Peskov denies discussing the law on the purchase of foreign assets at bargain prices

Russian President Vladimir Putin last week secretly instructed the government to draw up a bill that would allow the assets of “naughty” Western companies to be nationalized at below cost, the newspaper reported. Financial Times (FT) with reference to a secret decree. Presidential spokesman Dmitry Peskov denied the content of the newspaper’s material.

According to the Financial Times, the law referred to in the secret order would allow the Russian authorities to buy Western assets at a “significant discount” and sell them at a profit. At the same time, only Russian companies without foreign shareholders, as well as companies from which foreign shareholders leave, could acquire Western business. According to the newspaper, in this way the Kremlin wants to punish disloyal Western companies and encourage those that play according to Russian laws.

In a FT commentary, Dmitry Peskov, a spokesman for the Russian President, said that Western investors are “welcome” in Russia. At the same time, he noted that the situation is completely different if the company does not pay salaries or decides to leave the country. “We say goodbye to these companies. And what we will do with their assets after that is our business,” he replied. Today, June 15, Dmitry Peskov was asked at a briefing whether the information provided by the newspaper is correct. “No. This is not true,” he said.

According to sources of the publication, the head of the Central Bank Elvira Nabiullina was behind the restrictions in response to the withdrawal of thousands of Western companies from Russia due to fears that the outflow of foreign capital could weaken the ruble and limit the opportunities for Russian investors. At the same time, earlier today at the St. Petersburg Economic Forum (SPIEF), Elvira Nabiullina statedthat the details of the process of repurchasing foreign assets are being discussed, but a final decision on this procedure has not yet been made.

At the same time, according to sources, Finance Minister Anton Siluanov has a different position, who believes that the withdrawal of Western companies can be used to increase budget revenues.

According to the secret decree of Vladimir Putin, the new owners of Western companies must place 20% of assets on the Russian stock market. According to the newspaper, according to Elvira Nabiullina, this will provide Russian investors with more opportunities to place their money.

Several foreign businessmen who plan to leave the Russian market told the publication that they expect further nationalization of their businesses. One of them believes that commodity companies will be hit harder. In his opinion, in the current conditions, the Russian authorities are looking for new opportunities to use export revenues for the budget. Technology companies will suffer less because they are “hard to manage,” he said. A senior Western businessman in Moscow believes these measures are motivated by the authorities’ desire to prevent investors from leaving: he says these measures should make business exit even less attractive.

In September 2022, Vladimir Putin signed a decree prohibiting companies from “unfriendly” countries from independently managing shares in Russian companies. Such transactions are approved by a special government commission. In December, this commission announced the conditions that must be met in order to approve the sale of Russian assets by “unfriendly” persons. Among the requirements is the provision of a discount to an independent assessment of the market value of at least 50%, as well as an installment plan for one to two years. As an alternative or addition, “unfriendly” businessmen can voluntarily contribute at least 10% of the transaction to the budget.

According to the FT, the Russian authorities have been discussing the issue of nationalizing all Western companies since February 2022, but they rarely resorted to this mechanism, for example, in the situation with the subsidiaries of Finnish Fortum and German Uniper, which were nationalized in April this year.

Anastasia Larina