President Vladimir Putin today placed Russia’s largest car dealership under temporary state administration, in a move the Kremlin said was driven by commercial logic.

Rolf, owned by a company (Delance Limited and Rolf Motors) based in Cyprus and founded by Russian businessman Sergei Petrov, was one of the first car dealerships created after the collapse of the Soviet Union.

THE rapture The move, which began with a decree published on a government website, comes after Moscow took temporary control of several Western-owned assets this year in response to Russian asset freezes or Western sanctions.

Danish brewer Carlsberg and French dairy giant Danone are among them, but Rolf, which has traditionally sold a wide range of foreign cars, is the first time a major business with a dominant position in Russia has lost its fortunes in this way. .

Petrov, who lives in Austria, is accused by Russian authorities of illegally transferring money abroad, a charge he denies.

An arrest warrant has also been issued for Petrov.

“This is only related to economic feasibility and compliance with the current legislation of the Russian Federation and taking into account the known international economic situation that exists around us at the moment,” Kremlin spokesman Dmitry Peskov said.

Rolf was a Russian company but with an ownership structure that included an offshore company that required state intervention, Peskov added.

Rolf said that Alexei Gulyaev has been appointed as the company’s new CEO, with Svetlana Vinogradova as his first deputy.

The interim administration will have no impact on Rolf’s business, it said. Federal asset management agency Rosimushchestvo intends to develop Rolf and improve its financial performance, Rolf added.

Petrov called the move another blow to Russia’s investment landscapequestioning whether any investor from Asia, for example, would risk buying stakes in Russian assets.

“Temporary means permanent (administration),” Petrov told Reuters by telephone. “We knew all this already. Our bankers already told us — they’re going to put you under outside management.”

“This is probably in the interest of one of the structures that are now trying to buy (assets),” Petrov said, implying that the mechanism is being used as a cover for asset redistribution.

“People make deals using political incentives,” he added.

“This has a devastating effect on everyone. The state is, as a rule, inefficient, especially in such things as retail.”

Petrov was one of a handful of Russian businessmen who signed a letter in 2014 criticizing the damage to East-West relations following Russia’s annexation of the Ukrainian peninsula of Crimea.

Russian investigators launched an investigation into Rolf in 2019, accusing her of buying overvalued shares, a charge Petrov denied and said may have been related to his political views.

In September, a former Rolf executive was sentenced to 8.5 years in prison for allegedly taking part in an illegal money transfer scheme abroad.