Thursday, September 18, 2025

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Russia Begins To Seize Oligarch Assets

Russian authorities have taken legal action against Andrey Melnichenko, a prominent billionaire oligarch, in their bid to nationalize a company within his metals and mining conglomerate. The lawsuit asserts that the acquisition of the said company five years ago was marred by corruption.

This move comes as part of the Kremlin’s ongoing efforts to encourage affluent Russians, like Melnichenko, to repatriate their wealth and businesses, intensifying pressure on oligarchs residing abroad. Notably, Melnichenko currently maintains his base of operations in the United Arab Emirates and possesses a luxurious superyacht valued at $300 million.

The backdrop to these allegations stems from Russia’s significant incursion into Ukraine about a year and a half ago. During this period, the Kremlin has adopted a dual approach, utilizing both incentives and punitive measures, to ensure the loyalty of oligarchs to their homeland. Business figures who have expressed mild criticisms of the invasion have faced legal challenges concerning their assets, while those showing allegiance to the state have been rewarded. Some have even been offered the chance to acquire assets confiscated from foreign enterprises.

The present lawsuit against Melnichenko, who has described the invasion of Ukraine as “tragic,” specifically targets his ownership of Sibeco, an entity responsible for operating multiple thermal power plants in western Siberia, serving as a crucial electricity source for the region. The lawsuit was formally filed in Krasnoyarsk earlier this month.

Melnichenko’s acquisition of Sibeco transpired in 2018 from Mikhail Abyzov, a former government minister. Subsequently, Abyzov was apprehended in the spring of 2019, facing charges of embezzlement and shareholder fraud relating to Sibeco and another enterprise prior to the transaction. His assets were seized by the state, and he remains incarcerated in Russia.

The legal proceedings currently underway allege a “corrupt collusion” between Melnichenko and Abyzov during the 2018 Sibeco transaction. State prosecutors are actively investigating Abyzov himself as part of this case.

A spokesperson for Andrey Melnichenko confirmed that the lawsuit had been received and disclosed that a legal team was diligently addressing the matter. However, they refrained from commenting on the allegations until the litigation process officially commences. A court hearing is scheduled for early September as indicated on the Krasnoyarsk court website.

Forbes recently ranked Melnichenko as Russia’s wealthiest individual this year, with his net worth soaring to over $25 billion. This substantial increase is attributed to surging coal and fertilizer prices—key commodities traded by his flagship companies, EuroChem and Suek.

Following the sweeping Ukrainian crisis and the ensuing sanctions imposed by the US and EU on prominent Russian industrialists, including Melnichenko, he divested himself from the ownership and direct benefits of his two companies. Instead, his spouse became the primary beneficiary, a move that also led to her being subjected to sanctions. Forbes’ assessment of Melnichenko’s wealth is rooted in the corporate structure predating Russia’s invasion in February 2022.

Mikhail Abyzov, a close associate of former president Dmitry Medvedev, is grappling with four criminal charges. These charges encompass allegations of diverting Rbs4 billion ($42.5 million) from Siberian energy firms and funneling the funds offshore. Abyzov is currently confined in Moscow’s Lefortovo prison. The state has already seized Rbs32.5 billion from the former official and auctioned some of his assets, including apartments in the capital city.


Information for this story was found via Financial Times and the sources mentioned. The author has no securities or affiliations related to this organization. Views expressed within are solely that of the author. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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