Russia has placed five foreign-owned businesses under compulsory administration, including Belgian manufacturer Ontex and French flooring group Tarkett. The latest seizures deepen the confrontation over sanctions, frozen Russian assets and the future of European investment in Russia.

Russian President Vladimir Putin has ordered the transfer of five Western-owned businesses into compulsory Russian management, extending a campaign of asset seizures targeting European companies that continued operating in Russia after the full-scale invasion of Ukraine.

The decree, signed on 15 October, affects businesses with combined annual revenues exceeding 53 billion roubles, approximately €530 million. They include French flooring manufacturer Tarkett, Belgian hygiene products group Ontex, German packaging producer Menshen, Kappa Rus and Eviosys Packaging Kuban, now linked to American group Sonoco.

Under Presidential Decree No. 738, operational control has been transferred to Centre Capital, a little-known Moscow company established in February 2026 with registered share capital of just 10,000 roubles.

The decision follows similar interventions against Nestlé, Auchan, FM Logistic and Metro in September. Together, the measures demonstrate how Moscow is using foreign-owned businesses as instruments of economic retaliation against countries supporting Ukraine.

Foreign businesses placed under Russian control

Centre Capital is headed by Marat Mirkhaydarov, a former senior official in Russia’s Zabaykalsky region who reportedly served with the Akhmat military formation during Russia’s war against Ukraine.

The scale of the companies placed under his management contrasts sharply with the financial standing of the administrator.

Tarkett’s Russian operations generated approximately 19.3 billion roubles in revenue during 2025, while Kappa Rus recorded 16.5 billion roubles and Ontex RU another 10.3 billion. Eviosys Packaging Kuban and Menshen Packaging CIS reported approximately 6.1 billion and 1.4 billion roubles respectively.

The decree does not formally transfer ownership of the companies to Centre Capital. It does, however, remove the foreign shareholders’ effective control over management, operations and commercial decisions.

For Belgian manufacturer Ontex, the consequences are immediate.

In an official statement issued on 16 October, the Aalst-based company confirmed that a government-appointed administrator had assumed operational control of its Russian subsidiary.

Ontex Russia employs approximately 350 people, operates a manufacturing facility in Noginsk and maintains a sales office in Moscow. The subsidiary accounts for around five per cent of the group’s total revenue and between seven and eight per cent of adjusted EBITDA.

The company said it was examining measures to protect its assets and maintain business continuity.

Tarkett likewise confirmed that it was losing effective control of its Russian operations.

A mechanism established in 2023

The legal framework for such interventions dates to April 2023, when Putin introduced Decree No. 302, allowing the Russian authorities to place assets associated with countries designated as unfriendly under temporary external management.

The appointed administrator can exercise extensive ownership-related powers, although the formal right to dispose of the assets remains excluded.

Crucially, the arrangement can be terminated only by presidential decision. There is no automatic deadline for returning operational control to the original owners.

Moscow maintains that the measures are reversible. Nevertheless, the loss of management authority raises questions about whether businesses could eventually be returned with their financial position, organisational structure and commercial value intact.

The latest decree extends the process already documented by EU Today following the September takeover of Nestlé and Auchan’s Russian operations.

The Kremlin’s approach also serves domestic economic objectives. Keeping factories, retail networks and distribution facilities operating under Russian management helps preserve employment, production capacity and established supply chains.

At the same time, appointing Russian administrators allows the authorities to exercise greater influence over businesses originally developed through foreign capital, technology and expertise.

European companies caught in sanctions confrontation

Kremlin spokesman Dmitry Peskov has explicitly linked the seizures to the nationality of the affected companies and the policies of their governments.

He accused European states of participating in the unlawful seizure of Russian property through sanctions and financial restrictions.

Moscow’s argument centres partly on approximately €210 billion in Russian sovereign assets immobilised in the European Union, most of them held through Belgium-based securities depository Euroclear.

The European Union has used extraordinary revenues generated by those assets to support Ukraine, while further proposals involving the underlying funds remain subject to legal and political debate.

