Putin seeks ‘legal solutions’ to seize assets of companies exiting Russia

Vladimir Putin said Russia would find “legal solutions” to seize assets based in the country from international groups that have decided to close their operations over Moscow’s decision to invade Ukraine.

A long list of western brands, including McDonald’s and Ikea, have suspended or halted operations in Russia after the US and European countries imposed economic sanctions on the country.

Speaking via video link to his government on Thursday, the Russian president said: “With regards to those who are planning to close their production facilities, we must act decisively . . . By no means must we allow any harm to local Russian suppliers.”

“It is necessary . . . to introduce external management and then transfer these enterprises to those who actually want to work,” Putin said. “There are enough legal and market instruments for this. There is no need for any arbitrary actions; we will find legal solutions to these questions.”

Putin advised the government to protect the rights of those foreign investors who chose to stay and work in Russia, rather than pull out of the country.

Several high profile Russian figures have been pushing for nationalisations since the western sanctions began.

“Is there a reason why all these Pizza Huts and Ikeas and so on aren’t nationalised already?” Russia Today editor Margarita Simonyan wrote on Telegram on Tuesday. “Their shops, warehouses and quick-service cafés are on our land, our people work there — so what’s the problem?”

The Izvestia newspaper reported on Thursday that an agency had sent the government a list of around 60 foreign companies that could be transferred to the state since they had “stopped their work without presenting guarantees for customers”. It said accounts and assets could be seized.

Several western companies that have suspended operations do not actually produce goods in Russia. This means that if their Russian-based assets were seized, these businesses could not continue to operate as before.

Few foreign companies that have manufacturing operations locally have announced their suspension or departure.

Several firms that have announced suspensions have promised to continue paying staff for the time being. If they do depart from the Russian market completely, this could lead to significant job losses.

“We will still continue to hope that it will not be millions of people out of work, but fewer,” Kremlin spokesperson Dmitry Peskov said on Wednesday. “Indeed, companies are leaving. The government is dealing with it.”

According to the RIA news agency, Russia’s economy ministry said on Wednesday that companies with at least 25 per cent foreign ownership that had suspended their work in Russia could have a new management team imposed by the state.

The measure, the ministry added, would target any companies that have exited Russia since February 24 when Putin sent tanks across the border into Ukraine.

External administrators would keep the company running, form a register of creditors’ claims and conduct an inventory of assets, according to RIA. The original owner would have six months to either sell their share or restart the business and request in court that external management be removed.

Putin admitted that sanctions have had an impact on Russia, but said the economy would adapt over time. Sanctions would have been introduced anyway, regardless of the war in Ukraine, he said.

He added that Russia was continuing to fulfil its contractual obligations in terms of energy delivery. Earlier this week, Russia’s deputy prime minister Alexander Novak warned that Russia had the option of cutting gas supplies to Europe.