Russia Hands Over Seized Dutch, French Assets To Chechen Agric Minister

News in brief: Yakub Zakriev, the deputy prime minister and agricultural minister of Chechnya, has been appointed as the new head of Danone Russian subsidiary after Russia took control of the company. Critics have raised concerns over high-level cronyism by the Kremlin, and Carlsberg, another affected company, is investigating the implications of the management change for its Baltika Breweries project.

Russia has appointed Yakub Zakriev as the new head for the Russian subsidiary of yoghurt maker, Danone. Zakriev, who is the deputy prime minister and agricultural minister of Chechnya, now sits at the helm of affairs of the French firm’s business.

The move comes after Russia took control of Danone and Carlsberg, in what they describe as temporary management, according to news reports.

The 32-year-old is the nephew of Ramzan Kadyrov, Chechen leader and key ally of Russian President, Vladimir Putin. Kadyrov faces accusations of alleged violations of human rights in the Southern Russian Republic. Public commentators have criticised the move as an example of high-level cronyism by the Kremlin.

President Putin seized the assets of the companies under new regulations that allow the Russian state to take control of assets of unfriendly countries. The companies were in the process of selling their businesses in Russia, before the Moscow led takeover.

Dutch multinational brewer, Carlsberg, said it was not clear about the implications the development would have on its Russian project, Baltika Breweries, and its sale process. The company's executives said that they were investigating the situation as Russia already named Taimuraz Bolloev as brewery's new head.

Danone Russia and Carlsberg’s Baltika Breweries shares are under the control of Russian property agency, Rosimuschchestvo. The move took effect on Sunday, 16 July 2023.

France-based Danone suffered a billion euro hit for selling its business. Carlsberg said it was in the process of selling Baltika Breweries last month and it was neither informed nor did it approve the management changes. Baltika employs 8,400 workers across 8 plants and produces some of the most well known beer brands in Russia.