NewsPutin seizes control of Russia's top pasta giant amid legal turmoil

Putin seizes control of Russia's top pasta giant amid legal turmoil

Makfa is one of the 5 largest pasta producers in the world.
Makfa is one of the 5 largest pasta producers in the world.
Images source: © makfa | Makfa

6:43 AM EDT, May 9, 2024

The state has just taken over Russia's largest pasta and flour producer. Even protests, declarations of asset repurchase, and pledges to donate millions of dollars to the war in Ukraine didn't save the company. Makfa is now under Putin's control.

The takeover happened immediately at the prosecutor's office's request. Makfa lost its independence. The company, a leading distributor of pasta and flour in the country, is also a significant producer of cereals and cereal flakes. It ranks among the top five pasta producers worldwide.

The acquisition stems from accusations against the owners of Makfa: the former governor of Chelyabinsk Oblast, Mikhail Yurevich, is suspected of bribery, and Vadim Belousov, a former regional deputy, was convicted in 2022 on similar charges, as reported by "The Moscow Times". Both are currently living abroad.

Buyout offer and millions for the war

RBC reports that efforts to transfer the case to an arbitration court and avoid a closed-door trial were unsuccessful. The Russian newspaper also reports that, as part of a settlement, the owners offered to repurchase the company and contribute one billion rubles (equivalent to 12 million USD) annually to Russia's war effort in Ukraine.

On its website, Makfa announced that "its shareholders declare that they will seek justice through all available legal means".

Meanwhile, the company's lawyer, Pavel Khlyustov, argued, as quoted by the newspaper, that there is justification for appealing the verdict to the Russian Constitutional Court.

Gradual nationalization

"The Moscow Times" views the takeover of Makfa's assets as part of "the Kremlin's gradual move towards compulsory nationalizations".

"Since the beginning of Moscow's full-scale invasion of Ukraine, Russian authorities have been trying to nationalize key defense industry assets, aiming for greater control over increased military production. But now, the mass confiscation of assets increasingly targets the civilian economy," the article states.

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