MOSCOW: Russian businesses are seeking guarantees from the Kremlin that they won’t face asset seizures and privatisation reviews amid a growing list of cases where assets owned by local tycoons for decades are being nationalised.
Russia is seeing more cases of assets owned by local tycoons since the 1990s being nationalised, prompting businesses to seek guarantees from the Kremlin that they won’t face privatisation reviews.
“The creeping redistribution of property has begun,” said Oleg Vyugin, a former first deputy governor of Russia’s central bank. “Putin said a new elite is needed. The current elite, owners of significant assets, is being screened based on the principle of loyalty.”
Prosecutors filed at least 55 cases seeking to nationalise assets since the start of Moscow’s invasion of Ukraine two years ago, according to research published in December by the RBC newspaper.
The latest example is Makfa JSC, Russia’s largest pasta producer. Prosecutors have filed a court case in Chelyabinsk, central Russia, to wrest control of the company, Kommersant newspaper reported last Friday.
The total value of the assets is 46 billion rubles and they’re controlled by the families of Mikhail Yurevich, a former governor of the Chelyabinsk region, and former Duma deputy Vadim Belousov.
The sweeping privatisation that started in the 1990s allowed many Russian businessmen to amass significant fortunes.
Many have since then tried to diversify their businesses by buying assets in Europe or the United States and registering their holdings abroad, but President Vladimir Putin’s war in Ukraine upended their plans. — Bloomberg
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