Belgium has been particularly concerned about potential financial exposure and legal claims. As EU Today reported in September, a Belgian Council of State judgment raised additional questions about the administrative procedures governing certain frozen assets.

The dispute has also moved into the European courts, with the Bank of Russia challenging EU measures intended to protect Euroclear against the enforcement of Russian judgments.

Moscow’s treatment of European businesses adds another dimension to this confrontation. By retaining control over foreign-owned industrial and commercial assets, Russia possesses a means of exerting pressure on companies whose governments support sanctions and military assistance to Ukraine.

The implications are particularly serious for Western banks that still maintain substantial Russian operations.

Austria’s Raiffeisen Bank International and Italy’s UniCredit remain exposed to Russia through local subsidiaries. Any extension of compulsory administration to financial institutions could create additional difficulties involving deposits, capital and banking supervision.

The cost of remaining in Russia

The seizures also expose the financial risks faced by Western companies that delayed their withdrawal after February 2022.

Many initially sought to protect their investments, employees and commercial infrastructure. Others reduced operations but retained ownership, expecting that conditions might eventually permit an orderly sale or renewed business activity.

Russian restrictions have progressively complicated that calculation, requiring foreign investors from designated countries to accept substantial discounts on asset sales and obtain official approval for transactions.

Companies remaining in the country now face the additional possibility that the government will appoint administrators without their consent.

The consequences extend beyond the businesses immediately affected. Russia is establishing a precedent under which foreign investment can remain legally owned by its original shareholders while its economic benefits and operational management are placed beyond their control.

For European governments, the latest decree illustrates the increasing connection between commercial interests and geopolitical decisions.

The Kremlin has demonstrated that sanctions imposed over its invasion of Ukraine can be answered not only through diplomatic or financial measures, but also through direct intervention in European-owned businesses operating on Russian territory.

Any eventual negotiation over sanctions relief and the restoration of economic relations will consequently have to address the status of these assets, the rights of their original shareholders and the question of compensation.

Until then, Western companies remaining in Russia face an investment environment in which the ultimate authority over their businesses rests increasingly with the Kremlin rather than their shareholders.

The European Union has adopted an unprecedented package of sanctions against Russia’s military-industrial complex, blacklisting 1,569 companies and individuals involved in supplying weapons for Moscow’s war against Ukraine.

The Council measures announced on 12 October target 826 companies and 743 executives. Unlike earlier sanctions targeting political figures, the latest listings reach deeper into the industrial supply chains needed to manufacture missiles, drones, aircraft and ammunition.

Ballistic missile supply chains

EU foreign policy chief Kaja Kallas said more than half the new listings concerned ballistic missile production. The Council identified electronics manufacturers, semiconductor suppliers, radar specialists, navigation equipment firms and producers of explosives.

These businesses occupy positions in production networks that enable Russia to sustain the manufacture of weapons despite restrictions on its access to Western technologies. The Council announcement estimates their combined annual turnover at at least €20 billion and employment at more than 250,000.

The move follows intensive Russian missile and drone strikes against Ukrainian cities and energy installations. European governments increasingly seek to undermine Moscow’s operational capacity by identifying businesses that procure or manufacture components for its armed forces.

Enforcement beyond EU borders

Listed firms face asset freezes, while EU businesses and citizens cannot make funds or economic resources available to them. The named executives also face travel restrictions. Suppliers and financial institutions will need to check commercial transactions for links to sanctioned entities.

The actual impact on Russian output remains uncertain. Businesses with few assets in Europe may experience limited immediate disruption. Moscow has developed alternative procurement channels through third countries, some involving intermediaries that acquire electronics or equipment originally manufactured elsewhere.

Sanctions effectiveness therefore depends on customs intelligence, financial due diligence, international cooperation and the willingness of commercial partners to stop dealing with listed companies. Targeting managers individually is also intended to raise the personal costs of directing Russia’s military production.

A test for Europe’s economic pressure

Precision navigation systems, sophisticated electronics and specialised manufacturing technology remain difficult to substitute rapidly. Nevertheless, listing a supplier cannot by itself prevent components from moving through indirect trading routes.

