizens. The relevant text reads:
“[T]he Committee shall consider whether foreign investments in United States businesses that have access to or that store United States persons’ sensitive data, including health and biological data, involve a foreign person who might take actions that threaten to impair the national security of the United States as a result of the transaction, including whether the foreign person might have relevant third-party ties that might cause the transaction to pose such a threat.”
When reached for comment, Austin Russell’s phone rang six times and went to a full voicemail box. He did not respond to a text message asking for comment about his alleged involvement in buying Forbes. Lumniar did not respond to a contact on its website or via Twitter Direct Message about its current legal troubles.
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This leaked document shows the involvement of multiple Russia-linked venture capital funds in a bid to buy Forbes:
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Wow! Grant Stern! Dynamite exposure. Thank you! Seriously concerning moves described here.
Oops...I already follow you on Spoutible!!! Thank you for your reply. I fear for the survival of today's media. We no longer watch the main stream media as the corporate owners are focused on their bottom line, not in-depth reporting on issues of importance. We gravitated to PBS Newshour and independent journalism sources, such as The Stern Facts, and feel much better educated on the what is happening around the world.