Privatization…is worrying Russian businessmen

Russian companies are seeking guarantees from the Kremlin that they will not face asset confiscations and privatization reviews, amid a growing list of nationalizations of assets owned by Russian business tycoons for decades.

Russia has witnessed increasing cases of nationalization of assets owned by local business tycoons since the 1990s, prompting companies to seek guarantees from the Kremlin that they will not face privatization reviews.

Prosecutors have filed at least 55 cases aimed at nationalizing assets since Moscow began its invasion of Ukraine two years ago, according to research published by the Moscow newspaper RBC last December.

The latest example is Makfa, Russia’s largest pasta producer. The Kommersant newspaper reported on Friday that prosecutors had filed a lawsuit in court in Chelyabinsk, central Russia, to seize control of the company.

The total value of the company’s assets is 46 billion rubles ($497 million), and it is controlled by the families of Mikhail Yuryevich, the former governor of the Chelyabinsk region, and former Duma deputy Vadim Belousov.

The comprehensive privatization process that began in the 1990s allowed many Russian businessmen to amass great fortunes. Many have since tried to diversify their businesses by purchasing assets in Europe or the United States, and registering their properties abroad, but the war launched by President Vladimir Putin in Ukraine turned their plans upside down. (Bloomberg)