COPENHAGEN (Portal) – The head of Carlsberg’s seized Russian branch, Baltika Breweries, was remanded in custody until December 30 on Thursday on suspicion of fraud, the Vyborg District Court in St Petersburg said, highlighting the difficulties Western firms face in attempt to leave the company.
Moscow took control of the Danish brewery’s stake in Baltika in July and placed the company under “temporary management.”
Carlsberg said Russia was now trying to justify its takeover by “targeting innocent employees,” adding: “The allegations spread in Russian media are false.”
Executives at other companies trying to leave Russia told Portal that the impact on local employees was among their biggest concerns.
Carlsberg CEO Jacob Aarup-Andersen said last month that Russia had “stolen” Carlsberg’s business and that the group had cut ties with its Russian branch.
Carlsberg has abolished the licenses that allow Baltika to produce, market and sell all Carlsberg Group products, including international and regional brands; Aarup-Andersen said they would not make a deal that would make Moscow’s seizure of power appear legitimate.
But Baltika is suing Carlsberg in Russia for the right to continue using the trademarks. Prosecutors say Denis Sherstennikov and Anton Rogachevsky – described in their LinkedIn profiles as Baltika’s CEO and vice president – illegally transferred some intellectual property rights to Carlsberg when Russia took control.
Like Sherstennikov, Rogachevsky was arrested on Wednesday as the court approved Baltika’s request to hold the trial behind closed doors to protect trade secrets, Russian news agencies reported.
Large-scale fraud can result in a prison sentence of up to 10 years.
Ian Massey, head of corporate intelligence, EMEA, at global risk consultancy S-RM, said the arrests showed how few options multinationals had to break away.
“Either you proceed to a divestment and accept highly opaque processes and deeply discounted valuations as the price, or you navigate an increasingly difficult existing relationship and face the risk of confiscation, huge overall write-offs and the inability to meet your duty of care to employees , suspended,” he said.
(Reporting by Johannes Gotfredsen-Birkebaek in Copenhagen, Alexander Marrow in London and Gleb Stolyarov in Tbilisi, writing by Louise Rasmussen and Kevin Liffey, editing by Bernadette Baum and Mark Potter)