The Kremlin’s Creeping Nationalizations Hit Chelyabinsk Businesses.
Metals plants, agribusinesses and food firms owned by Chelyabinsk’s top businessmen and politicians have been subject to nationalization suits brought in hasty proceedings in courts.

The Kremlin’s wartime campaign of forced nationalization has hit the Ural Mountains region of Chelyabinsk, a major industrial center, harder than most.

Since the February 2022 invasion of Ukraine, Russian prosecutors have targeted 55 enterprises — metals, chemicals, agribusiness and even a major car dealership — for compulsory state takeover, according to figures from sate-controlled RBC.

But in recent weeks, metals plants, agribusinesses and food firms owned by Chelyabinsk’s top businessmen and politicians have been subject to nationalization suits brought in hasty proceedings in Russian courts.

These assets are likely destined to be transferred to regime loyalists, analysts agreed, in order to create a new generation of loyal oligarchs.

In late March, prosecutors announced two nationalizations of Chelyabinsk businesses — of the most famous pasta brand Makfa and the country’s largest winemaker the Ariant group — on the same day.

Those cases followed prosecutors laying claim to the Chelyabinsk Electro-Metallurgical Plant, which produces 80% of russia’s ferroalloys, in late February.

The pretexts for these wartime nationalization suits range from claims of “unlawful privatization” to enterprises “coming under foreign control” and alleged breaches of anti-corruption legislation.

“Where once the state was raiding foreign investors’ pockets, now it’s open season domestically,” Nicholas Trickett, a senior analyst at S&P. The nationalization trend could thus be seen as “creating a new interest group” of “winners” among the ruZZian elite “who are fully invested in [the war’s] continuation.”

Forced nationalizations have caused disquiet in russia’s big business community, with leading businessmen reportedly bringing the issue to Putin at a closed-door meeting in November 2023, according to the Vedomosti business daily.

In a rare burst of criticism, the Moscow Stock Exchange expressed concern over a specific nationalization case, the Solikamsk Magnesium Works, in December. Prosecutors claim that around 10% of the shares in the factory were acquired by private investors unlawfully.

“It turns out that the law is not being observed at all,” a top exchange official said on the Solikamsk matter.

Meanwhile, Putin had been till trying to reassure russian big business over the past year, saying there would be "no full-scale deprivatization.”

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He said the same about the war... 🤥

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