George Economou: Establishment do-gooder or Putin’s puppet?

George Economou: Establishment do-gooder or Putin’s puppet?

In May of last year, the Wall Street Journal dubbed George Economou the ‘bad boy’ of shipping, capturing in just two words the Greek magnate’s penchant for controversial deals that keep him on a legal knife-edge and are even viewed as a threat to European security.

Economou’s billion-dollar shipping empire includes TMS Group, Dry Ships, Performance Shipping and more recently the acquisition of a 9% stake in OceanPal. As an avid art collector, the ‘bad boy’ has positioned himself as an establishment do-gooder, in spite of the outrage at his seemingly unethical approach to business.

Alongside his former business partners and shareholders, the Ukrainian government has certainly taken a dim moral view of Economou, such is the extent of his facilitation of Russian oil exports in the face of Western sanctions.

Indeed, TMS Tankers (which is part of Economou’s TMS Group) was named by Ukraine’s National Committee for War and Sanctions as a ‘sponsor of war’, having transported tens of millions of barrels of Russian oil since Putin invaded Ukraine in February 2022.

While hundreds of thousands of Ukrainian lives have been lost in the intervening period, and its economy and infrastructure continue to crumble under the Kremlin’s bombardment, Economou executed a lucrative transformation of his business to become the second largest carrier of Russian oil, behind only Sovcomflot, Russia’s own state operator.

In dollar terms, according to statistics compiled by the Wall Street Journal, TMS makes between $4 and $5 million every time it completes a delivery of Russian crude to oil-hungry states not bound by the West’s price cap of $60 per barrel, such as India.

With more than 200 of these round trips completed to date, this is exceptionally good business for Economou.

It’s also very good for Russia. Putin’s war effort, bogged down by Ukraine’s fierce resistance, is in dire need of revenue. Much of this is now provided by oil exports facilitated by shipping companies like TMS.

The term ‘sponsor of war’, therefore, arguably rings truer than ‘bad boy’ as a result.

Compounding Ukraine’s misery, Russian oil exports remain high despite the West’s best efforts.

This is little wonder given that Europeans like Economou are on-hand to provide support – even if their dealings fill the pockets of a regime seemingly intent on invading Poland and the Baltic states, Greece’s allies and fellow NATO members.

TMS Group has not denied profiting at the expense of Ukrainian soldiers and civilians, but it has stated that its tankers do not violate Western sanctions to the best of its knowledge.

If ambiguity is working well for Economou in this line of work, his other business practices are considerably more brash.

The ongoing Dry Ships embroglio is a classic case. Economou listed the dry bulk shipping company on the Nasdaq in 2005 and it initially performed well. An industry upturn then drove its stock to new heights in 2015.

Dry Ships’ price eventually tanked but not before a shadow entity linked to the company but based in the British Virgin Islands bought shares on the cheap and then offloaded them pre-crash for a significant profit.

This revelation caused outrage and Economou is still in court over the matter, accused of having presided over stock price manipulation.

Unabashed in the face of widespread negative publicity, Economou has driven his shipping interests forward in recent years, picking up a 9% share in the aforementioned ship owner OceanPal in the summer of 2023.

Industry insiders claim that the Greek will soon replicate the hostile takeover model he used late last year to monopolise Performance Shipping, another respected owner.

In that case, just days after securing stock in Performance, Economou announced that he was seeking the resignation of four of its directors on the specious grounds of mismanagement.

Economou’s track record, however, suggests that it is his quest for full control in the interests of precluding scrutiny, rather than the failures of his partners, that was the primary motivation.

Only this week, and thus completing the hat trick, Genco Shipping – another firm in which Economou has invested – rejected his two new nominations to its board, citing their lack of industry experience. It was loyalty in the interests of influence, not expertise, that the bad boy was after.

Looking forward, with the international and Greek press fully aware of Economou’s dubious practices – not to mention that the CIA and Europe’s intelligence agencies will likely be monitoring his aiding and abetting of the Putin regime – the question remains as to how he can get away with it.

Reputation management in the form of generous gifts to international art establishments is only a small part of the answer. Economou’s ability to operate in legal grey zones – against all moral standards but not explicitly outside the law – is more accurate.

As the debate over the efficacy of sanctions on Russia and whether they must be tightened significantly to have a more meaningful impact continues to be had, the nature of the grey operations run by Economou and others will be scrutinised more firmly.

Indeed, if the current rules don’t preclude the provision of funds for Russia’s illegal, unconscionable war, then perhaps they must change to do so.

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