Oligarchs in danger: Putin stifles Russia’s elite

Konstantin Strukov, the boss of a Russian gold mining company and a staunch ally of President Vladimir Putin, is in danger of losing his empire and getting into serious trouble with the law.

The billionaire, whose fortune is estimated at $1.9 billion by Forbes, is accused of corruption. According to Kommersant, he used his official position to transfer assets to his company.

The FSB (domestic intelligence service) raided the Moscow headquarters of Uzhuralzoloto, Strukov’s company. The aim of the secret services: to investigate alleged violations of environmental and safety standards at several of the company’s mines, as well as deaths at some of its sites.

According to the Russian news agency Tass, Russia’s Prosecutor General has asked the courts to seize all Strukov’s assets and transfer them to the state. The Russian authorities are also asking the Kremlin to take control of other companies that Strukov has registered in European countries in the name of his daughter, who has Swiss nationality. In the indictment, they denounce how the billionaire allegedly transferred part of his fortune outside Russian borders to finance a luxurious lifestyle.

“A responsible entrepreneur is a true Russian citizen who does not open companies abroad to invest part of his or her assets, thereby placing himself or herself the mercy of foreign powers”, Russian President Vladimir Putin told a forum of entrepreneurs in March 2023.

Up until now, Strukov seemed to be the epitome of a Russian boss with impeccable loyalty. He was a member of the presidential party and an elected member of the Chelyabinsk regional parliament. He was also awarded the Medal of Merit in 2021.

“[The Kremlin] is trying to send a message that loyalty is paramount… You can be corrupt, but not excessively so, and not without showing loyalty,” Stephen Hall, Assistant Professor of Russian and Post-Soviet Politics at the University of Bath, told Ukrainian independent media outlet Kyiv Indepedent.

This is not the first time that the state has seized the assets of Russian oligarchs. This is the case of billionaire Vadim Moshkovich, founder of Rusagro, one of Russia’s largest agricultural companies. He has also been in pre-trial detention since the end of March, on charges of embezzlement.

Originally, the Kremlin’s aim was to take over the Russian branches of foreign groups that were unable or unwilling to do business in Russia because of sanctions and war, reports France 24. However, the Uzhuralzoloto example shows that Russian groups can also be affected. “There is a takeover of so-called strategic or critical sectors, such as gold, and other raw materials, particularly agricultural,” Maximilian Hess, founder of the Ementena Advisory consultancy and author of Economic War: Ukraine and the Global Conflict between Russia and the West, told the media.

According to economist Evgeny Nadorchin, Moscow should continue to seize national assets in the future,” he told the Reuters news agency.

And the Kremlin didn’t just strike out at the business world. Viktor Strigunov, former assistant director of the National Guard until 2023, was arrested for corruption and abuse of power in early July. Other members of the National Guard are also under investigation for similar reasons, reports the Moscow Times, an independent English-language Russian media outlet.

“It’s a sign that Vladimir Putin is using the same old tricks he has used in the past, namely to multiply arrests in order to give the impression that the country’s problems stem from corrupt individuals and that he alone can fix the situation”, points out Maximilian Hess. According to this specialist, the arrest of Konstantin Strukov and the nationalization of strategic companies are designed to reinforce Vladimir Putin’s already almost exclusive control over the Russian economic and political apparatus.