COPENHAGEN (Reuters) -The head of Carlsberg’s seized Russian unit, Baltika Breweries, was on Thursday remanded in custody to Dec. 30 on suspicion of fraud, according to St Petersburg’s Vyborg District Court, highlighting the difficulties faced by Western firms trying to leave.
Moscow assumed control of the Danish brewer’s stake in Baltika in July, taking the firm under “temporary management”.
Carlsberg said Russia was now trying to justify its takeover by “targeting innocent employees”, adding: “The allegations reported in Russian media are fake.”
Executives at other firms trying to leave Russia have told Reuters that repercussions for local staff are among their top concerns.
Carlsberg CEO Jacob Aarup-Andersen said last month that Russia had “stolen” Carlsberg’s business and the group had cut ties with its Russian unit.
Carlsberg has scrapped the licences enabling Baltika to produce, market and sell all Carlsberg Group products, including international and regional brands; Aarup-Andersen said it would not do a deal that would make Moscow’s seizure look legitimate.
But Baltika is suing Carlsberg in Russia for the right to continue using the trademarks. Prosecutors say Denis Sherstennikov and Anton Rogachevsky – described on their LinkedIn profiles as Baltika’s CEO and vice president, legal – transferred some intellectual property rights to Carlsberg illegally as Russia assumed control.
Like Sherstennikov, Rogachevsky was detained on Wednesday, when the court granted Baltika’s request to hold proceedings behind closed doors to protect trade secrets, Russian news agencies reported.
Large-scale fraud can carry a sentence of up to 10 years in prison.
Ian Massey, Head of Corporate Intelligence, EMEA, at global risk consultancy S-RM, said the arrests showed how few options departing multinationals had.
“Move to divest, accepting highly opaque processes and deeply discounted valuations as the price, or navigate an increasingly difficult ongoing relationship and face the threat of seizure, huge total write-downs, and the inability to provide duty of care to staff,” he said.
(Reporting by Johannes Gotfredsen-Birkebaek in Copenhagen, Alexander Marrow in London and Gleb Stolyarov in TbilisiWriting by Louise Rasmussen and Kevin LiffeyEditing by Bernadette Baum and Mark Potter)
Abhinav Thawait is a globe-trotting correspondent with a passion for international affairs. With a background in international relations, he offers a global perspective on the most pressing issues around the world. Abhinav’s curiosity takes his to the far corners of the earth, where he seeks to share untold stories and diverse viewpoints.
