Page 17 - RusRPTOct23

Can you protect yourself? “The message from the state is clear: ‘you own nothing’,” one Russian billionaire told The Bell. The state, he said, is behaving “extremely unpredictably, and it’s no longer very clear which of your actions might attract attention and lead to your assets being confiscated.” Everyone is feeling under pressure,” said another executive. “You need to develop the right relationships with important people... and be seen as doing the right thing.” Another major businessman, however, does not think “de-privatization” will become a significant new process. “I don’t completely understand why the Prosecutor General’s Office is suddenly acting like this,” he said. “But at least some of the renationalized assets were either abandoned or dying. It’s not easy to discern who benefits.” He gave as an example the January transfer of shares in the Far East Shipping Company to the state. This company was part of the FESCO transport group, owned by Ziyavudin Magomedov, a billionaire once close to ex-president Dmitry Medvedev. A month before the transfer, Magomedov was sentenced to 19 years in jail for running an organized criminal group and fraud. His older brother was jailed for 18 years.
One of The Bell’s sources believes assets owned by foreigners or tycoons who have left the country since the invasion of Ukraine are particularly at risk. But owners who do not show sufficient support for Russia’s war in Ukraine could also be targets for the state, said another businessman. According to him, the regional authorities regularly report to the Kremlin about what companies are doing for the war effort. “You can try not to give the governor the delivery of body armor he wanted, but the next day they’ll be on the phone asking questions,” he said.
Billionaire Melnichenko, according to one businessman who spoke to The Bell, could be in the firing line because of the words of anti-war tycoon Oleg Tinkov, who said in a recent interview that Melnichenko actually “hates Putin.” Melnichenko has denied the claim.
Western sanctions were, for a time, seen as a safeguard from state seizures: businessmen targeted by Western might even get compensation for any losses from the Kremlin. “That’s very honorable,” said Shokhin. “But now almost everyone is under sanctions. So, to save your business, it’s no longer enough to simply shut up and carry on as if there is no war. Instead you need to loudly and articulately state your support for the war in Ukraine.” However, this is not all about revenge or rallying support. There also appear to be pragmatic reasons. The Kremlin is taking control over export flows, especially for raw materials, said the businessman who believes “de-privatization” will not spread to the whole economy. “Hence the sudden interest in ports and logistics,” he said. Bloomberg reported last month the state was considering a proposal from billionaire Dmitry Mazepin to create a single fertilizer exporter. “They are thinking about something similar for metals and grain,” the businessman told The Bell.
– Alexandra Prokopenko
17 RUSSIA Country Report October 2023 www.intellinews.com