IPG CEO: Oligarch listing costing company millions
Photo | Grant Welker
The Oxford headquarters of IPG Photonics
Photo | Courtesy
Valentin Gapontsev
As long as CEO Valentin Gapontsev still is listed as a Russian oligarch and U.S. tensions with Russia continuing to escalate, IPG Photonics in Oxford will continue to lose business, the executive and company argued in a new court filing.
Gapontsev, a Russian-American billionaire and Worcester resident who wants to remove his name from a U.S. Treasury list of Russian oligarchs via federal court, said in a new court filing this week many customers and U.S. contractors are increasingly hesitant to do business with the company.
This comes as Russian activity in U.S. elections and elsewhere around the world has dominated the headlines for the duration of President Donald Trump’s presidency.
“The secretary’s designation has driven their customers away, cost them several millions in lost business, and trashed their reputation,” Gapontsev said in a response to the U.S. Secretary of the Treasury Steven Mnuchin’s motion to dismiss Gapontsev’s lawsuit. “As time goes on, and the U.S. government faces further aggression from Russia in Syria, in the Crimea, or in interfering with our elections, counterparties will stay even further away from the plaintiffs and the harm will only grow.”
The company did not openly detail those lost business opportunities, but filed a sealed document listing those projects.
If Gapontsev remains on the list, the company will lose several millions more in government and other contracts, Gapontsev and the company said.
“Those events parallel government contractors observing that IPG Photonics is effectively disqualified from their work because of Treasury designating Dr. Gapontsev as a Russian oligarch. The designation is destroying decades of the company’s hard work to make it a trusted supplier of laser technology to government laboratories and our Nation’s military," the filing said.
Gapontsev filed suit in December, alleging the Treasury’s list of oligarchs was simply lifted from a Forbes magazine list of Russian billionaires. He adamantly claimed he has no ties to the Kremlin or Russian President Vladimir Putin, unlike many other wealthy Russians.
He argues the list, compiled at the request of Congress for possible use in future sanctions, only considered wealth rather than close ties to Putin or association with the Russian government.
Instead, the majority of his wealth is tied to his company and his expertise in laser technology, Gapontsev said.
The company is headquartered in Oxford at a 417,000-square-foot facility which is slated for a 170,000-square-foot expansion. It operates significant facilities in Marlborough, Webster and elsewhere in the U.S., but it holds a significant presence in Russia in Moscow and Fryazino, according to its 2018 annual report.
Those Russian facilities total more than 600,000 square feet.
Of IPG’s 6,220 employees, 2,340 are in the U.S. while 1,740 are in Russia. Germany has the company’s third-most employees by country with 1,300.
The Treasury, in its initial response to Gapontsev earlier this month, did not dispute Gapontsev’s claim that he has no ties to Putin or the Russian government.
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