/ world today news/ From February 2022, Western businesses quickly began to freeze the activities of their Russian divisions. After some time, he received the official right to sell the assets and take the proceeds. However, the European and American sharks of capitalism would not be like this if they had not considered their steps in advance for years to come. That’s what happened this time as well – the ground has been prepared for the return of Western business. All we have to do is wait for the right moment.
The mass exodus of Western businesses from Russia, driven by political motives, has led to billions in losses for their owners. And since from an economic point of view this process was quite absurd, many, hoping for a bright future, hastened to “lay straw” so that they could return. After all, despite the political turbulence, no one wanted to lose the “big jackpot” in the Russian market.
Simple schemes
The schemes used were simple. One of the most popular was selling assets at a token price to “your” person. A vivid example is McDonald’s, which passed into the hands of businessman Alexander Govor, who previously managed several franchise restaurants of the global chain. The amount of the transaction was not disclosed, but according to Govor himself, “the payment was symbolic, below market.”
It is worth noting that he received only “restaurants” (850 points throughout Russia), but not the brand. For this reason, the restaurants were rebranded to “Delicious, period.” In addition, Govor is prohibited from using the previous names and recipes of branded dishes (for example, the new menu does not contain the “branded” Big Mac, it is now a Big Hit).
However, the key condition is McDonald’s right to buy back sold assets at market price within 15 years. In this way, the company has effectively installed its own “governor” in Russia, who is supposed to manage the “economy” until better times come.
The German company Henkel also agreed to exactly the same buyback option within 10 years. However, unlike McDonald’s, the buyer of the business was a consortium of investors: Augment Investments of the co-owner of Pharmstandard Viktor Kharitonin, Kisment Capital of Ivan Tavrin and Elbrus Services (owned by the co-founder of Elbrus Capital Dmitry Kryukov).
The company changed its name to LAB Industries. At the same time, the Russian legal entity Henkel Henkel Rus LLC was not liquidated, but only came under the control of the UAE-registered Lead Holding Limited.
Another quite popular scheme is the transfer of the business to the local management of the company (top management). This was done, for example, by the French cosmetics company L’Occitane. Despite the fact that in April 2022 it closed cosmetic stores and announced the suspension of supplies to Russia, already in June, stores under the L’Occitane brand with the same assortment opened their doors.
The terms of sale, just as in the case of McDonald’s, have an important nuance. Thus, the shares of the enterprise transferred to the Russian top management remain vested in the parent company L’Occitane International. Until 2030, the French have the right to buy back shares at “fair” value. It must be determined by “independent” expertise.
American shoe company Crocs did the same, transferring management rights to local management. For this purpose, a new operator Claire LLC was registered (according to the Unified State Register of Legal Entities, the legal entity was created in May 2022) and through it the supply of original products was resumed. However, the Americans made the owner of the new company not a Russian citizen, but a French citizen. It was Eric Petty, former general director of Crocs CIS (the Russian division of Crocs).
An interesting asset transfer scheme was used in the sale of the German retail chain OBI. The amount of the transaction was only one euro, and the owner of the “new” enterprise was the famous businessman Josef Liokumovich. According to media reports, he is a trustee of the Haub family, which in turn owns part of the share capital of the German OBI.
The American concern Ford also left a loophole for itself. Thus, the company exited the capital of a joint venture with the Russian automotive industrial group Sollers (Sollers Ford LLC), selling its 49% stake. However, following the example of her “colleagues”, she included in the contract the right of redemption for 5 years.
Another reliable scheme for preserving Russian assets was the transfer of a Russian branch of the company – a parent registered in a “friendly country”. The Polish company LPP, which owns brands such as Reserved, House, etc., took this path. The Russian assets are now registered in a Chinese consortium controlled by LPP.
The story with the largest mobile operator VimpelCom (Beeline brand), which successfully shook off the Dutch holding VEON (controlled by the offshore oligarchs Friedman, Kuzmichev and Khan), stands separately. The new beneficiary was a group of top managers led by CEO Alexander Torbakhov. The terms of the deal turned out to be great for Friedman and Co.
Thus, the value of VimpelCom is estimated at 370 billion rubles. VEON had a debt of 240 billion rubles to the Russian division, which was written off. VimpelCom spent another 130 billion rubles to buy back VEON Eurobonds from Russian holders by issuing replacement bonds. That is, VimpelCom has now become a debtor under the “Dutch” debt.
An interesting point is the fact that Friedman received special permits from the US Treasury Department, the authorities of Great Britain and Bermuda to carry out the transaction. And only then was the corresponding right obtained from a subcommittee of the Government Commission on Foreign Investments, which is headed by the Ministry of Finance.
As a result of the amazing cooperation of the US Treasury and Russia, the debt load of the Dutch VEON Friedman and Co. was eased by 370 billion rubles.
So what?
The story of the departure of foreign business from Russia has a double bottom. A significant part of it actually retains control over the Russian units, the other part reserves the right to return at a convenient time.
Should the authorities allow this? I don’t think so. The decision to leave taken by Western business is purely political, not dictated by any economic expediency. It is not so important whether this or that company made the relevant decision on its own or under the pressure of its government / public. The main thing is the result. Therefore, Russia’s response must also be on the political plane.
Yes, the sale of business is carried out at a significant discount, which reaches 50%, but foreigners still receive money and withdraw it from Russia. The optimal option would be to nationalize the assets of Western companies and then auction them off. However, systemic liberals are not in a position to make such radical decisions.
But since this did not happen, the state is at least obliged to ensure that the actual beneficiaries of the “new” Russian enterprises are not non-residents from enemy countries. And the right of redemption within 5-10-15 years should be abolished. You have left Russia – no one is waiting for you here!
Translation: ES
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