The sanctions coincide with renewed discussion of a possible halt to attacks on energy infrastructure. Brussels is signalling that negotiations about the war’s conduct need not entail relief from restrictions on Russia’s defence economy.

Whether the measures reduce missile production will depend on changes in procurement and output over the coming months. Their immediate significance is the EU’s decision to extend restrictions beyond the most visible weapons producers into the broader industrial networks sustaining Russia’s war.

First published in Deník N.

Until Russia’s full-scale invasion of Ukraine, Czech Vanadium was among the European companies which clearly had Russian owners.

Since 2007, the company has been controlled through the Evraz group by Russian businessman Roman Abramovich, who is close to Russian leader Vladimir Putin.

The ferrovanadium producer was part of a chain through which vanadium ore mined in Russia reached Europe before being sent on to Abramovich’s factories in the US. Ferrovanadium is an alloy added to steel to help improve its properties. And Czech Republic accounts for six percent of global production.

But sanctions following Russia’s full-scale invasion of Ukraine in 2022 forced the oligarch to sell up.

Evraz, the holding company in which Abramovich is the largest shareholder, supplied the Russian army, according to media reports. But Evraz denied this.

In 2024, the Abu Dhabi-based company Metco (now ‘Metco Holding’) became the sole shareholder in the Czech factory, but it is not clear who controls it.

Czech authorities and police suspect the transfer of the vanadium factory to a new parent company in the UAE may conceal the true owner. They are seeking to establish who is really behind the opaque company in the Persian Gulf, and whether it is still Roman Abramovich.

According to Deník N sources familiar with the investigation, specialists from Czech police bodies for organised crime (NCOZ) and the financial intelligence unit (FAÚ) are involved.

“Yes, we are investigating who is behind the company. There are many leads and the suspicion is clear that the company may still be backed by its former owners from Russia,” a source close to the investigation confirmed.

NCOZ spokesperson Jaroslav Ibehej declined to comment in more detail on the search for Czech Vanadium’s beneficial owner. “As a rule, we neither confirm nor deny what we are working on,” he said.

According to documents in the Czech judicial database, the company is formally controlled by one owner — a Dubai-based lawyer of Indian origin who provides nominee services for beneficial owners. The lawyer has been linked to money-laundering investigations in Ukraine and Moldova.

Apparent fake owner scheme

The officially declared owner of Czech Vanadium is Nikhil Skariah Kolekunnel. According to the ADGM free zone business register in the UAE, he is both the sole shareholder and director of Metco Holding.

However, the Gulf state’s database does not disclose so-called beneficiaries, who are entitled to the company’s profits and may also secretly control it.

Although the Czech judicial register lists Skariah as Czech Vanadium’s beneficial owner, this does not necessarily indicate the person exercising control in the background. For example, trustees of trust funds are also listed in the registers as beneficial owners.

The nature of Skariah Kolekunnel’s business suggests that he performs the specific role of an administrator, a so-called fiduciary — someone who accepts an ownership mandate and effectively manages another person’s assets.

He is a lawyer originally from India who founded two law firms in the UAE years ago. His companies represent large corporations and businesspeople who do not wish to publicly acknowledge ownership of a business.

“South Bridge Legal is an advisory firm for comprehensive business establishment in Dubai, Abu Dhabi and the UAE. Our highly experienced team has been active in the sector for more than 10 years, providing services tailored to the unique needs of every ambitious entrepreneur setting up companies in Dubai,” the company wrote on its website.

“We have all activities, which is tax management, tax consulting, accounting, corporate services, offshore company formation, free zone company formation…everything,” Skariah said in a recently published video on YouTube.

Metco Holding’s address in Abu Dhabi suggests it may be a shell company. And it is headquartered from a WeWork.

Moldova and Ukraine links

‘Skariah’, the name of the Indian administrator, had already emerged eight years ago in connection with the concealment of ownership structures during an investigation into the privatisation of Moldova’s national airline. At the time, Skariah appeared as the owner of the opaque company Gold Craft FZE, established in Dubai in 2015.

