In a significant move, President Vladimir Putin has placed Russia’s largest car dealership, Rolf, under temporary state management.
This decision, as claimed by the Kremlin, is driven by commercial considerations. However, the founder of Rolf, Russian businessman Sergei Petrov, perceives it as detrimental to Russia’s attractiveness to investors.
Rolf, a pioneer in the car dealership sector since the post-Soviet era, is currently owned by a Cyprus-based company.
This seizure of assets follows a series of actions taken by Moscow this year to gain temporary control of Western-owned assets in response to Western sanctions disrupting or freezing Russian assets.
Notably, this is the first instance where a high-profile Russian business leader has been stripped of their property in such a manner.
Sergei Petrov, who resides in Austria, faces allegations from Russian authorities of illicitly transferring funds abroad, which he vehemently denies.
Kremlin spokesperson Dmitry Peskov defended the move, citing economic expediency and compliance with Russian legislation, especially in light of the international economic climate.
The temporary management of Rolf will not disrupt its day-to-day operations, according to the company.
The Russian federal property management agency, Rosimushchestvo, aims to enhance Rolf’s financial performance and overall development.
Sergei Petrov expressed his concerns about this development, seeing it as a blow to Russia’s investment climate.
He questioned whether investors, particularly from Asia, would be willing to risk investing in Russian assets given these actions.
Petrov suggested that the temporary management mechanism might be utilized as a cover for asset redistribution, hinting at potential political motives behind the decision.
Petrov also emphasized the potential inefficiency of state involvement in retail businesses. This move has a broad-reaching impact, potentially deterring both domestic and international investors.
Sergei Petrov’s history includes signing a letter in 2014 critical of Russia’s annexation of Crimea from Ukraine and its repercussions on East-West relations.
Rolf has been under scrutiny since 2019 when Russian investigators accused it of purchasing shares at inflated prices, a charge Petrov believes may be linked to his political views.
In a related case, a former senior manager at Rolf was sentenced to 8-1/2 years in prison for an alleged illegal transfer of funds abroad, and an arrest warrant has been issued for Petrov himself.