The “daughter” of Google in Russia found signs of deliberate bankruptcy

A subsidiary of Google in Russia found signs of deliberate bankruptcy. About it says in a message from the Fed.

“Interim manager of Google LLC (Google’s Russian subsidiary – ed.) Talyarovsky V.A. informs that during the preparation of the Opinion on the presence (absence) of signs of fictitious and deliberate bankruptcy of Google LLC, signs of deliberate bankruptcy of Google LLC have been identified, the report says.

Talyarovsky studied the activities of Google from March 2019 to December 2022. He found that during this period the company’s absolute liquidity ratio decreased significantly. This was influenced, among other things, by an increase in current liabilities in the form of an increase in accounts payable and the emergence of dividend arrears in the amount of RUB 10 billion.

In June 2022, the Russian “daughter” of Google filed for its own bankruptcy, “since all the debtor’s funds are sent to the account of the bailiff.” The report says that the deterioration in the dynamics of the company’s financial position is due, among other things, to the company’s failure to pay fines for not deleting prohibited information (part 5 of article 13.41 of the Code of Administrative Offenses of the Russian Federation). In particular, Google was fined on December 27, 2021 for 7.221 billion rubles, on July 20, 2022 the company was fined again for 21.077 billion rubles.

In addition, the “daughter” of Google carried out write-offs of the value of non-current and current assets, “motivating the decision by the fact that there is uncertainty in the continuity of operations,” the manager found out. As a result, this led to a “significant reduction in the value of assets” of the company, through which it could pay off part of the obligations.

Google start the bankruptcy procedure of its Russian subsidiary on May 18, 2022. The company explained that the decision was due to the “impossibility of fulfilling financial obligations”. June 16, 2022 company filed an application to the Moscow Arbitration Court about its own bankruptcy. September 12 court acknowledged substantiated statement and started the bankruptcy proceedings of the company, however, at the end of the month, this process was suspended at the request of Roskomnadzor.