“On Monday 1 October 2018, one day before the privatisation agreement for Air Moldova was signed, a plane from Istanbul landed at Chișinău International Airport. One of the passengers, a 39-year-old man, was carrying nearly €2.6m in cash in his luggage. He declared the money to customs officers, which, according to the Office for the Prevention and Fight against Money Laundering, he had borrowed four days earlier from Gold Craft FZE in the United Arab Emirates,” the investigative outlet RISE Moldova reported.

It finds that Andrei Ianovici brought cash from Dubai, equivalent to tens of millions of Czech crowns. Later that day, he deposited the money in a bank, and it ended up in the accounts of Civil Aviation Group SRL. That company privatised Air Moldova, and Ianovici was one of its partners.

The true origin of the money was never established, leading local investigators to suspect that the money had not been earned legally. No charges were brought, however.

According to court records, Skariah was also involved in disputes in Ukraine, where Gold Craft FZE claimed ownership of an Ilyushin aircraft which the company allegedly purchased in 2017.

Skariah’s Russian-linked empire

However, the UAE-based lawyer was not the only individual to have emerged as an administrator of Czech Vanadium. Another is Sergei Gushchin.

A man of this name was formerly a prominent Russian businessman in rail freight transport and, although he withdrew from Russia three years ago, he appears on Ukrainian sanctions lists for supporting the Russian army.

Gushchin became a senior manager at PJSC TransContainer, a Russian rail freight carrier, after Evraz sold its stake. In the past, a quarter of the company was owned by the holding company of Abramovich.

Meanwhile another of Gushchin’s companies, Rail Service, formed a joint venture with Evraz in 2019 focused on the production of railway wheels.

According to a UAE register, Gushchin was a director and shareholder of Metco, which became Czech Vanadium’s parent company from 2022-23.

US credit-rating agency Moody’s shared data with Deník N that listed Gushchin as a recent beneficiary of Metco Holding and as the company’s director.

Russia’s ferrovanadium monopoly

Czech Vanadium’s revenues regularly exceed €81m, and in 2024 the company reported profits of more than €8m. This summer, the company sent over €0.6m of that sum to the Dubai company, the remaining funds staying in its retained earnings account.

Last year, the company recorded a modest €0.2m loss. Its accounts retained more than €12m in undistributed profits in total.

Czech Vanadium’s business remains closely tied to Russia. Last year alone, vanadium oxides or hydroxides worth nearly €82m were imported into the Czech Republic from the Russian Federation. Russia is effectively the sole supplier of the raw materials needed to produce ferrovanadium. According to the statistical office database, exports mainly go to the United States, as well as Germany and Taiwan.

Czech Vanadium did not reply to requests for comment or an explanation of its ownership structure.

It also did not answer the question of how a Dubai lawyer had bought the Czech company, which, according to some estimates, is worth more than €40m.

Company representatives have not responded to questions about its owners since 2024, when the company left the Evraz group structure.

Fake owner model in US

Jiří Skuhrovec, an analyst at Datlab, specialises in the global vetting of business partners. He says Abramovich uses a similar model for concealing ownership in the United States.

Sanctions also forced the Russian oligarch, who became better known through his former ownership of the British football club Chelsea, to withdraw from US companies. But Skuhrovec concluded that they were probably still controlled by people linked to Abramovich just like the factory in Czech Republic.

“We mapped the entire chain, from the Russian ore supplier through the Czech smelter to the final recipient: the US company Strategic Alloys LLC. Until recently, all three companies officially belonged to Abramovich, and all three are now controlled by people with links to his Evraz group. Abramovich may therefore still secretly control the entire supply chain for this strategic raw material. This would be a textbook case of sanctions circumvention, as well as an obvious security risk,” Skuhrovec said.

Findings led Datlab and Transparency International to submit a complaint to police. “We believe that the 16m Czech crowns (around €655,000) in distributed profit may have gone to Abramovich, who is on a sanctions list. That would constitute a criminal offence,” the analyst explained.