Page 9 - bneIntelliNews monthly country report Russia May 2024

across a continuously broadening territory, as well as sanctions-related shortages of equipment and spare parts, make this pledge doubtful. Drone attacks also force energy companies to invest in proper defence. Following the attack on the refineries in Tatarstan, the region’s head, Rustam Minnikhanov, called on companies to defend themselves because “no one will defend you.” This echoes a warning from more than a year ago by Andrey Kartapolov, the head of the Duma’s defence committee.
2.2 Nationalisations in Russia increasingly target SMEs
Since the full-scale invasion of Ukraine, there have been a wave of high-profile nationalisations in Russia, mainly affecting big business people and powerful officials. Now, however, there are more and more cases of the state seizing relatively minor assets from low-level tycoons, and even those without any significant personal wealth.
Significant incidents involving the state seizure of assets from wealthy Russians amid the war in Ukraine include auto trader Rolf (owned by former opposition parliamentary deputy Sergei Petrov) and chemical company Metafrax. In January, Russian prosecutors even ordered 13 plots of land along Moscow region’s prestigious Rublyovskoye Shosse be seised by the state (Rublyovka has long been regarded as Russia’s Millionaire’s Row).
In a significant legal dispute over the nationalisation of a magnesium factory in the central Russian city of Solikamsk, prosecutors Wednesday stated that they do not believe the apparently legal acquisition by minority shareholders of a stake in the plant on the Moscow Exchange was made in good conscience. This is a major case, which appears to be setting a precedent for further seizures. The most recent target for nationalisation is Russia’s biggest pasta company: Makfa. At the end of last month, it emerged that prosecutors had filed a lawsuit for the state to seise Makfa, and dozens of related companies. They estimated the combined value of the companies at about $500 million.
The lawsuit names businessmen Mikhail Yurevich and Vadim Belousov as Makfa’s beneficiaries. In the 1990s, the two men privatised pasta and flour plants in the Ural mountains Chelyabinsk Region. Like many other such business people, Makfa's owners went on to enter politics. Yurevich became mayor of Chelyabinsk, a city of 1.2 million people, then governor of the region. Belousov was a parliamentary deputy from 2011 to 2023. The justification for nationalizing Makfa is that, after the two were elected to government roles, they continued to do business. But this seems a very thin excuse – hundreds of other Russian entrepreneurs followed a similar path. Nationalisations have even begun to affect ordinary homeowners. Russian-installed officials in the occupied Ukrainian region of Zaporizhzhia this week announced their intention to pass a law to nationalise “abandoned” Ukrainian houses. While details are unclear, it seems that anyone who leaves the area could potentially lose their property. The authorities are promising to transfer nationalised housing to doctors, teachers and construction workers.
9 RUSSIA Country Report May 2024 www.intellinews.com